exv10w8






Exhibit 10.8




EMPLOYMENT AGREEMENT




     THIS EMPLOYMENT AGREEMENT (“Agreement”), effective this 1st day of
February, 2010 (“Effective Date”), is entered into between American Locker Group
Incorporated, a Delaware corporation (the “Employer”), and Paul M. Zaidins (the
“Executive”).



WITNESSETH




     WHEREAS, the Employer desires to employ the Executive as President, and the Executive desires
to assist in the development and oversee the implementation of the goals and objectives of the
Employer in accordance with the policies established by the Board of Directors of Employer; and



     WHEREAS, the Employer desires to be ensured of the Executive’s continued active participation
in the business of the Employer; and



     WHEREAS, the parties desire to specify the terms and conditions of Executive’s continuing
employment with the Employer and to provide certain severance benefits which shall be due the
Executive if his employment with the Employer is terminated under specified circumstances.



     NOW THEREFORE, in consideration of the premises and the mutual agreements herein contained,
the parties hereto, intending to be legally bound, hereby agree as follows:



1. Definitions.




     The following words and terms shall have the meanings set forth below for the purposes of this
Agreement:



     (a) Base Salary. “Base Salary” shall have the meaning set forth in Section 3(a)
hereof.



     (b) Board. “Board” shall mean the Board of Directors of Employer.



     (c) Cause. Termination of the Executive’s employment for “Cause” shall mean
termination because of willful misconduct, Fiduciary Breach, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final cease-and-desist order;
conviction of, or entering a plea of guilty or no contest to, a crime constituting a felony;
chronic addiction to alcohol, drugs or similar substances affecting the Executive’s ability to
perform his duties hereunder; material breach of any provision of this Agreement; or gross
negligence by the Executive in the performance of his duties; provided, however, the Executive
shall have been informed in writing of the act, or the failure to act, constituting Cause for
termination, and shall have been provided an opportunity to cure such act or failure to act (if
curable) within thirty (30) days and provided further, if it is not reasonable to cure such act or failure to act within thirty
(30) days, a reasonable period of additional time will be provided. For purposes of this section,
no act or failure to act on the Executive’s part shall be considered “willful” unless done, or



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omitted to be done, by the Executive not in good faith and without reasonable belief that the
Executive’s action or omission was in the best interest of the Employer. Cause shall be determined
in good faith by the affirmative vote of a majority of the Board after the Executive has been
provided in writing the facts and circumstances giving rise to termination for Cause, and the
opportunity to make a presentation to the Board in defense of such facts and circumstances, and
said presentation to the Board may be with the Executive’s counsel.




     (d) Change of Control. “Change of Control” means the occurrence of any of the
following: (i) the adoption of a plan relating to the liquidation or dissolution of the Employer,
(ii) the sale, lease or transfer, in one or a series of transactions, of all or substantially all
of the assets of the Employer or of the Employer and its subsidiaries taken as a whole, to any
Person or group (as such term is used in Section 13(d)(3) of the Exchange Act), (iii) the first day
on which a majority of the members of the Board are not Continuing Directors or (iv) any Person or
group is or becomes the “beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a Person shall be deemed to have “beneficial
ownership” all shares that any such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or indirectly, of shares of
Voting Stock of the Company representing more than 35% of the voting power of all of the Voting
Stock of the Company. Notwithstanding the foregoing, if (iv) occurs due to an Exempted Transaction
(as defined below), such action or actions shall not qualify as a Change of Control. As used
herein, an “Exempted Transaction” shall mean a transaction, or series of transactions, that
has been approved by a majority of the Board and that has, as its primary purpose, to cause the
Employer to no longer be subject to the periodic reporting, disclosure and other obligations under
the Securities Exchange Act of 1934, as amended.



     (e) Continuing Directors. “Continuing Directors” means, as of any date of
determination, any member of the Board who (i) was a member of the Board on February 1, 2008, or
(ii) was nominated for election or elected to the Board with, or whose election to the Board was
approved by, the affirmative vote of a majority of the Continuing Directors who were members of the
Board at the time of such nomination or election.



     (f) Date of Termination. “Date of Termination” shall mean (i) if the Executive’s
employment is terminated for Cause or Disability, the date specified in the Notice of Termination;
and (ii) if the Executive’s employment is terminated for any other reason not specified in (i), the
date on which a Notice of Termination is given or as specified in such Notice.



