Exhibit 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT made as of the 1st day of May, 1997 to be
effective as set forth below.
BETWEEN:
Xxxxx Xxxxx
(hereinafter referred to as the "Executive"),
OF THE FIRST PART
- and -
INTERCORP EXCELLE INC.
a corporation incorporated under the laws
of the Province of Ontario,
(hereinafter referred to as the "Corporation")
OF THE SECOND PART
WHEREAS the Executive is currently employed by the Corporation;
AND WHEREAS the Executive and the Corporation wish to continue the
Executive's employment upon the terms and conditions set forth herein;
NOW THEREFORE in consideration of the mutual covenants and agreements
contained herein, the parties covenant and agree as follows:
1. Appointment and Duties
1.1 The Corporation shall employ the Executive in the capacity of President,
Vice-President and Co-Chairman of the Board of Directors of the Corporation
(the "Board"). The Executive shall perform such duties and exercise such
powers as are normally associated with and incidental and ancillary to such
position and shall perform such additional duties and exercise such
additional powers as may be accorded to her by the Board.
1.2 The Executive shall well and faithfully serve the Corporation and use her
best efforts to promote the interests and goodwill of the Corporation during
the term of her employment hereunder. The Executive shall devote her full
time and energy to the Corporation. Without restricting the foregoing, the
Executive shall not, without the consent of the Board, engage in any other
business, or become an employee, director, manager or agent of any other
company, firm, association, organization or individual if the Board
determines acting reasonably that such would result in the inability of the
Executive to perform her obligations hereunder.
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1.3 This Agreement shall become effective on the date of the final
registration statement filed on behalf of the Corporation with the Securities
Exchange Commission pursuant to the Securities Act of 1933 (the "Effective
Date").
2. Term of Employment
2.1 Subject to earlier termination as provided in Sections 6 or 7 hereof, the
term of this Agreement shall be for a period of three (3) years, commencing
as of the Effective Date and concluding the third anniversary of the
Effective Date (the "Expiration Date"). The parties may mutually agree to
extend the term of employment on the same terms and conditions as contained
herein or on such other terms and conditions as are mutually agreed between
them.
3. Compensation
3.1 During the term of the Executive's employment under this Agreement, the
Corporation shall pay the Executive a minimum base salary of U.S. $135,000
per annum commencing as of the Effective Date and concluding as of the third
anniversary of the Effective Date, less statutory deductions, to be paid on a
bi-weekly basis.
3.2 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,
perquisite program 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.
3.3 The Executive shall be eligible to receive a discretionary management
bonus (the "Management Bonus") in an amount to be determined by the Board in
its absolute discretion. The Management Bonus shall be paid to the Executive
in the event that the Corporation achieves performance targets established by
the Board in its sole discretion. The minimum amount of such discretionary
Management Bonus will be no less than 20% of base compensation salary for
that year and shall be paid in accordance with such terms as are specified by
the Board at the time such Management Bonus is awarded.
3.4 Upon the death of the Executive while this agreement is in force, the
Corporation shall pay to her heir(s) or other designee(s) as provided in
writing by the Executive in her last Will and Testament or document of
similar intent and designations, an amount equal to the Executive's salary
for a period of two (2) years after her death, payable in the same
installments as her salary was being paid immediately prior to her death.
3.5 The Corporation shall during the term of employment maintain a term
policy or policies in the face amount of Cdn. $240,000, insuring the life of
the Executive. The Executive shall be the owner of said policy, and shall be
entitled to designate the beneficiary of such policy. The Corporation shall
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provide the Executive from time to time as reasonably requested with
documentary proof of the purchase and maintenance of said insurance policy.
The Executive has the right to purchase and maintain such term life insurance
and pay for same if the Corporation fails to so purchase and maintain such
policy, which expenses and costs incurred by the Executive shall be
chargeable to and paid by the Corporation.
