EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective the 26th day of July, 2000.
BETWEEN:
SURPLUS OFFICE SYSTEMS, LLC, a limited company incorporated under the
laws of Washington and having an office located at 543 - 0000 0xx
Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx, 00000
- and -
ABLE AUCTIONS (1991) LTD., a company incorporated under the laws of
British Columbia and having an office located at 0000 Xxxxxxxx
Xxxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(collectively, the "Company")
OF THE FIRST PART
AND:
XXXXX XXXXXXXX, of 0000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx,
X0X 0X0
(the "Employee")
OF THE SECOND PART
WHEREAS:
A. The Company is engaged in the business of the manufacturing,
re-manufacturing, and retail sales of office furniture (the "Business");
B. The Employee has represented to the Company that he is qualified to provide
management services to the Company in connection with the Business; and
C. The Company wishes to employ the Employee to provide those services to the
Company on the terms and subject to the following conditions;
NOW THEREFORE THIS AGREEMENT WITNESSES that the parties mutually agree as
follows:
1. EMPLOYMENT
1.1 Subject to the terms and conditions of this Agreement, the Company employs
the Employee to perform the duties set out in section 2.1.
1.2 The Employee's obligation to perform the duties and the Company's obligation
to pay the remuneration to the Employee will commence on July 26, 2000 (the
"Effective Date") and will continue for a term of three years from the Effective
Date unless earlier terminated in accordance with Article 5 (the "Term").
2
1.3 At the end of the Term, the parties may renew this Agreement in writing for
a further term of three years or as the parties otherwise agree.
2. DUTIES
2.1 The Employee will use his best efforts to manage the Business in the San
Francisco Bay Area and to perform any other duties and functions that may be
directed by the Company's Board of Directors (the "Duties").
2.2 The Employee will perform the Duties in a diligent, professional, and
efficient manner to preserve and enhance the Company's corporate image and will
faithfully devote his full time, effort, and ability to the performance of the
Duties.
3. REMUNERATION
3.1 The Company will pay the Employee a base annual salary of US$125,000,
payable in bi-monthly instalments of US$5,208.33 (less applicable source
deductions) on the 15th day (or the business day immediately before the 15th
day, if the latter is not a business day) and the last business day of each
month during the Term.
3.2 The Company will also pay the Employee a bonus at the end of each fiscal
year equal to the positive amount, if any, calculated as follows:
2% of gross sales of the Business generated in the San Francisco Bay Area
in that fiscal year, minus US$125,000 (the annual base salary)
Where the Employee performs services hereunder for less than 12 months in
any fiscal year, the calculation of 2% of gross sales will be based only on
sales achieved during those months of services and the amount to be subtracted
will be the total amount of salary actually paid to the Employee during those
months.
Despite the foregoing, the bonuses will only be payable to the extent that
the Business remains profitable in the San Francisco Bay Area in that fiscal
year, and any bonuses payable will be reduced as appropriate if payment of the
entire bonus earned would result in the Business suffering a loss for that
fiscal year. Gross sales and profitability will be calculated for the purposes
of this section in accordance with generally accepted accounting principles.
3.3 The Company will reimburse the Employee for all travelling and other
expenses, including expenses incurred by the Employee in moving to the San
Francisco Bay Area up to a maximum of CDN$5,000, actually and properly incurred
by him in connection with the Duties. The Employee will provide the Company with
receipts and statements for all expenses at the Company's request.
3.4 Xxxxxxxxxxxx.xxx, Inc. (the "Parent Company") will also grant to the
Employee, subject to regulatory approval, an incentive stock option (the
"Option") to acquire 100,000 shares of its common stock (the "Shares") at an
exercise price of US$8.66 per Share, exercisable in stages for three years from
the date of grant of the Option as follows:
(a) the first 33,333 Shares may be purchased on or after the first
anniversary of the date of grant;
3
(b) the second 33,333 Shares may be purchased on or after the second
anniversary of the date of grant; and
(c) the final 33,334 Shares may be purchased on or after the third
anniversary of the date of grant.
The Parent Company and the Employee will enter into a separate
incentive stock option agreement setting out in more detail the terms and
conditions of the Option.
3.5 Unless the Company has a vehicle available for the Employee's use, the
Employee will provide, maintain, and use his own vehicle for the performance of
the Duties. The Company will pay the Employee a vehicle allowance of US$500 per
month.
3.6 During the Term, the Employee will be entitled to a total of four weeks
vacation in each calendar year and the Employee agrees to take vacations at the
times that the President of the Company may reasonably approve having regard to
the Company's operations.
3.7 The Employee will be entitled to participate in any medical or other benefit
plans or programs that may be established by the Company during the Term,
provided that:
(a) the Employee will contribute US$200 per month toward monthly premiums;
and
(b) the Company will contribute not more than US$800 per month toward
monthly premiums in respect of the Employee, his spouse, and any
children.