     (g) Disability. Termination by the Employer of the Executive’s employment based on
“Disability” shall mean termination because the Executive is unable to perform the essential
functions of his position due to a physical or mental impairment which either: (i) qualifies the
Executive for disability benefits under the applicable long-term disability plan maintained by the
Employer or any subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System; or (ii) extends for a period of at
least four (4) consecutive months or more than six (6) months in any twelve (12) month period.



     (h) Exchange Act. “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.



	 	 	 
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     (i) Fiduciary Breach. “Fiduciary Breach” shall mean the Executive’s breach of his
fiduciary duty to the Company or the Executive’s intentional misconduct, which breach or misconduct
involves personal profit.



     (j) Good Reason. Termination by the Executive of the Executive’s employment for “Good
Reason” shall mean termination by the Executive, on thirty (30) days’ written notice to Employer,
based on:



          (i) Without the Executive’s express written consent, (i) a demotion of the Executive to a
position within the Employer that is subordinate to the President of the Employer or (ii) a
material adverse change made by the Employer in the Executive’s functions, duties or
responsibilities as President, as such duties exist of the date hereof;




          (ii) Without the Executive’s express written consent, a reduction by the Employer in the
Executive’s Base Salary, as such salary may be increased from time to time or, except to the extent
permitted by Section 3(b) hereof, a material reduction in the package of fringe benefits required
to be provided to the Executive pursuant to this Agreement, taken as a whole;




          (iii) Without the Executive’s express written consent, the relocation of the Executive outside
Dallas or Tarrant County, Texas;




          (iv) The occurrence of a Change of Control, provided such termination by the Executive shall
occur within six (6) months following such Change of Control.




     (k) ICP. “ICP” shall mean the American Locker Group Incentive Compensation Plan as it
may be amended from time to time.



     (l) Notice of Termination. Any purported termination of the Executive’s employment by
the Employer for any reason, including without limitation, for Cause on Disability, or by the
Executive for any reason, including without limitation for Good Reason, shall be communicated by a
written “Notice of Termination” to the other party hereto. For purposes of this Agreement, a
“Notice of Termination” shall mean a dated notice which: (i) indicates the specific termination
provision in this Agreement relied upon; (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s employment under the
provision so indicated; (iii) specifies a Date of Termination, which shall be not less than thirty
(30) nor more than ninety (90) days after such Notice of Termination is given, except in the case
of the Employer’s termination of the Executive’s employment for Cause, for which the Date of
Termination may be the date of the notice; and (iv) is given in the manner specified in Section
11 hereof.



     (m) Person. “Person” shall mean an individual, partnership, corporation, business
trust, limited liability company, limited liability partnership, joint stock company, trust,
unincorporated association, joint venture or other entity.



	 	 	 
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     (n) Voting Stock. “Voting Stock” shall mean all classes of capital stock of the
Employer then outstanding and normally entitled to vote in elections of directors of the Employer.


2. Term of Employment.




     (a) Employer hereby employs the Executive to serve as President of Employer and Executive
hereby accepts said employment and agrees to render such services to the Employer, on the terms and
conditions set forth in this Agreement. Unless extended as provided in this Section 2,
this Agreement shall terminate three (3) years after the Effective Date.



     (b) During the term of this Agreement, the Executive shall perform such executive services for
the Employer as is consistent with his title and shall devote such time, attention and energies to
the business of the Employer as the Board reasonably deems necessary to build stockholder value.
Executive may during the term hereof be involved in other business activities so long as such
activities, individually or collectively, do not materially interfere with the performance of
Executive’s duties hereunder and as long as Executive notifies the Board (by written notice to the
Chairman of the Board) prior to the commencement of such activities; provided that Executive shall
not be required to notify the Board of any activities if such activities consist solely of passive
investment activities.


3. Compensation and Benefits.




     (a) For services rendered hereunder by the Executive, the Employer shall compensate and pay
Executive for his services during the term of this Agreement at a minimum annual gross base salary
of One Hundred Seventy Thousand and No/100 Dollars ($170,000.00) for the year ending December 31,
2010 and each year thereafter (the “Base Salary”), which may be increased from time to time
in such amounts as may be determined by the Board.



