Exhibit 10.37
EXECUTIVE
SEVERANCE AGREEMENT
This Agreement is made as of the 15th day of October, 2002
BETWEEN:
NORSKE XXXX CANADA LIMITED, a corporation continued and amalgamated
under the laws of Canada
(the "Corporation")
OF THE FIRST PART,
AND:
XXXXX X. XXXXXXXX
(the "Executive")
OF THE SECOND PART.
WHEREAS:
A. The Executive is a senior executive of the Corporation and has made and
is expected to continue to make significant contributions to the
Corporation and its shareholders, including in particular, in
connection with any proposed sale or disposition of the shares or
assets of the Corporation which may be undertaken by the Corporation or
its principal shareholder, Norske Skogindustrier ASA ("NSI"); and
B. The Corporation desires to assure itself of both the present and future
continuity of management, to induce the Executive to remain with the
Corporation in connection with any Proposed Transaction (as defined
below) and to provide severance benefits for the Executive to be
available only on and after completion of a Proposed Transaction.
NOW THEREFORE in consideration of the mutual covenants and agreements contained
in this Agreement and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged by each of the parties), the
Corporation and the Executive agree as follows:
1. INTERPRETATION
1.1. DEFINITIONS. In this Agreement, the following terms will have the
following meanings unless the context otherwise requires:
(a) "Base Salary" means the annualized monthly base salary of the
Executive at the date of completion of a Proposed Transaction;
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(b) "Business Day" means any day other than a Saturday, Sunday or
a day observed as a holiday in Vancouver, British Columbia;
(c) "Board" means the board of directors of the Corporation;
(d) "Cause" means the occurrence of any of the following:
(i) continued failure by the Executive to substantially
perform his duties with the Corporation (other than
any such failure resulting from his Disability) after
a demand for substantial performance improvement has
been delivered in writing to the Executive by the
Corporation which specifically identifies the manner
in which it is believed that the Executive has not
substantially performed his duties and after allowing
the Executive an opportunity to improve his
performance; or
(ii) engaging by the Executive in misconduct which is
materially injurious (financially or otherwise) to
the reputation or business of the Corporation;
(e) "Common shares" means the Common shares without par value in
the capital of the Corporation;
(f) "Constructive Dismissal" means a unilateral change by the
Corporation, without the Executive's consent, of a fundamental
term or condition of the Executive's employment including:
(i) a significant reduction in the Executive's
responsibilities and duties;
(ii) a decrease of more than 5% in the total compensation
package provided to the Executive; and
(iii) a transfer on a permanent basis of the Executive to
an office or location other than within the Greater
Vancouver Regional District;.
(g) "Disability" means the physical or mental illness of the
Executive resulting in the Executive's absence from his full
time duties with the Corporation;
(h) "Dispute" has the meaning ascribed thereto in section 7;
(i) "Effective Date" means the date of termination of employment
of the Executive specified in a notice given by the
Corporation or the date of Constructive Dismissal;
(j) "Executive Benefits" has the meaning ascribed thereto in
subsection 4.1(b) or subsection 5.1(b) as applicable;
(k) "Normal Retirement Date" means the date, if any, as of which
the Executive would be required to retire, determined in
accordance with the Corporation's practices and policies
relating to retirement generally, which practices and
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policies apply to its senior executives and are in effect
immediately prior to the completion of a Proposed
Transaction or at the Effective Date, whichever is more
favourable to the Executive and, in absence of any such
practices and policies, means the date as of which the
Executive attains the age of 65;
(l) "Person" means any individual, partnership, joint venture,
company, corporation, unincorporated association or any other
entity;
(m) "Proposed Transaction" shall mean any of the following:
(i) any change in ownership, direct or indirect, of
shares of the Corporation and/or securities
("Convertible Securities") convertible into,
exchangeable for or representing the right to acquire
shares of the Corporation, as a result of or
following which NSI beneficially owns, directly or
indirectly, or exercises control or direction over,
shares of the Corporation and/or Convertible
Securities such that, assuming only the conversion,
exchange or exercise of Convertible Securities
beneficially owned by NSI, NSI would beneficially
own, directly or indirectly, or exercise control or
direction over, shares of the Corporation that would
entitle the holders thereof to cast more than 50% of
the votes attaching to all shares of the Corporation
that may be cast to elect directors of the
Corporation;
(ii) any change in ownership, direct or indirect, of
shares of the Corporation and/or Convertible
Securities, as a result of or following which an
Acquiror (as defined in paragraph (vi) below)
beneficially owns, directly or indirectly, or
exercises control or direction over, shares of the
Corporation and/or Convertible Securities such that,
assuming only the conversion, exchange or exercise of
Convertible Securities beneficially owned by the
Acquiror,
A. the Acquiror would beneficially own,
directly or indirectly, or exercise control
or direction over, shares of the Corporation
that would entitle the holders thereof to
cast more than 35% of the votes attaching to
all shares of the Corporation that may be
cast to elect directors of the Corporation,
and
B. if NSI then beneficially owns, directly or
