Exhibit 10.6
EMPLOYMENT AGREEMENT
DATED: March 2, 1999
BETWEEN: International Barter Corp., a
Nevada Corporation ("Company")
AND: Xxx Xxxxx ("Executive")
1.0 RECITALS
1.1 The Company desires to employ the Executive as its Chief Operating
Officer and Executive is willing to accept such employment by the Company, on
the terms and subject to the conditions set forth in this Agreement.
2.0 DEFINITIONS
2.1 "Effective Date" shall mean the date upon which the Executive's
employment with the Company commences, currently agreed as February 28, 1999.
2.2 "Termination Date" shall mean the date of the termination of
Executive's employment with the Company.
2.3 "Termination For Cause" shall mean termination by the Company of the
Executive's employment by the Company for cause at law; including but not
limited to by reason of the Executive's willful dishonesty towards, fraud upon,
or deliberate injury or attempted injury to the Company, or by reason of the
Executive's negligence which has resulted in injury to the Company, and material
breach of this Agreement by the Executive.
2.4 "Termination Other Than For Cause" shall mean termination by the
Company of the Executive's employment by the Company for any reason other than a
Termination for Cause.
2.5 "Voluntary Termination" shall mean termination by the Executive of the
Executive's employment by the Company other than (i) "Termination Upon a Change
in Control," and (ii) termination by reason of the Executive's death or
disability as described herein.
3.0 DUTIES
3.1 During the term of this Agreement, the Executive agrees to be employed
by and serve the Company as its Chief Operating Officer, and the Company agrees
to employ and retain the Executive in such capacities. In such capacity, the
Executive shall
1
oversee the daily operations of the Company and render such managerial,
administrative and other services as are customarily associated with or incident
to such position and shall perform such duties and responsibilities for the
Company as the Chief Executive Officer or board of directors of the Company may
reasonably require, consistent with such position. The Executive shall devote a
substantial portion of his business time, energy, and skills to the affairs of
the Company and shall perform the duties and carry out the responsibilities
assigned to him, to the best of his ability, in a diligent, trustworthy,
businesslike and efficient manner for the purpose of advancing the business of
the Company. The Executive shall report to the Chief Executive Officer.
4.0 TERM OF EMPLOYMENT
4.1 Initial Term. The initial term of employment of the Executive by the
Company shall be for a period of two (2) year beginning with the Effective Date
("Initial Term"), unless terminated or renewed earlier pursuant to this
Agreement. This Agreement may be extended for additional consecutive one-year
periods by written agreement of the parties to this Agreement at least 90 days
prior to the expiration of the Initial Term. Notwithstanding anything contained
in this section, the term of employment is subject to termination pursuant to
the following provisions.
4.2 Termination For Cause. Termination For Cause may be effected by the
Company at any time during the term of this Agreement and shall be effected by
written notification to the Executive. Upon Termination For Cause, the Executive
shall be paid within 7 days of termination, all accrued salary and bonus plan
benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of the Company in which the Executive is a participant
to the full extent of the Executive's rights under such plans, accrued vacation
pay and any appropriate business expenses incurred by the Executive in
connection with his duties hereunder, all to the Termination Date, shall be paid
within 30 days of Termination Date or as required by applicable law. Subject to
this Agreement, the Executive shall not be paid any other compensation or
reimbursement of any kind, including without limitation, severance compensation.
4.2.1 In the event of Termination For Cause, all unvested stock options
granted by the Company shall terminate immediately. Vested options shall
terminate, to the extent not previously exercised, upon the occurrence of the
first of the following events: (i) the expiration of the option, as designated
by the plan administrators; or (ii) the expiration of 90 days from the date of
termination of Executive's employment or contractual relationship with the
Company.
4.3.1 Disability. If, during the term of this Agreement, the Executive, in
the reasonable judgment of the Company's board of directors, has failed to
perform his duties under this Agreement on account of illness or physical or
mental incapacity, and such illness or incapacity continues for a period of more
than three (3) consecutive months, the Company shall have the right to terminate
the Executive's employment hereunder by written notification to the Executive
thirty (30) days prior to the Termination Date. All accrued salary, bonus
compensation to the extent earned shall be promptly paid to the
2
Executive upon termination. Additionally, in the event of termination by reason
of Disability, all amounts that would be payable to Executive during his Initial
Term of employment, or for the remainder of an additional one-year term if this
Agreement is renewed, shall be promptly paid, with a minimum 6-month payout.