     (b) During the term of the Agreement, Executive shall be entitled to participate in and
receive the benefits of any pension or other retirement benefit plan, 401(k) plan, profit sharing,
stock option, employee stock ownership, incentive compensation, or other plans, benefits and
privileges given to executive level employees of the Employer, to the extent commensurate with his
then duties and responsibilities, as fixed by the Board. The Employer may amend or terminate any
such plan in its discretion, but shall not make any material changes in such plans, benefits or
privileges that would adversely affect the Executive’s rights or benefits thereunder, other than in
an across-the-board change of benefits to all senior executives of the Employer. The basis on which
the Executive shall be entitled to participate in any such plans and the benefits to be received by
him thereunder shall be governed by the terms of such respective plans and in the event of any
conflict between such plans and this Agreement, the terms of such plans shall control.



     (c) During the term of this Agreement, the Executive shall be entitled to four (4) weeks of
paid vacation, to be taken in accordance with the Employer’s normal and customary vacation
policies. The Executive shall also be entitled to all paid holidays to which similarly situated
executives and key management employees of the Employer are entitled. The Executive shall be
entitled to paid leave due to physical illness in each calendar year to be taken and



	 	 	 
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determined in accordance with the policies and procedures established from time to time by the Employer. The
Executive shall not be entitled to receive any additional compensation from the Employer for
failure to take a vacation, or failure to use “sick days,” nor shall Executive be able to
accumulate unused vacation or “sick days,” except to the extent authorized by the Board.




     (d) The Executive shall be entitled to the use of that certain 2008 Ford Explorer XLT
(VIN#1FMEU63E28UA93897) that is currently leased by the Employer for the remainder of the lease
term and all costs of insurance and maintenance of such vehicle shall be borne by the Employer.



     (e) The Employer hereby irrevocably transfers to Executive the laptop computer that Employer
has provided to the Executive for use in connection with his employment; provided that, in the
event of the termination of the Executive’s employment hereunder, for any reason, the Employer
shall be given access to such laptop for the limited purpose of retrieving and deleting information
that belongs solely to the Employer.


4. Termination.




     (a) Termination Due to Death. If the Executive’s employment is terminated by reason
of the Executive’s death, the extent to which of any beneficiary of the Executive shall be entitled
to benefits under any benefit plan shall be determined in accordance with the provisions of such
plan or, in the case of the ICP, as provided in Section 4(l).



     (b) Termination Due to Disability. If the Executive is terminated due to Disability,
the Employer shall maintain and provide for a period ending on the earlier of: (i) the expiration
of the remaining term of employment pursuant hereto prior to the Notice of Termination; or (ii) the
date of the Executive’s full-time employment by another employer at no increased cost to the
Executive, the Executive’s continued participation in all group insurance, life insurance, health
and accident, disability and other employee benefit plans, programs and arrangements in which the
Executive was entitled to participate immediately prior to the Date of Termination, provided that
if the Executive’s participation in any such plan, program or arrangement is barred or during such
period any such plan, program or arrangement is discontinued or the benefits thereunder are
materially reduced, the Employer shall arrange to provide the Executive with benefits substantially
similar to those which the Executive was entitled to receive under such plans, programs and
arrangements immediately prior to the Date of Termination or those which the Executive would have
been entitled to receive had he continued in the employ of the Employer.



     (c) Termination by Executive by Resignation. In the event the Executive terminates
this Agreement by resignation, compensation pursuant to Section 3(a) of this Agreement shall expire
as of the Date of Termination. The extent to which the Executive shall be entitled to benefits under any benefit plan shall be determined in accordance with the provisions of such plan
or, in the case of the ICP, as provided in Section 4(l).



     (d) Termination by the Employer Other Than for Death, Disability or Cause. If this
Agreement is terminated by the Employer for reasons other than death, Disability or Cause,
effective the Date of Termination, the Employer shall pay to the Executive a cash payment equal