indirectly, or exercises control or
direction over, shares of the Corporation
that would entitle holders thereof to cast
more than 35% of the votes attaching to all
shares of the Corporation that may be cast
to elect directors of the Corporation, the
Acquiror would beneficially own, directly or
indirectly, or exercise control or direction
over, shares of the Corporation that would
entitle the holders thereof to cast more of
the votes attaching to all shares of the
Corporation that may be cast to elect
directors of the Corporation than may be
cast by holders of shares of the Corporation
beneficially owned, directly or indirectly,
or over which control or direction is
exercised, by NSI;
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(iii) the acquisition by NSI or an Acquiror of all or
substantially all of the assets of the Corporation;
or
(iv) a merger of the Corporation with or into one or more
other companies, corporations, trusts or other
entities (other than subsidiaries of, or trusts or
other entities controlled by, the Corporation):
A. where the members of the Board of Directors
of the Corporation immediately prior to the
consummation of the merger do not constitute
a majority of the directors, trustees or
other governing body of the company,
corporation, trust or other entity surviving
or continuing from the merger; or
B. that results in the securityholders of the
parties to the merger other than the
Corporation owning, directly or indirectly,
securities of the company, corporation,
trust or other entity surviving or
continuing from the merger that entitle the
holders thereof to cast more than 35% of the
votes attaching to all securities of the
surviving or continuing company,
corporation, trust or other entity that may
be cast to elect its directors, trustees or
other governing body; or
C. that has been designated by resolution of
the directors of the Corporation as a
Proposed Transaction prior to the
consummation of the merger;
and for the purposes of this clause 1.1(m)
(v) the expression "NSI" shall include any group of
persons which includes NSI, any persons acting
jointly or in concert with NSI and any persons
associated or affiliated within the meaning of the
Securities Act (British Columbia) with NSI, or any
such group of persons or persons acting jointly or in
concert;
(vi) the expression "Acquiror" shall mean a person, group
of persons or persons acting jointly or in concert,
or persons associated or affiliated within the
meaning of the Securities Act (British Columbia) with
any such person, group of persons or persons acting
jointly or in concert, but shall not include an
Acquiror as so defined which consists of or includes
NSI; and
(vii) the expressions "change in ownership", "acquisition"
and "merger" include, as the context may require, a
transaction or series of transactions by way of
takeover bid, purchase, exchange, lease, statutory
amalgamation, statutory merger, reorganization,
consolidation, statutory arrangement,
recapitalization, liquidation or other business
combination;
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(n) "Protection Period" means the period commencing on the date of
the completion of a Proposed Transaction and ending on the
second anniversary of that date;
(o) "Related Person" means in relation to any Person participating
in a Proposed Transaction, any Affiliate (as defined in the
Canada Business Corporations Act)) of that Person and any
other Person which, pursuant to any agreement, commitment or
understanding, acts jointly or in concert with that Person in
connection with the completion of a Proposed Transaction;
(p) "Retirement" means the retirement of the Executive from
employment by the Corporation on or after the Normal
Retirement Date;
(q) "SAR" means any right granted pursuant to and in accordance
with the terms of any of the SAR Plan;
(r) "SAR Plan" means any share appreciation right plan or similar
plan of the Corporation in respect of Common shares, in each
case as constituted and administered at the Effective Date;
(s) "Selling Price Per Share" means the purchase price or value of
the consideration paid for each Common share of the
Corporation purchased or otherwise acquired pursuant to a
Proposed Transaction and which, in the case of a Proposed
Transaction involving the sale of all or substantially all of
the assets of the Corporation, will be equal to the aggregate
purchase price (after deduction of debt retired by the
Corporation or assumed by the purchaser in connection with the
Proposed Transaction and transaction costs) for all of such
assets in the Proposed Transaction divided by the number of
outstanding Common shares of the Corporation on the date of
completion of the Proposed Transaction;
(t) "Short Term Incentive Plan" means the Corporation's Short Term
Incentive Plan and any other executive cash bonus or incentive
plan of the Corporation, in each case as constituted and
administered at the Effective Date;
(u) "Stock Option" means any right to subscribe for Common shares
issued pursuant to any Stock Option Plan;
(v) "Stock Option Plan" means the Corporation's 1995 Stock Option
Plan and any other employee stock option plan of the
Corporation, in each case as constituted and administered at
the Effective Date;
(w) "Term" means the period commencing as of the date hereof and
ending on September 30, 2004 or such date later than September
30, 2004 as the Corporation may from time to time by notice to
the Executive specify;
(x) "Termination Date" means the earliest of:
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(i) the date immediately following the expiry of 24
months from the Effective Date;
(ii) the date of commencement of alternate employment by
the Executive as contemplated by section 4.2;
(iii) the date of the termination of the Executive's
employment with the Corporation by reason of his
death or for Cause;
(y) "Termination Leave" means the period commencing on the
Effective Date and ending on the Termination Date.
