EMPLOYMENT AGREEMENT
This Employment Agreement is executed on February 20th, 1996 by and
between Cantar/Polyair Inc., an Ontario Corporation, having its executive
offices located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, (the
"Company") and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, an individual residing at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the "executive).
In consideration of the terms and conditions hereinafter set forth, the
parties hereto agree as follows:
1. Employment. The Company shall employ the Executive for a term (the "Term")
commencing on and as of the date Polyair Inter Pack Inc., the parent
corporation of the Company, successfully completes the initial public
offering of its common shares to the public pursuant to a Preliminary
Prospectus dated December 20, 1995, and continuing indefinitely until
terminated pursuant to Section 6.
2. Duties. The Company agrees to employ the Executive to act as its President
and Chief Executive Officer, and the Executive hereby agrees to serve the
Company and its subsidiaries in such capacity, to perform such duties and
to assume such authorities and responsibilities which are commensurate with
the office of President and Chief Executive Officer as the Board of
Directors of the Company and its subsidiaries, may from time to time
determine. The Executive shall be responsible and have authority for all
aspects of the Company's business and operations, subject in all cases to
the ultimate authority of the Board of Directors of the Company. For and
during the Terms of this Agreement the Executive shall be entitled to sit
on the Board of Directors of the Company.
3. Compensation.
3.1 As compensation for all services to be rendered by the Executive
hereunder, the Company aggress to pay to Executive a salary (the
"Salary") at the rate of $285,000 per year. The Board of Directors
will review the Salary on an annual basis giving consideration to all
relevant terms including, without limitation, the economic conditions
in general, the performance and financial position of the Company and
the Executive's performance.
3.2 Payment. The Executive's Salary shall be payable in equal monthly
instalments or in such other instalments as may be agreed upon by the
parties. The Salary shall be calculated at the commencement of each
year for purposes of determining the Executive's monthly or other
periodic rate of pay.
3.3 Bonus. The Executive will receives a minimum annual bonus (the
"Minimum Bonus") equal to 2.5% of Profits (as defined below). The
Executive will also receive an additional Bonus (the "Additional
Bonus") for each year equal to 2.5% of Profits in excess of the amount
which is equal to six (6%) percent of gross revenues for such year.
The Minimum Bonus would be payable within 30 days of the finalization
of the Company's audited financial statements. The percentage of the
Bonus will be reviewed by the Board of Directors on an annual basis in
accordance with the criteria under Section 3.1. For purposes of this
Section 3.3, "Profits" (and revenues as the context requires) will
mean that of the Company, and its subsidiaries on a consolidated
basis, after payment and accrual of all expenses and interest and
taxes, all in accordance with generally accepted accounting
principles. Any Bonus earned which can not be paid due to lending
restrictions will accrue and bear interest at the prime lending rate
of the Company's working capital lender as in effect from time to
time. All transactions between the Company and any Affiliates will be
accounted for on an arms' length basis. Profits will be adjusted to
reverse the impact of interest income due to cash balances due to the
initial public offering of Polyair Inter Pack Inc., the parent
corporation of the Company herein. The Board of Directors may elect to
authorize any amount of additional Bonus based on the Board's
determination of financial condition and performance and Executive's
performance. Notwithstanding anything herein contained or contemplated
to the contrary, the Minimum Bonus and the Additional Bonus which may
be earned by the Executive in any year shall not exceed the aggregate
sum of $500, 000 all inclusive.
4. Insurance and Other Benefits. The Executive shall be entitled to
participate, if the Executive so elects and is eligible therefore, in any
plans for the benefit of officers or employees of the Company from time to
time in force, including, but not limited to, disability and medical
insurance and group life insurance. In furtherance, and not in limitation
of the foregoing, the Company agrees as follows:
5. Expenses, Automobiles, Vacations, etc..
5.1 Expenses. The Executive shall be entitles to reimbursement for normal
and reasonable expenses incurred on behalf of the Company in
furtherance of its business, as supported by vouchers there for in
accordance with the Company's policies in force from time to time.
5.2 Vacation, etc. The Executive shall be entitled to six (6) weeks annual
vacations, holidays, sick leaves of absence in accordance with the
Company's general policies and practices in force from time to time.
5.3 Use of Automobile. The Company shall provide the Executive with an
automobile (similar to that provided to all other senior management of
the Company from time to time) as its expense (ie: whereby the Company
shall pay all related expenses with regard to the use and maintenance
of such automobile consistent with the policies of the Company as they
relate to all senior executives on the date hereof) in accordance with
the Company's general policies and practices in force from time to
time.
6. Termination of Employment.
6.1 For Cause. The Board of Directors of the Company may terminate the
Executive's employment hereunder and remove the Executive from his
position with the Company at any time for Cause. The term "Cause" as
used in this Agreement shall be deemed to refer to and include only:
6.1.1 The failure by the Executive to substantially perform his duties
pursuant to the terms of this Agreement without good cause,
within a reasonable period, after a written demand for
substantial performance is delivered to the Executive by the
Board of Directors.