	 	 	 
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to twelve (12) months Base Salary at the salary level in effect on the Date of Termination. These
payments shall be made in accordance with the Employer’s normal payroll procedures. Thereafter,
the Employer’s obligation to pay compensation pursuant to Section 3 of this Agreement shall expire.
In addition thereto, the Employer shall maintain and provide for a period ending at the earlier of
(i) the expiration of the remaining term of employment pursuant hereto prior to the Notice of
Termination or (ii) the date of the Executive’s full-time employment by another employer at no
increased cost to the Executive, the Executive’s continued participation in all group insurance,
life insurance, health and accident, disability and other employee benefit plans, programs and
arrangements in which the Executive was entitled to participate immediately prior to the Date of
Termination, provided that If the Executive’s participation in any such plan, program or
arrangement is barred or during such period any such plan, program or arrangement is discontinued
or the benefits thereunder are materially reduced, the Employer shall arrange to provide the
Executive with benefits substantially similar to those which the Executive was entitled to receive
under such plans, programs and arrangements immediately prior to the Date of Termination or those
which the Executive would have been entitled to receive had he continued in the employ of the
Employer. Executive shall, as a condition to receiving the payment described in this Section 4(d)
execute a full and complete release of the Employer from any further obligation under this
Agreement, in form and substance reasonably satisfactory to Employer and Executive.




     (e) Termination for Cause. Upon a termination by the Employer for Cause, the Employer
shall have no further obligation to pay compensation to the Executive effective the Date of
Termination. The extent to which the Executive shall be entitled to benefits under a plan
described in Section 3 upon such termination shall be determined in accordance with the provisions
of such plan or, in the case of the ICP, as provided in Section 4(l).



     (f) Termination by the Executive for Good Reason. If the Executive terminates this
Agreement for the reasons specified in clauses (i), (ii) or (iii) of the definition of Good Reason,
the Executive shall be entitled to receive the same payments and benefits specified in Section 4(d)
of this Agreement, subject to the limitations stated therein and in this Section 4(f). If the
Executive terminates this Agreement for the reasons specified in clauses (iv) of the definition of
Good Reason, the Executive shall be entitled to receive his monthly Base Salary for a number of
months (the “Payment Period”) equal to the product of two (2) months multiplied by the
number of full years during which the Employee shall be employed prior to Executive’s termination
of this Agreement; provided, however, that the Payment Period shall not be shorter than twelve (12)
months and shall not be longer than twenty-four (24) months. All payments pursuant to this Section
4(f) shall be made shall be made in accordance with the Employer’s normal payroll procedures. For
purposes of calculating the Payment Period, the Employer and the Executive agree that the
Executive’s employment with the Employer commenced on November 8, 2006.



          The Executive shall, as a condition to receiving the payments described in this Section 4(f),
(i) execute a full and complete release of the Employer from any further obligation under this
Agreement, in form and substance reasonably satisfactory to the Employer and the Executive and (ii)
make himself available to the Employer on a reasonable basis, during normal business hours (not to
exceed 40 hours a week), but at the Employer’s expense, for three months




	 	 	 
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following the termination of his employment for purposes of assisting the Executive’s successor as president of the Company.




     (g) Termination by Mutual Consent. Notwithstanding any of the foregoing provisions of
this Section 4, if at any time during the course of this Agreement the parties by mutual consent
decide to terminate it, they shall do so by separate agreement setting forth the terms and
conditions of such termination.



     (h) Cooperation with Employer After Termination of Employment. Following termination
of the Executive’s employment for any reason, the Executive shall fully cooperate with the Employer
in all matters relating to the winding up of his pending work on behalf of the Employer including,
but not limited to, any litigation in which the Employer is involved, and the orderly transfer of
any such pending work to other employees of the Employer as may be designated by the Employer. The
Employer agrees to reimburse the Executive for any out-of-pocket expenses he incurs in performing
any work on behalf of the Employer following the termination of his employment.



     (i) Full Discharge of Employer Obligations. The amounts payable to the Executive
pursuant to this Paragraph 4 following termination of his employment shall be in full and complete
satisfaction of the Executive’s rights under this Agreement. Such amounts shall constitute
liquidated damages with respect to any and all such rights and claims and, upon the Executive’s
receipt of such amounts, the Employer shall be released and discharged from any and all liability
to the Executive in connection with this Agreement.



     (j) Access to Computers Systems following Termination. The Executive agrees that
following the termination of his employment with the Employer, he will not access the Employer’s
computer systems, download files or any information from the Employer’s computer systems or in any
way interfere, disrupt, modify or change any computer program used by the Employer or any data
stored on the Employer’s computer systems.