1.2. DATE OF COMPLETION - For the purposes of this Agreement, the term "date
of completion" where used in connection with a Proposed Transaction
means the date on which the actual transfer of the Common shares or
assets of the Corporation or corporate transaction comprising the
Proposed Transaction takes effect.
1.3. GENDER AND NUMBER. Unless otherwise expressly provided for in this
Agreement or unless the context otherwise requires, words importing the
singular include the plural and vice versa and words importing gender
include all genders.
2. OPERATION OF AGREEMENT
2.1. Subject to subsection 2.2, this Agreement will be effective and binding
on the parties hereto immediately upon its execution but, anything in
this Agreement to the contrary notwithstanding, this Agreement will not
be operative unless and until the completion of a Proposed Transaction
occurs. Upon and concurrently with the completion of a Proposed
Transaction at any time during the Term, without further action on the
part of any party, this Agreement shall become immediately operative.
For the avoidance of doubt, this Agreement will not be applicable in
respect of the termination of the Executive's employment with the
Corporation for any reason whatsoever at any time prior to the
commencement of the Protection Period, in which case the Executive's
then existing terms of employment and legal rights in connection with
any such termination will apply.
2.2. Section 3 of this Agreement will not apply to any termination by the
Corporation of the Executive's employment in connection with the
completion of any Proposed Transaction if:
(a) the Executive has entered into a new employment arrangement
with the purchaser of all or substantially all of the assets
of the Corporation as contemplated in paragraph 1.1(m)(iii)
(the "Purchaser"); and
(b) the Purchaser has agreed to be bound by and has assumed all of
the obligations of the Corporation under this Agreement.
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For greater certainty, if the Executive remains employed by the
Purchaser for the duration of the Protection Period, all rights of the
Executive under this Agreement as against the Purchaser will cease
immediately following the last day of that Period.
3. TERMINATION AFTER COMPLETION OF A PROPOSED TRANSACTION
3.1. In the event during the Protection Period of either (i) the receipt by
the Executive of notice of termination of his employment by the
Corporation (other than by reason of his Disability or Retirement or
for Cause) or (ii) the Executive's Constructive Dismissal, the
Executive may, within seven days after receipt of notice of termination
or the Executive's Constructive Dismissal, whichever is applicable,
elect by written notice to the Corporation to accept Termination Leave
in accordance with section 4 of this Agreement or receive a Lump Sum
Settlement in accordance with section 5 of this Agreement.
3.2. If no election is made by the Executive within the period specified in
section 3.1, the Executive shall be deemed to have elected to accept
Termination Leave in accordance with section 4.
4. TERMINATION LEAVE ELECTION
4.1. Subject to subsection 4.2, during the Termination Leave the Executive
will remain an employee of the Corporation and will be entitled to a
leave of absence from work on the following terms:
(a) the Corporation will on the last Business Day of each month
during the Termination Leave pay to the Executive an amount
equal to one-twelfth (1/12) of the Base Salary, less all
deductions provided for in Schedule A or as required of the
Corporation by law;
(b) all benefits and perquisites to which the Executive was
entitled immediately prior to the Effective Date will
terminate on that Date, except that the Corporation will
provide to, continue or maintain for the Executive, as
applicable, the benefits and perquisites described in Schedule
A (the "Executive Benefits");
(c) the Executive will continue to participate in the Short Term
Incentive Plan on the following terms:
(i) subject to paragraph (ii) of this subsection,
payments to the Executive of any bonus awards under
the Short Term Incentive Plan will continue to be
made to the Executive in accordance with the Plan's
terms;
(ii) bonus awards payable to the Executive under the Short
Term Incentive Plan will be based solely on the
corporate financial performance portion of the awards
payable under the Plan and the Executive will not be
entitled to receive any awards which may be payable
under the Plan based on achievement of individual
objectives;
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(iii) in the event that at any time during the Termination
Leave a determination of bonus awards cannot be made
under the Short Term Incentive Plan as a result of a
material change in the Corporation's business, any
merger or other corporate reorganization involving
the Corporation or the disposition of all or some of
its assets, the Corporation will pay a bonus award to
the Executive based on an amount equal to 75% of the
Executive's target bonus amount for the fiscal year
of the Corporation in which the Effective Date
occurred, which amount will be paid to the Executive
in accordance with the terms of the Plan and this
Agreement; and
(iv) any payment to the Executive under the Short Term
Incentive Plan for the fiscal year in which the
Termination Date occurs will be pro-rated to the
Termination Date; and
(d) all obligations, if any, of the Corporation to the Executive
in respect of the granting of any SAR or Stock Option shall
terminate on the Effective Date.
