EXHIBIT 10(gggg)
149
TIREX AMERICA INC.
---------------------
CORPORATE
AND
UNITED STATES SECURITIES COUNSEL
EMPLOYMENT AGREEMENT
---------------------
This Corporate and United States Securities Counsel Employment
Agreement (the "Agreement") is made and entered into as of this 22nd day of
December 1996 (the "Effective Date") by and between
Tirex America Inc.
0000 Xxxxxxx
Xxxxx Xx. Xxxxxxx
Xxxxxx, Xxxxxx X0X 0X0
Tirex Canada Inc.
0000 Xxxxxxx
Xxxxx Xx. Xxxxxxx
Xxxxxx, Xxxxxx X0X 0X0
(collectively, the "Corporation"*)
and
Xxxxxxx Xxxx Xxxxxx
000 Xxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
(the "Employee").
Whereas, the Employee and the Corporation were parties to a certain
employment agreement, dated as of January 18, 1995, as amended as of May 31,
1996 (the "Executive Agreement") pursuant to which the Employee served as
Secretary and General Counsel to the Corporation and which Executive Agreement
the parties agree shall be terminated upon execution of this Agreement and a
certain Release of even date herewith from the Corporation and each of its
directors to the Employee.
Whereas, the Corporation desires to employ the Employee as its
Corporate and United States Securities Counsel and the Employee is willing to
accept such employment by the Corporation, on the terms and subject to the
conditions set forth in this Agreement.
150
Whereas, because of the Corporation's lack of financial resources, the
Employee was compensated for services rendered by her under the Executive
Agreement by way of the issuance of unregistered shares of the common stock of
Tirex (the "Compensation Shares") in lieu of cash salary payments, which
Compensation Shares were issued by the Corporation and accepted by the Employee
on the basis of such shares eventually having some liquid value through the
market sale thereof pursuant to the exemption from the registration requirements
of the Securities Act of 1933, as amended (the "Securities Act") provided by
Rule 144 thereof ("Rule 144") and/or pursuant to the registration of such shares
by the Corporation under the Securities Act pursuant to a Form S-8 registration
statement or such other Form as should be available and practicable for such
purpose;
Whereas, because the Corporation may during the term of this Agreement
continue to lack the financial resources to meet its financial obligations
hereunder in cash, the parties acknowledge that the Employee may receive
compensation under the terms of this Agreement by way of the issuance of
additional Compensation Shares in lieu of cash and that such Shares will be
issued and accepted on the basis of such shares eventually having some liquid
value through the market sale thereof pursuant to the exemption from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act") provided by Rule 144 thereof ("Rule 144") and/or pursuant to
the registration of such shares by the Corporation under the Securities Act
pursuant to a Form S-8 registration statement or such other Form as should be
available and practicable for such purpose;
Whereas, The Corporation is a "start-up" company in its very early
stage of development, with negligible or no hard assets, no income, no
operations, and no financial resources on hand to finance the development of its
technology and the commencement of operations. Its future financial prospects
and position are therefore highly contingent and impossible to predict. Based
upon the foregoing, unregistered shares of the Corporation's common stock, which
cannot be sold into the public market for an extended period of time, have a
value which reflects the Corporation's poor financial position and uncertain
future, and can be expected to be saleable by the Corporation, in arm's length
transactions, for not more than fifty percent (50%) of the current market value
of the publicly traded stock of the Corporation or for substantially less.
Now Therefore, it is agreed as follows:
1. Definitions
For the purposes of this Agreement the following terms shall have the
following meanings:
1.0 The "Corporation" shall mean Tirex America Inc. and 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, Tirex America
Inc., jointly and severally.
151
1.1 "Change in Control" shall mean (i) the time that the Corporation
first determines that any person and all other persons who constitute a group
(within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934
("Exchange Act") have acquired direct or indirect beneficial ownership (within
the meaning of Rule 13d-3 under the Exchange Act) of twenty percent (20%) or
more of the Corporation's outstanding securities, unless a majority of the
"Continuing Directors", as that term is defined in Paragraph 1.3, approves the
acquisition not later than ten (10) business days after the Corporation makes
that determination, or (ii) the first day on which a majority of the members of
the Corporation's Board of Directors are not "Continuing Directors."
