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THIS AGREEMENT made as of the 1st day of December, 1998.
AMONG:
INTERNATIONAL MENU SOLUTIONS INC.,
a corporation incorporated under the laws of the Province of
Ontario,
(hereinafter referred to as the "Corporation"),
OF THE FIRST PART,
- and -
XXXXX XXXXXXX,
of the Town of Whitchurch, in the Province of Ontario,
(hereinafter referred to as "Executive").
OF THE SECOND PART.
WHEREAS the Corporation wishes to retain the services of the Executive to
provide the services hereinafter described during the term hereinafter set out;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants and agreements here contained and for other good and valuable
consideration, the parties agree as follows:
1. TERM
The corporation shall employ the Executive for a period of five (5) years, from
December 1, 1998 to and including November 30, 2003, unless such employment
shall be terminated earlier as hereinafter provided. Upon the expiry of the term
of this Agreement on November 30, 2003, and on each anniversary of such date
falling thereafter, the term of this Agreement shall automatically be extended
for one additional year on the same terms and conditions unless, not less than
three (3) months prior to any such anniversary, either the Executive or the
Corporation shall have given written notice to the other that it does not wish
to further extend this Agreement.
2. DUTIES
The Executive shall serve the Corporation and any subsidiaries of the
Corporation in such capacity or capacities and shall perform such duties and
exercise such powers pertaining to the management and operation of the
Corporation and any affiliates and associates of the Corporation (as those terms
are defined in the Ontario Business Corporations Act) as may be determined from
time to time by the board of directors of the Corporation consistent with the
officer of the Executive. Without limitation of the foregoing, the Executive
shall occupy the office of Vice-President and Chief Financial Officer of the
Corporation.
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The Executive shall:
(a) devote his full time and attention and his best efforts during
normal business hours to the business and affairs of the
Corporation;
(b) perform those duties that may reasonably be assigned to the
Executive diligently and faithfully to the best of the Executive's
abilities and in the best interests of the Corporation; and
(c) use his best efforts to promote the interests and goodwill of the
Corporation.
The Executive shall not during the period that the Executive is an employee of
the Corporation have any interest either directly or indirectly in any party
that is a supplier or customer to the Corporation or any affiliates or
associates of the Corporation.
3. REPORTING PROCEDURES
The Executive shall report to Xx. Xxxxxxx X. Xxxxxx, President of the
Corporation. The Executive shall report fully on the financial affairs of the
Corporation and its affiliates and advise to the best of his ability and in
accordance with reasonable business standards on matters that may arise from
time to time during the term of this Agreement.
4. SALARY
The salary payable to the Executive for his services hereunder for the Term
shall be at the rate of One Hundred and Twenty-Five Thousand Dollars
($125,000.00) per annum, exclusive of benefits as provided in this Agreement.
The annual salary payable to the Executive pursuant to the provisions of this
Section 4 shall be payable in arrears in such manner as may be mutually agreed
upon, less such deductions or withholdings required by law.
The fiscal year of the Corporation ends on December 31. The remuneration shall
be reviewed each year during the thirty day period following the completion of
the audited financial statements for the Corporation commencing for the fiscal
year ending December 31, 1999. The remuneration will then be determined for the
fiscal year commencing on the January 1 prior to such determination. The
appropriate adjustment for the period from January 1 to the date of
determination shall be made for the review will be undertaken by assessing the
Employee's achievement of the over-all objectives established by the Corporation
and by having regard to the market rates of remuneration paid in Canada for
similar duties and responsibilities. Provided that in no event shall the
Executive's remuneration be adjusted to an amount less than the prior year's
remuneration.
5. BENEFITS
The Executive shall have the right to participate in the Corporation's group
insurance plan.
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The Corporation shall provide to the Executive during the calendar year 1999 a
stock option plan substantially in the form provided in the attached Schedule
"A", but subject to compliance with applicable securities laws and listing
requirements, the particulars of which will be determined by the board of
directors of International Menu Solutions Corporation. Such options shall be
commensurate with options granted within other operating divisions of
International Menu Solutions Corporation and its affiliates.
