Exhibit 10L
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT made the 1st day of October, 2001 by and between
STAKE TECHNOLOGY LTD., a corporation incorporated under the laws of Canada (the
"Company") and XXXXXX X. XXXXXXX, an Ontario resident ("Employee");
WHEREAS, Employee desires to be employed by the Company, and the Company
desires to employ the Employee, all as herein provided;
NOW THEREFORE for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
Article I. Definitions
Capitalized terms used in this Agreement shall have their defined meaning
throughout the Agreement. The following terms shall have the meanings set forth
below, unless the context clearly requires otherwise.
1.01 "Agreement" means this Employment Agreement, as from time to time
amended;
1.02 "Base Salary" means the total annual cash compensation payable on a
regular periodic basis, without regard to voluntary or mandatory deferrals, as
set forth at Section 3.01 of this Agreement;
1.03 "Board" means the Board of Directors of the Company;
1.04 "Bonus" means the bonus compensation payable as provided in Section
3.02 of this Agreement;
1.05 "Cause" means termination of Employee's employment by the Company
based on any one or more of the following:
(a) an act or acts of personal dishonesty taken by Employee
and intended to result in substantial personal
enrichment of Employee at the expense of the Company;
(b) violations by the Employee of his obligations and duties
under Section 2.02 which are demonstrably willful and
deliberate on Employee's part and which are not remedied
within a reasonable period after Employee's receipt of
notice of such violations from the Company; or
(c) the willful engaging by Employee in illegal conduct that
is injurious to the Company;
No act, or failure to act, on Employee's part shall be considered
"dishonest",
"willful" or "deliberate" unless done, or omitted to be done, by Employee
in bad faith and without reasonable belief that Employee's action or
omission was in, or opposed to, the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the board or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to
be done, by Employee in good faith and in the best interests of the
Company.
1.06 "Company" means Stake Technology Ltd., a corporation incorporated
under the laws of Canada.
1.07 "Confidential Information" means information that is proprietary to
the Company or proprietary to others and entrusted to the Company, whether or
not trade secrets. Confidential Information includes, but is not limited to,
information relating to business plans and to business as conducted or
anticipated to be conducted, and to past or current or anticipated products.
Confidential Information also includes, without limitation, information
concerning research, development, purchasing, accounting, marketing, selling and
services. All information that Employee has a reasonable basis to consider
confidential is Confidential Information, whether or not originated by Employee
and without regard to the manner in which Employee obtains access to this and
any other proprietary information.
1.08 "Disability" means the unwillingness or inability of Employee to
perform Employee's duties under this Agreement because of incapacity due to
physical or mental illness, bodily injury or disease for a period of 180
consecutive days.
1.09 "Disability Payment Date" shall mean the day which is twelve (12)
months following the 180 consecutive days of incapacity required under the
definition of "Disability".
1.10 "Dispute" means any claim, controversy or dispute arising between the
parties with respect to this Agreement.
1.11 "Employee" means Xxxxxx X. Xxxxxxx, an Ontario resident.
1.12 "Good Reason" means termination of employment by Employee based on
any one or more of the following (which termination must occur within ninety
(90) days of such event):
(a) an adverse change in Employee's status or position with the
Company, including, without limitation, any adverse change in
Employee's status or position as a result of a material
diminution in Employee's duties, responsibilities or authority
as of the date of this Agreement (or any status or position to
which Employee may be promoted after the date hereof) or the
assignment to Employee of any duties or responsibilities which
are inconsistent with Employee's status or position (except in
connection with the
termination of Employee's employment for Cause, Disability or
death, as herein provided);
(b) a reduction by the Company in Employee's Base Salary as the
same may be increased from time to time, except in
semi-retirement or retirement;
(c) the Company requiring Employee to be based anywhere other than
where Employee's office is located as of the date of this
Agreement, except for required travel on the Company's
business;
(d) any purported termination by the Company of this Agreement or
the employment of the Employee by the Company in a position
which is not expressly authorized by this Agreement or any
breach of this Agreement by the Company other than an
isolated, insubstantial and inadvertent failure not occurring
in bad faith and which is remedied by the Company within a
reasonable period of time after the Company's receipt of
notice thereof from Employee; or
(e) a successor succeeds to the interests of the Company and the
directors implement or threaten to implement one or all of(a),
(b), (c) or (d) above.