1.2 "Compensation Shares" shall mean all shares of the common stock of
Tirex America hereafter issued to the Employee in lieu of cash salary payments
as compensation for services rendered pursuant to the terms of this agreement as
well as all shares heretofore issued to the Employee in lieu of cash salary
payments as compensation for services rendered pursuant to the terms of a
certain Executive Agreement, dated as of January 18, 1995, as amended as of May
31, 1996.
1.3 "Constructive Termination" shall mean termination by the
Corporation of the Employee's employment by reason of material breach of this
Agreement or by the Corporation's violation, against the Employee's advice or
without the Employee's knowledge, of the laws of any jurisdiction if such
violation could reflect upon the reputation of the Employee as an attorney at
law or involve, or give the appearance of involving, any misconduct by the
Employee. If caused by a breach of this agreement, such "Constructive
Termination" to be effective upon 30 days written notice thereof from the
Employee to the Corporation; If caused by a violation of the law, such
"Constructive Termination" to be effective immediately upon written notice
thereof from the Employee to the Corporation;
1.4 "Continuing Directors" shall mean, as of any date of determination,
any member of the Board of Directors of the Corporation who (i) was a member of
that Board of Directors on January 19, 1995, (ii) has been a member of that
Board of Directors for the two years immediately preceding such date of
determination, or (iii) was nominated for election or elected to the Board of
Directors with the affirmative vote of the greater of (x) a majority of the
Continuing Directors who were members of the Board at the time of such
nomination or election or (y) at least four Continuing Directors.
1.5 "Effective Date" shall mean January 8, 1997.
1.6 Termination For Cause" shall mean termination by the Corporation of
the Employee's employment by the Corporation by reason of the Employee's willful
dishonesty towards, fraud upon, or deliberate injury or attempted injury to, the
Corporation or by reason of the Employee's willful material breach of this
Agreement which has resulted in material injury to the Corporation. For purposes
of this paragraph, no act, or failure to act, on the Employee's part shall be
considered "willful" or "deliberate" unless done, or omitted to be done, by her
not in good faith and without reasonable belief that her action or omission was
in the best interest
152
of the Corporation and the Corporation's retention of Outside Counsel pursuant
to Paragraph 3.1 hereof, or otherwise, at the volition of the Corporation or of
the Employee shall not under any circumstances whatsoever constitute "Cause" for
termination of this Agreement. Notwithstanding the foregoing, the Employee shall
not be deemed to have been terminated for Cause without (i) written notice to
the Employee setting forth the reasons for the Corporation's intention to
terminate for Cause, (ii) an opportunity on not less than 20 days written notice
from the Corporation to the Employee for the Employee, together with her
counsel, to be heard before the full Board of Directors of the Corporation, and
(iii) delivery to the Employee of a Notice of Termination as defined in
Paragraph 6.9 hereof from the Board of Directors finding that, following such
hearing before the Board, in the good faith opinion of such Board, the Employee
was guilty of conduct set forth above and specifying the particulars thereof in
detail.
1.7 "Termination for 'Good Reason'" shall mean termination by the
Employee of the Employee's employment by the Corporation because of: (i) a
"Change in Control", as defined in Paragraph 1.1, above, (ii) a failure by the
Corporation to comply with any material provision of this Agreement which has
not been cured within ten (10) days after notice of such noncompliance has been
given by the Employee to the Company, (iii) the determination by the Employee
that because of changes in the composition or policies of the Board of Directors
of the Corporation, or of other events or occurrences of material effect, that
the Employee can no longer properly and effectively discharge her
responsibilities as Corporate and United States Securities Counsel of the
Corporation after giving the Corporation not less than thirty (30) days prior
written notice of the effective date of such termination, or (iv) any purported
termination of the Employee's employment which is not effected pursuant to a
Notice of Termination satisfying the requirements of Paragraph 6.9 hereof (and
for purposes of this agreement no such purported termination shall be
effective).
