SCHEDULE 1.1.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT made the 11th day of March, 1997
BETWEEN:
KENHAR CORPORATION
(hereinafter referred to as "Kenhar")
OF THE FIRST PART
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CASCADE CORPORATION
(hereinafter referred to as "CASCADE")
OF THE SECOND PART
-and-
XXXXXXX X. XXXXXXXX
(hereinafter referred to as the "Executive")
OF THE THIRD PART
(hereinafter collectively referred to as the "Parties")
WHEREAS Xxxxxxxx is the President and Chief Executive Officer of Kenhar;
AND WHEREAS a wholly-owned subsidiary of Cascade has today completed
the purchase of all of the issued and outstanding shares of Kenhar;
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AND WHEREAS Kenhar wishes to continue to retain the services of the
Executive and the Executive wishes to continue to be retained by Kenhar upon
and subject to the terms and conditions specified herein;
AND WHEREAS Kenhar and the Executive desire to enter into a written
agreement which contains the agreed-upon terms and conditions of the
Executive's continued employment;
AND WHEREAS Cascade wishes to nominate the Executive and the
Executive wishes to be elected to the Board of Directors and Cascade wishes
to appoint the Executive and the Executive wishes to be appointed to an
Executive Committee of Cascade to be formed;
AND WHEREAS Cascade and the Executive desire to enter into a written
agreement with respect to his nomination to the Board of Directors and his
appointment to the Executive Committee of Cascade;
NOW THEREFORE for the good and valuable consideration of Ten Dollars
($10.00) and the mutual covenants and agreements hereinafter contained, the
receipt and sufficiency of which is expressly acknowledged, the Parties
mutually covenant and agree as follows:
1 Position, Duties and Responsibilities
1.1 Kenhar hereby agrees to employ the Executive in the position of
President and Chief Executive Officer ("President") and the Executive hereby
accepts such employment. During the continuation of his employment
hereunder and as part thereof, Cascade shall cause the Executive to be
appointed a director of Kenhar, and,
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in accordance with the provisions of section 7.2 hereof, an Executive
Vice-President and a member of the Executive Committee of Cascade.
1.2 The Executive shall serve Kenhar in the capacity of President and
Chief Executive Officer to perform such duties and exercise such powers as
may be reasonably required of him or be vested in him by the Board of
Directors of Kenhar. The Executive acknowledges that he is employed in a
fiduciary capacity and agrees to devote his full time and attention and
exert his best professional efforts, knowledge, skill and energy to the
diligent, faithful, efficient and competent performance of his duties and
responsibilities hereunder and will not, without the prior written consent
of Cascade or the Board of Directors of Kenhar, assume other employment or
engage in any other business provided that the foregoing (but subject always
to the provisions of paragraphs 9 and 10 hereof) shall not be construed to
prevent the Executive from serving as a director or officer of any
non-profit organization or trade association or as a director of any
business corporation, provided that in each such case the prior consent of
Cascade, which shall not be unreasonably withheld, shall have been obtained
by the Executive.
1.3 Excluding business travel (including, without limitation, any travel
necessary to fulfil the Executive's duties and responsibilities as President
and a director of Kenhar and as a director and member of the Executive
Committee of Cascade), the Executive will not be required to report
regularly for work outside the environs of Guelph, Ontario.
2 Term of Employment
2.1 The term of the Executive's employment shall be for a minimum period
of at least three (3) years from the date hereof, unless terminated earlier
in accordance with the provisions of this Agreement.
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3 Compensation
3.1 Base Salary - The Executive shall receive an annual base salary of
$200,000 (U.S. Funds), less required statutory and other deductions
authorized by the Executive, which base salary shall be paid in accordance
with Kenhar's normal payroll practices.
3.2 Bonus - The Executive shall be entitled to receive an annual bonus
payable by Kenhar which shall be calculated on a formula basis comparable to
the bonus, if any, determined payable by the Board of Directors of Cascade
pursuant to Cascade's bonus plan to the other Executive Vice President(s) of
Cascade.
3.3 Stock Options - As an employee of Kenhar and officer of Cascade,
the Executive is eligible to participate in the Cascade stock option plan, a
copy of which has been provided to the Executive, subject to applicable
legislation and stock exchange rules. The Executive acknowledges that stock
options are granted in the discretion of the Board of Directors of Cascade.