1.13 "Successor" means any corporation, individual, group, association,
partnership, firm, venture or other entity or person that, subsequent to the
date hereof, succeeds to the actual or practical ability to control (either
immediately or with the passage of time), all or substantially all of the
Company's business and/or assets, directly or indirectly, by merger,
consolidation, recapitalization, purchase, liquidation, redemption, assignment,
similar corporate transaction, operation of law or otherwise.
Article II Employment, Duties and Term
2.01 Employment. Upon the terms and conditions set forth in this
Agreement, the Company hereby employs Employee, and Employee accepts such
employment, as Chairman and Chief Executive Officer of Stake Technology Ltd.
2.02 Duties. During the term of this Agreement, and excluding any periods
of vacation, sick, disability or other leave to which Employee is entitled,
Employee agrees to devote his reasonable full time and attention during normal
business hours to the business and affairs of the Company and, to the extent
necessary, to discharge the r~ponsibilities assigned to Employee hereunder by
the board of directors and to use Employee's reasonable best efforts to perform
faithfully and efficiently such responsibilities. Employee's responsibilities
and duties shall be as mutually agreed upon
from time to time by the Employee and the Board but shall initially include
those items listed on Exhibit "A" attached hereto. Employee shall comply with
the Company's policies and procedures; provided that, to the extent such
policies and procedures are inconsistent with this Agreement, the provisions of
this Agreement shall control. The Company acknowledges that the Employee has
business and personal interests he carries on in his own time and the Board is
aware of such activities and has no objection to the same.
2.03 Certain Proprietary Information. If Employee possesses any
proprietary information of another person or entity as a result of prior
employment or relationship, Employee shall honour any legal obligation that
Employee has with that person or entity with respect to such proprietary
information.
2.04 Term. Subject to the continuing provisions of Sections 5.01 and 6.01,
the term of employment of Employee under this agreement shall be nineteen (19)
years and five (5) months to February 26, 2020. Nothwithstanding anything other
in this Agreement contained, the Company acknowledges to, and covenants to the
Employee that all compensation provisions of this Agreement, whether the same
relate to the period prior to February 26th 2005 or thereafter to February 26,
2020, shall remain in full force and effect notwithstanding that the Company
shall have terminated the employment of the employee as provided in Article IV
hereof or a Successor succeeds to the interests of the Company.
2.05 Early Retirement. The Employee shall carry out his duties as provided
in Section 2.02 hereof until he reaches the age of 65 on the 26th day of
February, 2005.
Notwithstanding the foregoing, however, the Employee may seek early retirement
and carry out his duties on a part time basis by giving the Board of Stake at
least one year's notice of his intention to do so. If such notice be given then,
at the conclusion of the notice period, the salary of the Employee shall be
reduced to $75,000 per annum payable in equal consecutive semimonthly periods,
in arrears, and he shall be entitled to a performance bonus of up to 50% of such
salary and the life insurance maintained by the Company on his life in the
amount of $1,000,000 shall continue until the contract is complete on February
26, 2003. He shall also continue to be entitled to receive directors' stock
options plus possible additions thereto as approved by the Board. All other
employee and automobile benefits to which the Employee shall be entitled shall
continue in full force. In exchange for compensation, the Employee shall provide
the Company with a minimum of fifty (50) days consulting services which shall
include his activities as a director of the Company. It is contemplated that the
Employee would continue as Chairman but not as Chief Executive Officer.
2.06 Full Retirement. Between the said 26th day of February, 2005 and the
26th day of February, 2010, the Employee shall be paid a consulting retainer of
$75,000 per annum in equal consecutive monthly instalments in arrears. Between
the said 26th day of February, 2010 and the 26th day of February, 2015, the
Employee shall be paid a
consulting retainer of $50,000 per annum in equal consecutive monthly
instalments in arrears subject to increase at the CPI rate commencing February
26, 2005. Between the said 26th day of February, 2015 and the 26th day of
February, 2020, the Employee shall be paid a consulting retainer of $25,000 per
annum in equal consecutive monthly instalments in arrears. If he remains on the
board of directors of the Company, the Employee shall continue to be entitled to
receive stock options on the same basis as the other directors and continue to
receive employee and automobile benefits to an annual maximum of $7,500,
adjusted for inflation at the CPI rate, commencing February 27th 2005. In
exchange for such compensation, the Employee shall provide the Company with a
minimum of one day per week consulting services for the period ending February
26, 2010.