6. VACATION
The Executive shall be entitled during the first year of the Term to four (4)
weeks annual vacation and thereafter to six (6) weeks during each year of the
Term provided that only two (2) weeks shall be taken consecutively in any one
year. A vacation of more than two (2) consecutive weeks shall require the prior
approval of the President of the Corporation.
In the event that the Executive decides not to take all the vacation to which he
is entitled in any fiscal year, the Executive shall be entitled to take the
unused portion of such vacation in the next following fiscal year at a time
approved in advance by the President.
7. AUTOMOBILE
The Corporation shall pay to the Executive an automobile expense allowance in
the amount of Eight Hundred Dollars ($800.00) plus applicable taxes per month
for the cost to lease an automobile. The Corporation shall pay or reimburse the
Executive for all reasonable operating costs of this vehicle, including leasing
costs, insurance, maintenance, gas and oil, properly incurred or to be incurred
in connection with the Executive carrying out his duties hereunder. The
Executive shall supply the Corporation with the originals of all invoices or
statements in respect of which the Executive seeks reimbursement.
8. EXPENSES
The Executive shall be reimbursed for all reasonable travel and other
out-of-pocket expenses actually and properly incurred by the Executive from time
to time in connection with carrying out his duties hereunder. For all such
expenses the Executive shall furnish to the Corporation originals of all
invoices or statements in respect of which the Executive seeks reimbursement.
9. TERMINATION
(a) For Cause
The Corporation may terminate the employment of the Executive without
notice or any payment in lieu of notice for cause which, without limiting the
generality of the foregoing, shall include:
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(i) if there is a repeated and demonstrated failure on the part of
the Executive to perform the material duties of the Executive's position
in a competent manner and where the Executive fails to substantially
remedy the failure within a reasonable period of time after receiving
written notice of such failure from the Corporation;
(ii) if the Executive is convicted of a criminal offence involving
fraud or dishonesty;
(iii) if the Executive or any member of his family makes any
personal profit arising out of or in connection with a transaction to
which the Corporation is a party or with which it is associated without
making disclosure to and obtaining the prior written consent of the
Corporation;
(iv) if the Executive fails to honour his fiduciary to the
Corporation, including the duty to act in the best interests of the
Corporation; or
(v) if the Executive disobeys reasonable instructions given in the
course of employment by the Chairman or the board of directors of the
Corporation that are not inconsistent with the Executive's management
position and not remedied by the Executive within a reasonable period of
time after receiving written notice of such disobedience.
(b) For Disability/Death:
This Agreement may be immediately terminated by the Corporation by notice
to the Executive if the Executive becomes permanently disabled. The Executive
shall be deemed to have become permanently disabled if in any year during the
employment period, because of ill health, physical or mental disability, or for
other causes beyond the control of the Executive, the Executive has been
continuously unable or unwilling or has failed to perform the Executive's duties
for 120 consecutive days, or if, during any year of the employment period, the
Executive has been unable or unwilling or has failed to perform his duties for a
total of 180 days, consecutive or not. The term "any year of the employment
period" means any period of 12 consecutive months during the employment period.
This Agreement shall terminate without notice upon the death of the Executive.
10. SEVERANCE PAYMENTS
(a) Upon termination of the Executive's employment: (i) for cause; (ii) by
the voluntary termination of employment of the Executive; or (iii) by the
non-renewal of this Agreement, the Executive shall not be entitled to any
severance payment other than compensation earned by the Executive before the
date of termination calculated pro rata up to and including the date of
termination, together with any amount to which the Executive is entitled under
the Employment Standards Act (Ontario), as amended and in force from time to
time.