1.8 "Termination Other Than For Cause" shall mean termination by the
Corporation of the Employee's employment by the Corporation (other than in a
Termination for Cause) and shall include "Constructive Termination", as that
term is defined in Paragraph 1.2.
1.9 "Termination Upon a Change in Control" shall mean a termination by
the Corporation of the Employee's employment with the Corporation within 120
days following a "Change in Control", as that term is defined in Paragraph 1.1.
1.10 "Voluntary Termination" shall mean termination by the Employee of
the Employee's employment by the Corporation other than (i) Constructive
Termination, (ii) Termination Upon a Change in Control, (iii) Termination for
Good Reason, and (iv) termination by reason of the Employee's death or
disability as described in Paragraphs 6.4 and 6.5.
2. Employment
During the term of this Agreement, the Employee agrees to be employed
by the Corporation and to serve as its Corporate and United States Securities
Counsel, and the Corporation agrees to employ and retain the Employee in such
capacity.
153
3. Duties and Responsibilities
3.1 The services to be rendered by the Employee as Corporate and United
States Securities Counsel shall be of a legal and non-business nature and shall
consist of those corporate and United States securities legal services
specifically requested by the Corporation, by way of providing legal advice and
guidance, reviewing and/or drafting related documents; filing such documents
with appropriate authorities; attending meetings and conferences; and
communicating and dealing with federal and state agencies, securities exchanges
and associations, transfer agents, attorneys, accountant, stockholders and all
other appropriate persons and all related legal services, except that, to the
extent that any such required services shall, in the judgment of either the
Corporation or the Employee, be beyond the expertise of capacity of the Employee
or shall, for any other reason whatsoever, not be able to be performed by the
Employee, the Corporation shall engage other appropriate legal counsel for the
performance of such services ("Outside Counsel").
3.2 Employee shall devote such of her time, energy, and skill to the
affairs of the Corporation, as shall be required for her duties, reporting
solely to the its President, and at all times during the term of this Agreement
the Employee shall have powers and duties at least commensurate with her
position as Corporate and United States Securities Counsel.
3.3 The Corporation hereby acknowledges that the Employee has reviewed
with the Board of Directors of this corporation, her present directorships and
other positions held by her in business organizations and legal practices, and
the Corporation agrees to and approves of the Employee's continuance in such
present capacities unless the Board determines, in a particular case, that there
is a potential material conflict with the business of the Corporation. Any
future proposed directorships and positions which may pose a potential conflict
with the business of the Corporation shall be subject to review by the
Corporation's Board of Directors, providing however, that such Board shall not
prohibit any such activities unless such potential material conflict with the
business of the Corporation shall exist.
4. Term of Employment
The term of employment of the Employee by the Corporation shall be for
a period of four (4) years beginning with the Effective Date (the "Initial
Term"), unless terminated earlier pursuant to Section 6. At any time prior to
the expiration of the Initial Term, the Corporation and the Employee may by
mutual written agreement extend the Employee's employment under the terms of
this Agreement for such additional periods as they shall mutually agree.
5. Salary, Benefits and Bonus Compensation
5.1 Base Salary. As payment for the services to be rendered by the
Employee as provided in Section 3, the Corporation agrees to pay to the Employee
a "Base Salary" for the twelve (12) calendar months beginning the Effective Date
at the rate of one hundred fifty
154
thousand dollars ($150,000) per annum payable in 12 equal monthly installments
of $12,500 subject to annual review and increase, as the board of directors
shall determine, provided however that the Employee shall be considered for
bonuses or salary increases at such times as the Corporation is considering
granting bonuses or salary increases to its executive officers and directors
other than the Chief Executive Officer. The Corporation shall promptly notify
the Employee of bonuses and salary increases granted to any of the executive
officers and/or directors of the Corporation. A failure to so notify the
Employee pursuant to this paragraph 5.1 shall be considered a material breach of
this agreement. All salary increases shall be reviewed annually by the
Compensation Committee, if any shall be in existence.