4. Additional Compensation
4.1 The Executive shall be reimbursed for all reasonable and necessary
business, travel, entertainment and other expenses actually and properly
incurred by the Executive from time to time in connection with the carrying
out of her duties hereunder on submission of proper receipts, vouchers and
other reasonable confirming documentation. The Executive will receive a
minimum car allowance determined by the Board plus all reasonable car
expenses. The budget for all such expenses shall be reviewed at the beginning
of each fiscal year during the term of the Executive's employment under this
Agreement.
4.2 The Executive shall be entitled to 4 weeks vacation as permitted pursuant
to the vacation policy in effect from time to time for the Corporation. Such
vacations shall be scheduled as agreed by the Board.
4.3 The additional compensation paid to the Executive on account of car
allowance, insurance, RRSP contributions and all other perquisites and
compensation, shall not exceed, in the aggregate, and exclusive of the base
salary and Management Bonus (if any) provided hereunder, U.S. $20,000.
5. Confidentiality, Non-Competition and Non-Solicitation
5.1 The Executive acknowledges that as President, Vice-President and
Co-Chairman of the Board of Directors of the Corporation she will acquire
information about certain matters pertaining to the Corporation, its
affiliates and their businesses which are confidential to the Corporation and
which information is the exclusive property of the Corporation including but
not limited to clients and accounts, information concerning products and
services, trade secrets and know-how, computer programs and the financial
history of the Corporation. The Executive acknowledges that such
information could be used to the detriment of the Corporation and therefore
the Executive shall not disclose such information in any manner, directly or
indirectly, to any person without the prior written consent of the
Corporation.
5.2 The Executive in her capacity as an officer and employee of the
Corporation, covenants and agrees that:
(a) the Executive will not at any time within the period of eighteen (18) months
following the termination of the Executive's employment hereunder for cause,
either individually or in partnership or jointly or in conjunction with any
person or persons as principal, agent, shareholder (except as a shareholder
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holding not more that five (5) percent of the outstanding shares from time
to time from any class of shares of a publicly traded corporation) or in
any manner whatsoever carry on or be engaged in or concerned with or
interested in, or advise, lend money to, guarantee the debts of or
obligations of, or permit her name or any part thereof to be used or
employed by or associated with, any person or persons engaged in or
concerned with or interested in, any business the same or similar to or
competitive with the business or any other business now or at any time
during the course of employment of the Executive hereunder carried on by
the Corporation within any territory where the Corporation is carrying on
business at the time of the termination of the Executive's employment
hereunder;
(b) the Executive will not at any time within the period of eighteen (18) months
from the termination of the Executive's employment hereunder, either
directly or indirectly, by any means or in any capacity, approach, solicit
or contact in the course of being engaged in a business competitive with
the Corporation any person solicited, serviced, or contacted by the
Executive on behalf of the Corporation during the Executive's employment
or any person known by the Executive to have been a client of the
Corporation during the term of the Executive's employment;
(c) the Executive will not at any time within the period of eighteen (18) months
from the termination of the Executive's employment hereunder, interfere with
the employment arrangements between the Corporation or any of its employees
and will not in any way solicit, recruit, hire, assist others in recruiting
or hiring, or discuss employment with any employees of the Corporation; and
(d) effective from the termination of the Executive's employment hereunder, the
Executive shall deliver over to the Corporation without demand, all
documentation, correspondence, papers, diskettes, and any other similar
material which may have been prepared by the Executive during the course of
her employment and the Executive agrees not to reproduce by any means any
of the above mentioned matters.
5.3 If any covenant or provision herein is determined to be void or
unenforceable in whole or in part, it shall not be deemed to affect or impair
the validity of any other covenant or provision and subsections 5.2(a), (b),
(c) and (d) are each declared to be separate and distinct covenants.