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(b) if the Executive's employment is terminated for any other reason other
than the reason set forth subsection 10(a), the Executive shall be entitled to
receive the lesser of:
(i) the total of:
(A) 24 months' salary at the then applicable base salary rate;
(B) the present value, as determined by the Chairman, acting
reasonably, of the benefits described in section 5 that would be
enjoyed by the Executive during the next 24 months assuming his
employment was not terminated and assuming the then current level of
benefits were continued for those 24 months; and
(C) the present value, as determined by the Chairman, acting
reasonably, of the amounts that would have been paid by the
Corporation or reimbursed to the Executive pursuant to section 7
during the next 24 months assuming that his employment had not been
terminated; and
(ii) the salary otherwise payable to the Executive for the unexpired
term of this Agreement together with the other amounts described in clause
10(b)(i), mutatis mutandis, provided that in no case will the Executive
receive less than the amount to which he is entitled under the Employment
Standards Act (Ontario).
The payment described in this subsection 10(b) is the only severance payment the
Executive will receive in the event of the termination of this Agreement for
reasons contemplated in this subsection 10(b).
(c) If the Executive's employment is terminated as result of the permanent
disability or death of the Executive, the Executive or his estate, as
applicable, shall be entitled to receive, within 30 days of the date of such
termination, the balance of the base salary that would otherwise be paid to the
Executive during the remainder of the term of this Agreement. The Executive
agrees to reasonably comply with all requirements necessary for the Corporation
to obtain life insurance for the term of this Agreement.
(d) For the purposes of this section 10, whenever a payment is to be
determined with reference to the remaining term of this Agreement, if less than
six months remain in the term of this Agreement and no party has given notice of
its intention not to renew this Agreement as contemplated by section 1, the
"remaining term of this Agreement" shall include the remainder of the then
existing term of this Agreement plus the renewal period.
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11. CONFIDENTIALITY
The Executive acknowledges and agrees that:
(a) in the course of performing his duties and responsibilities as an
officer of the Corporation, he has had and will continue in the
future to have access to and has been and will be entrusted with
detailed confidential information and trade secrets (printed or
otherwise) concerning past, present, future and contemplated
products, services, operations and marketing techniques and
procedures of the Corporation and its subsidiaries, including,
without limitation, information relating to addresses, preferences,
needs and requirements of past, present and prospective clients,
customers, suppliers and employees of the Corporation and its
subsidiaries (collectively, "Trade Secrets"), the disclosure of any
of which to competitors of the Corporation or to the general public,
or the use of same by the Executive or any competitor of the
Corporation or any of its subsidiaries, would be highly detrimental
to the interests of the Corporation;
(b) in the course of performing his duties and responsibilities for the
Corporation, the Executive has been and will continue in the future
to be a representative of the Corporation to its customers, clients
and suppliers and as such has had and will continue in the future to
have significant responsibility for maintaining and enhancing the
goodwill of the Corporation with such customers, clients and
suppliers and would not have, except by virtue of the employment
with the Corporation, developed a close and direct relationship with
the customers, clients and suppliers of the Corporation;
(c) the Executive, as an officer of the Corporation, owes fiduciary
duties to the Corporation, including the duty to act in the best
interests of the Corporation; and
(d) the right to maintain the confidentiality of the Trade Secrets, the
right to preserve the goodwill of the Corporation and the right to
the benefit of any relationships that have developed between the
Executive and the customers, clients and suppliers of the
Corporation by virtue of the Executive's employment with the
Corporation constitute proprietary rights of the Corporation, which
the Corporation is entitled to protect.
In acknowledgment of the matters described above and in consideration of the
payments to be received by the Executive pursuant to this Agreement, unless
otherwise agreed in writing by the Executive and the Corporation, the Executive
hereby agrees that he will not, directly or indirectly, disclose to any person
or in any way make use of (other than for the benefit of the Corporation), in
any manner, any of the Trade Secrets, provided that such Trade Secrets shall be
deemed not to include information that is or becomes generally available to the
public other than as a result of disclosure by the Executive.