2.07 Retiring Allowance. Upon his Early Retirement or his Full Retirement
as defined in Articles 2.05 and 2.06 above, the Company shall on the date of
such retirement of the Employee, or as soon as possible thereafter, pay to the
Employee a "retiring allowance" as defined in Section 248 of the Income Tax
(Canada) to the maximum amount allowed by the provisions of such Act on such
date.
2.08 Return of Proprietary Property. Employee agrees that all property in
Employee's possession belonging to the Company, including without limitation,
all software, documents, reports, manuals, memoranda, computer print outs,
custom lists, credit cards, keys, identification, products, access cards,
automobiles and all other property relating in any way to the business of the
Company are the exclusive property of the Company, even if Employee authored,
created or assisted in authoring or creating, such property. Employee shall
return to the Company all such documents and property immediately upon
termination of employment or at such earlier time as the Company may reasonably
request.
Article III. Compensation Benefits and Expenses
3.01 Base Salary. During the term of Employee's full time employment under
this Agreement, the Company shall pay Employee a Base Salary at an annual rate
that is not less than $257,500 (Canadian) or such higher annual rate as may from
time to time be approved by the board, such Base Salary to be paid in
substantially equal regular periodic payments in accordance with the Company's
regular payroll practices. If Employee's Base Salary is increased from time to
time during the term of Employee's employment under this Agreement, the
increased amount shall become the Base Salary for the remainder of the term and
any extensions of Employee's term of employment under this Agreement.
3.02 Performance Bonus. In addition to the remuneration to be paid to him
as set out in Section 3.01, Employee shall also be entitled to a Bonus of up to
70% of his Base Salary payable quarterly in arrears. Such Bonus shall follow the
same format of meeting and achieving budget and management goals as the bonus
plan of the Company.
3.03 Other Compensation and Benefits. During the term of Employee's
employment under this Agreement, the Company shall make available to Employee
all Plans in which Employee currently participates as an employee of Stake
Technology Ltd. In addition to any existing Plans in which Employee currently
participates, Employee shall be entitled to participate- in or receive benefits
under any Plan which is made available by the Company to other employees of the
Company who are similarly situated to Employee with respect to responsibility,
grade level, or other reasonable categorizations. Nothing paid to Employee under
any Plan shall be deemed to be in lieu of the Base Salary, Bonus, incentives or
compensation of any other nature otherwise payable to Employee.
3.04 Vacation. For the 1999 fiscal year of the Company, and for each
subsequent fiscal year that begins during the term of Employee's employment
under this Agreement, Employee shall be entitled to five (5) weeks paid vacation
(prorated for any partial fiscal year). Carryover of unused vacation shall be in
accordance with the then existing Company policy.
3.05 Business Expenses. During the term of Employee's employment under
this Agreement the Company shall, in accordance with and to the extent of, its
uniform policies in effect from time to time, bear all ordinary and necessary
business expenses incurred by Employee in performing Employee's duties as an
employee of the Company including, without limitation, all travel and living
expenses while away from home on business in the service of the Company,
provided that Employee accounts promptly for such expenses to the Company in the
manner reasonably prescribed from time to time by the Company.
3.06 Automobile. During the term of Employee's employment under this
Agreement, the Company shall furnish Employee with the use of an automobile for
business purposes in accordance with the Company's automobile policy.
Article IV. Termination
4.01 Cause. The Company may terminate the Employee's employment with the
Company for Cause. In the event of such termination, the Company shall pay all
Base Salary and benefits (but not Bonus), to Employee prorated through the date
of termination. Such payments shall be made according to the normal payroll
practices of the Company. Employee shall forfeit any of his unexercised stock
options at the date of termination for Cause.
4.02 Good Reason. The Employee may terminate employment with the Company
under this Agreement with Good Reason. In the event of such termination, the
Company shall pay all Base Salary, Bonus and benefits to Employee as per this
contract until February 26, 2020. Such payment shall be made according to the
normal payroll practices of the Company. All Employee's Stock Options shall
remain effective subsequent to Employee's termination for Good Reason.
4.03 Death. This Agreement shall immediately terminate upon the death of
Employee. In the event of such termination, the Company shall pay all Base
Salary, Bonus and benefits to the Employee's estate prorated to the date of the
Employee's death. Such payment shall be made according to the normal payroll
practices of the Company. Employee's estate shall only have those rights to
exercise any vested unexercised stock options as are provided in the relevant
stock option plan.
