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EXHIBIT 10(a)
EMPLOYMENT CONTRACT
THIS AGREEMENT made as of 1st day of November, 1997.
BETWEEN:
SEL-DRUM INTERNATIONAL, INC.
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Hereinafter called the "Company"
of the FIRST PART,
- and -
XXXXXXX XXXXXX
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Hereinafter called the "Executive"
of the SECOND PART,
WHEREAS the Company desires to employ the services of the Executive in
connection with the conduct of the Company's business;
AND WHEREAS the Executive desires to be employed by the Company;
AND WHEREAS the Executive recognizes and acknowledges that the
Executive's position with the Company will provide the Executive with access to
the Company's customers and/or its confidential and proprietary business
information.
NOW THEREFORE IN CONSIDERATION of the mutual covenants and agreements
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties, intending to be
legally bound, hereby agree, as follows:
1. Employment.
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The Company shall employ the Executive, and the Executive shall serve
the Company in the capacity and on the terms specified in this Agreement. Since
the Executive is a citizen of the United States of America, and accordingly must
be authorized by the Government of Canada to work within Canada, this Agreement
and the employment of the Executive by the Company shall be subject to and
conditional upon the issuance of such approval or authorization by the
Government of Canada. The Company shall make best efforts on an ongoing basis
during the term of this Agreement in providing assistance to the Executive in
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securing employment authorization or such other necessary authorization from
Employment and Immigration Canada, as required on an ongoing basis, including
but not limited to, providing the Executive with a letter setting out an offer
of employment.
2. Period.
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(a) This Agreement shall commence on the date hereof and, subject to
the other provisions hereof, shall continue for a period of
three (3) years, being fully completed on October 31, 2000
("Term"). At the end of the Term, this Agreement shall continue
for an additional one (1) year period if the Company shall give
the Executive written notice of its intention to extend the
Agreement for such period at least thirty (30) days prior to the
end of the Term; provided, however, the salary for such renewal
period shall be agreed upon by the parties by no later than ten
(10) days prior to the end of the Term failing which this
Agreement shall be fully completed on October 31, 2000.
(b) A renewal of this Agreement as provided for in paragraph 2(a)
shall not include any further right of renewal.
(c) The Executive's continuous period of employment by the Company
shall be deemed to have commenced on November 1, 1997.
3. Duties and Performance.
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During the continuance of this Agreement, the Executive:
(a) shall serve the Company in the position of President and Chief
Executive Officer (or in such capacity as may from time to time
be mutually agreed upon) and shall perform and render such duties
and services as are customarily performed and rendered by one
holding such position. The Executive shall be located at and
principally work from the Company's offices in Burlington,
Ontario;
(b) shall report to the Board of Directors of the Company ("Board")
or as delegated by the Board;
(c) shall perform and render all of the duties and services that may
be required of and from the Executive consistent with the
responsibilities and authority of his position and pursuant to
the terms and conditions hereof, faithfully, industriously, to
the best of his ability, experience and talents, and to the
reasonable satisfaction of the Board, shall comply with the
advice, directions, orders, policies, regulations and standards
of the Board as promulgated from time to time;
(d) may be required in pursuance of his employment to be engaged in
work on behalf of the Company or any parent, subsidiary or
affiliate of the Company from time to time ("collectively, the
"Group"); and
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(e) shall devote his entire work time, attention, knowledge, skills,
energies and best efforts to the performance and rendition of his
duties and services hereunder, and to the furtherance of the
business and interests of the Company and the Group.
4. Remuneration.
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(a) As remuneration for his services hereunder, the Company shall pay
the Executive, and the Executive agrees to accept, a base salary
of $125,000.00 (U.S.), or at such other rate as may from time to
time be mutually agreed upon in writing. Such base salary shall
be payable in accordance with the Company's usual payment policy
and practices, but not less frequent than monthly. Base salary
shall be subject to any applicable federal, provincial and local
withholding taxes and deductions.
(b) A bonus may be payable, at the end of the second year and/or the
end of the third year of this Agreement, based upon mutually
agreed upon performance targets, if any. No bonus shall be
payable with regard to the first year of this Agreement.