5.2 Bonuses. the Employee shall be eligible to receive a discretionary
bonus for each year (or portion thereof) during the term of this Agreement and
any extensions thereof, with the actual amount of any such bonus to be
determined in the sole discretion of the Board of Directors based upon its
evaluation of the Employee's performance during such year, provided however that
the Employee shall be considered for bonuses at such times as the Corporation is
considering granting bonuses to its executive officers and directors other than
the Chief Executive Officer. The Corporation shall promptly notify the Employee
of bonuses granted to any of the executive officers and/or directors of the
Corporation. A failure to so notify the Employee pursuant to this paragraph 5.2
shall be considered a material breach of this agreement. All such bonuses shall
be reviewed annually by the Compensation Committee, if any shall be in
existence.
5.3 Additional Benefits. During the term of this Agreement, the
Employee shall be entitled to the following fringe benefits:
5.3.1 Employee Benefits. The Employee shall be eligible to
participate in such of the Corporation's benefits and
deferred compensation plans as are now generally
available or later made generally available to executive
officers of , including, without limitation, the
Corporation's Stock Option Plan, profit sharing plans,
annual physical examinations, dental and medical plans,
personal catastrophe and disability insurance, financial
planning, retirement plans and supplementary executive
retirement plans, if any. For purposes of establishing
the length of service under any benefit plans or programs
of the Corporation, the Employee's employment with will
be deemed to have commenced on the Effective Date.
5.3.2 Vacation. The Employee shall be entitled to vacation time
during each year during the term of this Agreement and
any extensions thereof, in an amount to be determined by
the Employee in her sole discretion.
155
5.3.3 Automobile. The Corporation shall provide the Employee
with the use of an automobile for the term of this
agreement and any extensions thereof, or in lieu thereof,
the Corporation shall provide the Employee with an
automobile allowance equivalent to the highest such
allowance received by any executive officer of the
Corporation other than the Chief Executive Officer.
5.4 Reimbursement for Expenses. During the term of this Agreement, the
Corporation shall reimburse the Employee for reasonable and properly documented
out-of-pocket business and/or entertainment expenses incurred by the Employee in
connection with her duties under this Agreement, including without limitation
cash payments, telecopier, telefax, courier, photocopier, travel and all other
disbursements.
5.5 Issuance of Stock in Lieu of Base Salary
5.5.1 In the event that, from time to time, the Corporation shall not
have the financial resources to pay the Base Salary, then, with the consent of
the Employee, the Corporation's obligation to pay the Base Salary will be
satisfied by the issuance to the Employee of shares of Compensation Shares,
which shares shall constitute compensation pursuant to the terms of this
Agreement, provided however that the Corporation will use its best efforts to
allocate such cash resources as are available to it to meet any obligations
which the Corporation may have under the United States Federal, State, or other
applicable tax laws and provided further that, upon advice from the
Corporation's and/or the Employee's tax accountant or attorney, the Corporation
will amend any other aspects of this paragraph 5.5.1 if any changes are required
in order for the Employee and the Corporation to be in compliance with such tax
laws.
5.5.2 All Compensation Shares will be issued to the Employee at a value
equal to fifty percent (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.
5.5.4 The Corporation shall on a continuing basis, upon the request of
the Employee, register the Compensation Shares hereafter issued to the Employee
in lieu of cash salary payments as compensation for services rendered pursuant
to the terms of this Agreement and all Compensation Shares heretofore issued to
the Employee in lieu of cash salary payments as compensation for services
rendered pursuant to the terms of a certain Executive Agreement, dated as of
January 18, 1995, as amended as of May 31, 1996, under a Registration Statement
on Form S-8, including a Re-offer Prospectus, in amounts sufficient to allow the
Employee to offer and sell thereunder, exclusive of any shares sold by the
Employee under Rule 144, during every three-month period, a number of
Compensation Shares equal to one percent of the total number of shares of common
stock of the Corporation then issued and outstanding. Notwithstanding the
156
foregoing, the Corporation shall be under no obligation to register any
Compensation Shares unless and until such shares shall have been held by the
Employee for a period of not less than eighteen months or such other shorter
period as the parties shall agree. Request for registration of any Compensation
Shares which the Employee is entitled to have registered under the provisions of
this Paragraph 5.5.4 shall be submitted by the Employee in writing at any time
commencing ten days prior to the three-month period in which such Compensation
Shares may be offered and sold.