Vested deferred compensation (other than pension plan or profit sharing plan
benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of the Company in which the Executive is a participant
to the full extent of the Executive's rights under such plans, accrued vacation
pay and any appropriate business expenses incurred by the Executive in
connection with his duties hereunder, all to the Termination Date, but the
Executive shall not be paid any other compensation or reimbursement of any kind,
including without limitation, severance compensation.
4.3.2 Death. In the event of the Executive's death during the term of this
Agreement, the Executive's employment shall be deemed to have terminated as of
the last day of the month during which his death occurs and the Company shall
pay, within 30 days of the death of the Executive or as required by applicable
law, to his estate or such beneficiaries as the Executive may from time to time
designate all accrued salary, bonus compensation to the extent earned, vested
deferred compensation (other than pension plan or profit sharing plan benefits
which will be paid in accordance with the applicable plan), any benefits under
any plans of the Company in which the Executive is a participant to the full
extent of the Executive's rights under such plans, accrued vacation pay and any
appropriate business expenses incurred by the Executive in connection with this
duties hereunder, all to the Termination Date. Additionally, in the event of
termination by reason of Death, all amounts that would be payable to Executive
during his Initial Term of employment, or for the remainder of an additional
one-year term if this Agreement is renewed, shall be promptly paid, with a
minimum 6-month payout. The Executive's estate shall not be paid any other
compensation or reimbursement of any kind, including without limitation,
severance compensation.
4.4 Voluntary Termination. In the event of a Voluntary Termination, the
Company shall promptly pay all accrued salary, bonus compensation to the extent
earned. Vested deferred compensation (other than pension plan or profit sharing
plan benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of the Company in which the Executive is a participant
to the full extent of the Executive's rights under such plans, accrued vacation
pay and any appropriate business expenses incurred by the Executive in
connection with his duties hereunder, all to the Termination Date shall be paid
within 30 days of Termination Date or as required by applicable law, but no
other compensation or reimbursement of any kind, including without limitation,
severance compensation.
4.4.1 In the event of Voluntary Termination, all unvested stock options
granted by the Company shall terminate immediately. Vested options shall
terminate, to the extent not previously exercised, upon the occurrence of the
first of the following events: (i) the expiration of the option, as designated
by the plan administrator; or (ii) the expiration of 90 days from the date of
the termination of Executive's employment or contractual relationship with the
Company.
3
4.5 Termination Upon a Change of Control. If there is a termination of the
Executive as a result of change in control (which for these purposes is defined
as the acquisition or issuance of a majority of the issued and outstanding
shares of the Company), then the Executive shall have the same termination
rights as Xxxxxx Xxxxx (or such other person filling the role as President and
Chief Executive Officer), including a payout of the compensation provided for in
Section 5.1 of this Agreement in full, for the remainder of the Agreement,
provided that in no event will the amount of the payment be for less than 1
year, and provided that all deferred, vested and unvested options are paid out
to the Executive or retained by the Executive, at the sole discretion of the
Executive.
4.6 Payments Under Share Purchase Agreement. In the event of termination
for any reason hereunder other than the Voluntary Termination or Termination For
Cause, all amounts payable to Executive under the Share Purchase Agreement among
the Company, the Executive and Barter Business Exchange Inc. dated March 2, 1999
(the "Share Purchase Agreement"), including but not limited to any deferred
payments, will become due and payable within 30 calendar days of the termination
date. For purposes of valuing the deferred variable payment due under the Share
Purchase Agreement, if termination occurs prior to the 1 year anniversary of
this Agreement, the monthly average cash revenue amounts to the Termination
Date, multiplied by 12 shall be used as the 12 month cash revenue figure
payable.
