EXHIBIT 10 (zz)
442
----------
THE TIREX CORPORATION
----------
MANAGING DIRECTOR
OF
EUROPEAN MARKET DEVELOPMENT
----------
CONTRACTUAL EMPLOYMENT AGREEMENT
Contractual Employment Agreement, executed this 1st day of July, 1997 to
be effective retroactively as of January 15, 1997 between The Tirex Corporation,
a Delaware corporation ("Tirex") with offices located at 000 Xx. Xxxxxxx, Xxxxx
000 Xxxxxxxx, Xxxxxx, Xxxxxx X0X 0X0 and Xxxx Xxxxxxxx, Xxxx Xxx xx Xxxxxxxxx
00X, 0*X, 00000 Xxxxxx, Xxxxx ("Xxxxxxxx"). For purposes of this Agreement, the
term "Tirex" shall mean The Tirex Corporation and 3143619 Canada Inc. (known and
doing business as "Tirex Canada Inc."), and all other corporations,
partnerships, 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, Tirex is in the business of developing, manufacturing, and
distributing cryogenic scrap tire disintegration equipment and processes (the
"TCS-1 System") for the recovery of rubber crumb, wire and fiber from scrap
tires and wishes to launch the sale of its products and services in the markets
of the European Union.
Whereas, Xxxxxxxx has expertise and substantial business and marketing
experience and contacts in the European market as well as in various other areas
in Asia and the Middle East, which can be important to Tirex.
Whereas, Tirex wishes to assure itself of the marketing services of
Xxxxxxxx for the period provided in this Agreement, and Xxxxxxxx is willing to
provide such services to Tirex for the said period under the terms and
conditions hereinafter provided.
Now, Therefore, Witnesseth, that for and in consideration of the premises
and of the mutual promises and covenants herein contained, the parties hereto
agree as follows:
443
1. Term and Employment
1.1 Tirex agrees to and does hereby engage Xxxxxxxx, and Xxxxxxxx agrees
to and does hereby accept engagement by Tirex as Managing Director of European
Market Development for the one-year period, which commenced on January 15, 1997
(the "Engagement Period").
1.2 The terms of this Agreement shall be automatically extended for two
successive one-year periods, ("Extension Periods") unless, not later than 30
days prior to the end of the Engagement Period or the then current Extension
Period, either party shall give written notice to the other that such party does
not wish the term of this Agreement to be extended beyond the current Engagement
or Extension Period on the terms then in effect.
1.3 This Agreement cancels and replaces the European Market Development
Consulting Agreement (the "Consulting Agreement"), entered into by the parties
hereto on May 29, 1997, retroactively effective to January 15, 1997.
Notwithstanding the foregoing, the said Consulting Agreement shall remain in
effect with respect to all matters pertaining to certain market studies for the
Iberian Peninsular and India, which were heretofore conducted by GAPCO, Inc., a
corporation under the control of Xxxxxxxx, and the compensation paid therefor by
Tirex, receipt of which is hereby acknowledged by Xxxxxxxx.
2. Duties
2.1 Xxxxxxxx shall be responsible for undertaking and effecting activities
necessary to establish and develop markets for the TCS-1 System and for the
crumb rubber which will be produced by the operation of the TCS-1 System
throughout the European Economic Union, India, Pakistan, Saudi Arabia (the
"Territory"), and such other areas as the parties may, from time to time,
mutually agree. Such activities shall include, but not be limited to, the
following:
(a) setting up the appropriate corporate structure and organization for
importing and distributing the TCS-1 System and crumb rubber into
and throughout the Territory;
(b) establishing and managing a network of TCS-1 System distributors and
crumb rubber brokers in the Territory;
(c) arranging importation and installation of TCS-1 Systems and
providing customer support as required to ensure effective
installation and maintenance of all TCS-1 Systems in the Territory;
(d) providing after-sales support to customers;
(e) serving as a liaison with Tirex in North America on matters of
interest to Tirex, including but not limited to technical
developments in the use of crumb rubber;
444
(f) representing Tirex's interests in any other activities which Tirex
may, from time to time, undertake in the Territory, including local
manufacturing and trading in crumb rubber.
2.2 Tirex will, at all times during the Engagement Period:
(a) provide Xxxxxxxx with appropriate support, including product
specifications, sales literature, and all other necessary and
available sales materials; and
(b) ensure that all members of Tirex's technical staff in the Territory
are fully trained and able to provide effective after sales services
to customers.
All such services are to be performed only upon direct authorization from
Tirex and must be performed by Xxxxxxxx directly.
3. Compensation
3.1 For all services to be rendered hereunder by Xxxxxxxx during the
Engagement Period, Xxxxxxxx shall receive the following compensation:
(a) a salary, payable monthly, at the annual rate of $75,000 (Canadian)
commencing as of July 1, 1997.