(c) A relocation allowance of $25,000.00 (U.S.) shall be paid to the
Executive at such time as the authorization to work in Canada has
been issued, as aforestated, and the Executive has taken up
full-time residence in Canada. This allowance shall be a one-time
payment as reimbursement for all expenses incurred by the
Executive in assuming employment in and moving to Canada.
5. Expenses.
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During the continuance of this Agreement, the Executive shall be
entitled:
(a) to be reimbursed for all reasonable out-of-pocket expenses which
he has properly incurred in performing his duties and obligations
under this Agreement upon receipt by the Company of satisfactory,
itemized accounts and receipts of all such expenditures which
shall not be in excess of any limitation established for such
expenditures by the Company; and
(b) to a car allowance in the amount of $750.00 (U.S.) per month.
From this car allowance, the Executive is to make all car lease
payments (if any). The Company will reimburse the Executive for
gas, oil, parking and car insurance expenses which the Executive
incurs in the course of executing his duties under this
Agreement. Payment will be made within thirty days of receipt by
the Company of invoices documenting these expenses.
6. Benefit Plans.
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The Company agrees that the Executive shall be entitled to customary
employee benefits provided by the Company to other senior personnel upon his
qualification for and in accordance with the terms and conditions of the plans
and programs established and implemented by the Company. Subject to the terms of
such plans or programs and federal and provincial laws applicable thereto, the
Executive acknowledges that the Company may change, alter or eliminate, without
the Executive's consent, any and all of such benefits at any time.
7. Vacations and Statutory Holidays.
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The Executive shall be entitled in each calendar year, other than 1997,
to the following vacations and paid holidays:
(a) three (3) weeks vacation will full salary to be taken at such
reasonable time or times as may be approved by the Company; and
(b) paid statutory holidays in accordance with the personnel policies
of the Company.
8. Illness and Disability.
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(a) The Company shall continue to pay the Executive at his normal
rate of pay during any periods of absence resulting from sickness
or injury up to an aggregate maximum of ninety (90) working days
during the Term and the renewal, if any; provided however, the
Company may require the Executive to provide medical certificates
in accordance with the personnel policy of the Company.
(b) If the Executive is participating in the short-term disability
program of the Company, if any, it is expressly understood
between the parties that any payments made to the Executive by
the Company during any temporary disability will be reduced by
the amount the Executive is entitled to receive from the
disability program of the Company in accordance with the
provisions of any group policy issued to the Company.
9. Termination.
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Notwithstanding paragraph 2(a) of this Agreement:
(a) The Executive's employment by the Company shall terminate if the
Executive fails to obtain or maintain his status to work in
Canada, or dies.
(b) The Executive's employment by the Company shall terminate on
October 31, 2000 unless this Agreement has been extended by the
Company in accordance with paragraph 2(a) of this Agreement.
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(c) The Executive's employment by the Company shall terminate on
October 31, 2001 if this Agreement has been extended by the
Company in accordance with paragraph 2(a) of this Agreement.
(d) The Executive's Employment by the Company may be terminated by
the Company at any time, and for any reason, including just
cause, during the Term or the extension, if any, of the Term;
provided that without restricting in any way the meaning or
definition of "just cause", it is understood that with respect
to the obligations and duties of the Executive as set out in or
referred to in this Agreement, termination of the Executive for
"just cause" shall entail a material breach of this Agreement by
the Executive.
(e) If the Company terminates the employment of the Executive for
just cause, the Executive shall not be entitled to notice or
severance pay or any other compensation whatsoever.
(f) If the Company terminates the employment of the Executive as
provided in paragraph 9(d) (other than for just cause) prior to
the expiry of the Term, or the extension of it, the Executive
undertakes to use his best efforts to obtain alternative
employment and the Company agrees to continue the Executive's
salary and benefits until the earlier of the date the Executive
obtains alternative employment or the expiry of a period of one
year from the date of the termination of the Executive's
employment. Where the Executive obtains alternative employment
prior to the end of the one year period aforestated, the Company
shall also pay to the Executive an amount equal to fifty percent
(50%) of the Executive's remaining base salary, from the date he
obtains alternative employment to the end of the one year period
aforestated. For the purposes of this paragraph, alternative
employment shall mean both employment of the Executive by a new
employer or commencement of or participation by the Executive in
any business venture, provided that the commencement of or
participation by the Executive in any business venture shall not
include any inquiry, meetings, or negotiations by the Executive
with any person(s) or corporation(s) of a general nature where
no firm commitment or binding arrangement exists between the
Executive and such person(s) or corporation(s) for the
commencement of or participation by the Executive in such
business venture.