4.2. If, after the Effective Date, the Executive commences alternate
employment (of which the Executive shall promptly notify the
Corporation) which is comparable as to aggregate annual compensation
and authority, duties and responsibilities to the position held by the
Executive immediately prior to the Effective Date, the obligations of
the Corporation pursuant to section 4.1 will upon the commencement of
such alternate employment immediately be altered as follows:
(a) all rights of the Executive to receive monthly payments
pursuant to subsection 4.1(a) will cease and the Corporation
will forthwith pay to the Executive a cash lump sum comprised
of an amount equal to one half of the amount which the
Executive would have been entitled to receive pursuant to
subsection 4.1(a) for each month (or portion thereof)
remaining in the Termination Leave had it continued for a
period of 24 months from the Effective Date;
(b) the Executive's entitlement to participate in any of the
Executive Benefits will cease effective from the date of
commencement of that employment (unless otherwise expressly
stated in Schedule A); and
(c) the Executive's entitlement to participate in the Short Term
Incentive Plan will cease, subject to any payment to which the
Executive would have been entitled if the Termination Date
were the date of termination of his employment by the
Corporation (without Cause) as contemplated by the Plan.
4.3. The employment of the Executive with the Corporation will terminate on
the Termination Date.
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5. LUMP SUM SETTLEMENT ELECTION
5.1. On the Effective Date, the Executive will cease to be an employee of
the Corporation on the following terms:
(a) within fourteen days after the Effective Date, the Corporation
will pay to the Executive, in addition to salary due to the
Executive for the period ending on the Effective Date, the sum
of:
(i) an amount representing all of the Executive's accrued
regular and extended vacation entitlement, if
applicable, to the Effective Date; and
(ii) an amount equal to 80% of the amount calculated by
multiplying two times the sum of the Base Salary and
the Executive's target bonus amount for the fiscal
year of the Corporation in which the Effective Date
occurred;
(b) all benefits and perquisites to which the Executive was
entitled immediately prior to the Effective Date will
terminate on the Effective Date, except that the Corporation
will provide to, continue or maintain for the Executive, as
applicable, the benefits and perquisites described in Schedule
B (the "Executive Benefits"); and
(c) the Executive's entitlement to participate in the Short Term
Incentive Plan will cease on the Effective Date, and in lieu
of any cash award for the fiscal year in which the Effective
Date occurs, the Corporation will pay a bonus award to the
Executive based on an amount equal to 75% of the Executive's
target bonus amount for the fiscal year of the Corporation in
which the Effective Date occurred, which amount will be
pro-rated to the Effective Date and paid to the Executive in
accordance with the terms of the Short Term Incentive Plan;
and
(d) all obligations, if any, of the Corporation to the Executive
in respect of the granting of any SAR or Stock Option shall
terminate on the Effective Date.
5.2. For greater certainty, the employment of the Executive with the
Corporation will terminate on the Effective Date.
6. DUTY TO MITIGATE
6.1. The Executive will not be subject to any duty or obligation to seek
alternate employment or other sources of income or benefits, or to
mitigate his damages, or to any similar duty or obligation, following
or as a result of any termination of his employment by the Corporation
either expressly by notice without Cause or by Constructive Dismissal
and, except as specifically provided in section 4.2, no payments or
other obligations of the Corporation under this Agreement will be
subject to any rights of set-off, duty to mitigate or other reduction,
and all such payments and obligations will be paid and performed in
full notwithstanding any alternate employment or other sources of
income or benefits obtained or received or receivable by the Executive.
