EMPLOYMENT AGREEMENT
EXHIBIT
10.3
This
Employment Agreement made as of the 14th
day of
August, 2008.
BETWEEN:
XXXXXX
X. XXXXXXX
of
the
City of Toronto
in
the
Province of Ontario
(hereinafter
referred to as the “Executive”)
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and
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a
corporation incorporated pursuant to the
laws
of
the State of Nevada
(hereinafter
referred to as the “Corporation”)
WHEREAS
the Corporation is desirous of employing the Executive
in the
position of President and Chief Executive Officer of the
Corporation;
AND
WHEREAS the parties hereto wish to confirm the terms and conditions relating
to
the Executive’s employment with the Corporation;
NOW
THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, it is hereby agreed
as
follows:
ARTICLE
1
EMPLOYMENT
AND DUTIES OF EXECUTIVE
1.01 Employment
of Executive: In accordance with the terms and conditions of this Agreement,
the
Corporation hereby employs the Executive and the Executive hereby accepts
employment with the Corporation as its President and Chief Executive Officer.
1.02 Duties
of
Employment: The Executive shall have such duties typically associated with
the
titles of President and Chief Executive Officer and shall exercise such power
and authority as may be commensurate with such duties. The Executive shall
well
and faithfully serve the Corporation and use his best efforts to promote the
interests and goodwill of the Corporation during the term of his employment
hereunder. The Executive shall devote his full time and energy to the
Corporation and shall perform his duties and exercise such powers as may be
consistent with the position of the Executive. Notwithstanding the foregoing
or
any other provision of this Agreement, it shall not be a breach or violation
of
this Agreement for the Executive to (a) serve on corporate (subject to prior
approval of the Board of Directors of the Corporation (the “Board”)), civic or
charitable boards or committees, or (b) deliver lectures, fulfill speaking
engagements or teach at educational institutions, so long as such activities
do
not significantly interfere with or significantly detract from the performance
of the Executive’s responsibilities to the Corporation in accordance with this
Agreement.
1.03 Term:
The
initial term of employment of the Executive shall commence with effect from
the
date hereof and shall continue for a period of 10 years unless terminated in
accordance with the provisions of this Agreement. At the end of the initial
term, the term of employment of the Executive shall renew for successive two
(2)
year terms, subject to earlier termination in accordance with the terms of
this
Agreement, unless the Corporation or the Executive delivers written notice
to
the other at least six (6) months prior to the expiration date of the then
current term of employment.
1.04
Appointment: The Executive agrees to accept appointment to the Board of the
Corporation.
ARTICLE
2
REMUNERATION
OF EXECUTIVE
2.01 Base
Salary: The Executive’s base salary shall be one hundred fifty thousand United
States dollars (US $150,000) per
annum
payable in equal bi-weekly instalments, not in advance, exclusive of bonuses,
benefits and other compensation, but subject to applicable statutory deductions
(“Base Salary”).
2.02 Review:
The Base Salary will be reviewed by the Board on an annual basis, and may,
in
the sole discretion of the Board, be increased.
2.03 Bonus.
During the term of this Agreement, the Executive shall be entitled to receive
on
a fiscal year basis a cash bonus (the “Bonus”) from the Corporation determined
in the discretion of the Board, provided that such bonus shall not be less
than
two percent (2%) of the Corporation’s EBITDA.
2.04 Stock
Option: At the sole discretion of the Board, the Executive may be granted
options to purchase common shares in the capital of the Corporation in
accordance with any Incentive Stock Option Plan, and the current practice of
the
Corporation with respect to specific terms. Notwithstanding the foregoing or
any
other provision of this Agreement, in each year of this Agreement, the Board
shall grant to the Executive at least as many options with at least as
favourable an exercise price as are granted to any other person or entity
(together with their affiliates) in each year, The Executive understands and
agrees that upon the termination of his employment by the Corporation, whether
such termination occurs with or without notice and with or without just cause,
then, all rights that the Executive may have otherwise had in respect of stock
option(s) shall terminate effective as of and from one (1) year after the date
on which the Executive receives notice of such termination.
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ARTICLE
3
BENEFITS
3.01 Vacation
Entitlement: The Executive’s vacation entitlement shall be six (6) weeks in each
year of employment. Any vacation time not taken by Executive during any calendar
year may be carried forward for up to two (2) calendar years. In selecting
such
vacation time the Executive undertakes to consider the exigencies of his
office.
3.02 Insurance
Benefits: The Executive shall be entitled to participate in any plan with
respect to medical, dental and other benefits established by the Corporation.
The Corporation agrees that the Executive’s benefits pursuant to any such plans
shall be paid for by the Corporation to the extent that the Executive so
desires. The Corporation shall procure directors and officers insurance and
errors and omissions insurance both of which shall include the Executive as
an
insured.
3.03 Life
Insurance: The Executive agrees to co-operate with the Corporation in the event
that it wishes to put into place insurance on his life or key-man insurance,
provided that any premiums associated with such insurance shall be paid by
the
Corporation.
3.04 Other
Expenses: The Executive shall be entitled to reimbursement for all travelling,
entertainment and other expenses incurred by the Executive on behalf of the
Corporation in the course of the performance of his duties, upon production
of
appropriate receipts and invoices, forthwith after review and
approval.
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3.05 Indemnity:.