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12. INVENTIONS
(a) Original Development. The Executive represents and warrants to the
Corporation that all work that he performs for or on behalf of the Corporation
and all work product that he produces, including but not limited to receipts,
documentation, memoranda, ideas, designs, inventions, processes, etc. ("Work
Products"), will not knowingly, other than where the Corporation has the right
and license to do so, infringe upon or violate any patent, copyright, trade
secret or other property right of any former employer or of any other third
party.
(b) Disclosure. The Executive will promptly disclose to the Corporation
all Work Products developed by him within the scope of his employment with the
Corporation or which relate directly to or involve the use of any Trade Secrets,
including but not limited to all software, all concepts, ideas and designs and
all documentation, manuals, letters, pamphlets, drafts, memoranda and other
documents, writings or tangible things of any kind.
(c) Copyright Ownership. The Executive acknowledges and agrees that all
copyrightable Work Products prepared by him within the scope of his employment
with the Corporation are "works made for hire" and, consequently, that the
Corporation owns all rights and copyrights thereto; provided that, where the
Work Products are derivative work of works licensed to the Corporation by third
parties, such third parties will continue to own all right and copyright to
their work.
(d) Assignment. The Executive hereby assigns to the Corporation all of his
other rights, title and interest (including but not limited to all patent,
copyright and trade secret rights) in and to all Work Products prepared by him,
whether patentable or not, made or conceived in whole or in part by him within
the scope of his employment by the Corporation or that relate directly to or
involve the use of Trade Secrets.
(e) Documents. The Executive will execute all documents reasonably
requested by the Corporation to further evidence the foregoing assignment and to
provide all reasonable assistance to the Corporation (at the Corporation's
expense) in perfecting or protecting any or all of the Corporation's rights in
his Work Products.
(f) Pre-existing Inventions Not Assigned. The Executive represents that
all inventions, expressions of ideas or other Work Products not related to the
Corporation's business and created prior to the date of this Agreement in which
the Executive has any right, title or interest are not assigned to the
Corporation.
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13. NON-COMPETITION
(a) The Executive recognizes and acknowledges that in the course of his
services with the Corporation he may obtain knowledge of confidential and
proprietary information of a special and unique nature and value and become
familiar with Trade Secrets of the Corporation relating to the conduct and
details of the Corporation's business. Therefore, it is possible that he could
cause grave and irreparable harm to the Corporation which could not be
adequately compensated by monetary damages if he entered into the services of a
rival competitive concern or entered into the business of the Corporation
himself anywhere in North America.
(b) After the termination of the Executive's services for any reason, the
Executive will not compete with the Corporation in the retail food home meal
replacement and associated food replacement services as undertaken by the
Corporation at the time of the termination of the Executive's services in North
America, directly or indirectly, in any manner whatsoever, including without
limitation, either individually or in a partnership or jointly, or in
conjunction with any other person or persons, as principal, agent, shareholder,
Executive, contractor, co-venturer, officer or otherwise within the period of
two (2) years.
(c) The Executive acknowledges and agrees that the foregoing geographical
and time limits are reasonable and properly required for the adequate protection
of the business of the Corporation and, in the event that any geographical or
time limitation is deemed to be unreasonable by a court of competent
jurisdiction, the Executive agrees and submits to the reduction of the
geographical or time limitation to a limit as the court shall deem to be
reasonable.
(d) The Executive agrees that, in the event of a breach or threatened
breach by him of any of the provisions of this paragraph, the Corporation, in
addition to and not in limitation of any of the rights, remedies or damages
available to the Corporation, at law or in equity, shall be entitled to an
injunction in order to prevent or to restrain any breach by the Executive or by
any or all of his partners, co-venturers, employers, Executives, servants,
agents, representatives and any and all persons directly or indirectly acting
for, on behalf of or with the Executive.
(e) The Executive agrees that the restrictions and covenants contained in
this paragraph shall be construed independently of all other provisions of this
Agreement and the existence of any claim or cause of action by the Executive
against the Corporation, whether predicated on this Agreement or otherwise,
shall nor constitute a defence to the enforcement by the Corporation of the
covenants or restrictions; provided, however, if any provision shall be held to
be illegal, invalid or unenforceable in any jurisdiction, the decision shall not
affect any other covenant or provision of this Agreement or the application of
any other covenant or provision.