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7. DISPUTE RESOLUTION REGARDING CONSTRUCTIVE DISMISSAL AND OTHER BENEFITS
7.1. If any dispute or question (a "Dispute") arises between the Corporation
and the Executive concerning the determination as to whether a
Constructive Dismissal of the Executive has occurred (including with
respect to the date of such dismissal), the entitlement of the
Executive to any Executive Benefits under this Agreement or whether the
Executive has been terminated for Cause, the Corporation and the
Executive will attempt in good faith to resolve the Dispute. If the
Corporation and the Executive have not agreed to a settlement of the
Dispute within 30 days from the date on which the Dispute first became
known to both parties, then the Corporation and the Executive agree
that the Dispute will be submitted to arbitration in Vancouver, British
Columbia, before a sole arbitrator agreed to by both parties. The
parties agree that the Rules of the British Columbia International
Commercial Arbitration Centre for the conduct of domestic commercial
arbitrations do not apply. However, the arbitrator may be guided by
Rules 1, 3, 6, 8, 9, 13, 15, 16, 19-36, and 39-45, in establishing the
rules for the arbitration. In the event that the parties are unable to
agree on the appointment of a sole arbitrator in accordance with this
section 7 within 45 days from the date on which the Dispute first
became known to both parties, a sole arbitrator for this purpose will
be determined for the parties in accordance with section 17 of the
Commercial Arbitration Act, R.S.B.C. 1996, c.55.
7.2. The Corporation and the Executive agree that a Dispute will not be made
the subject matter of an action in any court by either the Corporation
or the Executive unless the Dispute has first been submitted to
arbitration and finally determined by a sole arbitrator in accordance
with this section 7, and that any such action will only be for the
purposes of enforcing the decision of the arbitrator and the costs
incidental to the action. In any such action the decision of the sole
arbitrator will be conclusively deemed to determine the rights and
liabilities between the Corporation and the Executive in respect of the
matter which is the subject of the Dispute.
7.3. In the event that the Executive receives an award in any Dispute which
exceeds the offer for settlement of such Dispute by the Corporation
immediately preceding an arbitration pursuant to this section 7, the
Corporation agrees to pay to the Executive any and all costs and
expenses (including reasonable legal fees) incurred by the Executive in
connection with the Dispute concurrently with the payment of any award
made pursuant to such arbitration.
8. SARS AND STOCK OPTIONS
8.1. If the Executive holds any SARs or Stock Options at the date of
completion of a Proposed Transaction which results in a payment to
holders of Common shares of cash or securities, the Corporation and the
Executive agree that:
(a) this Agreement will constitute a notice pursuant to the
applicable provision of each of the SAR Plans such that, on
the date of completion of the Proposed Transaction, the
Corporation will pay to the Executive an amount equal to the
result obtained by multiplying the excess, if any, of the
Selling Price Per Share over the Exercise Price (as defined in
the respective SAR) by the number of the
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Common shares in respect of which each SAR remains
unexercised (whether or not such SAR would then be
exercisable);
(b) upon payment of all amounts pursuant to subsection 8.1(a), all
rights of the Executive pursuant to the SARs, any share
appreciation rights agreement entered into between the
Corporation and the Executive and the SAR Plans will
terminate; and
(c) the provisions of sections 7.5, 7.6 and 7.7 of the
Corporation's 1995 Stock Option Plan shall apply to every
Stock Option with respect to a Proposed Transaction; provided
that for purposes of subsection 7.5.2 thereof the Market Price
(as defined in the 1995 Stock Option Plan) on the date of
completion of the Proposed Transaction shall be deemed to be
equal to the Selling Price Per Share.
9. ACCEPTANCE OF TERMS
The terms set out in this Agreement are in lieu of (and not in addition
to) and in full satisfaction of any and all other claims or
entitlements which the Executive has or may have upon the termination
of his employment by the Corporation (other than by reason of his
Disability or Retirement or for Cause) including by Constructive
Dismissal. The entering into of this Agreement by the Corporation will
effect a full and complete release of the Corporation from any and all
claims which the Executive may then have for whatever reason or cause
in connection with the Executive's employment and in respect of such
termination (except for any claims arising in connection with the
performance by the Corporation of its obligations under this Agreement)
and, as a pre-condition to receiving any payments or benefits pursuant
to this Agreement, the Executive specifically agrees to execute and
deliver to the Corporation a release document to that effect in the
form set out in Schedule C and resignation as an officer of the
Corporation and as an officer or director of any affiliate of the
Corporation in which the Executive is an officer or director.
10. WITHHOLDING OF TAXES
The Corporation may withhold from any amounts payable to the Executive
under this Agreement all federal, provincial, state, city or other
taxes as the Corporation is required to withhold pursuant to any law or
government regulation or ruling, and such other amounts as the
Executive has authorized or may authorize the Corporation to deduct or
withhold.
11. NOTICES
Any notice required or permitted to be given under this Agreement will
be in writing and will be properly given if delivered by hand or mailed
by prepaid registered mail addressed as follows:
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(a) in the case of the Corporation, to:
Norske Xxxx Canada Limited
9th Floor, 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Attention: President
(b) in the case of the Executive, to:
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
or to such other address as the parties may from time to time specify
by notice given in accordance with the Agreement. Any notice given will
be conclusively deemed to have been given or made on the day of
delivery, if delivered, or if mailed by registered mail, on the date
shown on the postal return receipt as the date upon which the envelope
containing such notice was actually received by the addressee.
12. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties
with respect to the payment to the Executive of severance benefits in
connection with any Proposed Transaction and supersedes all prior
agreements, understandings, negotiations and discussions, whether
written or oral. There are no covenants, conditions, agreements,
representations, warranties or other terms or provisions, express or
implied, collateral, statutory or otherwise, relating to the payment to
the Executive of severance benefits in connection with any Proposed
Transaction except as provided in this Agreement.
13. SEVERABILITY
If any term or other provision contained in this Agreement is
determined to be invalid, illegal or incapable of being enforced by any
rule of law or public policy, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect so
long as the economic and legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to
any party hereto. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement
so as to effect the original intent of the parties hereto as closely as
possible in an acceptable manner to the end that transactions
contemplated by this Agreement are fulfilled.
14. EXECUTION OF DOCUMENTS
Each of the Corporation and the Executive agrees to execute all such
documents and to do all such acts and things as the other party may
reasonably request and as may be lawful and within its powers to do or
to cause to be done in order to carry out and/or implement the
provisions or intent of this Agreement.
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15. APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Province of British Columbia and the laws of Canada
applicable therein.
16. AMENDMENT AND WAIVERS
No amendment or waiver of any provision of this Agreement will be
binding on any party unless consented to in writing by that party. No
waiver of any provision of this Agreement will constitute a waiver of
any other provision nor will any waiver constitute a continuing waiver
unless otherwise provided.
17. SUCCESSORS AND ASSIGNS
This Agreement will enure to the benefit of and be binding upon the
Executive and his heirs, executors, administrators and other legal
personal representatives and upon the Corporation and its successors
and assigns. This Agreement is personal to the Executive and may not be
assigned by him.
18. ACKNOWLEDGEMENT
The Executive hereby acknowledges that he has been afforded a
reasonable opportunity to obtain independent legal advice regarding the
matters contained in and contemplated by this Agreement prior to the
Executive executing this Agreement.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto.
NORSKE XXXX CANADA LIMITED
by: /s/ X. Xxxxxx
---------------------------------------
President
/s/ Xxxxx X. Xxxxxxxx
-------------------------------------------
XXXXX X. XXXXXXXX
SCHEDULE A
TREATMENT OF BENEFITS AND PERQUISITES ON
ELECTION OF TERMINATION LEAVE
1. The following benefits will be provided, continued or maintained until
the Termination Date:
(a) Provincial Medical Services Plan (MSP): coverage for Executive
and dependants
(b) Extended Health Benefits (EHB): coverage for Executive and
dependants
(c) Dental Benefits: coverage for Executive and dependants
(d) Life Insurance: the current level of coverage (up to 3x of
annual salary) will continue until the Termination Date. The
Executive will have 31 days from the Termination Date to
convert this coverage to an individual life insurance policy,
to a maximum of $200,000.
(e) Employee Share Purchase Plan: monthly contributions by way of
payroll deduction by the Executive and matching Corporation
contributions will continue to the earlier of the Termination
Date, the Executive's election to cease contributions, or the
termination of the Plan. The provisions of the Plan relating
to termination of employment shall apply at the Termination
Date, but the Executive shall be entitled to exercise his
rights under the share withdrawal provision of the Plan prior
to that time.
(f) Group RRSP: participation (outside of the SELECTIONS program)
by way of payroll deduction by the Executive will continue
until the Termination Date.
(g) Other Payroll Deductions: payroll deductions, such as:
o auto plan
o computer loan
o personal lines insurance
o leased vehicle driver option
o Canada Savings Bonds
will continue to be deducted from the Executive's payments during the
Termination Leave, with the full amount due and payable on the
Termination Date. Eligibility to
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renew any of the above deductions will terminate as of the
commencement of the Termination Leave.
2. The following benefits will cease at the commencement of the
Termination Leave as shown below:
(a) Life Insurance: any optional coverage for the Executive, his
spouse or his children, will cease at the commencement of the
Termination Leave. The Executive will have 31 days from the
last day worked to convert all or part of his Executive and/or
spousal coverages to individual life insurance policies, to a
maximum of $200,000 each.
(b) Accidental Death and Dismemberment Benefits:
(i) All 24 hour company paid accidental death and
dismemberment insurance benefits, will cease at the
commencement of the Termination Leave.
(ii) All Executive, spousal and child optional accidental
death and dismemberment benefits will cease at the
commencement of the Termination Leave; the Executive
may elect to convert all or part of his Executive
and/or spousal coverages to individual coverage,
within 31 days after the commencement of the
Termination Leave.