However, subject to the provisions of Cascade's stock option plan, it is
understood and agreed that the Executive shall be entitled to participate at
such times as and at the level, exercise price and other terms comparable to
Cascade personnel having comparable duties and shall be entitled to
participation in such plan in respect of options to be allocated thereunder
during the year ending January 31, 1998. For the sole purpose of the
Executive's entitlement under Cascade's stock option plan, the Executive's
previous employment with Kenhar will be treated as Cascade employment. In
no other case will the Executive's employment with Kenhar be treated as
employment with Cascade.
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4 Benefits and Vacation
4.1 While employed by Kenhar, the Executive shall be eligible to
participate in the Kenhar employee benefits program which it makes available
to other employees of Kenhar from time to time. The current benefits are
listed on the attached Schedule "A". Nothing contained in this Agreement
limits or restricts Kenhar's ability to change such benefits (i) in
accordance with the terms of the plans which govern such benefits or (ii) to
conform to the new or modified terms of Cascade's plans applicable to its
executives in Canada provided that as a result of any such changes none of
the benefits currently available to the Executive shall be reduced without
his consent.
4.2 In addition to the benefits available under the employee benefits
program, the Executive shall receive a retirement allowance of $2,000 (Cdn.
Funds) per year for each calendar year of service with Kenhar and its
predecessors (which currently totals 23 such years) payable on any
termination for whatever reason of the Executive's employment hereunder.
4.3 In addition, the Executive will be eligible to a supplementary
pension benefit as described on the attached Schedule "B".
4.4 While employed by Kenhar:
(a) the Executive shall be entitled to six weeks' vacation per
year, to be scheduled at the mutual convenience of the Parties;
and
(b) the Executive shall be entitled to the regular holidays
schedule recognized and observed by Kenhar.
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5 Other Executive Benefits
5.1 The Executive shall be entitled to other executive benefits provided
to key executives at a level commensurate with the Executive's position, in
accordance with the current Kenhar arrangements which are listed on the
attached Schedule "C".
6 Reimbursement of Expenses
6.1 The Executive shall be reimbursed for all expenses incurred by him
in compliance with Kenhar's expense policies, as may be modified from time
to time.
7 Cascade Covenants
7.1 During the Executive's employment with Kenhar under this Agreement,
Cascade will maintain a three (3) member Executive Committee (the
"Committee"), one member of which will be the Executive (it being understood
by the Executive that this is an entitlement personal to the Executive and
that the Executive shall have no entitlement to appoint a nominee or proxy
at any time). The other two members shall be Messrs. Xxxxxx and Xxxxxx for
so long as they desire and are capable or for so long as the Board of
Directors of Cascade considers appropriate. The mandate of the Committee
will be contained in a by-law of Cascade the provisions of which are as set
out in the attached Schedule "D".
7.2 The Executive will be nominated as a director and is hereby
appointed an officer of Cascade, holding the office of Executive
Vice-President, during his term of employment with Kenhar, and in addition
to his duties and responsibilities hereunder to and in respect of Kenhar,
will have such other duties and responsibilities as may from time to time be
assigned to him.
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7.3 In his capacity as a director and member of the Executive Committee
of Cascade, the Executive shall receive such fees, if any, to which the
other directors who are employees, and members of the Executive Committee
are entitled and as shall be determined by the Board of Directors of Cascade.
7.4 Subject to the overall direction and control of the Board of
Directors of Cascade, Kenhar and its subsidiaries' business activities will
continue to be conducted as a distinct business unit under the
administration of Kenhar. It is agreed by the Parties that Messrs. Hoy,
Ostmeier and Xxxxxxxx shall continue to report directly to the President and
Chief Executive Officer of Kenhar, in accordance with their employment
arrangements.
7.5 Cascade will assist the Executive and his spouse in obtaining such
approvals and consents as may be required from the United States Immigration
and Naturalization Service as may be necessary and appropriate in the
circumstances in order to enable the Executive to perform his
responsibilities hereunder.
7.6 Except as expressly set forth in this Agreement, Cascade shall have
no other obligations to the Executive during the course of the Executive's
employment with Kenhar. The Executive will have no cause of action or claim
against Cascade with respect to his employment with Kenhar or the
termination thereof.
