1
Exhibit #5
EMPLOYMENT CONTRACT
THIS EMPLOYMENT CONTRACT MADE DECEMBER 01, 1995.
BETWEEN:
Xxxxxxx X. Xxxx, an individual residing in Calgary, Alberta ("Xxxx")
OF THE FIRST PART
-and-
BIRCH MOUNTAIN RESOURCES LTD., a body corporate with principal offices
in Calgary, Alberta ("Birch Mountain")
OF THE SECOND PART
WHEREAS the parties hereto desire to set forth and confirm the basis of
the employment of Xxxx as President and Chief Executive Officer of Birch
Mountain.
NOW THEREFORE this Agreement witnesseth that in consideration of the
recitals hereto and the mutual covenants and agreements herein contained and the
payment of Ten ($10.00) Dollars by each party hereto to the other (the receipt
and sufficiency of which is hereby specifically acknowledged), Birch Mountain
and Xxxx hereby and mutually covenant and agree as follows:
1. TERM OF EMPLOYMENT AND POSITION
1.01 Xxxx shall be employed as the President and Chief Executive Officer of
Birch Mountain until terminated in accordance with the provisions of
this Agreement.
2. COMPENSATION
3.4 Birch Mountain shall pay to Xxxx and Xxxx agrees to accept as basic
remuneration for his services as of the date of this Agreement a salary
at an annual rate of One Hundred and Eight Thousand ($108,000.00)
Dollars and thereafter as determined by the Board of Directors of Birch
Mountain annually provided that each annual determination shall not be
less than the previous year's annual salary. The annual salary shall be
payable in accordance with Birch Mountain's usual payroll practices but
in any event, not less than monthly.
2.02 Xxxx shall be eligible from time to time to receive additional stock
options as may be determined by the Board of Directors of Birch
Mountain in accordance with Birch Mountain's Employee Stock Option Plan
then in force.
2.03 Xxxx shall also receive and participate in any and all fringe benefit
plans, coverages and other perquisites existing as of the date of this
Agreement or made available from time to time and in or to which Birch
Mountain's senior officers and executives are entitled to participate.
3. TERMINATION OF EMPLOYMENT
2
3.01 Either party may, at any time, by written notice to the other, terminate
this Agreement for cause which termination shall be effective upon
delivery of written notice to such effect. Birch Mountain shall pay all
salary and benefits earned by Xxxx to the date of termination for cause
but shall not be obligated to pay any other amounts except as provided in
this Agreement.
3.02 A party purporting to terminate this Agreement for cause shall,
concurrently with and as a condition to the effectiveness of the notice
of termination, provide in reasonable detail the facts relied upon as the
basis of such cause, and shall have the onus of proof that such cause
existed at the date of termination.
3.03 In the event Birch Mountain terminates Xxxx'x employment hereunder for
any reason other than cause, Birch Mountain shall pay to Xxxx, within
seven (7) business days after the date of termination an amount equal to:
(a) two and one half (2.5) times his then current annual salary
provided for in paragraph 2.01; whether or not payment
pursuant to this paragraph 3.03 is required as a result of the
exercise of Xxxx'x rights under clause 3.05(a) or otherwise;
plus
(b) the present worth (using the prime rate of Birch Mountain's
banker at such time) of all employee benefits as referred to
in paragraph 2.03 which would have been available to Xxxx for
a period of eighteen (18) months from the effective date of
the termination; plus
(c) the total amount of all the membership dues referred to in
Article 8 hereof for eighteen (18) months, unless previously
paid.
3.04 For the purposes of this Agreement and in particular paragraph 3.03
hereof, Birch Mountain shall be deemed, upon the written election of Xxxx
exercised within three (3) months after any of the following events
occurs, to have given written notice of termination to Xxxx pursuant to
this paragraph 3.04, whether or not any written or other notice of any
kind is in fact given, and without cause if:
(a) without Xxxx'x written consent, Xxxx'x title as President and
Chief Executive Officer is removed;
(b) there is any material reduction in the responsibilities or
authority of Xxxx, whether or not the title of President and
Chief Executive Officer is removed; or
(c) there is any change amounting to a reduction in the reporting
requirements for Xxxx whether or not the title of President
and Chief Executive Officer is removed.
3.05 For the purposes of this Agreement and in particular paragraph 3.03
hereof, Birch Mountain shall be deemed, upon the election of Xxxx, to
have given written notice of termination to Xxxx pursuant to this
paragraph 3.05, whether or not any written or other notice of any kind is
in fact given, and without cause if:
(a) any Change of Control (as hereinafter defined), occurs with
respect to Birch Mountain, in which event Xxxx may exercise
his election by notice in writing to
3
Birch Mountain within a period commencing on the effective
date of any such Change of Control and ending three (3) months
after notice of such Change of Control has been given by Birch
Mountain to Xxxx, but not if Xxxx has theretofore given notice
of termination under paragraph 3.01; or
(b) Xxxx terminates this Agreement for cause pursuant to paragraph
3.01.
3.06 In this Agreement:
(a) "Change of Control" means the acquisition and exercise, or either of
them, of de facto control or the acquisition of the power to exercise de
facto control over 25% of the issued and outstanding Voting Securities of
Birch Mountain by any person, firm or corporation or group which did not,
as at the date hereof exercise or have power to exercise such control
over Birch Mountain, except as provided for in a Preliminary Agreement
dated October 12,1995 between Birch Mountain Resources Ltd., Danfort
Development Limited, Saskatoon Natural Resources Ltd., Xxxxxx X. Xxxxx,
Xxxxx X. Xxxxx and Xxxxxx Xxxxxxxxx; and
(b) "Voting Securities" means and includes all securities which carry
the right to vote for directors.