(c) Disability Benefits: short term and long term disability
coverage will cease at the commencement of the Termination
Leave.
(d) Charitable donations and social club fees will cease to be
deducted at the commencement of the Termination Leave.
(e) Vacation: the accrual of regular and, if applicable, extended
vacation entitlement will cease on the commencement of the
Termination Leave. All accrued regular and extended vacation
entitlement, including pro-rated regular and, if applicable,
extended entitlement to the Termination Date, will be paid to
the Executive at the commencement of the Termination Leave.
3. Perquisites will continue during the Termination Leave, in accordance
with the following:
(a) Leased Automobile: the Corporation will continue to lease the
automobile, presently leased by the Corporation and designated
for the Executive's use, until the Termination Date and bear
all reasonable costs associated with its maintenance,
including insurance, but excluding fuel.
The Executive is entitled to elect to purchase the automobile at any
time during the Termination Leave, for the then current residual option
price of the automobile. The Executive will bear all sales and other
tax costs and any other costs and taxes which may be associated with
such transfer.
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(b) Financial Counselling: to the extent the Executive is eligible
for this perquisite at the time of commencement of the
Termination Leave, the current level of financial counselling
will continue until the Termination Date.
(c) Corporation Loans (Housing): the Executive must continue to
repay any loans at the rate not less than what is currently
being deducted from his salary payments, but in any event
shall repay the loan in full by the Termination Date.
(d) Club Memberships: to the extent the Executive has been granted
a club membership at the time of commencement of the
Termination Leave, the Corporation will continue to pay for
the employee's membership until the Termination Date. Upon the
Termination Date corporate (as opposed to personal) club
memberships will remain with the Corporation.
4. Post-Retirement Medical and Dental Benefits will apply as follows:
If the Executive is age 51 or older as of the Effective Date, he will
be eligible on the latter of the first of the month following the
Termination Date or the first of the month following his 55th birth
date, to apply for medical, extended health and dental benefits on the
basis of treatment equivalent to that being received by an employee of
the Corporation who retired on the Effective Date.
5. Pension Benefits:
(a) The Executive will continue to participate in the registered
pension plan and unfunded supplemental plan in which the
Executive is enrolled on the date of commencement of the
Termination Leave (the "Pension Plans") on the following
terms:
(i) for the purposes of any contribution (notional or
actual) provision of the Pension Plans, the amounts
paid to the Executive pursuant to section 4.1(a) of
the Agreement shall be treated in the same manner
that payments of salary to the Executive were
recognized prior to the date of commencement of the
Executive's Termination Leave, and the amounts paid
to the Executive pursuant to section 4.1(c) of the
Agreement shall be treated in the same manner that
payments under the Corporation's incentive
compensation programs were recognized prior to the
date of commencement of the Executive's Termination
Leave;
(ii) if on the Termination Date the Executive has not
satisfied a vesting condition under the Pension
Plans, the Executive will be deemed to have satisfied
this condition;
(iii) upon the completion of the Executive's Termination
Leave, the Executive shall become entitled to
benefits under the Pension Plans on the basis that
the Executive terminated employment with the
Corporation on that date.
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(b) If the circumstances described in section 4.2 of the Agreement
arise, the Executive shall immediately stop accumulating
further benefits under the Pension Plans, and, without
limitation, any payment the Executive becomes entitled to
pursuant to section 4.2(a) of the Agreement shall not be
recognized under any contribution (actual or notional)
provision of the Pension Plans.
SCHEDULE B
TREATMENT OF BENEFITS AND PERQUISITES ON
ELECTION OF LUMP SUM SETTLEMENT
All benefits, privileges and perquisites the Executive might formerly have
received as a result of employment with the Corporation will cease as of the
Effective Date except as expressly set out below:
1. Provincial Medical Services Plan (MSP): coverage for Executive and
dependants will cease at the end of the month in which the Effective
Date occurs.
2. Life Insurance: the current level of coverage (up to 3 times annual
salary) will continue until the Effective Date, and the Executive will
have 31 days from the Effective Date to convert this coverage to an
individual life insurance policy, to a maximum of $200,000.
3. Optional Life Insurance: any executive, spousal, or child optional life
insurance coverage the Executive had by reason of employment with the
Corporation will cease on the Effective Date. The Executive may convert
all or part of any optional executive and/or spousal insurance, up to a
maximum of $200,000 each, within 31 days of this date, to individual
life insurance policies at prevailing individual, as opposed to group
insurance rates and without medical examination.