(g) Upon the termination of this Agreement for any reason, the
Executive shall:
(i) immediately return to the Company all papers, documents,
books, accounts, drawings, credit cards, keys, computer
software, and other property belonging to, or relating
to the business of, the Company or any company in the
group which are then in the possession or control of the
Executive;
(ii) immediately return to the Company any company
automobile; and
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(iii) upon the Company's request, immediately in writing
resign any directorship or other office which the
Executive may hold in the Company or any company in the
Group without compensation for loss thereof and transfer
any nominee or other shares owned by the Company or any
such company in the Group to such person or company as
the Company shall nominate.
(h) Notwithstanding the termination of this Agreement for any
reason, the provisions of Paragraphs 9(e), 9(f), 10(c), 10(d),
10(e), 10(f), 10(g) and 11, as and if applicable, shall continue
in full force and effect.
10. Restraints on the Executive's Activities.
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(a) During the continuance of this Agreement, the Executive shall not
be, directly or indirectly, engaged, concerned or interested in
any capacity in any other trade, business or occupation, except:
(i) as the owner of securities which are held for investment
only, which are listed on a recognized stock exchange, and
which do not exceed five percent (5%) in nominal value of
the securities of that class ("Approved Ownership"); or
(ii) with the prior written consent of the Company, which
consent shall not be unreasonably withheld. A request for
such written consent shall include the detail of any
proposed concern and/or interest.
(b) During the continuance of this Agreement, the Executive shall
comply with all applicable laws, regulations and rules in force
from time to time relating to trading of shares of stock of the
Company, and shall obtain the prior written consent of the Board
before effecting a trade of shares of stock of the Company;
provided that the provisions of this subparagraph 10(b) shall
not in any way limit, restrict or diminish the terms and
provisions of the non-incentive stock option granted to the
Executive pursuant to a Non-Incentive Stock Option Grant dated
as of November 3rd, 1997.
(c) During the term of the employment of the Executive with the
Company and at all times thereafter, the Executive shall keep
confidential and shall not at any time use, for his own or
another's advantage or disclose to any person, firm or company
any trade secrets, business methods or confidential information
concerning the business, financial status or affairs of the
Company or any company in the Group, including but not limited
to, customer or supplier lists, trade processes or materials,
price lists, pricing, costings, new product or business plans
("Confidential Information") which may have come to the
Executive's knowledge during his employment hereunder provided,
however, this restriction shall not prevent:
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(i) any disclosure or use authorized by the Board, required by
law, or made to enable the Executive to perform his duties
hereunder, or
(ii) the use of the personal skills of the Executive in any
business in which he may be lawfully engaged, subject to
the terms of this Paragraph 10, after termination of this
Agreement; or
(iii) the use of Confidential Information that is in or comes
into the public domain in any way without breach of this
Agreement by the Executive.
(d) During the term of this Agreement and for the period ending one
(1) year after the actual date of termination of employment
("Covenant Period"), the Executive shall not, whether alone or
jointly with another, and whether directly or indirectly,
solicit or endeavor to entice away, knowingly offer employment
to, knowingly employ, or offer or conclude any contract for
services with, any person who is employed by the Company or any
company in the Group at the date of the termination of the
Executive's employment and who has been employed in skilled or
managerial work at any time during the period of one (1) year
preceding the date of the termination of the Executive's
employment by the Company or any company in the Group.