     (k) Vesting of Stock Options. If the Executive’s employment is terminated during the
Employment Term for Good Reason or by reason of the death or Disability of the Executive, (i) all
stock options that have been previously granted to the Executive by the Employer as of the date of
such termination shall become vested and immediately exercisable, and the Executive or his personal
representative or estate shall have six months from the date of his termination to exercise such
options and pay to the Employer the applicable exercise price with respect thereto and (ii) all
awards and grants of stock that have been previously made to the Executive by the Employer as of
the date of termination that have not yet, as of the date of such termination vested, shall
automatically become vested and immediately deliverable to the Executive or his personal
representative or estate.



     (l) Effect of Termination on Participation in Incentive Compensation Plan. Following
the termination of the Executive’s employment for any reason (other than by reason of a Fiduciary
Breach), or for no reason, he shall be entitled to receive the full balance of his share of the
Gross Bonus Pool (as defined in and determined in accordance with and pursuant to the Plan). In
addition, if Executive’s employment is terminated before the end of a fiscal year (other than by
reason of a Fiduciary Breach), the Employer shall, upon determination of the Gross



	 	 	 
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Bonus Pool in respect of the fiscal year in which his employment is terminated, pay to Executive his percentage
share of such additional contribution in respect of such partial fiscal year (which percentage
share may be adjusted to reflect the fact that Executive’s employment ended prior to the completion
of a full fiscal year).



5. Mitigation; Exclusivity of Benefits; Notice of Other Employment.




     (a) The Executive shall not be required to mitigate the amount of any benefits hereunder by
seeking other employment or otherwise, nor shall the amount of any such benefits be reduced by an
compensation earned by the Executive as a result of employment by another employer after the Date
of Termination or otherwise, except as provided in Sections 4(b) and 4(d) of this Agreement. If
the Executive’s employment terminates pursuant to Section 4(b) or 4(d) hereof, the Executive shall
promptly (and in any event within 5 days) notify the Employer of the date of the Executive’s
full-time employment by another employer.



     (b) The specific arrangements referred to herein are not intended to exclude any other
benefits which may be available to the Executive upon a termination of employment with the Employer
pursuant to employee benefit plans of the Employer or otherwise.



     (c) If the Executive’s employment terminates pursuant to Section 4(b) or 4(d)
hereof, the Executive shall promptly (and in any event within five (5) days) notify the Employer of
the date of the Executive’s full-time employment by another employer.


6. Withholding.




     All payments required to be made by the Employer hereunder to the Executive shall be subject
to the withholding of such amounts, if any, relating to tax and other payroll deductions as the
Employer may reasonably determine should be withheld pursuant to any applicable law or regulation.


7. Non-Competition and Non-Solicitation of Customers and Employees.




     (a) The Executive agrees that the Employer’s commitment to provide its Confidential
Information to him gives rise to the Employer’s interest in restraining the Executive from
competing against it and that the restrictions in this Section are designed to enforce the
Executive’s promise in Section 8 not to disclose Confidential Information belonging to the Employer
except as necessary to perform his duties. Executive agrees that the restrictions in this section
are reasonable and do not impose a greater restraint than necessary to protect the goodwill or
other business interests of the Employer. The Executive also acknowledges and recognizes the
highly competitive nature of the business of the Employer and accordingly agrees
that, during the term of this Agreement and, in consideration of the receipt of any payment
pursuant to this Agreement, during the Restricted Period, unless otherwise agreed to in writing by
the Employer, the Executive shall not, within the geographic areas in which the Executive performed
services for Employer, either directly or indirectly, in any manner or capacity, whether as
principal, agent, partner, member, officer, director, employee, joint venturer,



	 	 	 
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salesman, corporate shareholder or equity owner or otherwise for the benefit of any Person (as defined below),




          (i) engage in, own any interest in, perform any services for, participate in or be connected
or associated in any way with any Competing Business (as defined below) or Competing Services (as
defined below);




          (ii) solicit the rendering of Competing Services to any Person;




          (iii) solicit the rendering of Competing Services to or from any Person which is then or has
been at any time during a period of one (1) year prior to the Termination Date an Employer Customer
(as defined below), employee, salesperson, agent, representative of or supplier with whom Executive
had contact while employed by Employer;




          (iv) engage in conduct which interferes or might interfere with the relationship of the
Employer with any Customer, supplier, employee, salesperson, agent or representative of the
Employer; or




          (v) (A) induce any Employee (as defined below) to terminate employment with the Employer or,
(B) employ or offer employment to or participate in the employment or offer of employment by any
Person of any Employee.