5.5.5 The Corporation acknowledges that it has received from the
Employee good and adequate consideration for all of the Compensation Shares
heretofore issued to her as compensation under the Executive Agreement, dated as
of January 18, 1995, as amended as of May 31, 1996 and that any shares hereafter
issued to the Employee as compensation under this Agreement will be, upon their
issuance, fully paid and nonassessable and agrees that so long as all conditions
for the sale of any of the Compensation Shares under Rule 144 shall be met, the
Corporation shall not withhold or instruct its attorney to withhold the legal
opinion letter required for the consummation of the sale of such Compensation
Shares under Rule 144.
5.5.6 In the event that the Corporation fails to register any of the
Compensation Shares in accordance with Paragraph 5.5.4 above within ten business
days of the Employee's submission of the written request therefor, the
Corporation agrees that the Employee will be entitled to liquidated damages in
an amount equal to three times the amount of any losses incurred by the Employee
as a result of such failure to register such shares on a timely basis. In
addition, if any of the Compensation Shares are eligible for sale in accordance
with the requirements of Rule 144 and the Corporation fails to furnish the to
Employee or the Corporation's transfer agent, as the case may be, the required
legal opinion approving such Rule 144 sale within ten days of the request for
such legal opinion, the Corporation agrees that the Employee will be entitled to
liquidated damages in an amount equal to three times the amount of any losses
incurred by the Employee as a result of such failure to furnish such legal
opinion on a timely basis.
6. Termination
6.1 Termination For Cause. Termination For Cause may be effected by the
Corporation in accordance with the procedures set forth in Paragraph 1.6 at any
time during the term of this Agreement and shall be effected by written
notification to the Employee in accordance with Paragraph 6.9, below. Upon the
effectiveness of a Termination For Cause, the Employee shall promptly be paid
all accrued salary, bonus compensation to the extent earned, vested deferred
compensation (other than pension pay or profit sharing plan benefits which will
be paid in accordance with the applicable plan), any benefits under any plans of
in which the Employee is a participant to the full extent of the Employee's
rights under such plans, accrued vacation pay and any appropriate business
expenses incurred by the Employee in connection with her duties hereunder, all
to the date of termination, but the Employee shall not be paid any other
compensation or reimbursement of any kind.
157
6.2 Termination Other Than For Cause. Notwithstanding anything else in
this Agreement, the Corporation may effect a Termination Other Than For Cause at
any time upon giving written notice to the Employee of such termination. Upon
the effectiveness of any Termination Other Than For Cause, the Employee shall
promptly be paid all accrued salary, bonus compensation to the extent earned,
vested deferred compensation (other than pension plan or profit sharing plan
benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of in which the Employee is a participant to the full
extent of the Employee's rights under such plans (including accelerated vesting,
if any, of awards granted to the Employee under the Corporation's stock option
plan), accrued vacation pay and any appropriate business expenses incurred by
the Employee in connection with her duties hereunder, all to the date of
termination, and all severance compensation as provided in Paragraph 7.1.
6.3 Termination For Good Reason. Notwithstanding anything else in this
Agreement, the Employee may effect a Termination for Good Reason at any time
upon giving written notice to the Corporation of such termination in accordance
with the provisions of Paragraph 6.9 hereof. Upon the effectiveness of any
Termination for Good Reason the Employee shall promptly be paid all accrued
salary, bonus compensation to the extent earned, vested deferred compensation
(other than pension plan or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any benefits under any plans of in which
the Employee is a participant to the full extent of the Employee's rights under
such plans (including accelerated vesting, if any, of awards granted to the
Employee under's stock option plan), accrued vacation pay and any appropriate
business expenses incurred by the Employee in connection with her duties
hereunder, all to the date of termination, and all severance compensation as
provided in Paragraph 7.1.
