Exhibit 10.5
THIS AGREEMENT made as of the 1st day of January, 2000
AMONG:
ISLAND CRITICAL CARE CORP.
a corporation incorporated under the laws of Ontario,
(hereinafter referred to as the "Corporation"),
OF THE FIRST PART,
-and-
XXXXXXX XXXXXX
of the City of Nepean, in the province of Ontario,
(hereinafter referred to as the "Executive"),
OF THE SECOND PART.
WHEREAS the Corporation wishes to retain the services of the Executive to
provide the services hereinafter described during the term hereinafter set out;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants and agreements herein contained and for other good and valuable
consideration, the parties agree as follows:
1 TERM
1.1 The Corporation shall employ the Executive for an unlimited term
commencing on January 1, 2000 unless such employment shall be
terminated earlier as hereinafter provided.
2 DUTIES
2.1 The Executive shall serve the Corporation and any subsidiaries of the
Corporation in such capacity or capacities and shall perform such
duties and exercise such powers pertaining to the management and
operation of the Corporation and any subsidiaries and associates of
the Corporation as may be determined from time to time by the board of
directors of the Corporation consistent with the office of the
Executive. Without limitation of the foregoing, the Executive shall
occupy the office of the President and Chief Executive Officer of the
Corporation. The Executive shall:
(1) devote his full time and attention and his best efforts during
normal business hours to the business and affairs of the
Corporation;
(2) perform those duties that may reasonably be assigned to the
Executive diligently and faithfully to the best of the
Executive's abilities and in the best interests of the
Corporation; and
(3) use his best efforts to promote the interests and goodwill of the
Corporation.
3 REPORTING PROCEDURES
3.1 The Executive shall report to the person holding the office of
Chairman. The Executive shall report fully on the management, operations
and business affairs of the Corporation and advise to the best of his
ability and in accordance with reasonable business standards on business
matters that may arise from time to time during the term of this
agreement.
4 REMUNERATION
4.1 The annual base salary payable to the Executive for his services
hereunder for the first year of this agreement shall be one hundred
and fifty thousand dollars of lawful currency of Canada (Cdn$
150,000.00), exclusive of bonuses, benefits and other compensation.
The annual base salary payable to the Executive for his services
hereunder for each successive year of the term of this agreement,
exclusive of bonuses, benefits and other compensation, shall increase
by eight (8%) of the annual base salary for the immediately preceding
year. The annual base salary payable to the Executive pursuant to the
provisions of this section 4 shall be payable in equal bi-weekly
installments in arrears in such other manner as may be mutually agreed
upon, less, in any case, any deductions or withholdings required by
law.
4.2 The Corporation shall provide the Executive with employee benefits
comparable to those provided by the Corporation from time to time to
other senior executives of the Corporation and shall permit the
Executive to participate in any share option plan, share purchase
plan, retirement plan or similar plan offered by the Corporation from
time to time to its senior executives in the manner and to the extent
authorized by the board of directors of the Corporation.
4.3 The Executive shall be entitled to receive ONE THOUSAND compensation
options which shall vest in the Executive monthly, in arrears, and may
be exercised by the Executive at a fixed price of $0.25 per option for
a period of three years after vesting. In the event that an option
shall not be exchanged for a common share within the time limit
proscribed, it shall expire and be rescinded absolutely.
5 PERFORMANCE BONUS
5.1 In addition to the Executive's annual base salary, the Executive shall
participate in the Corporation's executive bonus plan (the "Plan")
described in Schedule A attached hereto in the manner described in
Schedule A.
6 NO FURTHER SALARY OR BONUS ADJUSTMENTS
6.1 Other than as herein provided, there shall be no cost-of-living
increase or merit increase in the annual base salary or the executive
bonus unless agreed to in writing by the Corporation.
7 VACATION
7.1 The Executive shall be entitled to five (5) weeks' paid vacation per
fiscal year of the Corporation at a time approved in advance by the
Chairman, which approval shall not be unreasonably withheld but shall
take into account the staffing requirements of the Corporation and the
need for the timely performance of the Executive's responsibilities.
