THE TIREX CORPORATION
EMPLOYMENT AGREEMENT
By and between:
--------------------------------------------------------------------------------
The Tirex Corporation Xxxxxxx X.X. Xxx.
3828 St-Xxxxxxx 310 xxxxxx Xxxxxxxx
Montreal and St-Bruno
Quebec, Canada Quebec, Canada
H4E 1A4 J3V 4P6
--------------------------------------------------------------------------------
(the "Corporation") (the "Executive")
* Unless context necessarily implies otherwise, all references herein
to the Corporation shall be to The Tirex Corporation, The Tirex Corporation
Canada Inc., Tirex Canada R&D Inc. and all other corporations, partnership, or
other entities, now or in the future controlled by, under common control with,
or in control of, The Tirex Corporation, jointly and severally.
Whereas the Executive has been employed by the Corporation since January 11,
1999 both as a direct employee and from September 24, 1999 to December 31, 2000
under a consulting agreement, and has since February 11, 1999 occupied the
position of Secretary-Treasurer and Chief Financial Officer of the Corporation,
and
Whereas, the Corporation desires to employ the Executive as Secretary-Treasurer
and Chief Financial Officer to serve in such position and the Executive is
willing to accept such employment with the Corporation on the following terms
and conditions.
Now therefore, it is agreed:
1 Preamble
The preamble shall form an integral part hereof.
2 Definitions
For the purposes of this Agreement, the following terms shall have the
following meanings:
2.1. Change in Control shall mean (i) the time that the Corporation
first determines that any person and all other persons who
constitute a group (within the meaning of Section 13(d) (3) of
the Securities Exchange Act of 1934 ("Exchange Act") have
acquired direct or indirect beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) of twenty
percent (20%) or more of the Corporation's outstanding
securities, unless a majority of the "continuing Directors",
as that term is defined in Paragraph 2.3, approves the
acquisition not later than ten (10) business days after the
Corporation makes that determination, or (ii) the first day on
which a majority of the members of the Corporation's Board of
Directors are not "Continuing Directors".
2
2.2. Constructive Termination shall mean termination by the
Corporation of the Executive's employment by reason of
material breach of this Agreement by the Corporation, such
"Constructive Termination" to be effective upon thirty (30)
days written notice thereof from the Executive to the
Corporation.
2.3. Continuing Directors shall mean, as of any date of
determination, any member of the Board of Directors of the
Corporation who (i) was a member of that Board of Directors on
January 1st, 2000, (ii) has been a member of that Board of
Directors for the two (2) years immediately preceding such
date of determination, or (iii) was nominated for election or
elected to the Board of Directors with the affirmative vote of
the greater of (x) a majority of the Continuing Directors who
were members of the Board at the time of such nomination or
election or (y) at least four Continuing Directors.
2.4. Effective Date shall mean January 1, 2001.
2.5. Termination For Cause shall mean termination by the
Corporation of the Executive's employment by the Corporation
by reason of the Executive's wilful dishonesty towards, fraud
upon, or deliberate injury or attempted injury to, the
Corporation or by reason of the Executive's wilful material
breach of this Agreement which has resulted in material injury
to the Corporation. For purposes of this paragraph, no act or
failure to act on the Executive's part shall be considered
"wilful" or "deliberate" unless done or omitted to be done, by
him not in good faith and without reasonable belief that his
action or omission was in the best interest of the
Corporation. Notwithstanding the foregoing, the Executive
shall not be deemed to have been terminated for Cause without
(in written notice to the Executive setting forth the reasons
for the Corporation's intention to terminate for Cause, (ii)
an opportunity on not less than twenty (20) days written
notice from the Corporation to the Executive for the
Executive, together with his counsel, to be heard before the
full Board of Directors of the Corporation, and (iii) delivery
to the Executive of a Notice of Termination as defined in
Paragraph 7.9 hereof from the Board of Directors finding that,
following such hearing before the Board, in the good faith
opinion of such Board, the Executive was guilty of conduct set
forth above and specifying the particulars thereof in detail.