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14A. OTHER INTERESTS
Save and except an interest of less than 5% of the voting shares of a
corporate entity offering its securities to the public, the Executive covenants
and agrees that so long as he is employed by the Corporation he will not acquire
any interest, either directly or indirectly in any supplier or customer of the
Corporation. In the event that at the date hereof the Executive has such an
interest, either directly or indirectly in any supplier or customer of the
Corporation, then the Executive agrees to dispose of such interest to a party
being arm's length (as such term is defined in the Income Tax Act (Canada)) to
the Executive on or before May 31, 1999.
14. NON-SOLICITATION
The Executive hereby agrees that he will not, during the period commencing on
the date hereof and ending two years following the expiration of the term of
this Agreement, be a party to or abet any solicitation of customers, clients or
suppliers of the Corporation or any of its subsidiaries, to transfer business
from the Corporation or any of its subsidiaries, to any other person, or seek in
any way to persuade or entice any employee of the Corporation or any of its
subsidiaries to leave that employment or to be a party to or abet any such
action.
15. PLACE OF EMPLOYMENT
The Corporation's place of business and the Executive's place of employment is
within the Xxxxxxx Xxxxxxx Area provided that it is understood that the
Executive as part of his duties will undertake extensive travel for the
Corporation.
16. RETURN OF MATERIALS
All files, forms, brochures, books, materials, written correspondence,
memoranda, documents, manuals, computer disk, software products and lists
(including lists of customers, suppliers, products and prices) pertaining to the
business of the Corporation or any of its subsidiaries and associates that may
come into the possession or control of the Executive shall at all times remain
the property of the Corporation or such subsidiary or associate, as the case may
be. On termination of the Executive's employment for any reason, the Executive
agrees to deliver promptly to the Corporation all such property of the
Corporation in the possession of the Executive or directly or indirectly under
the control of the Executive. The Executive agrees not to make for his personal
or business use or that of any other party, reproductions or copies of any such
property or other property of the Corporation.
17. GOVERNING LAW
This agreement shall be governed by and construed in accordance with the laws of
the Province of Ontario.
18. SEVERABILITY
If any provision of this agreement, including the breadth or scope of such
provision, shall be held by any court of competent jurisdiction to be invalid or
unenforceable, in whole or in part, such
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invalidity or unenforceability shall not affect the validity or enforceability
of the remaining provisions, or part thereof, of this agreement and such
remaining provisions, or part thereof, shall remain enforceable and binding.
19. ENFORCEABILITY
The employee hereby confirms and agree that the covenants and restrictions
pertaining to the Executive contained in this agreement, including, without
limitation those contained in Section 11 hereof, are reasonable and valid and
hereby further acknowledges and agree that the Corporation would suffer
irreparable injury in the event of any breach by the Executive of his
obligations under any such covenant or restriction. Accordingly, the Executive
hereby acknowledges and agrees that damages would be an inadequate remedy at law
in connection with any such breach and that the Corporation shall therefore be
entitled in lieu of any action for damages, temporary and permanent injunctive
relief enjoining and restraining the Executive from any such breach.
20. NO ASSIGNMENT
The Executive may not assign, pledge or encumber the Executive's interest in
this agreement nor assign any of the rights or duties of the Executive under
this agreement without the prior written consent of the Corporation.
21. SUCCESSORS
This agreement shall be binding on and enure to the benefit of the successors
and assigns of the Corporation and the heirs, executors, personal legal
representatives and permitted assigns of the Executive.