8 Termination
8.1 In the event the Executive's employment with Kenhar is terminated
(a) by reason of the Executive's death,
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(b) by reason of resignation or retirement,
(c) by Kenhar upon the Executive becoming Permanently Disabled
(as hereinafter defined) or,
(d) by Kenhar for Cause (as hereinafter defined),
then, the Executive shall not be entitled to any notice, severance, bonus,
salary or options by reason of such termination except for obligations
accrued to the date of termination including, without limiting the
generality of the foregoing, the payments provided under paragraphs 4.1,
4.2, 4.3 and 4.4 hereof.
8.2 If the Executive's employment with Kenhar is terminated prior to the
end of the initial three (3) year term for any reason other than provided in
paragraph 8.1 above, the Executive shall be entitled to (a) a lump sum
payment including his base salary and any bonus which would have been paid
if he were employed for the balance of the three (3) term ending on the
third anniversary of the date hereof and (b) to have the benefits and
payments provided by paragraphs 4.1, 4.2, 4.3 and 5.1 continued for the
balance of such term as if such employment had not been terminated, it being
understood that the determination and payment of the amount of any bonus
will be subject to and made after the approval by the Cascade Board of
Directors of its financial results.
8.3 If the Executive's employment with Kenhar is terminated after the
third anniversary of the date hereof for any reason other than provided in
paragraph 8.1 above, the Executive shall be entitled to reasonable notice of
termination. Compensation for such reasonable notice shall be (a) a lump sum
calculated based on the Executive's base salary and any amounts for bonus
payments during the reasonable notice period and (b) continuation for such
notice period, unless
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prevented under the terms of the relevant plans or arrangements, of the
benefits and payments provided by paragraphs 4.1, 4.2, 4.3 and 5.1 as if
such employment continued throughout such notice period.
9 Non-Disclosure of Confidential Information
9.1 The Executive acknowledges that Kenhar and its subsidiaries have,
during his prior employment by Kenhar, disclosed and will continue, during
the course of his employment hereunder, to disclose and that Cascade and its
other subsidiaries may disclose, Confidential Information to the Executive
during the continuation of his employment hereunder. Kenhar and Cascade and
their subsidiaries are collectively referred to herein as the "Companies".
The Executive shall not, without the prior written consent of the Companies,
during the continuation of his employment hereunder or at any time
thereafter, disclose or permit to be disclosed to any third party by any
method whatsoever any of the Confidential Information of the Companies nor
use or permit to be used any Confidential Information other than to further
the Companies' business interests. When the Executive's employment
terminates, he will return to the Companies all documents, books, records,
data compilations, and other written or recorded materials obtained during
the course of his employment, and all copies thereof, including electronic
or other media containing Confidential Information.
For purposes of this Agreement, "Confidential Information" shall include,
but not be limited to any and all confidential and proprietary information
in any form concerning the property, business or financial affairs of the
Companies, including without limitation trade secrets, technical and
non-technical business knowledge, business methods, plans, systems, customer
lists and customer relations, vendor lists and vendor relations, cost and
pricing information, distribution and logistical
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information, computer programs and other information relating to the
business of one or more of the Companies.
9.2 The Executive agrees that the Confidential Information is and shall
remain the property of the Companies. No less than once a year during the
continuation of his employment hereunder, on request by Kenhar or Cascade,
and at or prior to the termination of his employment, the Executive will
disclose to Kenhar and Cascade all ideas, inventions and business plans
developed in whole or in part by the Executive which relate directly or
indirectly to the Companies' business or operations including without
limitation those giving rise to rights under patent or copyright laws. The
Executive agrees that such ideas, inventions, and business plans will be
Kenhar and Cascade's property and that he will, at their request and
expense, take whatever steps are necessary to secure all rights (including
moral rights) for Kenhar and Cascade or their assignees.
9.3 The covenants set forth in this paragraph which are made by the
Executive are in consideration of the employment, or continuing employment
of, and the compensation paid to, the Executive during his employment by
Kenhar.
