EXHIBIT 10.18
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 1ST day of JANUARY, 2000 between GSI
LUMONICS INC. (the "company"), a corporation continued under the laws of New
Brunswick and XXXXXXX X. XXXXXXX (the "executive");
WHEREAS the Company and the Executive have entered into an employment
relationship for their mutual benefit;
NOW THEREFORE THIS AGREEMENT WITNESSES that the parties have agreed that
the terms and conditions of the relationship shall be as follows:
1. DUTIES
1.1 The Company confirms the appointment of the Executive as Chief Executive
Officer of the Company to undertake the duties requested of the Executive
from time to time by the Board of Directors (the "Board") of the Company or
such committee of the Board designated by the Board and the Executive
accepts the office, on the terms and conditions set forth in this
Agreement.
1.2 The Executive, throughout the term of this Agreement shall devote his full
time and attention to business and affairs of the Company and shall not,
without the consent in writing of the Chairman of the Board undertake any
other business or occupation or become an officer, employee, agent or
consultant of any company, firm or individual nor hold more than 5% of the
issued shares or stock of any company.
1.3 The Executive shall faithfully serve the Company and use his reasonable
best efforts to promote the interests thereof.
2. TERM
2.1 The appointment of the Executive shall be for three years from the date
hereof unless terminated sooner in accordance with the provisions of this
Agreement.
2.2 If the employment of the Executive by the Company continues, in accordance
with the provisions of this Agreement, until December 31, 2003, the
Executive shall have the right to remain in the employ of the Company, in
an advisory and consulting capacity, for an additional two years (ie. until
December 31, 2005) (the "Extended Period"). During the Extended Period the
Executive shall perform such services as may be assigned to him from time
to time by the Board of Directors provided he shall not be required to
spend more than 50% of his normal working time on Company business. During
the Extended Period the Executive shall be entitled to an annual salary
equal to 50% of his base salary during the last
year of this Agreement and he shall be entitled to continue to participate
in the Company's stock option plans.
3. COMPENSATION
3.1 The compensation of the Executive shall be as agreed upon from time to time
between the Executive and the Company and in no case shall it be less than
his 2000 base salary of US $400,000 plus bonus at target of 70% of base
salary.
4. BENEFITS AND VACATION
4.1 The Executive shall be entitled to all benefit coverage offered by the
Company during the term of this agreement.
5. NON COMPETITION
5.1 The Executive agrees that the nature of the services to be provided by the
Executive (which the Executive acknowledges are of a special, unique,
extraordinary and intellectual character), places the Executive in a
position of confidence and trust with suppliers, customers and employees of
the Company. The Executive also acknowledges that the suppliers and
customers serviced by the Company are located throughout the world and,
accordingly, it is reasonable that the restrictive covenants set forth
herein are not limited by any geographical area. The Executive understands
and accepts the provisions of this Agreement may limit the employment
opportunities available to the Executive following the termination of this
Agreement. The Executive understands and agrees that it is reasonable and
necessary for the protection and goodwill of the business of the Company
that the Executive makes the covenants contained herein.
5.2 Accordingly, it is agreed that the Executive will not, at any time during
the 24 months next following the termination of this Agreement for any
reason (and for greater certainty, whether such termination is for cause or
not for cause or by resignation of the Executive or by frustration of this
Agreement or by passage of time) directly or indirectly either alone or in
conjunction with any individual or firm, corporation, association or other
entity, whether as principal, agent, shareholder, investor or in any other
capacity whatsoever:
(i) carry on, or be engaged in, concerned with or interested in, directly
or indirectly, any business which relates to the establishment,
development, promotion, marketing, sales or other provision of
products or services which are engaged (except for an equity share
investment in a public company whose shares are listed on a stock
exchange where such investment does not in the aggregate exceed 5% of
the issued equity shares of such company);
(ii) attempt to solicit away from the Company any person or entities with
whom the Company or both are engaged including suppliers, employees,
customers, agents or distributors;
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(iii)take any act as a result of which the relations between the Company
and any of their suppliers, customers, employees, agents,
distributors or others may be impaired or which may otherwise be
detrimental to the business of the Company.
