Exhibit 10.4
THIS EMPLOYMENT AGREEMENT made as of the 14th day of August, 1998.
BETWEEN:
CAPTIAL ENVIRONMENTAL RESOURCE INC., an Ontario corporation having its
head office at 0000 Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx
(hereinafter called "Capital")
-and-
XXXXXX XXXXXXXX, of X.X. Xxx 0, Xxxxxxxx, Xxxxxxx
(hereinafter called the "Employee")
WHEREAS:
1. Capital and the Employee are parties to a letter agreement dated June
19, 1997, as amended by memoranda dated January 30, 1998, May 19, 1998
and August 14, 1998 setting forth the terms of the Employee's
employment with Capital.
2. The parties wish to incorporate into this Employment Agreement the
existing employment arrangement and amend certain terms thereof as
herein provided.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT the parties agree as follows:
1. EMPLOYMENT
1.01 Capital hereby employs the Employee as its President and Chief
Operating Officer, effective January 30, 1998. As such, the Employee
will have general supervision of the business of Capital and shall
perform such duties, commensurate with his position, as may be assigned
to him from time to time by Xxxx Xxxxxxx, the Chairman and Chief
Executive Officer of Capital. The Employee hereby accepts employment
with Capital upon the terms and conditions contained herein and agrees
to devote his full time, attention and efforts to promote and further
Capital's business.
2. COMPENSATION
2.01 For all services rendered by the Employee to Capital, Capital shall pay
and reimburse the Employee the following amounts:
(a) The Employee's base salary shall, effective July 1, 1998, be
$170,000.00 per annum, payable in advance in equal monthly
instalments, or on any other periodic basis consistent with
Capital's payroll procedures for executive employees. The
Employee's base salary shall be reviewed at least annually and
shall be increased as agreed by Capital and the Employee from
time to time. Upon the completion
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of an initial public offering of the shares of common stock of
Capital on a recognized stock exchange (which shall for purposes
of this Agreement include the New York Stock Exchange, the
American Stock Exchange, the NASDAQ National Market and the
Toronto Stock Exchange), the Employee's base salary will be the
greater of U.S.$125,000, converted into Canadian dollars or Cdn
$170,000.00.
(b) The Employee shall be entitled to receive the following
additional compensation:
(i) An annual bonus, payable at the discretion of the Board of
Directors of Capital, having regard to the degree of success
with which Employee has performed the services required of
him, of not less than fifty percent (50%) of Employee's base
salary. The amount of the bonus will be fixed by the Board
of Directors and paid not later than ninety (90) days after
each fiscal year end of Capital;
(ii) Participation at the same level as other executive employees
of Capital in a full benefits package and pension plan;
(iii) Four (4) weeks vacation in each fiscal year, to be taken at
such times as mutually agreed between the Employee and
Capital. Vacation may only be taken within the year of
entitlement and may not be accumulated from year to year
unless otherwise mutually agreed;
(iv) Stock option grants as and when authorized by the Board of
Directors of Capital;
(v) Capital will provide Employee with a vehicle commensurate
with the Employee's position as President, which vehicle
shall be leased by Capital. Capital will pay all operating,
maintenance and insurance charges in respect of the vehicle.
Capital will provide Employee with a mobile telephone and
pay all charges incurred by Employee in connection with the
use of such telephone;
(vi) Reimbursement of all expenses reasonably incurred in the
performance of his duties, subject to submission of
appropriate documentation in accordance with Capital's
expense reimbursement policy in effect from time to time.
(c) Capital will, at its expense, throughout the term of this
Agreement maintain directors and officers indemnity insurance for
such amount(s) as Capital considers appropriate having regard to
the standards in the waste management industry for companies with
similar amounts of capital. Capital agrees to indemnify and save
Employee harmless from all losses, costs and damages suffered by
Employee as a result of his employment with Capital to the
fullest extent permitted by law.