4. Accidental Death and Dismemberment Insurance ("AD&D"):
(a) coverage under AD&D will cease on the Effective Date; and
(b) any executive, spousal, or child optional AD&D coverage the
Executive had by reason of employment will cease on the
Effective Date; the Executive may elect to convert all or part
of any optional executive and/or spousal insurance, up to a
maximum of $200,000 each, within 31 days after the Effective
Date.
5. Health Spending Account: contributions by the Executive will cease on
the Effective Date. The Executive may submit claims against the balance
accrued to the Effective Date, until the end of the calendar year in
which the Effective Date occurs.
6. Disability Benefits: short term and long term disability coverage will
cease at the Effective Date.
7. Vacation: all accrued regular and extended vacation entitlement,
including pro-rated regular and, if applicable, extended entitlement to
the Effective Date, will be paid to the Executive at the Effective
Date.
8. Share Purchase Plan: participation and/or contributions through payroll
deduction will cease on the Effective Date. All amounts in the
Executive's account must be withdrawn within 30 days of the Effective
Date.
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9. Group RRSP: participation and/or contributions by way of payroll
deduction by the Executive will cease at the Effective Date. Treatment
of the Executive's fund balances will be as per the terms of the Plan.
10. Leased Automobile: the Executive is entitled to elect to purchase the
automobile leased by the Corporation, and designated for his use, at
the Effective Date for the then current residual option price of the
automobile. The Executive will bear all sales and other tax costs and
any other costs and taxes which may be associated with any such
transfer.
11. Club Memberships:
(a) the payment by the Corporation of any personal club
memberships held by the Executive will cease on the Effective
Date; and
(b) the payment of any corporate club membership dues in respect
of the Executive will cease on the Effective Date, and the
membership will remain with the Corporation.
12. Corporation Loans, i.e. housing, auto insurance, leased vehicle driver
option, computer purchase, etc.: the balance outstanding on any and all
company loans granted to the Executive will become due and payable in
full on the Effective Date.
13. Canada Savings Bonds: if the Executive was purchasing Canada Savings
Bonds through payroll deductions, he may elect to receive a refund for
the amount already paid, or purchase the bond in full within 5 days
after the Effective Date.
14. Charitable donations and social club fees: deductions will cease at the
Effective Date.
15. Pension: the Executive shall at the Effective Date immediately stop
accumulating further benefits under the registered pension plan and
unfunded supplemental plan in which the Executive is enrolled at the
Effective Date (the "Pension Plans") and, without limitation, all
payments the Executive becomes entitled to pursuant to section 5.1 of
the Agreement shall not be recognized under any contribution (actual or
notional) provision of the Pension Plans. If on the Effective Date the
Executive has not satisfied a vesting condition under the Pension
Plans, the Executive will be deemed to have satisfied that condition.
16. Post Retirement Medical and Dental Benefits: if the Executive is age 51
or older as of the Effective Date, he will become eligible on the later
of the first of the month following the Effective Date or the first of
the month following his 55th birth date, to apply for medical, extended
health and dental benefits on the basis of treatment equivalent to that
being received by an employee of the Corporation who retired on the
Effective Date.
SCHEDULE C
RELEASE
IN CONSIDERATION for the payment to me of $1.00 by NORSKE XXXX CANADA LIMITED
(the "Corporation") and for the entry by the Corporation into the Executive
Severance Agreement (the "Agreement") dated as of the day of October, 2002
between the Corporation and me (the receipt and sufficiency of which are hereby
acknowledged), I, Xxxxx Xxxxxxxx, HEREBY RELEASE AND FOREVER DISCHARGE the
Corporation, its related and affiliated companies and subsidiaries (collectively
"Norske Xxxx"), and its officers, directors, and employees, from any and all
actions, causes of action, claims and demands, which in any way relate to my
employment and the termination of my employment with Norske Xxxx, including any
claim arising from the provisions of the EMPLOYMENT STANDARDS ACT, HUMAN RIGHTS
ACT or other applicable legislation. I FURTHER AGREE that the consideration I
have received includes full payment for any claim I may have under such
legislation.
The terms of this release set out the entire agreement between myself and Norske
Xxxx and are intended to be contractual and are not a mere recital.
I declare that I fully understand the terms of this settlement, I have been
advised to seek independent professional advice before executing this document
and that I voluntarily accept the consideration, for the purpose of making a
full and final compromise and settlement of all claims.
I further understand and agree that the terms of this settlement will remain
confidential and will not be disclosed by me to third parties, except to my
professional advisors and to my family, and as may be required by law.
Dated this ______ day of __________, 2002, at ________________, in the Province
of British Columbia.
WITNESSED BY:
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Witness - Signature Xxxxx X. Xxxxxxxx
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Witness - Address
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Witness - Occupation