6.4 Termination by Reason of Disability. If, during the term of this
Agreement, the Employee fails to perform her duties under this Agreement on
account of illness or physical or mental incapacity, and such illness or
incapacity continues for a period of more than twelve (12) consecutive months,
the Corporation shall have the right to terminate the Employee's employment
hereunder by written notification to the Employee and payment to the Employee of
all accrued salary, bonus compensation to the extent earned, vested deferred
compensation (other than pension plan or profit sharing plan benefits which will
be paid in accordance with the applicable plan), any benefits under any plans of
in which the Employee is a participant to the full extent of the Employee's
rights under such plans, accrued vacation pay and any appropriate business
expenses incurred by the Employee in connection with her duties hereunder, all
to the date of termination, with the exception of medical and dental benefits
which shall continue through the expiration of this Agreement, but the Employee
shall not be paid any other compensation or reimbursement of any kind.
6.5 Death. In the event of the Employee's death during the term of this
Agreement, the Employee's employment shall be deemed to have terminated as of
the last day of the month during which her death occurs and the Corporation
shall promptly pay to her estate or such beneficiaries as the Employee may from
time to time designate all accrued salary, bonus compensation to the extent
earned, vested deferred compensation (other than pension plan or
158
profit sharing plan benefits which will be paid in accordance with the
applicable plan), any benefits under any plans of in which the Employee is a
participant to the full extent of the Employee's rights under such plans,
accrued vacation pay and any appropriate business expenses incurred by the
Employee in connection with her duties hereunder, all to the date of
termination, but the Employee's estate shall not be paid any other compensation
or reimbursement of any kind.
6.6 Voluntary Termination. In the event of a Voluntary Termination, the
Corporation shall promptly pay all accrued salary, bonus compensation to the
extent earned, vested deferred compensation (other than pension plan or profit
sharing plan benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of in which the Employee is a participant to
the full extent of the Employee's rights under such plans, accrued vacation pay
and any appropriate business expenses incurred by the Employee in connection
with her duties hereunder, all to the date of termination, but no other
compensation or reimbursement of any kind.
6.7 Termination Upon a Change in Control. In the event of a Termination
Upon the effectiveness of a Change in Control, the Employee shall immediately be
paid all accrued salary, bonus compensation to the extent earned, vested
deferred compensation (other than pension plan or profit sharing plan benefits
which will be paid in accordance with the applicable plan), any benefits under
any plans of in which the Employee is a participant to the full extent of the
Employee's rights under such plans (including accelerated vesting, if any, of
any awards granted to the Employee under the Corporation's Stock Option Plan),
accrued vacation pay and any appropriate business expenses incurred by the
Employee in connection with her duties hereunder, all to the date of
termination, and all severance compensation as provided in Paragraph 7.1.
6.8 Constructive Termination. The Employee may give notice to the
Corporation that the Corporation has effected a Constructive Termination of the
Employee's employment by reason of the Corporation's material breach of this
Agreement, by written notification to the Corporation in accordance with
Paragraph 6.9, below. Upon the effectiveness of any Constructive Termination the
Employee shall immediately be paid all accrued salary, bonus compensation to the
extent earned, vested deferred compensation (other than pension plan or profit
sharing plan benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of the Corporation in which the Employee is
a participant to the full extent of the Employee's rights under such plans
(including accelerated vesting, if any, of any awards granted to the Employee
under the Corporation's Stock Option Plan), accrued vacation pay and any
appropriate business expenses incurred by the Employee in connection with her
duties hereunder, all to the date of termination, and all severance compensation
provided in Paragraph 7.1.
6.9 Notice of Termination. The Corporation may effect a termination of
this Agreement pursuant to the provisions of this Section upon giving thirty
(30) days' written notice to the Employee of such termination. The Employee may
effect a termination of this Agreement
159
pursuant to the provisions of this Section upon giving thirty (30) days' written
notice to the Corporation of such termination.
