EXHIBIT 10.15
EMPLOYMENT AGREEMENT
AGREEMENT made October 30, 1997, by and among XXXXXXX-XXXXXXX HOLDINGS,
INC., a Delaware corporation (the "Company"), HUNTER DRUMS LIMITED, a wholly
owned subsidiary of the Company organized under the laws of Ontario ("HDL"), and
XXXXXXX X. XXXXXX ("Executive").
RECITALS
In connection with the sale (the "Sale") of Executive's equity interest in
HDL to a subsidiary of the Company, and in order to induce Executive to continue
to serve as the President of HDL, the Company and HDL desire to provide
Executive with compensation and other benefits on the terms and conditions set
forth in this Agreement. Executive is willing to accept such employment and
perform services for HDL, on the terms and conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
I Employment.
1.1 Subject to the terms and conditions of this Agreement, the
Company agrees to cause HDL to employ Executive during the term hereof as
President of HDL. In his capacity as President of HDL, Executive shall report to
the Company's Chief Executive Officer. As President of HDL, Executive shall have
the customary powers, responsibilities and authorities of presidents of
subsidiary corporations of the size, type and nature of HDL, as it exists from
time to time, and
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such additional powers, responsibilities and authorities as the Company's Chief
Executive Officer shall from time to time reasonably delegate to Executive
consistent with Executive's status as the President of HDL and as if he was an
executive vice-president of the Company.
1.2 Subject to the terms and conditions of this Agreement,
Executive hereby accepts employment as President of HDL commencing on the date
of the closing (the "Closing Date") of the transaction contemplated in the Share
Purchase Agreement, dated as of the date hereof, among Xxxxxxx X. Xxxxxx, Xxxx
X. Xxxxxx, Xxxxxxx X. Xxxxxx Holdings Inc., Xxxx X. Xxxxxx Holdings Inc., Hunter
Holdings Inc., 373062 Ontario Limited, HDL, the Company and a subsidiary of the
Company (the "Share Purchase Agreement"), and agrees to devote his full working
time and efforts, to the best of his ability, experience and talent, to the
performance of services, duties and responsibilities in connection therewith.
Executive shall perform such duties and exercise such powers, commensurate with
his position as the President of HDL and as the Company's Chief Executive
Officer shall from time to time reasonably delegate to him (consistent with
Executive's status as the President of HDL and as if he was an executive
vice-president of the Company). In no event shall the Executive be required by
the Company or HDL to maintain a residence in the United States.
1.3 (a) Nothing in this Agreement shall preclude Executive
from continuing to serve as a director, shareholder and/or officer of any
corporation solely owned, directly or indirectly, by one or more of the
Executive and members of his family and trusts solely for the benefit of
Executive and members of his family (the "Family Holding Companies"), provided,
however, that: (i) Executive's principal activities with respect to any of the
Family Holding Companies shall be as a shareholder and/or director and not as a
manager and/or operator; (ii) such service does not interfere with Executive's
duties and responsibilities under this Agreement;
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and (iii) none of the Family Holding Companies engages in any business (A) in
which any of the Company and its subsidiaries is engaged as of the date such
Family Holding Company enters into such business or (B) which is involved in the
manufacturing, sale, distribution, leasing, reconditioning and/or fleet
management of rigid industrial packaging in North America.
(b) Nothing in this Agreement shall preclude Executive from
continuing to serve as a director and/or shareholder of Hunter Packaging Limited
("Packaging"), provided, however, that (i) Executive shall promptly resign as a
director of Packaging if (1) Executive's service as a director of Packaging
unreasonably interferes with Executive's duties and responsibilities under this
Agreement or (2) Packaging engages in any business (A) in which any of the
Company and its subsidiaries is engaged as of the date Packaging enters into
such business or (B) which is involved in the manufacturing, sale, distribution,
leasing, reconditioning and/or fleet management of rigid industrial packaging in
North America (either of (A) or (B) causing Packaging to be a "Competitor"),
(ii) Executive and his spouse and children and trusts for the benefit of one or
more of Executive and his spouse and children shall not, directly or indirectly,
alone acquire control of Packaging, (iii) if (x) Packaging becomes a Competitor
and (y) Executive, members of Executive's family and the Family Holding
Companies collectively alone control Packaging, Executive shall use his
reasonable efforts to divest all securities of Packaging beneficially owned by
him as soon as reasonably practicable and (iv) if Packaging becomes a
Competitor, Executive thereafter shall not voluntarily increase the aggregate
equity interest in Packaging, or the percentage of the voting power of
Packaging's voting securities, beneficially owned, directly or indirectly, by
him.