4.04 Disability. The Company may terminate the Employee or the Employee
may terminate his employment for Disability. In the event of such termination,
the Company shall pay all Base Salary, Bonus and benefits to the Employee
prorated through the Disability Payment Date. Such payments shall be made
according to the normal payroll practices of the Company. Employee shall forfeit
any unexercised stock options on the Disability Payment Date.
4.05 Employee Resignation. In the event the Employee resigns from
employment with the Company for other than Good Reason, death or Disability,
then the Company shall pay all Base Salary and benefits (but not Bonus) to the
Employee through the date of resignation. Such payments shall be made according
to the normal payroll practices of the Company. Employee shall forfeit any
unexercised stock options on the date of Employee's resignation for other than
for Good Reason, death or Disability.
4.06 Employee Dismissal. In the event the Employee's employment is
terminated by the Company for other than Cause, death or Disability, then the
Company shall pay all Base Salary, Bonus and benefits to Employee as per this
contract until February 26, 2020. Such payment shall be made according to the
normal payroll practices of the Company. All Employee's vested stock options
shall remain effective subsequent to Employee's dismissal for other than Cause,
death or Disability.
4.07 Survival. Notwithstanding the provisions of clause 4.06 of this
Article IV, in the event that the Employee's employment is terminated by death
or Disability, and the Employee leaves his wife him surviving, then the Company
shall pay all Base Salary, Bonus and Benefits to the Employee as per this
contract until the death of Employee's said wife or February 26, 2020 whatever
shall first occur. Such payment shall be made according to the normal payroll
practices of the Company. All Employee's vested stock options shall remain
effective subsequent to Employee's dismall, death or disability during the
effective provisions of this clause.
4.08 Buyout. At the option of the Company, in the event of the termination
of the Employee's employment for any of the reasons set out above in this
Article IV, the Company may pay in the manner and at the time contemplated by
clauses 4.01, 4.02, 4.03, 4.04, 4.05, 4.06 and 4.07 an amount equal to the
present value (as determined at the Company's expense by an actuary acceptable
to the Company and the Employee, which determination shall be final and binding)
of all Base Salary, Bonus and Benefits to Employee as they existed at the date
of termination, whichever is more favourable to the Employee.
Article V. Confidential Information
5.01 Prohibitions Against Use. Employee will not during or subsequent to
the termination of Employee's employment under this Agreement use or disclose,
other than in connection with Employee's employment with the Company, any
Confidential Information to any person not employed by the Company or not
authorized by the Company to receive such Confidential Information, without the
prior written consent of the Company. Employee will use reasonable and prudent
care to safeguard and protect and prevent the unauthorized use and disclosure of
Confidential Information. The obligations contained in this Section 5.01 will
survive- for as long as the Company in its sole judgment considers the
information to be Confidential Information. The obligations under this Section
5.01 will not apply to any Confidential Information that is now or becomes
generally available to the public through no fault of the Employee and will not
apply to Employee's disclosure of any Confidential Information required by law
or judicial or administrative process.
Article VI. Non-Competition
6.01 Non-Competition. As further consideration for this Agreement,
Employee covenants and agrees that during the term of this Agreement until
February 26, 2020, and for a period of one (1) year thereafter, Employee shall
not directly or indirectly:
(a) accept other employment or any other engagement, appointment
or association of any nature whatsoever with, or become an
investor or otherwise interested or concerned in or with, any
individual person, proprietorship, partnership, limited
partnership, joint venture, corporation, association or other
entity of any nature which is a competitor, director or
indirectly, with the business of the Company as now conducted
or which hereafter may in any way be conducted or engaged in
by the Company; or
(b) engage in any other activity whatsoever (whether on his own
account or for another) which is competitive with the Company
during the term of this Agreement.
Article VII. Injunction.
7.01 Injunction. Employee agrees that a breach or imminent breach of
Sections 5.01 or 6.01 above shall constitute a material breach of this Agreement
for which Company will have no adequate remedy at law. Employee agrees,
therefore, that Company's remedies upon a breach or imminent breach of Sections
5.01 or 6.01 above includes, but is not limited to, the right to preliminary and
permanent injunctive relief restraining Employee from further violation of such
Sections, as well as an equitable accounting of all profits or benefits arising
out of such breach, in addition to any other remedies available at law or in
equity or otherwise to Company or its affiliates.
Article VIII. General Provisions
8.01 Successors and Assigns.
(a) This Agreement shall be binding upon and enure to the benefit
of any Successor of the Company and any such Successor shall
absolutely and unconditionally assume all of the Company's
obligations hereunder.