(b) a sales commission of eight percent (8%) of the purchase price of
all sales of TCS-1 Systems within the Territory which shall be
payable, on a pro-rata basis, within two weeks of receipt by Tirex
of payments therefor, provided however that Tirex shall deduct, from
the amount of any sales commissions due under this Paragraph, all
salary payments made or payable to Xxxxxxxx pursuant to sub
paragraph 3.1(a), above.
3.2 In the event that this Agreement is terminated by Tirex prior to the
end of the Engagement Period or any Extension Period, pursuant to Tirex's notice
that it does not wish to extend this Agreement, as provided in Paragraph 1.2
above, and Xxxxxxxx gives written notice to Tirex, within 30 days of his receipt
of such notice, that he objects to the termination of this Agreement, then the
8% sales commission provided under subparagraph 3.1(b), above, shall be payable
to Xxxxxxxx on all sales of the TCS-1 System in the Territory for a period of
two years following such termination.
3.3 In the event that, from time to time, Tirex shall not have the
financial resources to pay the salary provided for above, then, the Tirex's
obligation to pay such salary will be satisfied by the issuance to Xxxxxxxx of
shares of the common stock of the Company ("Compensation Shares"), which shares
shall constitute compensation pursuant to the terms of this Agreement. All
Compensation Shares will be issued to Xxxxxxxx at a value equal to fifty percent
445
(50%) of the average of the high and low bid prices of Tirex America's common
stock as traded in the over-the-counter market and quoted in the NASDAQ
Electronic Bulletin Board during the period when such Compensation Shares were
earned.
4. Reimbursement of Expenses
During the Engagement Period, Tirex shall reimburse Xxxxxxxx for properly
documented expenses paid by him on behalf, or for the account, of Tirex in the
course of carrying out his duties hereunder. Such reimbursements shall not be
made for any expenses other than those listed below and the amount reimbursed
for any permitted category of expense shall not exceed the following:
Office rent $20,000
Office and marketing assistant 25,000
Advertising and publicity 20,000
Multi-lingual translation of product
information (excluding both English & French) 15,000
Legal costs 10,000
Travel to potential clients 15,000
Attendance at trade shows 10,000
5. Termination
This Agreement may be terminated at any time prior to the end of the
Engagement Period or any Extension Period, by mutual written Agreement of the
parties and pursuant to the following:
5.1 For Cause. The Company may terminate the Employee's employment at any
time "for cause" with immediate effect upon delivering written notice to the
Employee. For purposes of this Agreement, "for cause" shall include: (a)
embezzlement, theft, larceny, material fraud, or other acts of dishonesty; (b)
material violation by employee of any of his obligations under this Agreement;
(c) conviction of or entrance of a plea of guilty or nolo contendere to a felony
or other crime which has or may have a material adverse effect on the Employee's
ability to carry out his duties under this Agreement or upon the reputation of
the Company; (d) conduct involving moral turpitude; (e) gross insubordination or
repeated insubordination after written warning by the President of the Company;
or (f) material and continuing failure by the Employee to perform the duties
described in Section 2 above in a quality and professional manner for at least
thirty (30) days after written warning by the Board of Directors or the
President of the Company. Upon termination for cause, the Company's sole and
exclusive obligation will be to pay the Employee his compensation earned through
the date of termination, and the Employee shall not be entitled to any
compensation after the date of termination.
5.2 Upon Death. In the event of the Employee's death during the term of
the this Agreement, the Company's sole and exclusive obligation will be to pay
to the Employee's
446
spouse, if living, or to his estate, if his spouse is not then living, the
Employee's compensation earned through the date of death.
5.3 Upon Disability. The Company may terminate the Employee's employment
upon the Employee's total disability. The Employee shall be deemed to be totally
disabled if he is unable to perform his duties under this Agreement by reason of
mental or physical illness or accident for a period of three consecutive months.
Upon termination by reason of the Employee's disability, the Company's sole and
exclusive obligation will be to pay the Employee his compensation earned through
the date of termination.