3.8 The Company will continue to pay the premiums and any other costs of the
life insurance policy for the Employee and the beneficiary of such policy will
remain the Employee's wife.
4. RELATIONSHIP OF THE PARTIES
4.1 The Duties are personal in character and the Employee cannot assign either
this Agreement or any rights or benefits arising under this Agreement. In
performing the Duties, the Employee will operate as and have the status of
employee and will not act or hold himself out as or be an agent or partner of
the Company.
5. TERMINATION
5.1 This Agreement and the employment of the Employee may be terminated:
(a) at any time by notice from the Company to the Employee for "just
cause" (as defined below);
(b) after the first year from the Effective Date, if the Employee by
reason of illness or mental or physical disability fails for 60
consecutive days to perform the Duties, then by three months' notice
from the Company to the Employee.
For the purposes of this Agreement, "just cause" is defined as follows:
(c) the Employee's continued failure or negligence to perform any of the
Duties in the manner or within the time required or the continued
breach of or default in any of the Employee's covenants, duties, or
obligations 30 days after the Company delivers a
4
written demand for substantial performance to the Employee, which
demand specifically identifies the manner in which the Employee has
not performed the Duties or the nature of the breach or default;
(d) the Company acting reasonably determines the Employee has violated the
confidentiality of any information as provided for in this Agreement
or has become of unsound mind or is declared incompetent to handle his
own personal affairs;
(e) any dishonesty or misconduct on the part of the Employee that
materially affects the Company;
(f) the conviction of the Employee for any crime involving moral
turpitude, fraud, or misrepresentation; or
(g) the Employee becomes bankrupt or makes any arrangement or composition
with its creditors.
5.2 On termination of this Agreement for any reason, the Employee will deliver
to the Company all documents pertaining to the Company or its Business,
including without limitation all correspondence, reports, contracts, data bases
related to the Company, and anything included in the definition of "Confidential
Information" set out in section 6.1.
6. CONFIDENTIALITY AND NON-COMPETITION
6.1 For the purposes of this Article 6, "Confidential Information" includes
without limitation:
(a) trade secrets concerning the business and affairs of the Company and
its affiliates (collectively, the "Companies"), data, know-how, ideas,
past and current supplier and customer lists, current and anticipated
customer requirements, price lists, market studies, business plans,
computer software and programs (including object code and source
code), computer software and database technologies, systems,
structures and architectures (and related formulae, compositions,
processes, improvements, devices, inventions, discoveries, concepts,
designs, methods, and information), and any other information, however
documented, that is a trade secret; and
(b) information concerning the business and affairs of the Companies,
which includes historical financial statements, financial projections
and budgets, historical and projected sales, capital spending budgets
and plans, the names and backgrounds of key personnel, and personnel
training and techniques and materials, however documented; and
(c) notes, analyses, compilations, reports, studies, summaries, and other
material prepared by or for the Companies containing or based, in
whole or in part, on any information included in the foregoing.
6.2 The Employee acknowledges and agrees that all Confidential Information
prepared, produced, developed, known, or obtained by the Employee, directly or
indirectly, whether before or after the date hereof, belongs exclusively to the
Companies, which will be entitled to all rights, interests, profits, or benefits
in respect thereof.
6.3 The Employee will not disclose at any time any Confidential Information to
any person not expressly authorized in writing by the Company for that purpose.
The Employee will comply with
5
any directions that the Company may make to ensure the safeguarding or
confidentiality of all Confidential Information.
6.4 The Employee will not disseminate or distribute any of the Confidential
Information to the media, members of the public, shareholders of the Company,
prospective investors, members of the investment or brokerage community,
securities regulators, or any other third party, without the Company first
reviewing and approving the Confidential Information before dissemination or
distribution.
6.5 The Employee will not make any copies, summaries, or other reproductions of
any Confidential Information without the Company's express written permission,
provided that the Company permits the Employee to maintain one copy of the
Confidential Information for his own use during the Term.
6.6 The Employee will not, either directly or indirectly, use for his own
benefit or for the benefit of any third party any Confidential Information.
6.7 The Employee acknowledges and agrees that Confidential Information is and
will be of a special and unique character, the loss of which cannot be
reasonably, readily, or accurately calculated in monetary terms. Accordingly,
the Companies will be entitled to injunctive or other equitable relief to
prevent or cure any breach or threatened breach of this Agreement by the
Employee. Resort to equitable relief, however, will not be construed to be a
waiver of any other right or remedy that the Companies may have for damages or
otherwise.