(d) Within thirty (30) days of the completion of any of the
following, Capital will pay
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the Employee a one-time bonus of one hundred and twenty five
thousand dollars (C $125,000.00):
(i) an initial public offering of shares of common stock of
Capital on a recognized stock exchanged (which for purposes
of this Agreement shall include the NASDAQ National Market,
the New York Stock Exchange, the American Stock Exchange and
the Toronto Stock Exchange);
(ii) the disposition by Capital of all or substantially all of
its waste management and related assets in Ontario; or
(iii) an event or series of events (whether a share purchase,
amalgamation, merger, consolidation, pooling or other
business combination or otherwise) by which any person or
group of affiliated persons becomes the beneficial owner of
more than 50% of the combined voting power of the then
outstanding securities of Capital, where such person or
group of affiliated persons, immediately prior to the
occurrence of such event or series of events, was not the
beneficial owner of at least 50% of the combined voting
power of the then outstanding securities of Capital.
3. TERM/TERMINATION
3.01 The initial term of this Agreement shall be three (3) years, beginning
July 4, 1997 and expiring on July 3, 2000 and unless terminated as herein
provided, shall continue thereafter on a year-to-year basis, on the same
terms and conditions contained herein, unless amended by mutual agreement.
3.02 Notwithstanding the foregoing, if Capital shall complete an initial public
offering of its common shares (or other securities) on a recognized stock
exchange (which shall for purposes of this Agreement include the New York
Stock Exchange, the American Stock Exchange, NASDAQ National Market and
the Toronto Stock Exchange), this Agreement shall be automatically
extended for a further term of three (3) years from the date of completion
of such initial public offering.
3.03 Capital may terminate this Agreement in the following circumstances:
(a) for just and reasonable cause, without notice and without pay in lieu
of notice. For purposes of this Agreement. "just cause" shall include
serious misconduct, habitual neglect of duty, incompetence or conduct
incompatible with your duties, and wilful disobedience of any proper
direction or order of the Chairman of the Board of Capital;
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(b) the Employee's inability to perform his duties under this Agreement
because of illness, physical or mental disability, or other incapacity
which continues for an uninterrupted period in excess of three(3)
months or a cumulative period of six (6) months in any twelve (12)
month period;
(c) without cause and without notice, provided that Capital shall pay to
the Employee the following amounts:
(i) Base salary for a period of twenty four (24) months, to be paid
in a lump sum, at the option of the Employee, at the time of such
termination;
(ii) Bonus of two times (2x) the minimum annual bonus payable to the
Employee, together with any bonus earned by the Employee to the
date of termination. Bonus to be paid in a lump sum, at the
option of the Employee, at the time of such termination;
(iii) All stock options granted to the Employee prior to such
termination shall fully vest effective at the date of such
termination and shall be exercisable for a period of twelve (12)
months thereafter, notwithstanding any other provision of the
Stock Option Agreement entered into between the Employee and
Capital. (iv) All benefits and other entitlements owing to the
Employee hereunder shall be payable for the same period as base
salary is payable under subsection (c) (i) hereof.
(iv) All benefits and other entitlements owing to the Employee
hereunder shall be payable for the same period as base salary
is payable under subsection (c)(i) hereof
(d) on the Employee's death, Capital will pay to the Employee's
beneficiary, within 10 days of Employee's death, an amount equal to
accrued compensation owing to the Employee on the date of his death
(including pro rata salary, bonus and other benefits, deferred
compensation and accrued vacation pay). Capital will cause all death
benefits payable as a consequence of the Employee's death to be paid
to the Employee's beneficiary as soon as practicable.
3.04 Capital shall be deemed to have terminated the Employee's employment
without cause and without notice, and the Employee shall be entitled to
payment of the amounts set out in section 3.03 (c) above in the following
circumstances
(a) Xxxx Xxxxxxx shall cease to be employed full-time as the Chairman
and/or Chief Executive Officer of Capital; and/or
(b) Capital shall require the Employee, as a condition of his employment,
to relocate outside of the Province of Ontario or commute for work to
a location outside of the Province of Ontario.