2.6. Termination for "Good Reason" shall mean termination by the
Executive of the Executive's employment by the Corporation
because of: (i) a "Change in Control", as defined in Paragraph
2.1 above, (ii) a failure by the Corporation to comply with
any material provision of this Agreement which has not been
cured within ten (10) days after notice of such non-compliance
has been given by the Executive to the Company, (iii) the
determination by the Executive that because of changes in the
composition or policies of the Board of Directors of the
Corporation, or of other events or occurrences of material
effect, that the Executive can no longer properly and
effectively discharge his responsibilities as Chief Executive
Officer of the Corporation after giving the Corporation not
less than thirty (30) days prior written notice of the
effective date of such termination, or (iv) any purported
termination of the Executive's employment which is not
effected pursuant to a Notice of Termination satisfying the
requirements of Paragraph 7.9 hereof (and for purposes of this
Agreement no such purported termination shall be effective).
2.7. Termination Other Than For Cause shall mean termination by the
Corporation of the Executive's employment by the Corporation
(other than in a Termination for Cause) and shall include
"Constructive Termination", as that term is defined in
Paragraph 2.1.
3
2.8. Termination Upon a Change in Control shall mean a termination
by the Corporation of the Executive's employment with the
Corporation within 120 days following a Change in Control, as
that term is defined in Paragraph 2.1.
2.9. Voluntary Termination shall mean termination by the Executive
of the Executive's employment by the Corporation other than
(i) Constructive Termination, (ii) Termination upon a Change
in Control, (iii) Termination for Good Reason, and (iv)
termination by reason of the Executive's death or disability
as described in Paragraphs 7.4 and 7.5.
3 Employment
3.1 During the term of this Agreement, the Executive agrees to be
employed by the Corporation and to serve as its
Secretary-Treasurer and Chief Financial Officer and the
Corporation agrees to employ and retain the Executive in such
capacity.
4 Extent of Services
4.1 With the exception of reasonable periods of time to permit the
Executive to manage his own consulting practice, operating
under the names Ashbyrne Investments Inc., Ashbyrne
Consultants Inc. and Cove Investmetns Ltd., of which Tirex is
aware and consents to, the Executive shall devote most of his
working time, attention and energies to the performance of his
duties and shall not be engaged in any other business activity
other than as noted above, whether or not pursued for gain,
without the consent of the Company. The Executive shall at all
times faithfully and to the best of his ability perform his
duties under this Agreement. The duties shall be rendered at
either the office of Ashbyrne Investments Inc. or at the
Corporation's office in Montreal, Quebec, or at such other
place or places and at such times as the needs of the
Corporation may from time-to-time dictate.
5 Term
5.1 The term of this Agreement shall be deemed to have begun on
the Effective Date, and shall continue for the three (3) year
period which commenced on the Effective Date and shall end on
December 31, 2003. The Agreement shall thereafter be extended
for additional periods of one (1) year unless one party
notifies the other of its intention not to extend the
Agreement, at least four (4) months before the end of the
initial term or of any subsequent extension term.
5.2 The parties mutually agree that each party to this Agreement
shall have the right to review this Agreement annually and,
subject to Articles 7.3, 7.8 and 8.1 following, to propose
modifications thereto.
6 Salary, Benefits and Bonus Compensation
6.1 Base Salary. As payment for the services to be rendered by the
Executive as provided in Sections 3 and 4, the Corporation
agrees to pay to the Executive a Base Salary for the twelve
(12) calendar months beginning the Effective Date at the rate
of one hundred thousand US dollars (US$100,000) per annum
payable in twelve (12) equal monthly instalments of $8,333.33,
subject to annual review and increase, as the Board of
Directors shall determine. Should the time spent on Tirex
business drop below 75% of a standard forty-hour week, the
parties agree to renegotiate the terms of this Agreement.
4
6.2 Bonuses. The Executive shall be eligible to receive a
discretionary bonus for each year (or portion thereof) during
the term of this Agreement and any extensions thereof, with
the actual amount of any such bonus to be determined in the
sole discretion of the Board of Directors based upon its
evaluation of the Executive's performance during such year.