(c) Nothing in this Agreement shall preclude: (i) Executive's
ownership of any class of publicly-traded securities where such ownership (other
than ownership of securities of
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Packaging) does not exceed 5% of such class; and (ii) Executive's ownership of
any class of non-publicly traded securities; provided, however, that: (A)
Executive shall not knowingly make any investment in any entity (1) which is
engaged in a business in which any of the Company and its subsidiaries is
engaged as of the date of such investment or (2) which is involved in the
manufacturing, sale, distribution, leasing, reconditioning and/or fleet
management of rigid industrial packaging in North America, and if Executive
obtains knowledge that any such entity is engaged in any such business he shall
divest himself of any and all investments in such entity as promptly as
practicable and in no event later than the ninetieth (90th) day following the
date on which Executive obtains such knowledge; (B) such ownership does not
interfere with Executive's duties and responsibilities under this Agreement; (C)
if Executive proposes to acquire beneficial ownership of 10% or more of any
class of non-publicly traded securities, then the Executive must provide the
Company's Chief Executive Officer with reasonably prompt prior written notice of
such acquisition; and (D) Executive's activities with respect to any such
investment shall be consistent with those of a passive investor.
(d) Nothing in this Agreement shall preclude Executive from
engaging in charitable and community affairs; provided, however, that: (i)
Executive provides the Company's Chief Executive Officer with reasonably prompt
prior written notice thereof; and (ii) in the reasonable determination of the
Company's Chief Executive Officer, such activities do not interfere with
Executive's duties and responsibilities under this Agreement.
(e) Subject to Section 6.7(e) of the Share Purchase Agreement,
nothing in this Agreement shall preclude Executive, directly or indirectly, from
owning shares of Performance Recycling Inc. or being a director thereof.
(f) Executive shall resign as an officer of Performance
Recycling Inc. and as a
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director of Vanguard Container Corporation as promptly as practical following
the Closing.
1.4 So long as Executive is an executive officer of the
Company or any of its subsidiaries, each of Vestar Capital Partners III, L.P.
and Vestar/R-S Investment Limited Partnership (together, "Vestar") shall, and
shall cause any party which they control to, vote its shares of voting stock of
the Company to have Executive elected to the Company's board of directors and
the Company shall cause Executive to be elected to HDL's board of directors.
Executive agrees that he shall accept such elections and shall not receive any
additional compensation therefor.
II Term of Employment.
Executive's term of employment under this Agreement shall
commence on the Closing Date and, subject to the terms hereof, shall terminate
on the earlier of (i) the fifth anniversary of the Closing Date (the
"Termination Date") or (ii) the termination of Executive's employment pursuant
to this Agreement; provided, however, that any termination of employment by
Executive (other than for death or Permanent Disability or by Executive within
ninety (90) days following a Severance Event (as defined in Section 6.1(c)
hereof)) may only be made upon 90 days prior written notice to the Company;
provided, further, that this Agreement will be automatically renewed and the
term extended for additional one-year periods commencing on the fifth
anniversary of the Closing Date, and on each anniversary date thereafter, unless
the Company or Executive provides 60 days' prior written notice of non-renewal
in accordance with Section 8 before the end of such initial term or any such
one-year renewal term. Each time this Agreement is renewed pursuant to this
provision, the "Termination Date" shall become the next anniversary of the
Closing Date.
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III Compensation.
3.1 Salary. HDL shall pay Executive a base salary ("Base
Salary") at the rate of Cdn $345,000 per annum. The Base Salary shall be payable
in accordance with the ordinary payroll practices of HDL. Any increase in Base
Salary shall be in the discretion of the board of directors of the Company,
exercised on an annual basis and taking into account increases provided to other
executives of the Company, and the Base Salary as so increased shall constitute
"Base Salary" hereunder. Base Salary may not be reduced below Cdn $345,000.