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3.04 The Employee shall provide Capital with not less than three (3) months
notice of his intention to resign.
4. NON-COMPETITION/CONFIDENTIALITY
4.01 Simultaneously with and as a condition to Capital offering employment to
the Employee on the terms and conditions set out herein, the Employee has
executed and delivered a Non-competition and Confidentiality Agreement in
the form attached hereto, which shall remain in full and force in
accordance with its terms.
5. COMPLETE AGREEMENT
5.01 This Agreement sets forth the entire agreement between the parties
respecting the subject matter hereof and supersedes any and all other
agreements, either oral or in writing between Capital and the Employee with
respect to the employment of the Employee. This Agreement may only be
modified by further agreement in writing signed by the parties.
6. GOVERNING LAW
6.01 This Agreement shall be construed in accordance with and governed by the
laws of the Province of Ontario and the laws of Canada applicable therein.
7. MISCELLANEOUS
7.01 This Agreement shall be binding upon the parties and shall inure to the
benefit of the parties and their respective heirs, executors,
administrators, successors and assigns. If Capital is merged or
consolidated with another entity, such other entity shall automatically
succeed to the rights, powers and responsibilities of Capital hereunder.
IN WITNESS WHEREOF the parties have duly executed this Agreement as of the
date first noted above.
CAPITAL ENVIRONMENTAL RESOURCE INC.
By: /s/ (Illegible)
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/s/ (Illegible) /s/ Xxxxxx Xxxxxxxx
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Witness Xxxxxx Xxxxxxxx
THIS AMENDING AGREEMENT made this 30th day of October, 1998 to an Employment
Agreement dated as of August 14, 1998 between Capital Environmental Resource
Inc., an Ontario corporation having its head office at 0000 Xxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxx ("Capital") and Xxxxxx Xxxxxxxx, of X.X. Xxx 0, Xxxxxxxx,
Xxxxxxx (the "Employee")
WITNESSES THAT the parties hereby agree to amend the terms of the
above-described Employment Agreement as follows:
1. A new section 3.06 is added as follows:
If, during the term hereof, there is an event or series of events (whether
a share purchase, amalgamation, merger, consolidation, pooling or other
business combination or otherwise) by which any person or group of
affiliated persons becomes the beneficial owner of more than 50% of the
combined voting power of the then outstanding securities of Capital, where
such person or group of affiliated persons, immediately prior to the
occurrence of such event or series of events, was not the beneficial owner
of at least 50% of the combined voting power of the then outstanding
securities of Capital, the Employee shall have the irrevocable option
exercisable as hereinafter provided, to require Capital to pay to the
Employee at the time of the occurrence of such event or series of events,
in cash, the difference between the exercise price of all unexercised
options granted to the Employee and the market value of the securities to
which the Employee would be entitled upon the exercise of all unexercised
options. For purposes of this provision, the market value of the securities
to which the Employee would be entitled upon the exercise of his
unexercised options, shall be determined on the same basis as the
securities of Capital are valued in such event or series of events
described in this section 3.06. The Employee shall exercise the option
granted hereunder by delivering written notice of the exercise thereof to
any officer or director of Capital no later than three (3) business days
prior to the completion of the event or series of events giving rise to the
right to exercise the option granted herein. If the Employee does not
exercise his option as aforesaid, it shall thereafter expire and be of no
further force and effect.
2. In all other respects the parties confirm that the terms of the Employment
Agreement remain in full force and effect, unamended.
Dated at Burlington, this 30th day of October, 1998.
Capital Environmental Resource Inc.
By: /s/ (Illegible)
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/s/ (Illegible) /s/ Xxxxxx Xxxxxxxx
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Witness Xxxxxx Xxxxxxxx