All such bonuses shall be reviewed annually by the
Compensation Committee, if any shall be in existence. Such
bonuses shall be paid either in cash or by fully paid up
shares of the Corporation.
6.3 Additional Benefits. During the term of this Agreement, the
Executive shall be entitled to the following fringe benefits:
6.3.1 Executive Benefits.
The Executive shall be eligible to participate in such
of the Corporation's benefits and deferred
compensation plans as are now generally available or
later made generally available to executive officers,
including, without limitation, the Corporation's Stock
Option Plan, profit sharing plans, annual physical
examinations, dental and medical plans, personal
catastrophe and disability insurance, financial
planing, retirement plans and supplementary executive
retirement plans, if any. For purposes of establishing
the length of service under any benefit plans or
programs of the Corporation, the Executive's
employment with will be deemed to have commenced on
the Effective Date.
6.3.2 Stock Option
At the beginning of each year of this Agreement, the
Executive shall be granted a two-year option to
purchase up to 1,000,000 common shares of the Company.
During the first year, the option price will be equal
to the lesser of twenty cents (20(cent)) per share or
50% of the closing bid price of the day preceding the
date the option was exercised. For the second and
third years of this Agreement, the options granted to
the Executive will be exercisable at a price equal to
the lesser of forty cents (40(cent)) per share or 50%
of the closing bid price of the day preceding the date
the option was exercised for the options applicable to
calendar 2002, and at a price equal to the lesser of
fifty cents (50(cent)) per share or 50% of the closing
bid price of the day preceding the date the option was
exercised for the options applicable to calendar 2003.
The Executive shall be entitled to exercise the option
on a "cashless" basis, under which the actual number
of shares to be issued shall be closing bid price of
the day preceding the date the option was exercised
minus the exercise price multiplied by the number of
options exercised.
6.3.3 Vacation.
The Executive shall be entitled to reasonable
vacation time for each year during the term of this
Agreement and any extensions thereof.
6.3.4 Automobile.
The Executive shall be compensated for the use of his
automobile at the rate of 0.50 per kilometre which
rate shall be increased, at the end of each year,
with the increase in the cost of living index
(general - all products and services - Montreal
region).
5
6.4 Reimbursement for Expenses.
During the term of this Agreement, the Corporation shall
reimburse the Executive for reasonable and properly documented
out-of-pocket business and/or entertainment expenses incurred
by the Executive in connection with his duties under this
Agreement.
7 Termination
7.1 Termination For Cause.
Termination For Cause may be effected by the Corporation in
accordance with the procedures set forth in Paragraph 2.5 at
any time during the term of this Agreement and shall be
effected by written notification to the Executive in
accordance with Paragraph 7.9 below. Upon the effectiveness of
a Termination For Cause, the Executive shall promptly be paid
all accrued salary, bonus compensation to the extent earned,
vested deferred compensation (other than pension plan or
profit sharing plan benefits which will be paid in accordance
with the applicable plan), any benefits under any plans of in
which the Executive is a participant to the full extent of the
Executive's rights under such plans, accrued vacation pay and
any appropriate business expenses incurred by the Executive in
connection with his duties hereunder, all to the date of
termination, but the Executive shall not be paid any other
compensation or reimbursement of any kind.
7.2 Termination Other Than For Cause.
Notwithstanding anything else in this Agreement, the
Corporation may effect a Termination Other Than For Cause at
any time upon giving written notice to the Executive of such
termination. Upon the effectiveness of any Termination Other
Than For Cause, the Executive shall promptly be paid all
accrued salary, bonus compensation to the extent earned,
vested deferred compensation (other than pension plan or
profit sharing plan benefits which will be paid in accordance
with the applicable plan), any benefits under any plans of in
which the Executive is a participant to the full extent of the
Executive's rights under such plans (including accelerated
vesting, if any, of awards granted to the Executive under the
Corporations' stock option plan), accrued vacation pay and any
appropriate business expenses incurred by the Executive in
connection with his duties hereunder, all to the date of
termination, and all severance compensation as provided in
Paragraph 8.1.