(b) This Agreement and all rights of Employee hereunder shall
enure to the benefit of and be enforceable by Employee's
personal or legal representatives, executors, administrators,
successors, heirs, assigns, devisees and legatees. If Employee
should die while any amounts would still be payable to
Employee hereunder if Employee had continued to live, all such
amounts unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Employee's
devisee, legatee or other designee or, if there be no such
designee, to Employee's estate. Employee may not assign this
Agreement, in whole or in part, without the prior written
consent of the Company.
8.02 Notices. All notices, requests and demands given to or made pursuant
hereto shall, except as otherwise specified herein, be in writing and be
personally delivered or mailed postage prepaid, registered mail, to any party at
his or its address set forth on the last page of this Agreement. Either party
may, by notice hereunder, designate a changed address. Any notice hereunder
shall be deemed effectively given and received: (a) if personally delivered,
upon delivery; or (b) if mailed, on the registered date or the date stamped on
the certified mail receipt.
8.03 Withholding. To the extent required by any applicable law, including,
without limitation, any federal or provincial income tax or excise tax law or
laws, the Income Tax Act, the Employment Insurance Act or any comparable
federal, provincial or local laws, the Company retains the right to withhold
such portion of any amount or amounts payable to Employee under this Agreement
as the Company deems necessary.
8.04 Captions. The various headings or captions in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
8.05 Governing Law. The validity, interpretation, construction,
performance, enforcement and remedies of or relating to this Agreement, and the
rights and obligations of the parties hereunder, shall be governed by the
substantive laws of the Province of Ontario (without regard to the conflict of
laws, rules or statutes of any jurisdiction), and any and every legal proceeding
arising out of or in connection with this Agreement shall be brought in the
appropriate courts of the Province of Ontario, each of the parties hereby
consenting to the exclusive jurisdiction of said courts for this purpose.
8.06 Construction. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
8.07 Waivers. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right or remedy granted hereby or by any related document or by law.
8.08 Modification. This Agreement may not be modified or amended except by
written instrument signed by the parties hereto.
8.09 Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties hereto in reference to all the matters herein
agreed upon.
8.10 Counterparts. This Agreement may be executed in one (1) or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one (1) and the same instrument.
8.11 Survival. The parties expressly acknowledge and agree that the
provisions of this Agreement which by their express or implied terms extend
beyond the termination of Employee's employment hereunder shall continue in full
force and effect notwithstanding Employee's termination of employment hereunder
or the termination of this Agreement, respectively.
8.12 Disputes. To the maximum extent allowed by applicable law, any claim
or dispute between the parties arising out of or relating to this agreement
shall be submitted to and resolved by binding arbitration. Either party may file
a written demand for arbitration with the other with respect to any dispute or
disagreement arising out of this agreement. In the United States, such demand
shall also be filed with the American Arbitration Association and the
arbitration shall be conducted pursuant to the terms of the Federal Arbitration
Act and the Commercial Arbitration Rules of the American Arbitration Association
pursuant to the expedited procedures of the commercial rules then in effect. In
Canada, such arbitration shall be conducted pursuant to the provisions of the
Arbitrations Act (Ontario). The venue for such arbitration shall be the City of
Xxxxxxx, Xxxxxxx.
The arbitration shall be conducted before one arbitrator selected as follows:
within ten business days after the filing of the demand for arbitration, each
party shall designate a representative and, within ten business days after the
end of such ten day period, such representative shall select an arbitrator who
will serve as the sole arbitrator of the dispute. If the representatives of the
parties are in good faith unable to agree upon an arbitrator during the second
ten day period, the arbitrator, if the arbitration is to take place in the
United States, shall be selected through the American Arbitration Association's
arbitrator selection procedures arid, if the arbitration be taking place in
Canada, by a justice of the Ontario Superior Court of Justice, as provided in
the Arbitrations Act (Ontario).
The arbitrator so selected shall promptly fix the time, date and place of the
hearing and notify the parties accordingly. The arbitration shall be held and
the decision of the arbitrator shall be provided as quickly as is reasonably
possible and the arbitrator's decision may include an award of legal fees, costs
of arbitration and interest. The arbitrator shall promptly transmit an executed
copy of his decision and such decision shall be final, binding and conclusive
upon parties who shall have the right to enforce such decision by any court of
competent jurisdiction.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
STAKE TECHNOLOGY LTD.
Per: "Xxxxx Ing" Oct 17.01
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Per "Xxxxxx X. Xxxxxxx Oct 19.01
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