3.2 Annual Bonus. In addition to his Base Salary, Executive
shall be paid an annual bonus (the "Bonus") by HDL during the term of his
employment hereunder with a target amount equal to (i) 50% of (ii) (x) Base
Salary less (y) $20,000 (the "Target Bonus") based on performance criteria
determined by the board of directors of the Company in its sole discretion. The
Bonus shall be paid at the same time as the Company pays bonuses to its senior
executives. For the Company's 1997 fiscal year ending December 31, 1997 only,
HDL shall pay Executive a bonus equal to (a) Cdn $162,500, multiplied by (b) a
fraction, the numerator of which is the number of days elapsed from the Closing
Date through the end of the fiscal year and the denominator of which is 365.
3.3 Compensation Plans and Programs. Executive shall be
eligible to participate in any compensation plan or program (including any stock
option plan) maintained by the Company in which senior executives of the Company
participate on terms comparable to those applicable to such other senior
executives (or, in the case of any such compensation plan or program providing
for cash compensation, Executive may receive from HDL the equivalent benefit).
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IV Employee Benefits.
4.1 Employee Benefit Programs, Plans and Practices. HDL shall
provide Executive during the term of his employment hereunder with coverage
under all employee pension and welfare benefit programs, plans and practices
(excluding life insurance) (to the extent permitted under any employee benefit
plan) in accordance with the terms thereof.
4.2 Vacation and Fringe Benefits. Executive shall be entitled
to six weeks vacation. In addition, Executive shall be entitled to: (a) the
lease of a BMW 740iL or equivalent automobile and the reasonable expenses
associated with driving and maintaining said vehicle, including insurance and a
cellular telephone; and (b) annual dues relating to Executive's membership at
Burlington Golf and Country Club. Executive shall also be entitled to the other
perquisites and fringe benefits made available generally to the senior
executives of the Company.
4.3 D&O Insurance. So long as Executive is an officer or
director of any of the Company and its subsidiaries, Executive shall be covered
by any directors and officers insurance policy then maintained by the Company.
HDL shall reimburse the Company for its share of the cost thereof. The Company
will use all commercially reasonable efforts to maintain a directors and
officers insurance policy containing the endorsement attached hereto as Exhibit
A. If a directors and officers insurance policy containing such endorsement is
not so maintained, Executive may elect to resign as a director of HDL and/or the
Company. Such resignation or resignations by Executive shall not affect any of
the rights and obligations of the parties hereunder other than the obligation of
the Company and/or Vestar, as applicable, under Section 1.4 to cause Executive
to be elected to the board of directors of HDL and/or the Company, as
applicable, and Executive's obligation under Section 1.4 to serve as a director
of HDL and/or the Company, as applicable.
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4.4 Indemnification. During and after the term of employment
hereunder, the Company agrees that it shall indemnify the Executive, to the
maximum extent permitted by applicable law, against all judgements, fines,
costs, amounts paid in settlement and legal fees reasonably incurred in
connection with any civil, administrative or investigatory proceeding or action
brought against the Executive by third parties (a "Proceeding") arising out of
his actions or inactions on or after the date hereof in the good faith discharge
of his respective duties and responsibilities as an employee, officer or
director of the Company or any of its subsidiaries (the "indemnity obligation")
during the period of Executive's services as such an employee, officer or
director on or after the date hereof. The indemnity obligation shall continue to
the Executive even if he has ceased to be an employee, officer or director of
the Company or any of its subsidiaries. To the maximum extent permitted by
applicable law, the Company shall advance to the Executive all reasonable costs
and expenses incurred by him in connection with a Proceeding within 20 days
after receipt by the Company of a written request for such advance. Such request
shall include an itemized list of the costs and expenses and an undertaking by
the Executive to repay the amount of such advance if it shall ultimately be
determined, in a final judgment for which the time to appeal has expired, that,
pursuant to applicable law, he is not entitled to be indemnified against such
costs and expenses.
V Expenses.
Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement, including,
without limitation, expenses for business class travel, business entertainment
and similar items related to such duties and responsibilities. HDL will
reimburse Executive for or pay directly all such expenses upon presentation by
Executive from time to time of appropriately itemized and approved (consistent
with HDL's policy) accounts
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of such expenditures.
VI Termination of Employment.