7.3 Termination For Good Reason.
Notwithstanding anything else in this Agreement, the Executive
may effect a Termination for Good Reason at any time upon
giving written notice to the Corporation of such termination
in accordance with the provisions of Paragraph 7.9 hereof.
Upon the effectiveness of any Termination for Good Reason, the
Executive shall promptly be paid all accrued salary, bonus
compensation to the extent earned, vested deferred
compensation (other than pension plan or profit sharing plan
benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of in which the Executive
is a participant to the full extent of the Executive's rights
under such plans (including accelerated vesting, if any, of
awards granted to the Executive under stock option plan),
accrued vacation pay and any appropriate business expenses
incurred by the Executive in connection with his duties
hereunder, all to the date of termination, and all severance
compensation as provided in Paragraph 8.1.
6
7.4 Termination by Reason of Disability.
If, during the term of this Agreement, the Executive fails to
perform his duties under this Agreement on account of illness
of physical or mental incapacity, and such illness or
incapacity continues for a period of more than twelve (12)
consecutive months, the Corporation shall have the right to
terminate the Executive's employment hereunder by written
notification to the Executive and payment to the Executive of
all accrued salary, bonus compensation to the extent earned,
vested deferred compensation (other than pension plan or
profit sharing plan benefits which will be paid in accordance
with the applicable plan), any benefits under any plans of in
which the Executive is a participant to the full extent of the
Executive's rights under such plans, accrued vacation pay and
any appropriate business expenses incurred by the Executive in
connection with his duties hereunder, all to the date of
termination, with the exception of medical and dental benefits
which shall continue through the expiration of this Agreement,
but the Executive shall not be paid any other compensation or
reimbursement of any kind.
7.5 Death.
In the event of the Executive's death during the term of this
Agreement, the Executive's employment shall be deemed to have
terminated as of the last day of the month during which his
death occurs and the Corporation shall promptly pay to his
estate or such beneficiaries as the Executive may from time to
time designate all accrued salary, bonus compensation to the
extent earned, vested deferred compensation (other than
pension plan or profit sharing plan benefits which will be
paid in accordance with the applicable plan), any benefits
under any plans of in which the Executive is a participant to
the full extent of the Executive's rights under such plans,
accrued vacation pay and any appropriate business expenses
incurred by the Executive in connection with his duties
hereunder, all to the date of termination, but the Executive's
estate shall not be paid any other compensation or
reimbursement of any kind.
7.6 Voluntary Termination.
In the event of a Voluntary Termination, the Corporation shall
promptly pay all accrued salary, bonus compensation to the
extent earned, vested deferred compensation (other than
pension plan or profit sharing plan benefits which will be
paid in accordance with the applicable plan), any benefits
under any plans of in which the Executive is a participant to
the full extent of the Executive's rights under such plans,
accrued vacation pay and any appropriate business expenses
incurred by the Executive in connection with his duties
hereunder, all to the date of termination, but no other
compensation or reimbursement of any kind.
7.7 Termination Upon a Change in Control.
In the event of a Termination Upon the effectiveness of a
Change in Control, the Executive shall immediately be paid all
accrued salary, bonus compensation to the extent earned,
vested deferred compensation (other than pension plan or
profit sharing plan benefits which will be paid in accordance
with the applicable plan), any benefits under any plans of in
which the Executive is a participant to the full extent of the
Executive's rights under such plans (including accelerated
vesting, if any, of any awards granted to the Executive under
the Corporation's Stock Option Plan), accrued vacation pay and
any appropriate business expenses incurred by the Executive in
connection with his duties hereunder, all to the date of
termination and all severance compensation as provided in
Paragraph 8.1.