Provided however, that the provisions of this Section 7(a) shall not be deemed to prohibit the
Employee’s ownership of publicly traded classes of stock outstanding of any publicly held company.
Provided further, that in the event this Agreement has been terminated pursuant to either Section
4(d) or 4(f) so that the Executive in entitled to receive payments at and following termination,
then if the Employer fails to make any payment to the Executive within twenty (20) days after the
Executive has given the Employer written notice that such payment is due, the Executive shall be
immediately released from any further obligations under this Section 7(a). For purposes of this
Section 7(a) a payment is deemed made by the Employer if it is hand-delivered on or before the due
date or mailed three days prior to the due date to the Executive’s last know address as provided to
the Employer by the Executive in accordance with the requirements of Section 11. Provided further,
that if there is a good faith dispute as to whether any payment under this Agreement is due, no
payment shall be due, and the provisions of this Section 7(a) shall continue in full force and
effect, until such dispute is finally resolved.



For purposes of this Section 7, the following terms shall be defined as follows:




     (b) “Person” means any individual, trust, partnership, corporation, limited liability
company, association, or other legal entity.



     (c) “Customer” means any Person with which the Employer or any subsidiary is currently
engaged to provide goods or services, has been engaged to provide goods or services within twelve
(12) months prior to the Date of Termination, or actively marketed, discussed a project with,
negotiated with, provided a bid to or otherwise communicated with in an effort to



	 	 	 
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obtain an engagement to provide goods or services sold by the Employer or any subsidiary within twelve (12)
months prior to the Date of Termination.




     (d) “Competing Business/Competing Services” means the manufacturing, distributing,
servicing, owning and operating of storage lockers, locks and keys for postal, recreational, law
enforcement and other applications.



     (e) “Employee” means any person who is employed by the Employer, any subsidiary or any
Affiliate.



     (f) “Restricted Period” means a period of one year following the date of termination
of the Executive’s employment under this Agreement; provided, however that in the case of the
restrictions set forth in Section 7(a)(v)(B), the Restricted Period shall mean a period of 90 days
following the date of termination of the Executive’s employment under this Agreement.


8. Confidential Information, Return of Corporate Property.




     (a) Confidential Information: The Executive acknowledges that the Employer’s trade
secrets, as they may exist from time to time, and information concerning its product development,
programs, technical information, procurement and sales activities and procedures, identity of
customers and potential customers, business plans, promotion and pricing techniques, credit and
financial data concerning customers, computer software, marketing plans, sales plans, manufacturing
plans, management organization information (including data and other information relating to
members of the Board and management), operating policies or manuals, business plans, financial
records, packaging or web-site design or other financial, commercial, business or technical
information relating to the Employer or any of its subsidiaries or information designated as
confidential or proprietary that the Employer or any of its subsidiaries may receive belonging to
suppliers, customers or others who do business with the Employer or any of its Subsidiaries are
valuable, special and unique assets of the Employer. In light of the highly competitive nature of
the industry in which the Employer’s business is conducted, the Executive agrees that all knowledge
and information described in the preceding sentence and heretofore or in the future obtained by the
Executive shall be considered Confidential Information unless such Confidential Information has
been previously disclosed to the public by the Employer or is in the public domain (other than by
reason of the Executive’s breach of this Section 8). The Employer shall provide the Executive with
full access to its Confidential Information. The Executive agrees that, except to the extent
required by an order of a court having competent jurisdiction or under subpoena from an appropriate
government agency, he will not disclose any Confidential Information to any Person or other entity
for any reason or purpose whatsoever, except as necessary in the performance of his duties as an
employee of or consultant to the Employer and then only upon a written confidentiality agreement in
such form and content as requested by the Employer from time to time, nor shall the Executive make
use of any such secrets, processes or information (other than information in the public domain,
except information in the public domain by reason of Executive’s breach of this Section 9) for his own
purposes or for the benefit of himself, any Person or other entity (except the Employer and its
subsidiaries, under any circumstances.