22. NOTICES
Any notice or other communication required or permitted to be given hereunder
shall be in writing and either delivered by hand or mailed by prepaid registered
mail. At any time other than during a general discontinuance of postal service
due to strike, lock-out or otherwise, a notice so mailed shall be deemed to have
been received three business days after the postmarked date thereof or, if
delivered by hand, shall be deemed to have been received at the time it is
delivered. If there is a general discontinuance of postal service due to strike,
lock-out or otherwise, a notice sent by prepaid registered mail shall be deemed
to have been received three business days after the resumption of postal
service. Notice shall be addressed as follows:
(a) If to the Corporation:
International Menu Solutions Inc.
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
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(b) If to the Executive:
Xxxxx Xxxxxxx
00 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
23. LEGAL ADVICE
The Executive hereby represents and warrants to the Corporation and acknowledges
and agrees that he had the opportunity to seek and was not prevented nor
discouraged by the Corporation from seeking independent legal advice prior to
the employee and delivery of this agreement and that, in the event that he did
not avail himself of that opportunity prior to signing this agreement, he did so
voluntarily without any undue pressure and agrees that his failure to obtain
independent legal advice shall not be used by him as a defence to the
enforcement of his obligations under this agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the date first above written.
INTERNATIONAL MENU SOLUTIONS INC.
Per: /s/ [ILLEGIBLE]
-------------------------------
Title: President
-----------------------------
/s/ [ILLEGIBLE] /s/ Xxxxx Xxxxxxx
---------------------------------- ------------------------------------
Witness Xxxxx Xxxxxxx
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THIS IS SCHEDULE "A" TO THE AGREEMENT DATED AS OF THE 1ST DAY OF DECEMER, 1998
BETWEEN INTERNATIONAL MENU SOLUTIONS INC. and XXXXX XXXXXXX
STOCK OPTION Plan Particulars
Stock Option Plan
The Executive shall participate in the IMSC stock option plan which shall be
available for the fiscal period commencing ___________ with the number of
options for common shares of IMSC ("Shares") to be available to the Executive to
be as follows:
Year 1. _________ to _________ : _______ Shares
Year 2: _________ to _________ : _______ Shares
Year 3: _________ to _________ : _______ Shares
Year 4: _________ to _________ : _______ Shares
Options shall be earned based on the__________ (the "Division") meeting or
exceeding the budget targets for each of such four (4) years as follows:
(a) less than eighty-five percent (85%) of the operating budget for the
Division for the relevant year, no additional options;
(b) between eighty-five percent (85%) and one hundred percent (100%) of
the operating budget for the Division for the relevant year, the
options for the number of Shares stated above for the relevant year
at the option price being the then current market price as
determined by the Board of Directors of IMSC; and
(c) greater than one hundred percent (100%) of the operating budget for
the Division for the relevant year, options for the number of Shares
stated above for the relevant year times the percentage achievement
at the option price being the then current market price as
determined by the Board of Directors. For example if the achievement
is one hundred and twenty percent (120%), then the Executive will
receive options for the number of Shares stated for the relevant
year X 1.20.
For greater certainty, in the event that eighty-five percent (85%) or more of
the operating budget for the Division for the relevant year of the Corporation
is achieved, the entitlement of the Executive shall be either under (b) or (c)
as is applicable, but not both. The "operating budget" means the operating
budget of the Division approved by the board of directors of IMSC for the
Corporation.
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Options granted shall vest as follows:
(a) twenty percent (20%) of the Options granted on the date that the
Board of Directors approve the resolution for the grant of the
Options; and
(b) twenty percent (20%) of the Options granted on each of the first,
second, third, and fourth anniversaries of the last day of the
financial year to which the Options relate.
The dates upon which the options vest are hereinafter referred to individually
as a "Vesting Date" and collectively as the "Vesting Dates".
The foregoing rights are cumulative and, while the Executive continues to be
under contract by the Corporation, may be exercised on and after the respective
Vesting Date up to and including the date which is five (5) years after that
respective Vesting Date. All of the foregoing rights are subject to the terms of
the IMSC Stock Option Plan, if the Executive ceases to be an Executive of the
Corporation or dies or becomes disabled while an Executive of the Corporation.
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