In the event that the Executive decides not to take all the vacation
to which he is entitled in any fiscal year, the Executive shall be
entitled to accumulate such vacation entitlement from year to year
and, in the event the Executive shall have any accumulated vacation
entitlement as of the termination of his employment he may elect to be
paid for such vacation time at a rate equal to the weekly value of the
base compensation, as adjusted, times three (3).
8 AUTOMOBILE
8.1 The Executive shall be supplied with a leased car selected by the
Corporation to be used by him for the Corporation's business. The
Corporation shall pay or reimburse the Executive for reasonable
operating costs of this vehicle, including leasing costs, insurance,
maintenance, gas and oil and taxes properly incurred or to be incurred
in connection with the Executive carrying out his duties hereunder to
a maximum of six hundred and twenty-five dollars ($625.00) per month.
The Executive shall supply the Corporation with the originals of all
invoices or statements in respect of which the Executive seeks
reimbursement.
9 EXPENSES
9.1 The Executive shall be reimbursed for all reasonable travel and other
out-of-pocket expenses actually and properly incurred by the Executive
from time to time in connection with carrying out his duties
hereunder. For all such expenses the Executive shall furnish to the
Corporation originals of all invoices or statements in respect of
which the Executive seeks reimbursement.
9.2 It is understood and agreed that it is of value for the Executive to
belong to a private sports or business club and as such the
Corporation agrees to pay the annual fees or dues of such membership
on condition that the Executive shall make such facilities available
to the Corporation when necessary for the purpose of developing new
business, entertaining customers, for employee appreciation or other
functions which have a direct and identifiable financial benefit to
the Corporation.
9.3 In the event that the Corporation shall require the Executive to
relocate to Xxxxxx Xxxxxx Island, Canada, the Corporation agrees to
reimburse the Executive for all tolls, fees and taxes incurred by the
executive for using the bridge and/or ferry service provided.
10 TERMINATION
10.1 CAUSE: The Corporation may terminate the employment of the Executive
without notice or any payment in lieu of notice for cause which,
without limiting the generality of the foregoing, shall include:
(1) if there is a repeated and demonstrated failure on the part of
the Executive to perform the material duties of the Executive's
position in a competent manner and where the Executive fails to
substantially remedy the failure within a reasonable period of
time after receiving written notice of such failure from the
Corporation;
(2) if the Executive is convicted of a criminal offence involving
fraud or dishonesty;
(3) if the Executive or any member of his family makes any personal
profit arising out of or in connection with a transaction to
which the Corporation is a party or with which it is associated
without making disclosure to and obtaining the prior written
consent of the Corporation;
(4) if the Executive breaches his fiduciary duties to the
Corporation, including the duty to act in the best interests of
the Corporation; or
(5) if the Executive disobeys reasonable instructions given in the
course of employment by the Chairman or the board of directors of
the Corporation that are not inconsistent with the Executive's
management position and not remedied by the Executive within a
reasonable period of time after receiving written notice of such
disobedience.
10.2 DISABILITY/DEATH: This agreement may be immediately terminated by the
Corporation by notice to the Executive if the Executive becomes
permanently disabled.
(1) The Executive shall be deemed to have become permanently disabled
if in any year during the employment period, because of ill
health, physical or mental disability, or for other causes beyond
the control of the Executive, the Executive has been continuously
unable or unwilling or has failed to perform the Executive's
duties for 120 consecutive days, or if, during any year of the
employment period, the Executive has been unable or unwilling or
has failed to perform his duties for a total of 180 days,
consecutive or not. The term "any year of the employment period"
means any period of 12 consecutive months during the employment
period.
(2) This agreement shall terminate without notice upon the death of
the Executive.
11 SEVERANCE PAYMENTS
11.1 Upon termination of the Executive's employment:
(1) for cause;
(2) by the voluntary termination of employment of the Executive; or
(3) by the nonrenewal of this Agreement, the Executive shall not be
entitled to any severance payment other than compensation earned
by the Executive before the date of termination calculated pro
rata up to and including the date of termination.