5.4 The Executive agrees that all restrictions contained in Section 5.2 are
reasonable and valid and all defences to the strict enforcement thereof by
the Corporation are hereby waived by the Executive. The Executive agrees
that the covenants in Section 5.2 shall not terminate upon the termination of
the Executive's employment hereunder. The Executive acknowledges that a
violation of any of the provisions of Section 5.2 will result in immediate
and irreparable damage to the Corporation and agrees that in the event of
such violation the Corporation, in addition to any other right of relief,
shall be entitled to equitable relief by way of a temporary or permanent
injunction and to such other relief that any court of competent jurisdiction
may deem just and proper. If the Executive is in breach of any such
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restrictions, the running of the period of such restrictions shall be stayed
and shall recommence upon the date the Executive ceases to be in breach
thereof, whether voluntarily or by injunction.
6. Termination
6.1 The employment of the Executive hereunder may be terminated in the
following manner and in the following circumstances:
(a) at any time by notice in writing from the Corporation to the Executive for
cause;
(b) automatically without notice upon the death of the Executive;
(c) automatically in the event the Executive is subject to any bankruptcy,
insolvency or other similar proceeding;
(d) if the Executive shall become permanently disabled, then at any time by
notice in writing from the Corporation to the Executive (and, for purposes
of this subsection, the Executive shall be deemed to be permanently
disabled immediately following any period of 365 consecutive days during
which the Executive is prevented from performing her essential duties as a
senior officer of the Corporation for more than 180 days in the aggregate
by reason of illness or mental or physical disability; or
(e) in any other case by twelve (12) months (plus 1 additional month for each
year of service), notice in writing given by the Corporation or equivalent
compensation in lieu thereof provided that compensation in lieu of notice
may, in the sole discretion of the Corporation, be paid on the same basis
as set forth in Section 3.1.
6.2 In the case of the permanent disability of the Executive, the Executive
shall receive 70% of her salary for the remainder of the term of the
agreement.
6.3 Based upon any wrongful termination, which includes changes in control of
the Company (through an acquisition where any person acquires or announces a
tender offer or exchange for 25% of the Company, a sale of substantially all
of the assets or merger, acquisition of the Company or its consolidation with
another, or certain types of board changes), the Company shall pay the
Executive, a lump sum payment, based upon his or her then compensation,
including benefits and perquisites, from such termination. Such payment
shall be the balance of their respective compensation for the remainder of
the term. If the payment is in excess of $100,000, then such excess shall be
payable in equal quarterly payments with interest at the prescribed rate
under the Income Tax Act (Canada).
6.4 Any payment to the Executive under Sections 6 or 7 shall be deemed to
include all required payments pursuant to the provisions of the Employment
Standards Act (Ontario).
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6.5 The Executive may, by providing one (1) month notice in writing to the
Corporation (the "Notice Period"), terminate this Agreement and her
employment with the Corporation. In the event the Executive provides such
notice to the Corporation, the Corporation may request that the Executive
cease duties prior to the expiry of the Notice Period. The Corporation shall
in such event pay to the Executive an amount equal to the difference between
what the Executive would have received had the employment of the Executive
been continued for the Notice Period and the amount actually paid by the
Corporation to the Executive during the Notice Period.
7. Change of Control
7.1 Notwithstanding Section 6 of this Agreement, in the event of a Change in
Control (as hereinafter defined) of the Corporation where the Executive is
Constructively Dismissed (as hereinafter defined) by new management within
eighteen (18) months of the Change in Control, the Executive shall have the
option of resigning from her employment by providing the Corporation, within
ninety (90) days of the Constructive Dismissal, with written notice of her
intention to resign in which case the following will apply.
7.2 The Executive's resignation will be effective ninety (90) days from the
date at which the Corporation receives written notice of the Executive's
intention to resign. On the effective date of such resignation (the "Date of
Termination"), the Executive shall be entitled to the following benefits:
(a) the Corporation shall pay to the Executive a lump sum equal to twice
the aggregate of the Executive's annual salary; and
(b) the right to exercise all stock options previously granted to the
Executive whether or not such options have become fully vested within
thirty (30) days of the Date of Termination.