6. CONFIDENTIALITY
6.1 The Executive acknowledges that, by virtue of his position in the Company
he will have access to confidential information belonging to the Company.
The Executive therefore undertakes that he shall neither during the term of
this agreement nor at any time thereafter publish, disclose or otherwise
communicate to any person, company, business entity or other organization
whatsoever or make use of any confidential information belonging or
relating to the Company, except with the prior written approval of the
Company or strictly in accordance with the terms of this Agreement.
6.2 For the purposes of this Agreement, "Confidential Information" means all
materials relating to the business or affairs of the Company, whether of a
technical, operational or economic nature, including, without limitation,
all unpublished information, prices and discounts, data, designs, trade
secrets, know-how, formulae, plans, techniques, processes, manuals,
documents, records, drawings, specifications, samples, studies, findings,
inventions, software, source-code, ideas whether patented, patentable or
not, reports, information concerning employees or officers, financial
information and plans, information relating to business and financial
dealings, research activities, business marketing or strategic plans and
projects whether present or future, equipment, working materials, and lists
or identity of customers whether they be in written, graphic, oral form or
other form whatever prepared by the Company or by the Executive on behalf
of or for the Company or otherwise disclosed to the Executive in the course
of his engagement and any know-how of the Company or information relating
to the Company or to any person, firm or other entity with which the
Company does business which is not generally known to persons outside the
Company, and any document marked "Confidential" or which the Executive
might reasonably expect the Company would regard as confidential. The
Executive acknowledges that the foregoing is intended to be illustrative
and that other confidential information may exist or arise in the future.
6.3 Without prejudice to the generality of this Article the Executive
acknowledges that the following "Confidential Information" if disclosed or
used in contravention of this Article would cause the Company substantial
damage or loss:
(i) names of clients, customers or suppliers of the Company prior to the
termination of this Agreement;
(ii) discounts, special prices or special contact terms offered to or
agreed with clients, customers or suppliers of the Company;
(iii) marketing and sales strategies/plans of the Company;
(iv) planned new services or products of the Company;
(v) existing or proposed research activities of the Company;
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(vi) existing or proposed marketing and sales expenditures of the Company;
(vii) any drawings, plans, designs, processes, formulae, specifications,
know-how, trade secrets or any other technical data relating to any
existing products or services offered to customers by the Company
prior to the termination of this Agreement;
(viii) any financial dealings of the Company
(ix) any business transactions or dealings of the Company, or;
(x) the decisions or contents of any board meetings of the Company.
6.4 The Executive's obligations under this Article shall apply both during the
term of this Agreement and thereafter without limitation in time and shall
survive the variation, renewal, extension or termination of this Agreement.
6.5 The Executive's obligations shall not apply in relation to any Confidential
Information which:
(i) the Executive is authorized by the Company to disclose, publish,
communicate or make use of, or which it is necessary for the
Executive to disclose, publish, communicate or make use of for the
proper and efficient discharge of his duties as an employee of the
Company;
(ii) the Executive is required by law or any court or other similar
judicial body or authority to disclose, publish or communicate; or
(iii) has come into the public domain other than by way of unauthorized
disclosure by the Executive.
6.6 The Executive agrees that in the event of any violation of the provisions
of this Agreement, the Company in addition to any other right or relief to
which it may be entitled, shall be entitled to an injunction restraining
further breaches of this Agreement and the Company, upon applying for an
injunction, will not be required to prove the inadequacy remedies at law.
7. REASONABLENESS OF NON-COMPETITION AND CONFIDENTIALITY
7.1 The Executive understands and agrees that the Company has a material
interest in preserving the relationship it has developed with its suppliers
and customers against impairment by competitive activities of a former
employee. Accordingly, the Executive agrees that the restrictions and
covenants contained in Articles 5 and 6 and the Executive's agreement to
them by the execution of this Agreement, are of the essence of this
Agreement.