11.2 If the Executive's employment is terminated for any other reason other
than the reasons set forth in subsection 11.1, the Executive shall be
entitled to receive the lesser of the total of:
(1) 24 months' salary at the then applicable base salary rate;
together with,
(2) the present value, as determined by the Chairman, acting
reasonably, of the benefits described in section 4.2 that would
be enjoyed by the Executive during the next 24 months assuming
his employment was not terminated and assuming the then current
level of benefits were continued for those 24 months; together
with,
(3) the present value, as determined by the Chairman, acting
reasonably, of the amount that the Chairman estimates would be
the amount payable to the Executive out of the Executive Bonus
Pool assuming that the Executive's employment was not terminated
until the end of the current fiscal year and all other
participants of the Executive Bonus Pool continued in the
employment of the Corporation for the full then current fiscal
year; together with,
(4) the present value, as determined by the Chairman, acting
reasonably, of the amounts that would have been paid by the
Corporation or reimbursed to the Executive pursuant to sections 8
and 9 during the next 24 months assuming that his employment had
not been terminated; AND
(5) the salary otherwise payable to the Executive for the unexpired
term of this agreement together with the other amounts described
in clause 11.2(a) through 11.2(d), mutatis mutandis.
11.3 The payment described in this subsection 11.2 is the only severance
payment the Executive will receive in the event of the termination of
this agreement for reasons contemplated in this subsection 11.2.
11.4 If the Executive's employment is terminated as a result of the
permanent disability OR death of the Executive, the Executive or his
estate, as applicable, shall be entitled to receive, within 30 days of
the date of such termination, the balance of the base salary that
would otherwise be paid to the Executive during the remainder of the
term of this agreement. The Executive agrees to reasonably comply with
all requirements necessary for the Corporation to obtain life
insurance for the term of this agreement.
11.5 For the purposes of this section 11, whenever a payment is to be
determined with reference to the remaining term of this agreement, if
less than six months remain in the term of this agreement and no party
has given notice of its intention not to renew this agreement as
contemplated by section 1, the "remaining term of this agreement"
shall include the remainder of the then existing term of this
agreement plus the renewal period.
12 CONFIDENTIALITY:
12.1 The Executive acknowledges and agrees that:
(1) in the course of performing his duties and responsibilities as an
officer of the Corporation, he has had and will continue in the
future to have access to and has been and will be entrusted with
detailed confidential information and trade secrets (printed or
otherwise) concerning past, present, future and contemplated
products, services, operations and marketing techniques and
procedures of the Corporation and its subsidiaries, including,
without limitation, information relating to addresses,
preferences, needs and requirements of past, present and
prospective clients, customers, suppliers (which, for all
purposes of this agreement, shall be deemed to include, without
limitation, (list appropriate suppliers) and employees of the
Corporation and its subsidiaries (collectively, "Trade Secrets"),
the disclosure of any of which to competitors of the Corporation
or to the general public, or the use of same by the Executive or
any competitor of the Corporation or any of its subsidiaries,
would be highly detrimental to the interests of the Corporation;
(2) in the course of performing his duties and responsibilities for
the Corporation, the Executive has been and will continue in the
future to be a representative of the Corporation to its
customers, clients and suppliers and as such has had and will
continue in the future to have significant responsibility for
maintaining and enhancing the goodwill of the Corporation with
such customers, clients and suppliers and would not have, except
by virtue of his employment with the Corporation, developed a
close and direct relationship with the customers, clients and
suppliers of the Corporation;
(3) the Executive, as an officer of the Corporation, owes fiduciary
duties to the Corporation, including the duty to act in the best
interests of the Corporation; and,
(4) the right to maintain the confidentiality of the Trade Secrets,
the right to preserve the goodwill of the Corporation and the
right to the benefit of any relationships that have developed
between the Executive and the customers, clients and suppliers of
the Corporation by virtue of the Executive's employment with the
Corporation constitute proprietary rights of the Corporation,
which the Corporation is entitled to protect.