5.0 SALARY, BENEFITS AND BONUS COMPENSATION
5.1 Base Salary. As payment for the services to be rendered by the
Executive as provided in this Agreement, the Company agrees to pay to the
Executive a "Base Salary" for the twelve (12) calendar months beginning the
Effective Date at the rate of C$120,000 per annum payable in 12 equal monthly
installments of C$10,000. The Executive's Base Salary shall be reviewed annually
by the Company's board of directors, and the Base Salary for each year
thereafter (or portion thereof) beginning the Effective Date.
5.2 Bonuses. The Executive shall be eligible to receive a bonus, for each
year (or portion thereof) during the term of this Agreement and any extensions
thereof, with the actual amount of any such bonus to be determined in accordance
with mutually agreed performance criteria. The first such bonus would be payable
at the end of the first year of this Agreement, and annually thereafter while
this Agreement is in full force and effect.
5.3 Additional Benefits. During the term of this Agreement, the Executive
shall be entitled to the following fringe benefits:
5.3.1 Executive Benefits. The Executive shall be eligible to participate in
such of the Company's benefits and deferred compensation plans as are now
generally available or later made generally available to executive officers of
the Company, including, without limitation, the Company's Stock Option Plan,
profit sharing plans,
4
annual physical examinations, dental and medical plans, personal catastrophe and
disability insurance, financial planning, retirement plans and supplementary
executive retirement plans. For purposes of establishing the length of service
under any benefit plans or programs of the Company, the Executive's employment
with the Company will be deemed to have commenced on the Effective Date,
provided that the benefits paid hereunder shall be no less than those paid to
the Company's Chief Executive Officer. For purposes of the Company's Stock
Option Plan, the Executive's participation may not occur prior to April 1, 2000.
5.3.2 Vacation. The Executive shall be entitled to four (4) weeks of
vacation during each year during the term of this Agreement and any extensions
thereof, prorated for partial years.
5.3.3 Reimbursement for Expenses. During the term of this Agreement, the
Company shall reimburse the Executive for reasonable and properly documented
out-of-pocket business and/or entertainment expenses incurred by the Executive
in connection with his duties under this Agreement, subject to the Company's
policies in effect from time to time with respect to travel, entertainment and
other expenses. These expenses shall include, without limiting the generality of
the foregoing, car, car insurance, cellular phone, ETR toll route charges.
5.3.4 Position on Board. During the term of this Agreement, the Executive
shall have the right to be nominated to the board of directors of IBC in the
first proxy statement relating to an annual meeting mailed or distributed to
shareholders after closing.
6.0 SEVERANCE COMPENSATION
6.1 No Severance Compensation Upon Termination. In the event of a Voluntary
Termination or Termination For Cause, the Executive shall not be paid any
severance compensation, which does not include amounts payable under Sections
4.2 or 4.4.
7.0 CONFIDENTIALITY
7.1 The Executive agrees that all confidential and proprietary information
relating to the Company's business shall be kept and treated as confidential
both during and after the term of this Agreement, except as may be permitted in
writing by the Company's board of directors or as such information is within the
public domain or comes within the public domain without any breach of this
Agreement.
8.0 WITHHOLDINGS
8.1 All compensation and benefits to the Executive hereunder shall be
reduced by all federal, provincial, state, local and other withholdings and
similar taxes and payments required by applicable law.
5
9.0 INDEMNIFICATION
9.1 Except as provided in paragraph 9.2 below, in addition to any rights to
indemnification to which the Executive is entitled to under the Company's
articles of incorporation and bylaws, the Company shall indemnify the Executive
at all times during the term of this Agreement and in good faith on behalf of
the Company, to the maximum extent permitted under applicable law, and shall pay
the Executive's expenses including solicitors fees on a solicitor/client basis
in defending any civil or criminal action, suit, or proceeding in advance of the
final disposition of such action, suit or proceeding.
9.2 The Company agrees to pay for officer and director liability insurance
for the Executive, and to maintain such insurance in place at all times, with
respect to each of the Company and Barter Business Exchange Inc., to the extent
reasonably available.