6.1.2 The wilful engaging by the Executive in misconduct or inaction
materially injurious to the Company. For purpose of this Section,
an act or failure to act shall not be considered "wilful", unless
done or omitted in bad faith without reasonable belief on the
Executive's part that his action or omissions was in the best
interest of the Company.
6.1.3 The Executive's conviction for a felony or misdemeanour
involving moral turpitude.
6.2 Disability or Death. If, in the judgement of the Company's Board of
Directors, the Executive fails to render services of the character
contemplated hereby because of illness or other incapacity for a
period of six (6) consecutive months, or for shorter periods
aggregating more than six (6) months in any consecutive twelve (12)
months, the Board of Directors may determine that the Executive had
become disabled and may elect to terminate his employment hereunder,
effective as of the date of such determination. In the event of the
Executive's death during the term hereof, this Agreement shall
terminate forthwith.
6.3 Without Cause. The Company may terminate the Executive for any reason
without "Cause" upon thirty (30) days' prior notice, in which case the
provision of Section 6.4 shall apply.
6.4 Severance. If the Executive's employment hereunder is terminated
pursuant to Sections 6.3 or 6.6, the Company shall pay the Executive
as severance pay, subject to appropriate deductions, one-twelfth
(1/12) of his annual Salary for each full month occurring after his
employment termination (herein "Monthly Severance Payment") during the
twenty-four month period following termination (the "Severance
Period"). Except in the event of termination under Section 6.1,
notwithstanding termination, the Executive will be entitled to a pro
rata share of the Bonus earned for the year of termination (based on
the period of such year prior to termination). The Executive shall be
entitled to participate, throughout the Severance Period, at the
Company's expense, in the Company's employee benefit plans and
programs as described in Section 4 or an equivalent plans or programs
established by the Company, and the Company shall be responsible for
the payment of any unpaid amount on account of the Severance Period
with respect to Salary. Furthermore, any and all stock options granted
to Executive to purchase shares of Polyair Inter Pack Inc. or
Consolidated Mercantile Corporation shall be deemed to have fully
vested to and with Executive on and as of the date of termination of
this Agreement to the extent this Agreement is terminated pursuant to
Sections 6.3 or 6.6 hereof. For greater clarity it is acknowledged by
the parties that the severance obligations of the Company herein shall
not be reduced or mitigated by reason of Executive securing alternate
employment or other sources of income during the 24 month period
following the termination of this Agreement pursuant to Sections 6.3
or 6.6 hereof.
6.5 Voluntary Termination. If the Executive voluntarily terminates his
employment hereunder other than as provided in Section 6.6, he shall
give (i) three (3) months written notice and (ii) be paid Salary and
any and all Bonuses through the date of his termination and shall
receive other compensation and benefits, if any, for such three (3)
month period as provided under the Company's applicable plans and
programs.
6.6 Certain Changes Affecting the Executive's Employment. "Certain changes
affecting the Executives employment" shall mean any material
diminution in benefits or employment conditions as a result of which
the Executive terminates his employment hereunder, including any of
the following:
6.6.1 a material breach by the Company of its obligations under this
Agreement.
7. Inventions, Confidential Information and Related Matters.
7.1 Definitions. For purposes of this Agreement, the terms set forth below
shall have the following meaning:
7.1.1 Products. Finished and other products being manufactured,
assembled, processed, distributed or marketed, in whole or in
part, by the Company or any Affiliate.
7.1.2 Confidential Information. That secret proprietary information of
the Company or any Affiliate or whatever kind or nature disclosed
to the Executive or known by the Executive (whether or not
discovered or developed by the Executive) as a consequence of or
through his employment with the Company. Such proprietary
information shall include information relating to the Products,
processing, manufacturing, assembly, quality control, know-how,
research and development, sources of supplies and materials,
operating and other cost data, distribution arrangements and
Product proposals and marketing, any of which the Company or any
Affiliate engages in business (including industries supplying to
or purchasing from the Company or any Affiliates) in the United
States and Canada and shall specifically include all information
contained in manuals, memoranda, formulae, plans, drawings and
designs, specifications, equipment and machinery configurations,
and records of the Company and any Affiliate. Provided however,
Executive shall not be liable for disclosure of confidential
information if same becomes publicly known, or if Company has
provided its prior written consent for such disclosure.
7.1.3 Inventions. Those discoveries, developments, concepts and ideas
whether or not patentable, relating to the Products and to the
present and prospective activities of the Company or any
Affiliate (which activities are known to the Executive by reason
of his employment with the Company).
7.1.4 Affiliate. The Company or any subsidiary corporation of either
of them.
7.2 Inventions. All Inventions which are at any time developed by the
Executive acting alone or in conjunction with others, during the
period commencing with his employment by the Company, until the
termination of this Agreement (or, if based on or related to the
Executive's activities with the Company or on behalf of any Affiliate
or any Confidential Information or Invention(s) made by the Executive
within three years after the termination of Employee's employment)
shall be the property of the Company, free of any reserved or other
rights of any know on the Executive's part in respect thereof. The
Executive agrees promptly to make full disclosure of any such
Inventions to the Company, and at its cost and expense to execute
formal applications for patents and also to do all other acts and
things (including, among others, the execution and delivery of
instruments and further assurance or confirmation) deemed by the
Company to be necessary or desirable at any time or times in order to
effect the full assignment to the Company of his rights and title to
such Inventions and otherwise to carry out the purposes of this
section.
