------------------
THE TIREX CORPORATION
------------------
EMPLOYMENT AGREEMENT
The Tirex Corporation
0000 Xx-Xxxxxxx
Xxxxxxxx
Xxxxxx, Xxxxxx X0X 0X0
(the "Corporation")
and
Xxxx X. Xxxxxxxx, Xx.
00 Xxxxx xx Xxxxxx
Xxx-xxx-Xxxxxx
Xxxxxx, Xxxxxx X0X 0X0
(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 Corporation desires to employ the Executive as its chief
executive 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
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. 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 November 23rd, 1999.
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
3
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.
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
During the term of this Agreement, the Executive agrees to be employed
by the Corporation and to serve as its President and Chief Executive Officer and
the Corporation agrees to employ and retain the Executive in such capacity. The
Executive was also appointed a member of the Board of Directors of the
Corporation without further compensation as such.
4
4 Extent of Services
The Executive shall devote his entire working time, attention and
energies to the performance of his duties and shall not be engaged in any other
business activity, whether or not pursued for gain, without the consent of the
Company. The Executive may invest his personal assets in such form or manner as
will not require services on his part. 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 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
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.
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 twenty-five thousand US dollars (US$125,000)
per annum payable in twelve (12) equal monthly instalments of
$10,416.67, subject to annual review and increase, as the
Board of Directors shall determine.
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. As a sign up consideration,
2,500,000 shares of the Corporation are issued to the
Executive as fully paid, as at the Effective date.
6.3 Additional Benefits. During the term of this Agreement, the
Executive shall be entitled to the following fringe benefits:
5
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 Vacation. The Executive shall be entitled to reasonable
vacation time for each year during the term of this Agreement
and any extensions thereof.
6.3.3 Automobile. The Executive shall be compensated for the
use of his automobile at the rate of 0.54(cent) 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).
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
6
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.
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
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.
7.8 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
8
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 and/or Director, from
and after November 23rd, 2000 (in the event that the
termination occurs before November 23rd 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,
9
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
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.
10
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
Director, 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.
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:
Xxxx X. Xxxxxxxx, Xx.
00 Xxxxx xx Xxxxxx
Xxx-xxx-Xxxxxx
Xxxxxx, Xxxxxx X0X 0X0
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.
11
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.
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.
12
MONTREAL, 25th OF July 2000
----------------- ---------------------------------------------
THE TIREX CORPORATION
By /s/ XXXXX X. XXXX
------------------------------
Xxxxx X. Xxxx
/s/ XXXX X. XXXXXXXX, XX.
------------------------------
Xxxx X. Xxxxxxxx, Xx