7.2 The Executive understands and agrees that the restrictions and covenants
contained in Articles 5 and 6 constitute material inducements to the
Company to enter into this Agreement and that the Company would not enter
into this Agreement without such covenants.
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7.3 No claim or cause of action by the Executive against the Company, whether
predicated on this Agreement or otherwise, nor any assertion that the
Company has not complied with the terms of this Agreement or has breached
this Agreement fundamentally or otherwise, shall constitute a defence or
bar to the enforcement by the Company of the covenants or restrictions set
out in Articles 5 or 6.
8. TERMINATION OF EMPLOYMENT
8.1 The parties understand and agree that this Agreement may be terminated in
the following manner in the specified circumstances;
8.1.1 By the Company, in its absolute discretion, without any notice or
pay in lieu thereof, for cause. Any exercise of discretion pursuant to this
paragraph shall require the affirmative vote of not less than six members
of the Board of Directors excluding the Executive. For the purposes of
this Agreement, cause includes the following:
(i) any material breach of the provisions of this Agreement;
(ii) the failure or refusal of the Executive to comply with the lawful
directions or instructions of the Company on any material matter;
(iii) any conduct of the Executive which in the reasonable opinion of
the Company, tends to bring himself or the Company into
disrepute;
(iv) conviction of the Executive of a criminal offence punishable by
felony conviction;
(v) any material act of dishonesty directed at the Company or any
client of the Company;
(vi) any mental or physical disability or illness which results in the
Executive being unable to substantially perform the duties
assigned pursuant to this Agreement for a continuous period of
150 days or for periods aggregating 180 days in any period of 365
days;
(vii) use by the Executive of drugs or of alcohol in a manner which
materially affects his ability to perform his employment duties.
8.1.2 Failure by the Company to rely on the provision of this Article to
terminate this Agreement or to sanction or admonish the Executive in
any given instance or instances, shall not constitute a ratification
of the act or acts in question nor be deemed a waiver of the strict
terms of this Article.
8.2 The parties understand and agree that any offer or giving of notice (or
payment of pay in lieu of notice) by the Company to the Executive on
termination or proposed termination of this Agreement shall be without
prejudice and shall not prevent the Company from alleging cause for the
termination.
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8.3 In the event that the employment of the Executive is terminated by the
Company during the term of this Agreement without cause, the Executive
shall be entitled to the salary and benefits described in Appendix A to
this Agreement. Upon compliance by the Company of this paragraph, the
Executive shall not be entitled to pursue any legal action of any kind for
any additional payment or notice required to be given.
8.4 The Executive may voluntarily resign his employment at any time provided he
shall give the Company 90 days notice in writing of his intention to do so.
In the event of his voluntary resignation the Executive shall be entitled
to receive his salary and other benefits up to, but not after, the date of
termination of his employment.
8.5 On termination of employment the Executive shall immediately resign all
offices held (including directorships in the Company and save as provided
in this Agreement, the Executive shall not be entitled to receive any
severance payment or compensation for loss of office or otherwise by reason
of the resignation. If the Executive fails to resign as set out herein on
seven days notice, the Company is irrevocably authorized to appoint some
person in the Executive's name and on the Executive's behalf to sign any
documents or do any things necessary or requisite to give effect to it.
9. EMPLOYER'S PROPERTY
9.1 The Executive acknowledges that all things furnished by the Company to the
Executive, and all equipment, automobiles, credit cards, books, records,
reports, files, manuals, literature, confidential information or other
materials shall remain and be considered the exclusive property of the
Company at all times and shall be surrendered to the Company, in good
condition, promptly on the termination of the Executive's employment
irrespective of the time, manner or cause of the termination unless
expressly provided in this Agreement. The foregoing shall not include
anything purchased with the Executive's personal expense allowance.