7
7.8 Constructive Termination.
The Executive may give notice to the Corporation that the
Corporation has effected a Constructive Termination of the
Executive's employment by reason of the Corporation's material
breach of this Agreement, by written notification to the
Corporation in accordance with Paragraph 7.9 below. Upon the
effectiveness of any Constructive Termination, the Executive
shall immediately be paid all accrued salary, bonus
compensation to the extent earned, vested deferred
compensation (other than pension plan or profit sharing plan
benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of in which the Executive
is a participant to the full extent of the Executive's rights
under such plans (including accelerated vesting, if any, of
any awards granted to the Executive under the Corporation's
Stock Option Plan), accrued vacation pay and any appropriate
business expenses incurred by the Executive in connection with
his duties hereunder, all to the date of termination, and all
severance compensation provided in Paragraph 8.1.
7.9 Notice of Termination.
The Corporation may effect a termination of this Agreement
pursuant to the provisions of this Section upon giving thirty
(30) days written notice to the Executive of such termination.
The Executive may effect a termination of this Agreement
pursuant to the provisions of this Section upon giving thirty
(30) days written notice to the Corporation of such
termination.
8 Severance Compensation
8.1 Severance Compensation in the Event of: Termination Other Than
for Cause Pursuant to Paragraph 7.2; Termination for Good
Reason Pursuant to Paragraph 7.3; Termination Upon a Change in
Control Pursuant to Paragraph 7.7; or a Constructive
Termination Pursuant to Paragraph 7.8.
In the event the Executive's employment is terminated by a
Termination Other Than for Cause pursuant to Paragraph 7.2, by
a Termination for Good Reason pursuant to Paragraph 7.3, by a
Termination upon a Change in Control pursuant to Paragraph
7.7, or by a Constructive Termination pursuant to Paragraph
7.8, the Executive shall be paid as severance compensation
twice the amount of his yearly Base Salary at the rate payable
at the time of such termination. In addition to the above
Severance Compensation, the Executive shall be entitled to an
additional amount equivalent to four (4) months of his Base
Salary at the rate payable at the time of such termination,
for each year of service to the Corporation, as Executive from
and after February 11th, 1999 (in the event that the
termination occurs before January 1st of any given year, the
additional Severance Compensation of four (4) months per year
shall be prorated for the number of months elapsed. The
Executive shall also be entitled to an accelerated vesting of
any awards granted to the Executive under the Corporation's
Stock Option Plan or any other employee or to the extent
provided in the stock - executive compensation plans then in
effect, stock option or other affiliated agreement, if any,
entered into at the time of grant or award. The Executive
shall continue to accrue retirement benefits and shall
continue to enjoy any benefits under any plans of in which the
Executive is a participant to the full extent of the
Executive's rights under such plans, including any perquisites
provided under this Agreement, though the remaining term of
this Agreement; provided, however, that the benefits under any
such plans of in which the Executive is a participant,
including any such perquisites, shall cease upon re-employment
by a new employer. By way of additional severance
compensation, the Corporation shall issue to the Executive
within five (5) business days of the date of termination, a
number of shares of the common stock of the Corporation equal
8
to the number of shares of such common stock, if any, which
the Executive shall have forfeited under the terms of the
Stock Restriction Agreement, attached as Exhibit "A" hereto,
which stock shall be fully registered under a Form S-8
registration statement, if available to the Corporation, or if
such Form shall not be available to the Corporation, the
Corporation shall immediately take steps to register such
shares with the Securities and Exchange Commission on such
Form of registration statement as shall then be available to
the Corporation, including without limitation Form S-1.
8.2 No Severance Compensation Upon Other Termination.
In the event of Termination For Cause pursuant to Paragraph
7.1, or termination by reason of the Executive's Disability or
Death pursuant to Paragraphs 7.4 or 7.5, or Voluntary
Termination pursuant to Paragraph 7.6 hereof, neither the
Executive nor his estate shall be paid any severance
compensation.
9 Confidentiality
9.1 The Executive agrees that all confidential and proprietary
information relating to the business of the Corporation shall
be kept and treated as confidential both during and after the
term of this Agreement, except as may be permitted in writing
by the Corporation's Board of Directors or as such information
is within the public domain or comes within the public domain
without any breach of this Agreement.