12.2 In acknowledgement of the matters described above and in consideration
of the payments to be received by the Executive pursuant to this
agreement, the Executive hereby agrees That he will not, for two years
from his last day of employment with the Corporation, directly or
indirectly disclose to any person or in any way make use of (other
than for the benefit of the Corporation), in any manner, any of the
Trade Secrets, provided that such Trade Secrets shall be deemed not to
include information that is or becomes generally available to the
public other than as a result of disclosure by the Executive.
13 NON-SOEICITATION
13.1 The Executive hereby agrees that he will not, during the period
commencing on the date hereof and ending two (2) years following the
expiration of the term of this agreement, be a party to or abet any
solicitation of customers, clients or suppliers of the Corporation or
any of its subsidiaries, to transfer business from the Corporation or
any of its subsidiaries to any other person, or seek in any way to
persuade or entice any employee of the Corporation or any of its
subsidiaries to leave that employment or to be a party to or abet any
such action.
14 DISCLOSURE
14.1 During the employment period, the Executive shall promptly disclose to
the Chairman full information concerning any interest, direct or
indirect, of the Executive (as owner, shareholder, partner, lender or
other investor, director, officer, employee, consultant or otherwise)
or any member of his family in any business that is reasonably known
to the Executive to purchase or otherwise obtain services or products
from, or to sell or otherwise provide services or products to the
Corporation or to any of its suppliers or customers.
15 PLACE OF EMPLOYMENT
15.1 The current place of business of the Corporation is 00 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxx.
15.2 In the event that the Corporation shall determine that it is in its
best interests to move its place of business more than two hundred and
fifty kilometers from its current location the Corporation shall do so
in a manner that minimizes disruption to the Executive and his family.
It is expressly acknowledged and agreed that such a decision to move
shall not be deemed or construed as a termination, constructive or
otherwise, of the employment of the even that the Corporation should
require the Executive to relocate more than two the Executive under
this agreement.
15.3 In hundred and fifty (250) kilometers from his current principal
residence, the Corporation shall either pay for or reimburse the
Executive for the following:
(1) costs of the Executive, his spouse and his children, if any,
traveling to the proposed new location for up to one week to
examine prospective homes including transportation, hotel
accommodation and incidentals;
(2) should the Executive be required to sell his house in order to
move for the purposes of his employment the Corporation will pay
all real estate commissions and/or mortgage termination penalties
incurred in selling the Executive's principle residence. If the
Executive obtains written estimates of the fair market value of
his principal residence and thereafter the Executive sells his
house for less than the average fair market price, the
Corporation shall reimburse the Executive for the difference.
(3) costs of packing, moving and unpacking the contents of the
--------------------------------------------
Executive's principal residence;
(4) costs of relocating electronic services into the Executive's
destination home;
(5) the costs of one return airfare per year for the Executive's
spouse to the city from which the Executive has moved.
(6) The above provisions shall apply in every instance where the
Executive is required to move his principal residence at the
request of the Employer.
15.4 As of the execution of this Agreement the Executive is a resident for
tax purposes of the Province of Ontario, Canada. In the event that the
duties of the executive shall require him to move from Ontario, Canada
his income shall be adjusted to compensate the executive for any
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increased taxes which must be paid by the Executive upon changing his
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residency.
16 RETURN OF MATERIALS
16.1 All files, forms, brochures, books, materials, written correspondence,
memoranda, documents, manuals, computer disks, software products and
lists (including lists of customers, suppliers, products and prices)
pertaining to the business of the Corporation or any of its
subsidiaries and associates that may come into the possession or
control of the Executive shall at all times remain the property of the
Corporation or such subsidiary or associate, as the case may be. On
termination of the Executive's employment for any reason, the
Executive agrees to deliver promptly to the Corporation all such
property of the Corporation in the possession of the Executive or
directly or indirectly under the control of the Executive. The
Executive agrees not to make for his personal or business use or that
of any other party, reproductions or copies of any such property or
other property of the Corporation.
17 GOVERNING LAW
17.1 This agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario.
18 SEVERABILITY
18.1 If any provision of this agreement, including the breadth or scope of
such provision, shall be held by any court of competent jurisdiction
to be invalid or unenforceable, in whole or in part. such invalidity
or unenforceability shall not affect the validity or enforceability of
the remaining provisions, or part thereof, of this agreement and such
remaining provisions, or part thereof, shall remain enforceable and
binding.