6.1 Termination Not for Cause. (a) The Company or HDL may
terminate Executive's employment at any time for any reason. If Executive's
employment is terminated by the Company or HDL other than for Cause (as defined
in Section 6.4 hereof) or as a result of Executive's death or Permanent
Disability (as defined in Section 6.2 hereof) or by Executive within ninety (90)
days following a Severance Event (as defined in Section 6.1(c) hereof), in each
case prior to the Termination Date, Executive shall receive such payments, if
any, under applicable plans or programs, including but not limited to those
referred to in Section 3.3 hereof, to which he is entitled pursuant to the terms
of such plans or programs. In addition, Executive shall be entitled to receive
an amount (the "Termination Amount") from HDL in lieu of any Bonus in respect of
all or any portion of the fiscal year in which such termination occurs and any
other cash compensation (other than the Compensation Payment referred to below).
The Termination Amount shall consist of the sum of: (a) the product of (i) the
Severance Multiplier (as defined in Section 6.1(b) hereof) and (ii) the Base
Salary (at its then current rate); and (b) the product of (i) the Target Bonus
in respect of the fiscal year in which Executive's termination occurs (which
fiscal year shall consist of twelve calendar months for purposes of this
calculation) multiplied by (ii) a fraction, the numerator of which is the number
of days passed in the current fiscal year prior to Executive's termination and
the denominator of which is 365. The portion of the Termination Amount referred
to in clause (a) shall be payable at the beginning of each month following such
termination of employment in a number of equal monthly installments equal to the
product of (i) 12 months and (ii) the Severance Multiplier, and the portion of
the Termination Amount referred to in clause (b) shall be payable when the
Company pays bonuses to its senior executives. In
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addition, Executive shall be entitled to receive (x) a cash lump sum payment in
respect of compensation earned but not yet paid (including any deferred Bonus
payments) (the "Compensation Payment") and (y) to continued coverage under HDL's
group employee medical, dental and disability plans in accordance with the
respective terms thereof for a period of time equal to the product of (i) 12
months and (ii) the Severance Multiplier. The Compensation Payment shall be paid
by HDL to Executive within 30 days after the termination of Executive's
employment. If the Company delivers a notice of non-renewal pursuant to Section
2 hereof and Executive's employment terminates on the Termination Date,
Executive shall be entitled to receive all of the foregoing payments and
benefits applicable following a termination of Executive's employment by the
Company or HDL other than for Cause (including a Termination Amount), except
that the Severance Multiplier shall be one (1).
(b) As used herein, the term "Severance Multiplier" shall
mean: prior to the second anniversary of the Closing Date, three (3); from (and
including) the second anniversary of the Closing Date up to (but not including)
the third anniversary of the Closing Date, two (2); and from (and including) and
after the third anniversary of the Closing Date, one and one-half (1.5).
(c) As used herein, the term "Severance Event" shall be
limited to:
(i)a material breach by the Company or HDL of the last
sentence of Section 1.2 hereof;
(ii) a material breach by the Company or Vestar of Section 1.4
hereof;
(iii) a material breach by HDL of the first or last sentence
of Section 3.1 hereof;
(iv) a material breach by HDL of Section 3.2, 3.3, 4.1 or 4.2
hereof;
(v) a material and adverse diminution of duties from the
duties held by Executive following the Closing Date, or, in the event of a
reorganization of the Company or HDL, from the duties held by Executive
immediately following such reorganization
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(which duties should be comparable in importance to those of the
Company's Executive Vice Presidents); provided, however, that this
subpart (v) shall be null and void in the event that either the Company
or Executive gives the other notice within 90 days of the Termination
Date that this Agreement shall not be automatically renewed as provided
in Section 2 hereof; and
(vi) if the Company shall not have (w) delivered to Executive
written notice of a meeting of the board of directors of the Company pursuant to
Section 6.4(b) hereof or (x) alleged the breach by Executive of Section 12
hereof or Section 6.7 of the Share Purchase Agreement and if (y) the Company
shall not be in default under any material credit agreement to which it is a
party and (z) the performance of its obligations under the Stay/Pay Agreement
dated the date hereof between the Executive and the Company (the "Stay/Pay
Agreement") would not (with or without notice or lapse of time or both)
constitute such a default, a material breach of the Stay/Pay Agreement;
provided, however, that none of the events listed in (i) through (vi) above
shall constitute a Severance Event unless (x) the Executive gives the Company
written notice within 30 days of the occurrence of the event, specifying in
reasonable detail the relevant facts and the Severance Event the Executive
believes they will constitute absent the Company curing such event as
contemplated by clause (y) below, and (y) the Company does not cure such event
within the 30 day period following its receipt of such notice.