9.3 Executive represents and warrants that the Company will not incur any
liability in connection with the consummation of the transaction contemplated by
the Letter of Intent to any third party with whom the Executive or his agents
and affiliates have had discussions regarding the disposition of shares of
Barter Business Exchange Inc. For a period of one year from closing of the
acquisition of Barter Business Exchange Inc. by the Company, Executive agrees to
indemnify, defend and hold harmless the Company, its officers, directors,
shareholders, lenders and affiliates, from any claims by or liabilities to these
third parties, including any legal or other expenses incurred in connection with
the defense of these claims.
10.0 NOTICES
10.1 Any party may give any notice, request, demand, claim, instruction, or
other document under this section using any other means but no such notice,
request, demand, claim, instruction or other document shall be deemed to have
been duly given unless and until it actually is received by the individual for
whom it is intended at the address stated below. Any party may change its
address for any purpose by giving notice of the change of address to the other
party in the manner provided in this section>
If to COMPANY: With a copy to: And to:
International Barter Corp. Xxxxx Law Group, PLLC Xxxx & Xxxxxx
0000 000xx Xxx. X.X. Barristers & Solicitors
Suite A-103 000 Xxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000 Xxxxx 0000
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
6
If to EXECUTIVE: With a copy to:
Xxx Xxxxx Xxxxxx Xxxxxx
7 Fern Avenue Margolls Partnership
Xxxxxxxx Xxxx, Xxxxxxx Xxxxxxxxxx & Xxxxxxxxxx
Xxxxxx X0X 0X0 00 Xx. Xxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
11.0 NON-COMPETITION
11.1 Executive acknowledges that his duties and responsibilities will
require his substantive business efforts and agrees that during his term of
employment with the Company, he will not participate, whether as an owner,
shareholders, partner, consultant, entrepreneur, employee or otherwise, in any
business or any business activity connected with a barter trade organization, or
have any business pursuits or interests which materially interfere or engage
conflict with the performance of Executive's duties under this Agreement or
which compete with the Company. Nothing in this section shall prohibit the
Executive from investing in the stock of any competing corporation listed on a
national securities exchange or traded in the over-the-counter market, but only
if the Executive is not involved in the business of such corporation and
beneficially owns not more than an aggregate of five percent of the stock of
such corporation. In addition, the Executive may serve on the board of directors
of other corporations, so long as such board services does not materially
interfere or conflict with the performance of Executive's duties under this
Agreement and so long as these activities are not rendered for a competitor of
the Company. In addition, it is understood and agreed that the Executive shall
be entitled to fulfill his obligations and accept compensation from active Media
with respect to the following potential transactions: (i) Atlantic Promotions;
(ii) Kodak Canada; and (iii) Chrysler Canada. There will no further transactions
of this nature during the term of this Agreement.
12. NON-SOLICITATION
12.1 For a period of six (6) months from the Termination Date, Executive
agrees not to directly or through intermediaries solicit, encourage, entertain
or consider any inquiries or proposals, with respect to developing, obtaining or
acquiring any barter or trade business from the customers, clients or business
associates of Barter Business Exchange Inc., an Ontario corporation, or the
Company, whether such customers, clients or business associates are now existing
as of the date of this Agreement or may exist at the Termination Date.
7
13.0 GENERAL PROVISIONS
13.1 This Agreement may not be amended, modified or changed, nor shall a
provision of the Agreement be deemed waived, except only by an instrument in
writing signed by the party against whom enforcement of a waiver, amendment,
change or modification is sought.
13.2 This Agreement is governed by Ontario law, and the parties hereby
attorn to the exclusive jurisdiction of the courts of such province.
13.3 If any term or provision of this Agreement or the application to any
person or circumstances shall to any extent be invalid or unenforceable in any
jurisdiction, the remainder of this Agreement and application of such term or
provision to persons or circumstances other than those to which it is held
invalid or unenforceable or in any other jurisdiction shall not be affected, and
each term or provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
13.4 This Agreement may be signed in as many counterparts as is necessary,
each of which shall be considered an original.
14.0 EXECUTING SIGNATURES
14.1 IN WITNESS WHEREOF, the parties have signed this Agreement.
COMPANY: EXECUTIVE
International Barter Corp.
---------------------------------- ----------------------------------------
By: Xxxxxx X. Xxxxx, CEO Xxx Xxxxx