9.2 Any and all documents, drawings, things, techniques, computer programs or
related data, inventions or improvements of which the Executive may
conceive or make or assist in the conception or making during the period of
this Agreement relating or in any way appertaining to or connected with the
duties, responsibilities or work of the Executive pursuant to this
Agreement or any of the matters which have been, are, may become or were
intended to become the subject of the undertakings of the Company shall be
the sole and exclusive property of the Company, as the case may be. The
Executive will, whenever requested by the Company whether during or after
the termination of this Agreement, execute any and all applications,
assignments and other instruments which the Company shall deem necessary in
order to apply for and obtain patents, copyright, trademark protection or
other rights or protection in any country for the said documents, drawings,
things,
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techniques, computer programs or related data, inventions or improvements
and in order to assign and convey to the Company the sole and exclusive
right, title and interest in and to the said documents, drawings, things,
techniques, computer programs or related data, inventions or improvements.
10. ASSIGNMENT OF RIGHTS
10.1 The rights which accrue to the Company under this Agreement shall pass to
its successors or assigns. The rights of the Executive under this Agreement
are not assignable or transferable in any manner.
11. NOTICES
11.1 Any notice required or permitted to be given to the Executive shall be
sufficiently given if delivered to the Executive personally or if mailed by
registered mail to the Executive=s address last known to the Company.
11.2 Any notice required or permitted to be given to the Company shall be
sufficiently given if mailed by registered mail to the Company's Head
Office at its address last known to the Executive, Attention: Chief
Financial Officer.
12. SEVERABILITY
12.1 In the event that any provision or part of this Agreement shall be deemed
void or invalid by a court of competent jurisdiction, the remaining
provisions or parts shall be and remain in full force and effect.
12.2 In the event that any provision of this Agreement shall in its stated terms
or breadth be deemed void or invalid or unenforceable as a result a
decision by a court of competent jurisdiction, the said provision shall be
valid and enforceable to the extent consistent with the principle or
principles underlying the said decision.
13. ENTIRE AGREEMENT
13.1 This Agreement constitutes the entire agreement between the parties with
respect to the employment and appointment of the Executive and any and all
previous agreements, written or oral, express or implied, between the
parties or on their behalf, relating to the employment and appointment of
the Executive by the Company, are terminated and cancelled.
14. MODIFICATION OF AGREEMENT
14.1 Any modification to this Agreement must be in writing and signed by the
parties or it shall have no effect and shall be void.
15. HEADINGS
15.1 The headings used in this Agreement are for convenience only and are not to
be construed in any way as additions to or limitations of the covenants and
agreements contained in it.
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16. GOVERNING LAW
16.1 This Agreement shall be construed in accordance with the laws of Ontario
and the laws of Canada applicable therein.
17. FACSIMILE
17.1 This Agreement will be valid and binding whether executed by original or
facsimile signature.
18. COUNTERPARTS
18.1 This Agreement may be executed in any number of counterparts, each of which
will be deemed an original, but all of which together will constitute one
and the same instrument.
IN WITNESS WHEREOF this Agreement has been executive by the parties to it
on the day, month and year first written above.
"Xxxxxxx Xxxxxxx" "Xxxxxxx X. Xxxxxxx"
-------------------------------- -------------------------------------
Witness XXXXXXX X. XXXXXXX
GSI LUMONICS INC.
Per: "Xxxx Xxxxxxx"
-------------------------------------
XXXX XXXXXXX, CHAIRMAN OF THE BOARD
Per: "Xxxxxxxx Xxxxxxxx"
-------------------------------------
XXXXXXXX XXXXXXXX,
Chairman, Compensation Committee
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APPENDIX A
TERMINATION WITHOUT CAUSE
In the event that the employment of the Executive is terminated by the Company
during the term of this Agreement without cause, the Executive shall be entitled
to the following:
1. Base salary plus bonus at 70% of base salary as at the date of termination
to be continued for two years from the date of termination;
2. All Company medical and insurance benefits to be continued for a period
of two years from the date of termination.
3. Use of leased automobile to be continued for a period of two years from
the date of termination;
4. Annual US $7,000 allowance for tax planning and preparation to be
continued for a period of two years from the date of termination;
5. All unexercised stock options that have not vested shall vest on date of
termination. For greater certainty it is acknowledged that all options will
expire if not exercised within 90 days of the date of termination.
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