7. Severance Compensation
7.1 Severance Compensation in the Event of: Termination Other Than for
Cause Pursuant to Paragraph 6.2; Termination for Good Reason Pursuant to
Paragraph 6.3; Termination Upon a Change in Control Pursuant to Paragraph 6.7;
or a Constructive Termination Pursuant to Paragraph 6.8. In the event the
Employee's employment is terminated in a termination: Other Than for Cause
pursuant to Paragraph 6.2; for Good Reason pursuant to Paragraph 6.3; a Change
in Control pursuant to Paragraph 6.7; or a Constructive Termination pursuant to
Paragraph 6.8, the Employee shall be paid as severance compensation twice the
amount of her Base Salary (at the rate payable at the time of such termination),
for a period of twelve (12) months from the date of such termination.
Notwithstanding anything in this Paragraph to the contrary, the Employee may in
the Employee's sole discretion, by delivery of a notice to the Corporation
within thirty (30) days following a Termination Upon a Change in Control, elect
to receive from Compensation a lump sum severance payment by bank cashier's
check equal to the present value of the flow of cash payments that would
otherwise be paid to the Employee pursuant to this Paragraph. The Employee shall
also be entitled to an accelerated vesting of any awards granted to the Employee
under the Corporation's Stock Option Plan or any other employee or to the extent
provided in the stock executive compensation plans then in effect, stock option
or other affiliated agreement, if any, entered into at the time of grant or
award. The Employee shall continue to accrue retirement benefits and shall
continue to enjoy any benefits under any plans of in which the Employee is a
participant to the full extent of the Employee's rights under such plans,
including any perquisites provided under this Agreement, though the remaining
term of this Agreement; provided, however, that the benefits under any such
plans of in which the Employee is a participant, including any such perquisites,
shall cease upon re-employment by a new employer. By way of additional severance
compensation, the Corporation shall issue to the Employee within five (5)
business days of the date of termination, a number of shares of the common stock
of the Corporation equal to the number of shares of such common stock, if any,
which the Employee shall have forfeited under the terms of the Stock Restriction
Agreement, attached as Exhibit "A" hereto, which stock shall be fully registered
under a Form S-8 registration statement, if available to the Corporation, or if
such Form shall not be available to the Corporation, the Corporation shall
immediately take steps to register such shares with the Securities and Exchange
Commission on such Form of registration statement as shall then be available to
the Corporation, including without limitation Form S-1.
7.2 No Severance Compensation Upon Other Termination. In the event of
Termination For Cause pursuant to Paragraph 6.1, or termination by reason of the
Employee's Disability or Death pursuant to Paragraphs 6.4 or 6.5, or Voluntary
Termination pursuant to Paragraph 6.6 hereof, neither the Employee nor her
estate shall not be paid any severance compensation.
160
8. Outside Activities of the Employee
The Corporation acknowledges that the Employee has commitments and
business activities including the practice of law, not related to the
Corporation. There shall be no restriction on the Employee's ability to fulfill
such commitments or engage in such business activities, provided that during the
term of the Employee's employment under this Agreement or for a period of six
months after the termination of such employment (other than a Termination Other
Than For Cause or a Termination Upon Change in Control) the Employee shall not
divert away from, for the Employee's personal benefit, or for the benefit of an
organization in which the Employee has a material financial interest, any
opportunity, arising during such period, in the tire recycling industry unless
the Board of Directors of the Corporation have determined not to pursue such
opportunity.
9. Payment Obligations
The Corporation's obligation to pay the Employee the compensation and
to make the arrangements provided herein shall be unconditional, and the
Employee shall have no obligation whatsoever to mitigate damages hereunder. If
litigation after a Change in Control shall be brought to enforce or interpret
any provision contained herein, the Corporation, to the extent permitted by
applicable law and the Corporation's Articles of Incorporation and Bylaws,
hereby indemnifies the Employee for the Employee's reasonable attorneys' fees
and disbursements incurred in such litigation.
10. Confidentiality
The Employee agrees that all confidential and proprietary information
relating to the business of the Corporation shall be kept and treated as
confidential both during and after the term of this Agreement, except as may be
permitted in writing by the Corporation's Board of Directors or as such
information is within the public domain or comes within the public domain
without any breach of this Agreement.
11. Withholdings
All compensation and benefits to the Employee hereunder shall be
reduced by all federal, state, local and other withholdings and similar taxes
and payments required by applicable law.