3.07 If Xxxx wishes to terminate this Agreement without cause he must give
Birch Mountain at least three (3) months written notice of his intention
to do so and specify the termination date.
4. STOCK OPTIONS
4.01 Notwithstanding anything contained in this Article 4, Xxxx'x rights under
any stock option agreement, entered into pursuant to a Employee Stock
Option Plan implemented by Birch Mountain or otherwise, between Birch
Mountain and Xxxx ("the Stock Option Agreement"), shall be determined in
accordance with the applicable provisions of such agreement, provided
however that if Birch Mountain terminates this Agreement without cause or
if pursuant to paragraph 3.05 Xxxx elects to receive notice of
termination, then, notwithstanding any contrary provision hereof or in
the Stock Option Agreement:
(a) Xxxx'x right to exercise the option as to any and all shares, whether or
not the option right has accrued, shall vest as at the date of notice or
Xxxx'x election pursuant to paragraph 3.05, as the case may be; and
(b) Xxxx, or if applicable, his legal personal representative shall be
entitled to exercise the subject stock option at any time within the
period ending on the earlier of 90 days from the date of any such notice
or election, or with the period ending on the earlier of one year after
ceasing to be an employee by reason of death oi permanent disability. At
the request of Birch Mountain or Xxxx, the said Stock Optior Agreement
shall be amended to reflect therein the provisions of this paragraph
4.01.
5. SCOPE OF EMPLOYMENT
5.01 Xxxx shall perform all of the duties and functions of the President and
Chief Executive Officer as may be set from time to time by the Board of
Directors of Birch Mountain, and shall report to the Board of Directors
of Birch Mountain.
4
5.02 While the duties and functions of Xxxx to be performed under this
Agreement shall be primarily performed in Calgary, Alberta, it is
acknowledged that the performance of Xxxx'x duties and functions may
necessitate his travel to other places from time to time, in which event,
Xxxx shall be reimbursed for all reasonable expenses incurred for
transportation and subsistence or performing such duties and functions
away from Calgary.
6. PERFORMANCE OF DUTIES AND FUNCTIONS
6.01 Except as set forth in paragraphs 6.02 and 6.03, Xxxx shall devote his
full working time, attention and energy to the best of his skill and
ability to the business and affairs of Birch Mountain and its subsidiary
corporations, if any.
6.02 Provided that the performance of the following does not derogate from
Xxxx'x performance of the duties and functions to be performed under this
Agreement, Xxxx will not be considered in breach of this Article 6 to the
extent that he may from time to time carry on personal business which
shall not in any way be in competition with or conflict with the business
of Birch Mountain.
6.03 Provided the performance of the following does not derogate from Xxxx'x
performance of the duties and functions to be performed under this
Agreement, Xxxx shall not be considered in breach of this Article 6 to
the extent that he may from time to time serve as a member of the board
of directors of any corporation other than Birch Mountain, or any of its
subsidiaries, provided that Xxxx shall first receive the approval of the
Board of Directors of Birch Mountain.
7. VACATION
7.01 Xxxx shall be entitled during each calendar year, to such reasonable
holiday or holidays in accordance with Birch M'Ountain's then current
vacation policy; provided however such holidays shall in no event be less
than four (4) weeks in any year.
8. MEMBERSHIP DUES AND REIMBURSEMENT OF EXPENSES
8.01 The Company shall pay the annual dues payable by Xxxx for his membership
at the 400 Club which is situate in the City of Calgary.
8.02 Xxxx shall be reimbursed for all reasonable business expenses incurred by
him in connection with the performance by him of his duties as President
and Chief Executive Officer of Birch Mountain.
9. GENERAL
9.01 This Agreement shall be governed by the laws in force in the Province of
Alberta.
9.02 Time shall be of the essence.
9.03 This Agreement constitutes the entire agreement between the parties
hereto and replaces any prior employment contract or agreement, whether
oral or written in their entirety.
9.04 No amendment to this Agreement shall be effective unless made in writing.
5
9.05 This Agreement shall be binding upon and enure to the successors and
permitted assigns of the parties hereto.
9.06 Notices to be given under this Agreement shall be in @writing and shall
be given to the parties at the addresses below specified. Any notice
given shall be deemed to be given on the date delivered if delivered
personally and shall be deemed to be given five (5) business days after
mailing if mailed to the address of the party described below, postage
paid in Canada. The address for notice of the parties shall be:
Birch Mountain: 3100 000 Xxxxx Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Secretary
Xxxx: Xxx 00, Xxxx 00, XX x 0
Xxxxxxx, Xxxxxxx X0X 0X0
A party may change its address for notice by written notice to the other party.
IN WITNESS WHEREOF the parties have executed and delivered this Agreement as of
the date first above written.
BIRCH MOUNTAIN RESOURCES LTD.
Per: /s/ Xxxxxx X. Xxxxx
---------------------------
(Illegible Signature) /s/ Xxxxxxx X. Xxxx
-------------------------------- --------------------------------
(Witness) Xxxxxxx X. Xxxx
