Consulting Agreement

Exhibit 10.24


CONSULTING AGREEMENT


CONSULTING AGREEMENT, dated as of October 3, 2002 (the "Agreement"), by and between Advanced Glassfiber Yarns, LLC, with principal offices at 2556 Wagener Road, Aiken, South Carolina, 29801 ("AGY" or the "Company") and Carl Marks Consulting Group LLC with principal offices at 135 East 57th Street, New York, NY 10022 ("CMCG" or "Consultant").


WHEREAS, AGY desires to engage the financial and management consulting services of CMCG, subject to the terms and conditions hereinafter set forth; and


WHEREAS, CMCG has agreed to provide such financial and management consulting services subject to the terms and conditions hereinafter set forth;


NOW THEREFORE, in consideration of the above premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


1. Engagement: AGY hereby agrees to engage CMCG, and CMCG hereby agrees to serve AGY, as a financial and management consultant (it being understood and agreed that CMCG is not being engaged to act as financial advisors to AGY and CMCG acknowledges that Credit Suisse First Boston ("CSFB") has been engaged by AGY for such purpose). It is further agreed that Marc L. Pfefferle, a Partner of CMCG, will serve as the project partner on this engagement with Mark L. Claster, a Partner of CMCG, serving as the review partner. Gary Bernhardy, a Managing Director of CMCG, will serve as a senior consultant assigned to the engagement. Messrs. Pfefferle and Claster shall supervise this engagement with whatever resources from CMCG are needed. AGY understands and acknowledges that CMCG and Messrs. Pfefferle and Claster will devote substantial time, but not full time, to this engagement. Mr. Bernhardy will work full time on site on the engagement.


2. Scope: CMCG will serve AGY as Chief Restructuring Officer, ("CRO") (Marc Pfefferle) and as Chief Operating Officer, ("COO") (Gary Bernhardy). In this capacity, it is understood that CMCG will report to the Board of Directors (the "Board").


During the first eight weeks of this engagement, Messrs. Pfefferle and Bernhardy will assume the roles of CRO and COO, in order to further develop and confirm AGY's operating budget. CMCG will review operations, assess preliminary strategic options, and develop a short to medium range restructuring plan. CMCG will begin work to reduce costs, improve business operations, and support ongoing financial restructuring efforts already underway. During this time period, CMCG will supplement Mr. Pfefferle and Mr. Bernhardy with an operational and a


financial consultant in order to facilitate preparation of the budget to be presented to the bank group, following approval by the AGY Board, and to prepare an action plan for approval by the Board.


The Scope of activities thereafter will be to lead the implementation of the restructuring plan and the development of additional strategic plans to maximize value for all stakeholders. All material operational and/or strategic decisions recommended by CMCG shall be presented to and approved by the Board. All material communications which CMCG shall undertake with creditor constituencies on behalf of AGY shall be conducted along with a designee of the Board unless otherwise agreed by the Board.


CMCG will perform the following services:


CRO/Business Restructuring


A. First Eight Weeks


. Provide the day-to-day senior management of the Company and its
operations, including, but not limited to the preparation and
execution of required SEC reports (it being understood that CMCG shall
have the authority to implement, to the extent not already in place,
procedures and mechanisms deemed necessary to ensure adequate
compliance with the financial certification provision of the recently
enacted Sarbanes-Oxley legislation, or other applicable provisions of
law)


. Work with current management to develop a short-term budget for
presentation to the Bank Group


. Quickly analyze performance of all areas of business (plants, product
lines, channels, regions, etc.)


. Reassure customers, vendors, and lenders, as appropriate


. Undertake immediate in-depth operational, financial and organizational
analysis to better define issues and opportunities, and assess
management


. Evaluate options and prepare an action plan and recommendations; begin
to implement immediately where appropriate


. Evaluate bankruptcy options and their suitability to AGY, with Company
counsel


. Develop (validate, analyze and expand upon to the extent it exists) an
enterprise wide operational restructuring plan:


- Geared to support proposed/agreed upon balance sheet
restructuring


- Gain Board and constituent approvals


. Act as the management representative in connection with negotiations
with union representatives for the employees of AGY's Huntington,
Pennsylvania facility


B. Subsequent Periods


. Drive implementation of agreed short-term restructuring plan,
including operational changes required to support any agreed upon
financial restructuring


. Implement continued aggressive cost cutting across the business and
other EBITDA improvements


. Continue to reassure customers, vendors, and lenders, as appropriate


. Improve/re-focus marketing and sales as necessary and in concert with
the development of strategic and marketing plans


. Work with and direct CSFB to complete balance sheet restructuring with
constituents


. Modify short-term restructuring plan as appropriate, develop longer
term restructuring and strategic plan


Strategic Planning Activities


. Complete strategic assessment to include:


- Industry analysis


- Competitive analysis


- Assessment of AGY strategic/competitive position, strategic
capabilities, leverageable assets and barriers/constraints


- In conjunction with the operational assessment, deter ...