19 ENFORCEABILITY
19.1 The Executive hereby confirms and agrees that the covenants and
restrictions pertaining to the Executive contained in this agreement,
including, without limitation, those contained in sections 12 and 13
hereof, are reasonable and valid and hereby further acknowledges and
agrees that the Corporation would suffer irreparable injury in the
event of any breach by the Executive of his obligations under any such
covenant or restriction. Accordingly, the Executive hereby
acknowledges and agrees that damages would be an inadequate remedy at
law in connection with any such breach and that the Corporation shall
therefore be entitled in lieu of any action for damages, temporary and
permanent injunctive relief enjoining and restraining the Executive
from any such breach.
20 NO ASSIGNMENT
20.1 The Executive may not assign, pledge or encumber the Executive's
interest in this. agreement nor assign any of the rights or duties of
the Executive under this agreement without the prior written consent
of the Corporation.
21 SUCCESSORS
21.1 This agreement shall be binding on and enure to the benefit of the
successors and assigns of the Corporation and the heirs, executors,
personal legal representatives and permitted assigns of the Executive.
22 NOTICES
22.1 Any notice or other communication required or permitted to be given
hereunder shall be in writing and either delivered by hand or mailed
by prepaid registered mail. At any time other than during a general
discontinuance of postal service due to strike, lock-out or otherwise,
a notice so mailed shall be deemed to have been received three
business days after the postmarked date thereof or, if delivered by
hand, shall be deemed to have been received at the time it is
delivered. If there is a general discontinuance of postal service due
to strike, lock-out or otherwise, a notice sent by prepaid registered
mail shall be deemed to have been received Three business days after
the resumption of postal service. Notices shall be addressed as
follows;
(1) If to the Corporation:
(2) If to the Executive:
23 LEGAL ADVICE
23.1 The Executive hereby represents and warrants to the Corporation and
acknowledges and agrees that he had the opportunity to seek and was
not prevented nor discouraged by the Corporation from seeking
independent legal advice prior to the execution and delivery of this
agreement and that, in the event that he did not avail himself of that
opportunity prior to signing this agreement, he did so voluntarily
without any undue pressure and agrees that his failure to obtain
independent legal advice shall not be used by him as a defence to the
enforcement of his obligations under this agreement.
IN WITNESS WHEREOF the parties hereto have executed this agreement as of the
date first above written.
ISLAND CRITICAL CARE CORP.
Per:
WITNESS
Schedule A - Year 2000 and 2001 Bonus The amount of the
Executive Bonus Pool in respect of each fiscal year shall be conclusively
determined by the Corporation's auditors in accordance with this Schedule A and
shall be calculated by reference to the Corporation's pre-tax profits for such
fiscal year. For the purposes of this agreement the pretax profits of the
Corporation shall be equal to the consolidated net income before income taxes of
the Corporation and its subsidiaries before providing for bonuses and non-arm's
length charges and expenses other than direct reimbursements.
The amount of the Executive Bonus Pool in respect of each fiscal year is equal
to:
A. in the event that pre-tax profits in respect of such fiscal year of the
Corporation are greater than $5 00,000. the lesser of $15,000 or ten percent of
the Executive's base salary;
and
B.$10,000 plus 1% of the amount by which such pre-tax profits exceed $500,000;
and
C. in the event that pre-tax profits in respect of such fiscal year of the
Corporation are equal to or less than $500,000, nil.
In the event that the fiscal year-end of the Corporation shall change at any
time, the dollar amounts in subsections (a) and (b) above shall be adjusted
accordingly.
The amount of the Executive Bonus in respect of each of the fiscal years of the
Corporation shall be payable to the participants of the Plan as the board of
directors of the Corporation shall from time to time determine, in their sole
discretion, after consultation with the participants. The amounts payable to the
participants shall, however, be paid by the Corporation within 120 days of the
end of each of such fiscal years of the Corporation.