12. Indemnification
12.1 In addition to any rights to indemnification to which the Employee
is entitled to under the Corporation's Articles of Incorporation and Bylaws, the
Delaware Business Corporation Law or any successor provision thereof, and any
other applicable state law, the Corporation shall at all times during and after
the term of this Agreement indemnify and hold the Employee
161
harmless from and against any and all losses, claims, damages, liabilities and
obligations of any kind and description, including any reasonable attorney fees
incurred by the Employee in investigating, defending or settling such losses,
claims, damages, liabilities and obligations, arising out of or in anyway
connected with the Employee's serving as legal counsel to the Corporation
pursuant to her engagement under this Agreement or her previous engagement under
the Executive Agreement, dated January 18, 1995, as amended May 31, 1996, and
the Corporation shall pay the Employee's expenses in defending any civil or
criminal action, suit, or proceeding in advance of the final disposition of such
action, suit or proceeding.
12.2 The Employee agrees to give prompt notice to the Corporation
immediately upon her having actual knowledge of any claims as to which indemnity
shall or may be sought, and shall permit the Corporation (at its expense) to
assume the defense of any such claim or any litigation resulting therefrom;
provided that counsel for the Corporation, who shall conduct the defense of said
claim or litigation, shall be reasonably satisfactory to the Employee, and the
Employee may participate in such defense; provided, further, that the failure by
the Employee to give notice as provided herein shall not relieve the Corporation
of its obligations under Paragraph 12.1 hereof except to the extent that the
failure results in an omission of actual notice to the Corporation and the
Corporation is damaged solely as a result of the failure to give notice. The
Corporation, in the defense of any such claim or litigation, shall not, except
with the consent of the Employee, consent to the entry of any judgment or enter
into any settlement that does not include as an unconditional term, the giving
by the claimant or plaintiff to the Employee of a release from all liability in
respect to such claim or litigation.
13. Notices
Any notices permitted or required under this Agreement 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 to the Corporation at:
Tirex America, Inc.
3767 Thimens, Suite 000
Xxxxx Xx. Xxxxxxx, Xxxxxx
X0X 0X0
addressed to the Employee at:
Xxxxxxx Xxxx Xxxxxx
000 Xxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
162
or at any other address as any party may, from time to time, designate by notice
given in compliance with this Paragraph.
14. Law Governing
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
15. General
15.1 Titles and Captions. All section titles or captions contained in
this Agreement are for convenience only and shall not be deemed part of the
context nor effect the interpretation of this Agreement.
15.2 Entire Agreement. This Agreement contains the entire understanding
between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement.
15.3 Agreement Binding. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
15.4 Attorney Fees. In the event an arbitration, suit or action is
brought by any party under this Agreement to enforce any of its terms, or in any
appeal therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
15.5 Computation of Time. In computing any period of time pursuant to
this Agreement, the day of the act, event or default from which the designated
period of time begins to run shall be included, unless it is a Saturday, Sunday,
or a legal holiday, in which event the period shall begin to run on the next day
which is not a Saturday, Sunday, or legal holiday, in which event the period
shall run until the end of the next day thereafter which is not a Saturday,
Sunday, or legal holiday.
15.6 Pronouns and Plurals. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular, or plural
as the identity of the person or persons may require.
15.7 Presumption. This Agreement or any section thereof shall not be
construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party.
163
15.8 Further Action. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of the Agreement.
15.9 Parties in Interest. Nothing herein shall be construed to be to
the benefit of any third party, nor is it intended that any provision shall be
for the benefit of any third party.
15.10 Savings Clause. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
TIREX AMERICA, INC.
By /s/ Xxxxxxx X. Xxxxx
--------------------------
Xxxxxxx X. Xxxxx, President
TIREX CANADA, INC.
By /s/ Xxxxxxx X. Xxxxx
--------------------------
Xxxxxxx X. Xxxxx, President
By/s/ Xxxxxxx Xxxx Xxxxxx
--------------------------
Xxxxxxx Xxxx Xxxxxx
164