6.8 The Employee agrees that during the Term and any renewal term and for a
period of two years following the date of termination of this Agreement, he will
not, either for himself or for any other person:
(a) encourage or entice any persons who are employees or full-time
independent contractors of the Companies (collectively, "Service
Providers") at any time during the Term or any renewal term, or who
were Service Providers at any time within the 30 days preceding the
date of this Agreement, to seek employment or service with persons
other than the Companies; or
(b) offer employment or service or contracts, directly or indirectly, to
any persons who are Service Providers at any time during the Term or
any renewal term, or who were Service Providers at any time within the
30 days preceding the date of this Agreement; or
(c) in any way interfere with the relationship between the Companies and
any Service Providers;
(d) induce or attempt to induce any customer, supplier, or business
relation of the Companies to cease doing business with any of the
Companies, or in any way interfere with the Companies' relationship
with any customer, supplier, or business relation of the Companies.
6.9 The Employee agrees with the Company that he will not, except as a Service
Provider of any of the Companies:
(a) at any time during the Term or any renewal term or any other
association with any of the Companies and during any notice period
while the Employee is receiving remuneration from any of the
Companies, or
6
(b) where the Term or the association of the Employee with any of the
Companies is terminated for whatever reason, for a period of two years
thereafter,
either individually or in a partnership or jointly or in conjunction with any
person, firm, corporation, government, association, or syndicate as principal,
agent, employee, director, officer, consultant, or in any other manner, carry
on, manage, operate, or engage or participate in any business whose activities
compete in whole or in part with the Business or any other business of the
Companies within the Greater Vancouver area or the San Francisco Bay Area. The
Employee agrees that this covenant is reasonable with respect to its duration,
geographical area, and scope.
6.10 If the Employee breaches any of the provisions of this Article 6, the
Companies or any of them will be entitled to damages from the Employee and, in
addition to its rights to damages and any other rights any of the Companies may
have, to obtain injunctive or other equitable relief to restrain any breach or
threatened breach or otherwise to specifically enforce the provisions of this
Article 6, it being agreed that money damages alone would be inadequate to
compensate the Companies and would be an inadequate remedy for such breach. The
remedies afforded to the Companies by this Agreement will be cumulative and not
alternative and will be in addition to and not in substitution for any other
rights and remedies available to the participants at law or in equity, including
the remedy of injunctive relief.
6.11 On termination of this Agreement, the Employee will furnish to the Company
a certificate in a form approved by the Company's solicitors that declares that
the Employee has not:
(a) divulged, disclosed, distributed, or otherwise made available to any
person any of the Confidential Information; or
(b) reproduced or made any use of the Confidential Information for his own
benefit or for the benefit of any third party; or
(c) acted contrary to this Article 6, except with the Company's prior
written consent.
7. NOTICES
7.1 Any notices to be given by either party to the other will be sufficiently
given if delivered personally or transmitted by facsimile or if sent by
registered mail, postage prepaid, to the parties at their respective addresses
shown on the first page of this Agreement, or to any other addresses as either
party may notify to the other from time to time in writing. Notice will be
deemed to have been given at the time of delivery, if delivered in person or
transmitted by facsimile, or within three business days from the date of posting
if mailed.
8. FURTHER ASSURANCES
8.1 Each party will at any time and from time to time, at the other's request,
sign and deliver other documents and do other things that the other party may
reasonably request to carry out and give full effect to the terms, conditions,
and intent of this Agreement.
9. ENUREMENT
9.1 This Agreement is binding on the parties to this Agreement, and will enure
to the benefit of the Companies and their successors and assigns, and the
Employee, his heirs, personal representatives, and permitted assigns.
7
10. ASSIGNMENT
10.1 The Company may assign this Agreement to any affiliated company upon notice
to the Employee.
11. WAIVER
11.1 The rights and remedies of the parties to this Agreement are cumulative and
not alternative. Neither the failure nor any delay by any party in exercising
any right, power, or privilege under this Agreement will operate as a waiver of
such right, power, or privilege, and no single or partial exercise of any such
right, power, or privilege will preclude any other or further exercise of such
right, power, or privilege or the exercise of any other right, power, or
privilege. To the maximum extent permitted by applicable law,
(a) no claim or right arising out of this Agreement can be discharged by
one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party;
(b) no waiver that may be given by a party will be applicable except in
the specific instance for which it is given; and
(c) no notice to or demand on one party will be deemed to be a waiver of
any obligation of that party or of the right of the party giving the
notice or demand to take further action without notice or demand as
provided in this Agreement.
12. SEVERABILITY
12.1 If any provision of this Agreement is determined to be void or
unenforceable in whole or in part, that provision will be deemed not to affect
or impair the validity of any other provision of this Agreement and the void or
unenforceable provision will be severable from this Agreement.
13. GOVERNING LAW
13.1 This Agreement will be governed by and construed in accordance with the
laws of Washington and the parties irrevocably attorn to the courts of
Washington.
IN WITNESS WHEREOF the parties have signed this Agreement as of the date
written on the first page of this Agreement.
SURPLUS OFFICE SYSTEMS, LLC ABLE AUCTIONS (1991) LTD.
Per: Per:
----------------------------------- -----------------------------------
Authorized Signatory Authorized Signatory
-----------------------------------
XXXXX XXXXXXXX