6.2 Permanent Disability. If the Executive becomes totally
disabled (as defined in HDL's Long-Term Disability Benefit Plan applicable to
senior executive officers as in effect on the date hereof) for a continuous
period of six months or longer ("Permanent Disability"), the Company, HDL or
Executive may terminate Executive's employment on written notice thereof, and
Executive shall receive or commence receiving, as soon as practicable:
(i)amounts payable pursuant to the terms of a disability
insurance policy or similar arrangement which the Company maintains during the
term hereof;
(ii) the Target Bonus in respect of the fiscal year in which
his termination occurs, prorated by a fraction, the numerator of which is the
number of days of the fiscal year until termination and the denominator of which
is 365;
(iii) the Compensation Payment; and
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(iv) such payments under applicable plans or programs,
including but not limited to those referred to in Section 3.3 hereof, to which
he is entitled pursuant to the terms of such plans or programs.
6.3 Death. In the event of Executive's death during the term
of his employment hereunder, Executive's estate or designated beneficiaries
shall receive or commence receiving, as soon as practicable:
(i)the Target Bonus in respect of the fiscal year in which his
death occurs, prorated by a fraction, the numerator of which is the number of
days of the fiscal year until his death and the denominator of which is 365;
(ii) any death benefits provided under the employee benefit
programs, plans and practices referred to in Section 4.1 hereof, in accordance
with their terms;
(iii) the Compensation Payment; and
(iv) such payments under applicable plans or programs,
including but not limited to those referred to in Section 3.3 hereof, to which
Executive's estate or designated beneficiaries are entitled pursuant to the
terms of such plans or programs.
6.4 Voluntary Termination by Executive; Discharge for Cause.
(a) Either the Company or HDL shall have the right to terminate the employment
of Executive for Cause. In the event that Executive's employment is terminated
by the Company or HDL for Cause, as hereinafter defined, or by Executive (other
than as a result of the Executive's Permanent Disability or death or by
Executive within ninety (90) days following a Severance Event), prior to the
Termination Date, Executive shall only be entitled to receive the Compensation
Payment. Executive shall not be entitled, among other things, to the payment of
any Bonus in respect of all or any portion of the fiscal year in which such
termination occurs. After the termination of Executive's employment under this
Section 6.4, the obligations of the Company or HDL under this Agreement to make
any further payments, or provide any benefits specified herein, to Executive
shall thereupon cease and terminate.
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(b) As used herein, the term "Cause" shall be limited to (i)
willful neglect of duty (which shall not include any good faith errors in
business judgment) or willful misconduct (which shall not include any good faith
errors in business judgment) by Executive in connection with his employment,
(ii) continuing refusal by Executive to perform his duties hereunder as required
under Section 1.2, after 30 days prior written notice of any such refusal to
perform such duties or direction was given to Executive, (iii) any breach by
Executive of the provisions of Section 12 of this Agreement or Section 6.7 of
the Share Purchase Agreement or any other material breach of this Agreement by
Executive or (iv) (x) the commission by the Executive of (1) fraud, (2) an act
of dishonesty or disloyalty in respect of the discharge of his duties, (3) moral
turpitude, (4) an indictable offense under the Criminal Code (Canada) which in
the reasonable judgement of the board of directors of the Company is comparable
to a felony under the laws of the United States of America or any subdivision
thereof or (5) a felony under the laws of the United States of America or any
subdivision thereof or (y) the conviction of the Executive of an offense under
the Criminal Code (Canada) which results in the Executive's incarceration.
Termination of Executive pursuant to this Section 6.4 shall be made by delivery
to Executive of a copy of a resolution duly adopted by the affirmative vote of
not less than a majority of the Directors at a meeting of the board of directors
of the Company called and held for the purpose (after 30 days prior written
notice to Executive (during which 30 days Executive shall have the opportunity
to cure (if practicable) any action or inaction referred to in Section 6.4(b)
(i), (ii) or (iii)) and reasonable opportunity for Executive to be heard before
the board of directors of the Company prior to such vote), finding that in the
reasonable judgment of the board of directors of the Company Executive was
guilty of conduct set forth in any of clauses (i) through (iv) above and
specifying the particulars thereof.