(e) Recognizing that the Company's business success is dependent
upon the Confidential Information and business relationships
which the Company entrusts to its employees, the Executive
agrees that during the term of his employment and for the
Covenant Period, the Executive shall not, directly or
indirectly:
(i) call upon or solicit any customer of the Company or the
Group, or prospective customers with whom the Executive
had access to Confidential Information or had involvement
in development, or cause or attempt to cause any such
customer or prospective customer to divert, terminate,
limit or in any manner modify or fail to enter into, any
actual or potential business relationship or contract with
the Company or the Group;
(ii) cause or attempt to cause any supplier or prospective
supplier of the Company or the Group to divert, terminate,
limit or in any manner modify or fail to enter into any
actual or potential relationship or contract with the
Company or the Group.
(f) Each provision of this Paragraph 10 constitutes an entirely
separate and independent restriction. The Executive acknowledges
and agrees that the duration, extent and application of each
respective restriction of this Paragraph 10 is no greater than
is reasonable and necessary for the protection of the interests
of the Company, but that if any arbitrator or court of competent
jurisdiction shall determine that the period, the scope, or the
territory covered by, or any other provision of, this covenant
pursuant to this Paragraph 10 is unreasonable, such
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provision shall not be deemed to be null and void and of no
effect but shall be reformed by such arbitrator or court to
impose a reasonable period, reasonable scope, reasonable distance
limitation or reasonable other provision, as the case may be.
(g) In the event of a breach by the Executive of his obligations and
covenants hereunder, the Company shall be entitled to temporary
and/or permanent injunctive relief against the Executive, in
addition to any and all other rights or remedies which it may
have, including damages and reasonable solicitor's fees. The
Executive hereby expressly acknowledges that the harm which might
result to the Company's goodwill or its relationships with
customers, or as a result of the disclosure or use of the
Confidential Information, is irreparable.
(h) In addition to any other rights and remedies which the Company
may have, if the Executive breaches any of his obligations
pursuant to this Paragraph 10 at any time during the period of
payment under Paragraph 9(f), the Company shall immediately cease
to have any liability for such salary payments, or for provision
of benefits during or for the applicable period under the
provisions of Paragraph 9(f), which obligations by the Company
shall become null and void and of no further force and effect.
11. Inventions.
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The Executive has a special obligation to further the interests of the
Company and the Group. Accordingly, if the Executive makes, develops, modifies,
or discovers any discovery, invention, improvement or process in the course of
his employment for the Company or the Group (the "Discovery"), he shall:
(a) immediately provide full details of the Discovery to the Company;
(b) not disclose any details of the Discovery to any third party
without prior written consent of the Company;
(c) if required by the Company during or after the termination of
this Agreement, do all that is necessary to obtain patent or
other protection of the Discovery in any country specified by the
Company; and
(d) hold in trust for the Company all rights in the Discovery.
12. Miscellaneous.
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(a) This Agreement shall supersede all prior agreements made between
the parties hereto relating to the employment of the Executive.
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(b) Except as stated herein,
(i) this Agreement contains the entire agreement of the
parties as to its subject matter; and
(ii) neither party has entered into this Agreement in
reliance upon any oral representation, warranty or
inducement leading to the signature hereof.
(c) The various provisions of this Agreement are severable and, if
any provision is held to be invalid or unenforceable by any court
of competent jurisdiction, then such invalidity or
unenforceability shall not affect the remaining provisions
hereof.
(d) No modifications or amendment of any of the provisions of this
Agreement shall be effective unless in writing specifically
referring hereto, and signed by the parties.
13. Notice.
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All notices and other communications hereunder shall be in writing and
shall be hand-delivered or sent by registered or certified mail, return receipt
requested, postage prepaid, addressed to the addresses as follows:
to the Company: with a copy to:
Sel-Drum International, Inc. Xxxx & XxXxxxx
c/o Sel-Drum Corporation Barrister & Solicitors
1370 Artisans Court P.O. Box 907
Burlington, Ontario Xxxxxxxx, Ontario
L7L 5Y2 L8N 3P6
Attention: Messrs. Xxxxx Xxxxxxxx/ Attention: Messrs. Xxxxx X. Xxxx/
Xxxxxx Xxxxxxxxx Xxxx X. Xxxxxxx
to the Executive:
Xxxxxxx Xxxxxx
00 Xxxxx Xxx Xxxx
Xxxxxxxxx, Xxx Xxxx
X.X.X. 00000
or to such other address as shall be furnished in writing by either party to the
other party. All notices and other communications hereunder given in the manner
provided above shall be deemed effective on the date of hand delivery or two (2)
days after deposit in the mail.