	 	 	 
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     (b) Return of Employer Property. Upon the termination of his employment with the
Employer, the Executive (or, as appropriate, his personal representatives) shall deliver promptly
to the Employer (without retaining copies of the same in any media), all property of the Employer
within the possession or under the control of the Executive (or, as appropriate, his personal
representatives).


9. Survival Beyond Termination.




     Sections 7 and 8 of this Agreement and the restrictions and obligations contained therein
shall survive the employment relationship and be binding regardless of the reason for termination
of employment.


10. Assignability.




     The Employer shall assign this Agreement and its rights and obligations hereunder in whole,
but not in part, to any corporation or other entity with or into which the Employer may hereafter
merge or consolidate or to which the Employer may transfer all or substantially all of its assets,
if in any such case said corporation or other entity shall by operation of law or expressly in
writing assume all obligations of the Employer hereunder as fully as if it had been originally made
a party hereto, but may not otherwise assign this Agreement or its rights and obligations
hereunder. The Executive may not assign or transfer this Agreement or any rights or obligations
hereunder.


11. Notice.




     For the purposes of this Agreement, notices and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed
by certified or registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:



     To the Employer:


American Locker Group Incorporated

815 South Main Street

Grapevine TX 76051

Fax: 817.722.0100

Attn: Chairman of the Board




     To the Executive:


Paul M. Zaidins



____________________



____________________




	 	 	 
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     In either case, with a copy to:


Timothy R. Vaughan

Hallett & Perrin, P.C.

2001 Bryan Street, Suite 3900

Dallas, Texas 75201



12. General Provisions.




     (a) Amendment and Waiver. No amendment or modification of this Agreement shall be
valid or binding upon (i) the Employer unless made in writing and signed by a duly authorized
officer of the Employer or (ii) the Executive unless made in writing and signed by him.



     (b) Non-Waiver of Breach. No failure by either party to declare a default due to any
breach of any obligation under this Agreement by the other, nor failure by either party to act
quickly with regard thereto, shall be considered to be a waiver of any such obligation, or of any
future breach. Waiver by any party hereto of any breach or default by the other party of any of
the terms of this Agreement shall not operate as a waiver of any other breach or default, whether
similar to or different from the breach or default waived. No waiver of any provision of this
Agreement shall be implied from any course of dealing between the parties hereto or from any
failure by either party hereto to assert its or his rights hereunder on any occasion or series of
occasions.



     (c) Severability. If any provision or portion of this Agreement, with the exception
of Sections 2 and 3, shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force
and effect.



     (d) Governing Law. To the extent not preempted by Federal law, the validity and
effect of this Agreement and the rights and obligations of the parties hereto shall be construed
and determined accordance with the law of the State of Texas.



     (e) Entire Agreement; Termination of Prior Agreement. This Agreement contains all of
the terms agreed upon by the Employer and the Executive with respect to the subject matter hereof
and supersedes all prior agreements, arrangements and communications between the parties dealing
with such subject matter, whether oral or written. All prior agreements between Executive and
Employer pertaining to Executive’s employment by the Employer, his compensation or benefits
following a termination of change of control of Employer are hereby terminated.



     (f) Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of the transferees, successors and assigns of the Employer, including any company or
corporation with which the Employer may merge or consolidate.



	 	 	 
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     (g) Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which when taken together, shall be and constitute
one and the same instrument.



     (h) Arbitration. If the parties hereto are unable to resolve their disputes or
controversies arising out of or relating to this Agreement or the performance, breach, validity,
interpretation or enforcement of this Agreement, or the Executive’s employment and/or termination,
including, without limitation, any and all claims or causes of action which may arise or be
asserted under federal, state or local regulatory, statutory or common law, and including, without
limitation, claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Americans with Disabilities Act, the Civil Rights Act of 1991, the Family
Medical Leave Act, the Texas Commission on Human Rights Act, wrongful discharge, breach of
contract, and tort (such as intentional infliction of emotional distress, libel, slander, invasion
of privacy or personal injury), all such disputes and controversies will be resolved by binding
arbitration in accordance with the United States Arbitration Act and the Commercial Arbitration
Rules of the American Arbitration Association (the “AAA”), and judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction thereof. A party hereto
shall initiate arbitration by sending written notice of its intention to arbitrate to the other
party and to the AAA office located in Dallas, Texas. Parties shall have the same period of time
to file claims as provided by the applicable statute of limitation for such claim. Such written
notice will contain a description of the dispute and the remedy sought. The arbitration will be
conducted at the offices of the AAA in Dallas, Texas before an independent and impartial arbitrator
acceptable to the parties hereto. If the parties have not mutually agreed on an acceptable
arbitrator within thirty (30) days after the demand for arbitration is filed, the arbitrator shall
be appointed in the manner provided by the Commercial Arbitration Rules of the AAA. The decision
of the arbitrator will be final and binding on the parties hereto and their successors and
assignees. Where consistent with applicable law, the arbitrator shall order the non-prevailing
party to pay the prevailing party’s attorney’s fees and all costs of the arbitration. The parties
will participate in good faith in a non-binding mediation of their dispute at least 60 days prior
to the date of the arbitration hearing. The parties shall jointly select the mediator but if they
are unable to agree on a mediator, then the arbitrator shall appoint the mediator. The parties
hereto intend that this agreement to arbitrate be irrevocable.