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VII Mitigation of Damages.
Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise after the termination of his employment hereunder.
VIII Notices.
All notices or communications hereunder shall be in writing, addressed
as follows: To the Company:
Xxxxxxx-Xxxxxxx Holdings, Inc.
000 Xxxx Xxxx Xxxx
Xxx Xxxx, XX 00000
Attn: Chief Executive Officer
with a copy to:
Xxxxx X. Xxxxxx Esq.
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
To Executive:
Xx. Xxxxxxx X. Xxxxxx
c/o Hunter Drums Limited
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
Xxxxxx X0X0X0
with a copy to:
W. Xxxxx Xxxx, Esq.
Stikeman, Xxxxxxx
Commerce Court Xxxx
00xx Xxxxx
X.X. Xxx 00
Xxxxxxx, Xxxxxxx
Xxxxxx X0X0X0
Any such notice or communication shall be delivered by hand or
by courier, addressed as above
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(or to such other address as such party may designate in a
notice duly delivered as described above).
IX Separability; Legal Fees.
If any provision of this Agreement shall be declared to be
invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect. In any dispute regarding this Agreement, the
non-prevailing party shall bear the reasonable out-of-pocket costs incurred by
the prevailing party in respect of enforcing its respective rights under this
Agreement. In the event that neither party has prevailed with respect to all of
its claims, then the expenses will be apportioned as determined by the court. In
addition, the Company and HDL appoint Osler, Xxxxxx & Xxxxxxxx, X.X. Xxx 00, 1
First Canadian Place, Toronto, Ontario, Canada M5X1B8, Attention: Xxxx Xxxxxxxx;
or any other partner thereof, as agent for service of process and Executive
appoints Stikeman, Xxxxxxx (see Section 8 for address) Attention: Xxxxx Xxxx, or
any other partner thereof, as agent for service of process.
X Assignment.
This contract shall be binding upon and inure to the benefit
of the heirs and representatives of Executive and the assigns and successors of
the Company, but neither this Agreement nor any rights or obligations hereunder
shall be assignable or otherwise subject to hypothecation by Executive (except
by will or by operation of the laws of intestate succession) or by the Company,
except that the Company may assign this Agreement to any successor (whether by
merger, purchase or otherwise) to all or substantially all of the stock, assets
or businesses of the Company, if such successor expressly agrees to assume the
obligations of the Company hereunder.
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XI Amendment.
This Agreement may only be amended by written agreement of the
parties hereto.
XII Nondisclosure of Confidential Information.
(a) Executive shall not, without the prior written consent of
the Company, use, divulge, disclose or make accessible to any other person,
firm, partnership, corporation or other entity any Confidential Information
pertaining to the business of the Company or HDL or any of their subsidiaries,
except (i) while employed by the Company or HDL or any of their subsidiaries,
which use, divulgence or disclosure Executive reasonably determines to be in the
business of and for the benefit of the Company or HDL or any of their
subsidiaries, (ii) as required by law, (iii) as reasonably required to enforce
his rights hereunder or under the Stay/Pay Agreement or Share Purchase Agreement
or (iv) for the purposes of obtaining personal, legal or financial advice from
independent professional advisors. For purposes of this Section 12(a),
"Confidential Information" shall mean non-public information concerning the
financial data, strategic business plans, product development (or other
proprietary product data), customer lists, marketing plans and other non-public,
proprietary and confidential information of the Company, HDL and their
respective subsidiaries or their respective customers, that, in any case, is not
otherwise available to the public (other than by Executive's breach of the terms
hereof).
(b)Executive and the Company agree that this confidentiality
covenant and the covenant contained in Section 6.7 of the Share Purchase
Agreement are reasonable covenants under the circumstances, and further agree
that if in the opinion of any court of competent jurisdiction such restraints
are not reasonable in any respect, such court shall have the right, power and
authority to modify such provision or provisions of such covenants to the extent
the court determines such restraints are not reasonable and to enforce the
covenants as so amended.
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Executive agrees that any breach of the covenants contained in this Section 12
or in Section 6.7 of the Share Purchase Agreement would irreparably injure the
Company. Accordingly, Executive agrees that the Company or HDL may, in addition
to pursuing any other remedies it may have in law or in equity, cease making any
payments or providing any benefits otherwise required to be paid or provided
under this Agreement and obtain an injunction against Executive from any court
having jurisdiction over the matter restraining any further violation of this
Agreement by Executive.