In addition, the Corporation shall, at the request of the Executive, make
representations to the Securities Exchange Commission (the "SEC") in support
of an application by the Executive to the SEC for the release of any common
shares in the capital of the Corporation owned by her which are still held in
escrow pursuant to SEC Policy.
7.3 A "Change in Control" shall mean the occurrence of the acquisition or
continuing ownership of securities ("Convertible Securities") convertible
into, exchangeable for or representing the right to acquire shares of the
Corporation and/or shares of the Corporation as a result of which a person,
group of persons or persons acting jointly or in concert, or persons
associated or affiliated with any such person, group of persons or any of
such persons acting jointly or in concert (collectively, "Acquirors"),
beneficially own shares of the Corporation and/or Convertible Securities such
that, assuming only the conversion, exchange or exercise of Convertible
Securities beneficially owned by the Acquirors, the Acquirors would
beneficially own shares that would entitle the holders thereof to cast more
than 20% of the votes attaching to all shares in the capital of the
Corporation that may be cast to elect directors of the Corporation.
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7.4 "Constructively Dismissed" or "Constructive Dismissal" shall be deemed to
have occurred if and when any of the following events or circumstances has
occurred without the prior written consent of the Executive within eighteen
(18) months of a Change in Control:
(i) any material and adverse change in the title, status, position, job
function, job responsibilities and/or reporting responsibilities of
the Executive from those current at the date hereof;
(ii) the assignment to the Executive of duties and responsibilities which
are inconsistent with her current status and position;
(iii) a reduction in the Executive's annual base salary; or
(iv) a material reduction in the bonus compensation or other employee
benefits available to the Executive.
8. Legal Advice
8.1 The Executive hereby represents and warrants to the Corporation and
acknowledges and agrees that she 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 she did not avail himself with the opportunity prior to signing
this Agreement, she did so voluntarily without any undue pressure and agrees
that her failure to obtain independent legal advice shall not be used by her
as a defence to the enforcement of her obligations under this Agreement.
9. General
9.1 Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be delivered in person, transmitted
by telecopy or similar means of recorded electronic communication or sent by
registered mail, charges prepaid, addressed as follows or to such other
address as the relevant party may specify from time to time:
(a) if to the Corporation:
Intercorp Excelle Inc.
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
Attention: President
Telecopier: (000) 000-0000
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(b) if to the Executive, to her at:
00 Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Any such notice or other communication shall be deemed to have been given and
received on the day on which it was delivered or transmitted (or, if such
day is not a business day, on the next following business day) or, if mailed,
on the third business day following the date of mailing; provided, however,
that if at the time of mailing or within three (3) business days thereafter
there is or occurs a labour dispute or other event which might reasonably be
expected to disrupt the delivery of documents by mail, any notice or other
communication hereunder shall be delivered or transmitted by means of
recorded electronic communication as aforesaid.
9.2 This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether written or oral. There
are no covenants, conditions, agreements, representations, warranties or any
other terms or provisions, express or implied, collateral, statutory or
otherwise, relating to the subject matter hereof, except as herein provided.
9.3 This Agreement shall be construed, interpreted and enforced in accordance
with, and the respective rights and obligations of the parties shall be
governed by, the laws of the Province of Ontario.
9.4 No amendment or waiver of any provision of this Agreement shall be
binding on any party unless consented to in writing by such party. No waiver
of any provision of this Agreement shall constitute a waiver of any other
provision nor shall any waiver constitute a continuing waiver unless
otherwise provided.
9.5 This Agreement shall enure to the benefit of and shall be binding upon
and enforceable by the parties hereto, and the heirs, executors,
administrators and legal personal representatives of the Executive and the
successors and assigns of the Corporation. This Agreement is personal to the
Executive and may not be assigned by the Executive.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as
of the date first above written.
Signed, sealed and delivered in the presence of: )
)
)
)
_______________________________________ ____________________________
Witness: Xxxxx Xxxxx
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INTERCORP EXCELLE INC.
Per:
Authorized Signing Officer