6. Secrets
Xxxxxxxx agrees that any trade secrets or any other like information of
value relating to the business and/or field of interest of Tirex or any of its
affiliates, or of any corporation or other legal entity in which Tirex or any of
its affiliates has an ownership interest of more than twenty-five per cent
(25%), including but not limited to, information relating to inventions,
disclosures, processes, systems, methods, formulae, patents, patent
applications, machinery, materials, research activities and plans, costs of
production, contract forms, prices, volume of sales, promotional methods, list
of names or classes of customers, which he has heretofore acquired during his
engagement by Tirex or any of its affiliates or which he may hereafter acquire
during the Engagement Period and the three-year period beginning after
termination of the Engagement Period as the result of any disclosures to him, or
in any other way, shall be regarded as held by Xxxxxxxx and his personnel, if
any, in a fiduciary capacity solely for the benefit of Tirex, its successors or
assigns, and shall not at any time, either during the term of this Agreement or
thereafter, be disclosed, divulged, furnished, or made accessible by Xxxxxxxx
and his personnel, if any, to anyone, or be otherwise used by them, except in
the regular course of business of Tirex or its affiliates. Information shall for
the purposes of this Agreement be considered to be secret if not known by the
trade generally, even though such information may have been disclosed to one or
more third parties pursuant to distribution agreements, joint venture agreements
and other agreements entered into by Tirex or any of its affiliates.
7. Non-Competition
Unless this Agreement is terminated by Tirex prior to the end of the
Engagement Period or any Extension Period, without cause and over the objections
of Xxxxxxxx, during the two years following the termination of this Agreement,
Xxxxxxxx will not provide consulting services either as a consultant or as an
employee, either directly or otherwise to any business which is, or is preparing
or intending to be, in competition with Tirex.
8. Assignment
447
8.1 This Agreement may be assigned by Tirex as part of the sale of
substantially all of its business; provided, however, that the purchaser shall
expressly assume all obligations of Tirex under this Agreement. Further, this
Agreement may be assigned by Tirex to an affiliate, provided that any such
affiliate shall expressly assume all obligations of Tirex under this Agreement,
and provided further that Tirex shall then fully guarantee the performance of
the Agreement by such affiliate. Xxxxxxxx agrees that if this Agreement is so
assigned, all the terms and conditions of this Agreement shall obtain between
such assignee and himself with the same force and effect as if said Agreement
had been made with such assignee in the first instance.
8.2 This Agreement is personal to Xxxxxxxx and may not be assigned by him.
9. Entire Understanding
This Agreement contains the entire understanding between the parties and
supersedes all prior and collateral communications, reports, agreements, and
understandings between the parties. No change, modification, alteration, or
addition to any provision hereof shall be binding unless in writing and signed
by authorized representatives of both parties. This Agreement shall apply in
lieu of and notwithstanding any specific statement associated with any
particular information or data exchanged, and the duties of the parties shall be
determined exclusively by the aforementioned terms and conditions.
Notwithstanding the foregoing, the parties agree that certain provisions of this
Agreement may be changed or amended for the purpose of accommodating tax
considerations of the parties without affecting the basic terms and conditions
of this Agreement.
10. Survival of Certain Agreements
The covenants and agreements set forth in Articles 4 and 5, hereof, shall
survive the expiration of the Engagement Period and shall survive termination of
this Agreement and remain in full force and effect.
11. Notices
11.1 All notices required or permitted to be given hereunder shall be
delivered by hand, certified mail, or recognized overnight courier, in all cases
with written proof of receipt required, addressed to the parties as set forth
below and shall be deemed given upon receipt as evidenced by written and dated
receipt of the receiving party.
11.2 Any notice to Tirex or to any assignee of Tirex shall be addressed as
follows:
The Tirex Corporation
000 Xx. Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx
448
Canada H3C 1L5
11.3 Any notice to Xxxxxxxx shall be addressed as follows:
Xx. Xxxx Xxxxxxxx
Gran Xxx xx Xxxxxxxxx 00X, 0xX
00000 Xxxxxx, Xxxxx
11.4 Either party may change the address to which notice to it is to be
addressed, by notice as provided herein.
12. Applicable Law
This Agreement shall be interpreted and enforced in accordance with the
laws of the State of Delaware.
13. Interpretation
Whenever possible, each Article of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
Article is unenforceable or invalid under such law, such Article shall be
ineffective only to the extent of such unenforceability or invalidity, and the
remainder of such Article and the balance of this Agreement shall in such event
continue to be binding and in full force and effect.
14. Prior Agreements
Subject to the provisions of Paragraph 1.3, this Agreement supersedes and
cancels any and all prior agreements, whether written or oral, between the
parties.
15. Arbitration
In the event of any dispute among the parties hereto with respect to this
Agreement, the matters at issue will be submitted to the International Chamber
of Commerce in Geneva for arbitration, and the findings of the latter will be
binding on both parties.
In Witness Whereof, the parties hereto have executed the above Agreement
as of the day and year first above written.
449
The Tirex Corporation
By /s/ Xxxxxxx X. Xxxxx
----------------------------------
Xxxxxxx X. Xxxxx, President
/s/ Xxxx Xxxxxxxx
----------------------------------
Xxxx Xxxxxxxx
450