XIII Beneficiaries; References.
Executive shall be entitled to select (and change, to the
extent permitted under any applicable law) a beneficiary or beneficiaries to
receive any compensation or benefit payable hereunder following Executive's
death, and may change such election, in either case by giving the Company
written notice thereof. In the event of Executive's death, reference in this
Agreement to Executive shall be deemed, where appropriate, to refer to his
beneficiary, heirs at law, estate or other legal representative. Any reference
to the masculine gender in this Agreement shall include, where appropriate, the
feminine.
XIV Survivorship.
The provisions of Sections 4.4, 6 through 13 and 15, 17 and 18
shall survive any termination of this Agreement to the extent necessary to the
intended preservation of the rights and obligations provided therein.
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XV Governing Law; Attornment.
This Agreement shall be construed under and governed by the
laws of the Province of Ontario applicable to contracts made and to be performed
therein, and the parties hereto attorn to the exclusive jurisdiction of the
courts of the Province of Ontario for the purpose of any actions or proceedings
that may be required to enforce any provision of this Agreement.
XVI Effect on Prior Agreements.
This Agreement contains the entire understanding between the
parties hereto and supersedes in all respects any prior or other agreement or
understanding between the Company or any affiliate of the Company and Executive
regarding the subject matter hereof, other than the Share Purchase Agreement and
the Stay/Pay Agreement.
XVII Withholding.
The Company shall be entitled to withhold from payment any
amount of withholding required by law.
XVIII Payment.
Any money paid pursuant to this Agreement shall be paid by HDL
either by wire transfer of immediately available funds or by a check drawn on a
Canadian bank account in immediately available funds.
XIX Counterparts.
This Agreement may be executed in two or more counterparts,
each of which will be deemed an original.
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XX Currency.
Any sums delineated in dollars in this Agreement shall mean
Canadian dollars, not United States dollars.
XXI Guarantee.
The Company hereby (i) covenants, acknowledges and agrees that
all representations, warranties, covenants, undertakings and other agreements
contained herein on the part of HDL are joint and several obligations of HDL and
the Company and (ii) guarantees the obligations of HDL under this Agreement and
agrees to cause HDL to comply with the terms of this Agreement. This guarantee
shall be a continuing and irrevocable guarantee and shall survive the
termination of this Agreement. Without limitation, the obligations of this
guarantee shall not be released, discharged or affected by any extensions of
time or indulgences or modifications granted by the Executive in favor of HDL,
or by any failure to enforce any of the terms of this Agreement or by the
bankruptcy, insolvency, dissolution, amalgamation, winding-up or reorganization
of HDL, and the Company hereby waives any right to require the Executive to
exhaust any action or recourse against HDL before requiring performance by the
Company pursuant to this guarantee.
XXII Remedies.
In the event of a breach of this Agreement or the Stay Pay
Agreement which constitutes a Severance Event, the Executive may elect to treat
the breach as a Severance Event or, in the alternative but not in addition
thereto, exercise such other remedies as are available at law to enforce the
provisions of this Agreement or the Stay Pay Agreement. In the event of a breach
of this Agreement or the Stay Pay Agreement which does not constitute a
Severance Event, the Executive may exercise such remedies as are available at
law or under this Agreement
20
or the Stay Pay Agreement to enforce the provisions of this Agreement or the
Stay Pay Agreement.
HUNTER DRUMS LIMITED
By /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
XXXXXXX-XXXXXXX HOLDINGS, INC.
By /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
/s/ Xxxxxxx X. Xxxxxx
---------------------------
XXXXXXX X. XXXXXX
With respect to Section 1.4 only,
VESTAR CAPITAL PARTNERS III, L.P.
By: VESTAR ASSOCIATES III, L.P.
Its: General Partner
By: VESTAR ASSOCIATES CORPORATION III
Its: General Partner
By: /s/ Xxxxxx X. X'Xxxxxxx
-----------------------------
Name: Xxxxxx X. X'Xxxxxxx
Title: General Partner
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
VESTAR/R-S INVESTMENT LIMITED PARTNERSHIP
By: /s/ Xxxxxx X. X'Xxxxxxx
------------------------------
Name: Xxxxxx X. X'Xxxxxxx
Title: General Partner
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