7.3 Non-Disclosure. Except as required by his duties hereunder, the
Executive agrees that he will never, during or after his employment
with the Company, directly or indirectly, use, publish, disseminate or
otherwise disclose any Confidential Information or Inventions without
the prior written consent of the Company.
7.4 Return of Proprietary Materials. Upon termination of his employment
with the Company, all equipment, models, prototypes, designs, plans,
drawings, documents, procedural manuals, specifications, guides and
similar materials, records, notebooks and similar repositories of or
containing Confidential Information or Inventions, including all
whether prepared by the Executive or others, will be left with or
promptly returned by the Executive to the Company.
7.5 Non-Competition. Subject to the performance by the Company of its
obligations, if any, under Sections 6.4, 6.5 or 6.6 hereof, during the
twenty-four months thereafter, the Executive shall not, without prior
written consent of the Company, directly or indirectly, whether as an
officer, director, stockholder, partner, proprietor, associate
representative, importer, distributor or otherwise, become employed or
otherwise associated with or representing, any other person,
corporation (except the Company and any Affiliate), firm, partnership,
or other entity whatsoever engaged, in the United States or Canada, in
any line of business engaged in (or actively planned to be engaged in)
by the Company or any Affliate; provided, however, that anything above
to the contrary notwithstanding, the Executive may own, as an inactive
investor during such period, securities of any competitor corporation
or other entity, so long as his holding in any one such corporation or
entity shall not constitute more that two (2%) percent of the voting
stock of such corporation or other entity.
7.6 Survival of Obligations. Employee's obligations under this section 7
shall survive termination of this Agreement pursuant to section 6.
7.7 Options. The Executive shall be granted stock options to purchase
common shares in the capital stock of Polyair Inter Pack inc. and
Consolidated Mercantile Corporations as follows:
(a) 320,000 common shares of Polyair Inter Pack inc. (the "Float");
(b) 60,000 common shares of Consolidated Mercantile Corporation at
$2.60 per share;
(c) 60,000 common shares of Polyair Inter Pack Inc. owned by
Consolidated Mercantile Corporation. Such option(s) shall be deemed
granted to Executive on terms similar to the Polyair Inter Pack Inc.
stock option plan save and except that the vesting period shall be
three (3) years instead of seven (7) years and the Executive must,
correspondingly, exercise such options within one hundred, eighty
(180) days following such three (3) year period.
All the aforementioned stock options shall be granted to Executive in
accordance with the terms and process set forth in the respective sock
option plans in force with respect to Polyair Inter Pack inc. and
Consolidated Mercantile Corporation (except as modified by this
Agreement) and shall be at all times be subject to compliance with all
applicable requirements of the Securities Regulatory Authorities.
8. Assignment - Survival. Expect as provided below, either party shall have
the right to assign this Agreement or any rights or obligations hereunder
without the consent of the other party; provided, however, that this
Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Company, and their respective successors and
assigns, upon liquidation, dissolution or winding upon of the Company, or
upon any sale of all or substantially all of the assets of the Company, or
upon any merger or consolidation of the Company, as though successors and
assigns of the Company and their respective successors and assigns were the
Company. The respective rights and obligations of the parties hereunder
will survive any termination of this Agreement to the extent necessary to
the intended preservation of such rights and obligations. The Executive's
executor or successors by will or descent shall have the right to enforce
any of the Executive's rights under the Agreement which survive
termination.
9. Severability. The invalidity of unenforceability of any term or provision
of this Agreement shall not affect the validity or enforceability of the
remaining terms or provisions thereof, which shall remain in full force and
effect, and, should any tribunal having jurisdiction determine that any
such term or provision is unenforceable, by reason of its overbreadth,
whether as to time, geographical scope or otherwise, then such term or
provision shall be deemed to be amended to reduce its scope by the degree
of such overbreadth.
10. Notices. All notices required or permitted hereunder shall be given or made
in writing and shall be sufficiently given ten (10) days after sending by
registered mail to the addresses set forth on page 1, or to such other
address as either party shall designate by notice so given to the other.
11. Governing Law. This Agreement shall be interpreted and construed under the
laws of the Province of Ontario applicable to contracts executed and to be
performed wholly within such Province.
IN WITNESS WHEREOF, the parties have executed this agreement as of the date
first above written.
CANTAR/POLYAIR INC.
Per:_________________________
▇▇▇▇ ▇ ▇▇▇▇▇▇
Director
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Witness as to the Signature of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
For the sole and exclusive purpose of consenting to the stock option
provisions contained herein pursuant to Sections 6.4, 7(b) and (c) as they
relate to Consolidated Mercantile Corporation and Polyair Inter Pack Inc., the
undersigned hereby execute this Agreement.
CONSOLIDATED MERCANTILE CORPORATION
PER:________________________
PER:________________________
POLYAIR INTER PACK INC.
PER:________________________
PER:________________________