10 Non-Competition
10.1 The Executive shall not,
(a) while employed by Kenhar, and
(b) for a period of two (2) years following the date on which the
Executive's employment with Kenhar has been terminated without
Cause, and
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(c) for a period of five (5) years following the date on which the
Executive's employment with Kenhar has been terminated for any
other reason,
either alone or in conjunction with any individual, partnership, firm,
corporation, association or other entity, whether as principal, agent,
shareholder, consultant or in any other capacity whatsoever, directly or
indirectly within any market where any of the Companies conduct any aspect
of their business or proposed business at the time of the termination of the
Executive's employment hereunder:
(i) undertake, carry on, be engaged in, be concerned with, have a
financial interest in, advise, consult in, lend money to, guarantee the
debts or obligations of, or permit the Executive's name or any part thereof
to be used or employed by, or associated with, any person, firm,
association, syndicate, company or corporation engaged in or concerned with
or interested in directly or indirectly, an undertaking or business which
is competitive with any of the principal businesses or proposed business of
or any part thereof or carried on or to be carried on by the Companies;
(ii) manufacture, sell, distribute (wholesale or retail), promote or
market any product manufactured, sold, distributed (wholesale or retail),
promoted or marketed by any of the Companies or the products of any
business or proposed business (collectively the "Products") or provide any
service in respect of the foregoing;
(iii) solicit or attempt to solicit any client or customer of the Companies
for the purpose of selling any Product or any service associated therewith;
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(iv) persuade or attempt to persuade any client, customer or supplier to
cease purchasing any product or service from or from doing business with
the Companies or to reduce the amount of business which any such client has
historically done or contemplates doing with the Companies; or
(v) solicit for employment or hire any employee of the Companies or
induce or attempt to induce any of them to leave their employment
with any of the Companies.
In this Agreement, "proposed business" means any business that can
reasonably be regarded as a business in which it is probable that any of the
Companies would invest.
Clauses (i) and (ii) of this paragraph 10 shall not apply to prevent (A) the
ownership by the Executive, by way of passive investment only, of not more
than 2 percent of any class of listed and issued shares of any corporation
where such shares are listed on a recognized stock exchange in North America
or (B) the Executive from being an officer or director of any non-profit
organization or trade association or from serving as a director of any
corporation provided that, and so long as, the business, operations and
activities of such corporation which are within the scope of the clauses (i)
and (ii) of this section 10 are not material to such corporation.
11 Additional Remedies
11.1 Enforcement - The Executive specifically acknowledges that the
Companies have relied on the Executive's covenants of non-competition and
non-solicitation as set forth in this Agreement and that irreparable harm
will be suffered by the Companies and their businesses and properties in the
event of any breach or threatened breach by the Executive of any of the
provisions of paragraphs 9 and 10 of
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this Agreement or either of them, and that the Executive's continued
employment is predicated on the commitments undertaken by him pursuant to
such paragraphs. In the event of any breach or threatened breach of any of
the Executive's commitments pursuant to paragraphs 9 and 10 or either of
them, the Companies shall be entitled, in addition to any other remedies and
damages available, to injunctive relief or other equitable relief upon
application to a court of competent jurisdiction without requirement to
prove the inadequacy of available remedies, to restrain the violation of
such commitments by the Executive or by any person or persons acting for or
with the Executive in any capacity whatsoever. The Executive agrees not to
plead sufficiency of damages as a defence in any proceeding for injunctive
or other equitable relief brought by the Companies to enforce the provisions
of this Agreement. Furthermore, the existence of any claim or cause of
action which the Executive may have against the Companies shall not
constitute a defence or bar to entitlement of any provision of this
Agreement and shall be pursued by separate action by the Executive.
11.2 Restriction Reasonable - The Parties to this Agreement acknowledge
that the time, scope, geographic area and other provisions of this Agreement
have been specifically negotiated by fully informed parties with independent
legal advice and that all such provisions are reasonable in the
circumstances of this Agreement and are given as an integral and essential
part of this Agreement. The Executive acknowledges that the restrictive
covenants above are necessary in order to protect and maintain the business
of and the goodwill associated with the Companies.
12 Severability
12.1 If any provision of this Agreement as applied to any Party or to any
circumstance shall be adjudged by a court of competent jurisdiction to be
invalid or unenforceable, the same shall in no way affect any other
provision of this
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Agreement, the application of such provision in any other circumstances, or
the validity or enforceability of this Agreement.
13 Non-Assignment
13.1 This Agreement is personal to Executive and shall not be assigned by
him. The Executive shall not hypothecate, delegate, encumber, alienate,
transfer or otherwise dispose of his rights and duties hereunder. Kenhar
may assign its rights under paragraphs 9 and 10 hereof without Executive's
consent to any other entity who, in connection with such assignment,
acquires all or substantially all of Kenhar's assets or into or with which
Kenhar is merged or consolidated.