     (i) Compliance With Section 409A



          (1) This Agreement shall be interpreted to avoid any excise tax, penalty, or sanction
(collectively “Sanctions”) under Section 409A of the Internal Revenue Code, as amended (the
“Code”). If any payment or benefit cannot be provided or made at the time specified herein
without incurring Sanctions under Section 409A, then such benefit or payment shall be provided in
full at the earliest time thereafter when such Sanctions shall not be imposed. For purposes of
Section 409A of the Code, all payments to be made upon a termination of employment under this Agreement may only be made upon a “Separation of Service” (as defined in
Section 409A of the Code), and each payment made under this Agreement shall be treated as a
separate payment and the right to a series of installment payments under this Agreement is to be
treated as a right to a series of separate payments. In no event shall the Executive, directly or
indirectly, direct the calendar year of any payment. All reimbursements and in-kind benefits




	 	 	 
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provided under this Agreement shall be made or provided in accordance with the requirements of
Section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement
is for expenses incurred during the Executive’s lifetime (or during a shorter period of time
specified in this Agreement), (ii) the amount of expenses eligible for reimbursement, or in-kind
benefits provided, during a calendar year may not affect the expenses eligible for reimbursement,
or in-kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an
eligible expense will be made on or before the last day of the calendar year following the year in
which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits is not
subject to liquidation or exchange for another benefit.




          (2) Notwithstanding any provision in this Agreement to the contrary, if at the time of the
Executive’s Separation of Service with the Employer, the Employer has securities which are publicly
traded on an established securities market or otherwise (as determined by reference to Section 409A
of the Code) and the Executive is a “Specified Employee” (as defined in Section 409A of the Code)
and it is necessary to postpone the commencement of any severance benefits otherwise payable
pursuant to this Agreement as a result of such Separation of Service to prevent any accelerated or
additional tax under Section 409A of the Code, then Employer will postpone the commencement of the
payment of any such payments or benefits hereunder (without any reduction in such payments or
benefits ultimately paid or provided to the Executive) that are not otherwise paid within the
short-term deferral exception under Section 409A of the Code and are in excess of the lesser of two
(2) times (i) the Executive’s then-annual compensation or (ii) the limit on compensation then set
forth in Section 401(a)(17) of the Code, until the first payroll period that occurs after the date
that is six (6) months following the Executive’s Separation of Service with the Employer. If any
payments are postponed due to such requirements, such postponed amounts will be paid in a lump sum
to the Executive in the first payroll period that occurs after the date that is six (6) months
following the Executive’s Separation of Service with the Employer. If the Executive dies during
the postponement period prior to the payment of the postponed amount, the amounts withheld on
account of Section 409A of the Code shall be paid to the personal representative of the Executive’s
estate within sixty (60) days after the Executive’s death.




Signature page follows




	 	 	 
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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the
date and year first written above.



	 	 	 	 	 
	 	American Locker Group Incorporated,  

a Delaware corporation

 	 
	 	By:  	/s/ JOHN E. HARRIS
 	 
	 	 	Name:  	John E. Harris 	 
	 	 	Its:      Chairman of the Board 	 
	 
	 	 	 
	 	           /s/ PAUL M. ZAIDINS
 	 
	 	Paul M. Zaidins 	 
	 	 	 
	 



American Locker Group Incorporated

Employment Agreement





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