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14. No Waiver.
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No failure on the part of either party at any time to require the
performance by the other party of any term hereof shall be taken or held to be a
waiver of such term or in any way affect such party's right to enforce such
term, and no waiver on the part of either party of any term hereof shall be
taken or held to be a waiver of any other term hereof or the breach thereof.
15. Benefit and Assignment.
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The Executive acknowledges that the duties and services to be performed
and rendered by him are unique and personal; accordingly, the Executive may not
assign any of his rights or delegate any of his duties hereunder without the
prior written consent of the Company which may be withheld in its sole and
absolute discretion. The rights and obligations of the Company hereunder shall
be assignable and shall enure to the benefit of, and be binding upon, the
successors and assigns of the Company.
16. Construction.
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Whenever a singular word is used herein, it shall also include the
plural wherever required by the context, and vice versa; and whenever any gender
is used herein, it shall also include the other genders wherever required by the
context. The terms and conditions hereof shall be interpreted and construed in
accordance with their usual and customary meanings, and the parties hereby
expressly waive and disclaim, in connection with the interpretation and
construction hereof, any rule of law or procedure requiring otherwise,
specifically including, but not limited to, any rule of law to the effect that
ambiguous or conflicting terms or conditions contained herein shall be
interpreted and construed against the party whose counsel prepared this
Agreement or any earlier draft hereof.
17. Arbitration and Governing Law.
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Except for the enforcement of any rights to equitable relief to which
the parties consent to jurisdiction in the courts of the Province of Ontario,
the Executive and the Company agree that any dispute, controversy or claim
arising out of, based upon or relating to Executive's employment, this Agreement
or the breach, termination or invalidity thereof, including claims for tortious
interference, other tortious or statutory claims (including claims for
discrimination or discharge based upon race, sex, age, religion, disability or
other prohibited grounds), claims against any parent or affiliate of the Company
or any director, officer or employee of the Company or any of its parents or
affiliates, and claims arising out of, based upon or relating to Paragraph 10 of
this Agreement, whether arising before, during or after termination of
Executive's employment or this Agreement, shall be resolved by binding
arbitration before one (1) arbitrator pursuant to the rules of The Arbitration
and Mediation Institute of Ontario for commercial arbitration. Judgment on the
award rendered by the
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arbitrator may be entered in any court having jurisdiction thereof. This
Agreement shall be interpreted in accordance with the governed by the laws of
Ontario. Except as provided under the law and/or the provisions of Paragraphs
10(f) and 12(c) herein, the arbitrator shall have no authority to alter, amend,
modify or change this Agreement. Each party shall bear their own costs of
arbitration regardless of which party prevails in such arbitration. If the
Company is required to enforce the terms of this Agreement or otherwise seek
relief against the Executive under the terms of this Agreement or any third
party arising from or related to the terms hereof shall pay the solicitor's fees
of the Company.
18. Captions.
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The captions herein are for convenience and identification purposes
only, are not an integral part hereof, and are not to be considered in the
interpretation of any part hereof.
19. Counterparts.
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This Agreement may be executed in separate counterparts, each of which
shall be an original, but all of such counterparts shall together constitute but
one and the same instrument.
The parties have entered into this Employment Agreement based solely
upon the terms and conditions set out herein. This Agreement contains a binding
arbitration provision which may be enforced by the parties.
IN WITNESS WHEREOF the Company and the Executive have each executed this
Agreement as of the day and in the year first written.
SIGNED, SEALED & DELIVERED )SEL-DRUM INTERNATIONAL, INC.
in the presence of: )
)
)
/s/ Xxxxxx Xxxxxx )/s/ Xxxxx Xxxxxxxx
--------------------- )--------------------------
Barrister & Solicitor )Authorized Signing Officer
0000 Xxxxxxx Xxxxxx )
Xxxxxxxxxx, Xxxxxxx )
X0X 0X0 )/s/ Xxxxxxx Xxxxxx
)---------------------------
)Xxxxxxx Xxxxxx