14. Non-Waiver
14.1 The waiver by the Kenhar or Cascade, as the case may be, of a
breach by Executive of any provision of this Agreement shall not be
construed as a waiver of any subsequent breach by Executive.
15.4. Benefit
15.1 The provisions of this Agreement shall inure to the benefit of the
Companies, their successors and assigns, and shall be binding upon the
Companies and Executive, its and his heirs, personal representatives and
successors, including without limitation, the Executive's estate and the
executors, administrators, or trustees of such estate.
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16 Further Assurances
16.1 The Parties hereto shall do such things and sign such documents as
may be necessary and desirable to give full effect and force to this
Agreement.
17. Relevant Law
17.1 This Agreement shall be governed by and construed and enforced in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein and shall be treated in all respects as an Ontario
contract and the Parties shall attorn to the laws of Ontario and the
exclusive jurisdiction of the Ontario courts and agree not to dispute the
competence or jurisdiction of such courts.
18 Notice
18.1 All notices, requests, demands and other communications in
connection with this Agreement shall be made in writing and shall be deemed
to have been given when delivered by hand, one day after transmission by
facsimile, or 72 hours after mailing at any general or branch United States
or Canadian Post Office, by registered or certified mail, postage prepaid,
addressed as follows, or to such other address as shall have been designated
in writing by the addressee:
(a) If to Kenhar:
X.X. Xxx 0000
Xxxxxx, Xxxxxxx
X0X 0X0
Telecopier: (000) 000-0000
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(b) If to Cascade:
0000 XX 0xx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxx
00000
Telecopier: (000) 000-0000
(c) If to the Executive:
00 Xxx Xxx Xxxxx
X.X. #0
Xxxxxx, Xxxxxxx
X0X 0X0
Telecopier: (000) 000-0000
19 Entire Agreement
19.1 The Parties hereto agree that this Agreement contains the entire
agreement and understanding of the Parties relating to the subject matter
hereof and supersedes and replaces all oral or written contracts or
representations. This Agreement cannot be amended, modified or supplemented
in any respect except by subsequent written agreement signed by the Parties
hereto. The Executive acknowledges that paragraphs 9 and 10 of this
Agreement are in addition to the non-competition, non-solicitation and
confidentiality agreement of even date herewith executed and delivered by
the Executive in favour of Kenhar and Cascade in respect of the completion
by a wholly-owned subsidiary of Cascade of the purchase of all of the issued
and outstanding shares of Kenhar.
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20 Survival
20.1 Paragraphs 9, 10, 11, 12, 13, 15, 16, 17, 18 and 19 shall survive
the termination of the Executive's employment hereunder for any reason
whatsoever and shall continue in full force and effect in accordance with
the terms of such obligations.
21 Definitions
For the purposes of this Agreement,
21.1 "Cause" shall include and be deemed to exist if:
(a) the Executive willfully refuses to perform his duties hereunder;
(b) the Executive breaches paragraph 9 or paragraph 10 of this
Agreement;
(c) the Executive engages in acts of dishonesty or fraud; or
(d) the Executive engages in other serious misconduct of such a nature
that the continued employment of the Executive may reasonably be
expected to adversely affect the business or properties of the
Companies or any of them.
21.2 "Permanently Disabled" means that the Executive, by reason of
illness, disease, mental or physical disability or similar cause as
determined by a qualified medical practitioner mutually agreed to by the
Executive, Kenhar and Cascade ("Disability"), is permanently disabled so as
to be unable to fulfil the Executive's duties, responsibilities and
obligations hereunder and such Disability shall continue
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for any consecutive 365-day period or for any period of 365 days (whether or
not consecutive) in any consecutive 24-month period.
IN WITNESS WHEREOF the Parties hereto have executed this Agreement
on the day and year first above written.
SIGNED, SEALED AND DELIVERED )
In the presence of: )
/s/ illegible ) /s/ Xxxxxxx X. Xxxxxxxx
________________________ ) _______________________ l/s
Witness ) Xxxxxxx X. Xxxxxxxx
KENHAR CORPORATION
By: /s/ illegible c/s
______________________
By: /s/ illegible c/s
______________________
CASCADE CORPORATION
By: /s/ illegible c/s
____________________
By: /s/ illegible c/s
______________________
SCHEDULE "A"
CURRENT KENHAR BENEFITS
The Executive will be entitled to the benefits provided by Kenhar's current
employee benefits plans as disclosed in Kenhar's current employment benefit
book attached hereto.