9.2 The Executive acknowledges that he will develop and be exposed
to information that is or will be confidential and proprietary
to the Corporation. The information includes customer lists,
technology designs, plans and information, marketing plans,
pricing data, product plans, software, and other intangible
information. Such information shall be deemed confidential to
the extent not generally known within the trade. The Executive
agrees to make use of such information only in the performance
of his duties under this Agreement to maintain such
information in confidence and to disclose the information only
to persons with a need to know.
10 Withholdings
All compensation and benefits to the Executive hereunder shall be
reduced by all federal, provincial, state, local and other withholdings
and similar taxes and payments required by applicable law.
11 Indemnification
In addition to any rights to indemnification to which the Executive is
entitled to under the Corporation's Articles of Incorporation and
Bylaws, the Corporation shall indemnify the Executive at all times
during and after the term of this Agreement to the maximum extent
permitted under all laws applicable for any act or omission of the
Executive, either in his capacity of employee or of Officer, and shall
pay the Executive's expenses in defending any civil or criminal action,
suit, or proceeding in advance of the final disposition of such action,
suit or proceeding, to the maximum extent permitted under such
applicable laws. Such indemnification shall apply for whatever cause of
action, instituted by any person whatsoever.
9
12 Notices
Any notices permitted or required under this Agreement shall be
delivered by hand, certified mail, or recognised overnight courier, in
all cases with written proof or receipt required, addressed to the
parties as set forth below and shall be deemed given upon receipt
to the Corporation at:
The Tirex Corporation
0000 Xx-Xxxxxxx
Xxxxxxxx
Xxxxxx, Xxxxxx X0X 0X0
to the Executive at:
Xxxxxxx Xxx
310 xxxxxx Xxxxxxxx
St-Bruno
Quebec, Canada J3V 4P6
or at any other address as any party may, from time to time, designate
by notice given in compliance with this Paragraph.
13 Law Governing
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Quebec.
14 General
15.1 Titles and Captions.
All sections, titles or captions contained in this Agreement
are for convenience only and shall not be deemed part of the
context nor effect the interpretation of this Agreement.
15.2 Entire Agreement.
This Agreement contains the entire understanding between and
among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this
Agreement.
15.3 Agreement Binding.
This Agreement shall be binding upon the heirs, executors,
administrators, successors and assigns of the parties hereto.
15.4 Computation of Time.
In computing any period of time pursuant to this Agreement,
the day of the act, event or default from which the designated
period of time begins to run shall be included, unless it is a
Saturday, Sunday or a legal holiday, in which event the period
shall begin to run on the next day which is not a Saturday,
Sunday, or legal holiday, in which event the period shall run
until the end of the next day thereafter which is not a
Saturday, Sunday or legal holiday.
15.5 Pronouns and Plurals.
All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine, neuter, singular or plural
as the identity of the person or persons may require.
10
15.6 Presumption.
This Agreement or any section thereof shall not be construed
against any party due to the fact that said Agreement or any
section thereof was drafted by said party.
15.7 Further Action.
The parties hereto shall execute and deliver all documents,
provide all information and take or forbear from all such
action as may be necessary or appropriate to achieve the
purposes of the Agreement.
15.8 Parties in Interest.
Nothing herein shall be construed to be to the benefit of any
third party, nor is it intended that any provision shall be
for the benefit of any third party.
15.9 Savings Clause.
If any provision of this Agreement or the application of such
provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement or the application of
such provision to persons or circumstances other than those as
to which it is held invalid, shall not be affected thereby.
Signed this 26th day of May , 2001, in Xxxxxxxx, Xxxxxx, Xxxxxx
--------------- ---------
--------------------------------------------------------------------------------
For and on behalf of For and on behalf of
The Tirex Corporation The Executive
--------------------------------------------------------------------------------
/s/ XXXX X. XXXXXXXX, XX. /s/ XXXXXXX X.X. XXX
--------------------------------------------------------------------------------
Xxxx X Xxxxxxxx, xx Xxxxxxx X.X. Xxx
President & CEO
--------------------------------------------------------------------------------