Subject to limitations imposed by law, the Corporation shall indemnify and
hold
harmless the Executive to the fullest extent permitted by law from and against
any and all claims, damages, expenses (including reasonable attorneys’ fees),
judgments, penalties, fines, settlements, and all other liabilities incurred
or
paid by him in connection with the investigation, defense, prosecution,
settlement or appeal of any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative and to
which the Executive was or is a party or is threatened to be made a party by
reason of the fact that the Executive is or was an officer, Executive or agent
of the Corporation, or by reason of anything done or not done by the Executive
in any such capacity or capacities, provided that the Executive acted in good
faith, in a manner that was not grossly negligent or constituted willful
misconduct and in a manner he reasonably believed to be in or not opposed to
the
best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
Corporation also shall pay any and all expenses (including reasonable attorney’s
fees) incurred by the Executive as a result of the Executive being called as
a
witness in connection with any matter involving the Company and/or any of its
officers or directors. The provisions of this Section 3.05 shall survive the
termination or expiration of this Agreement.
3.06 Work
Location and Facilities: Notwithstanding any current or future location of
the
Corporation’s headquarters or facilities, the Executive shall be located and
perform his duties on a day to day basis from Toronto, Canada or such other
city
as the Executive chooses, provided that Executive agrees to travel as necessary
from time to time to fulfil his duties. The Corporation shall furnish the
Executive with a downtown office, a personal assistant (or other secretarial
help) and services suitable to his position and adequate for the performance
of
his duties hereunder.
ARTICLE
4
TERMINATION
OF EMPLOYMENT
4.01 Termination
by Executive: The Executive may terminate his employment pursuant to this
agreement by giving at least twelve (12) month’s advance notice in writing to
the Corporation.
4.02 Termination
with Cause: The Corporation may terminate the Executive’s employment without
notice or payment in lieu thereof, for cause. In such event, the Executive
shall
be entitled to receive any amounts on account of Base Salary or expenses accrued
and unpaid to the date of termination. For the purposes of this agreement
“cause” shall mean:
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(a)
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wilful
misconduct or gross negligence by the Executive resulting, in either
case
in material economic harm to the Corporation;
or
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(b)
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fraud,
embezzlement or theft of a material nature by the Executive against
the
Corporation resulting in material economic harm to the
Corporation.
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An
act or
failure to act shall not be wilful if done by the Executive in good faith and
with the reasonably held belief that such action or failure to act was in the
best interest of the Corporation.
4.03 Termination
Without Cause: The Corporation may terminate the Executive’s employment pursuant
to this agreement at its sole discretion and for any reason and upon such
termination, the Executive shall be entitled to receive all accrued salary
and
pro-rata bonus plus a severance amount (the “Severance Amount”) equal to (a) two
(2) times the Executive’s highest Base Salary, but in no event less than three
hundred thousand United States dollars (US$300,000), plus (b) two (2) times
the
Executive’s highest Bonus. The Executive may elect to receive the Severance
Amount in (i) one lump sum amount in which event such amount shall be payable
within ten (10) business days of Executive’s termination; or (ii) twenty four
(24) equal monthly instalments commencing on the first of the month following
the Executive’s termination. The Corporation shall for a twenty four (24) month
period following Executive’s termination, continue at its expense to maintain
the Executive as a member of all insurance plans to which Executive is a member
under Section 3.02 of this Agreement. Upon termination, all of the Executive’s
entitlement to purchase common shares under existing stock options will
immediately vest.
4.04 Return
of
Materials: As soon as the Executive ceases to be an employee of the Corporation,
the Executive shall immediately deliver to the Corporation all property of
the
Corporation in the possession of 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.
4.05 Change
of
Control Payment: In the event of a Change of Control, as hereinafter defined,
the Executive shall receive a lump sum payment equal to (a) two (2) times the
Executive’s highest Base Salary, but in no event less than three hundred
thousand United States dollars (US $300,000); plus (b) two (2) times the
Executive’s highest Bonus.
For
purposes of this Agreement, Change of Control shall mean:
(i)
Fifty
percent or more of the Corporation’s voting stock shall be acquired by any
person (other than the Executive) entity or affiliated group;
(ii)
A
change to the majority control of the Board not approved by the
Executive;
(iii)
Any
merger, consolidation or business combination pursuant to which the Corporation
is not the surviving corporation or fifty percent (50%) or more of the
Corporation’s voting stock shall be owned or controlled by any person (other
than the Executive), entity or affiliated group;
(iv)
A
liquidation or dissolution of the Corporation; or
(v)
The
sale of all or substantially all of the Corporation’s assets.
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ARTICLE
5
CONFIDENTIAL
INFORMATION
5.01 Confidential
Information: The Executive hereby agrees to maintain in confidence and not
to
disclose to any person, corporation, group or organization whatsoever, during
the term of this Agreement and for a one year period thereafter, any information
respecting the business affairs, prospects, operations or strategic plans
respecting the Corporation or its affiliates or subsidiaries gained in the
Executive’s capacity as an employee of the Corporation or otherwise, and not
otherwise publicly available or disclosed.
ARTICLE
6
NON-COMPETITION
COVENANTS
6.01 Representation:
The Executive represents and agrees that his experience and capabilities are
such that the provisions of this Article will not prevent him from earning
a
livelihood and that irreparable and substantial injury could befall the
Corporation should the Executive violate this Article. The Executive and the
Corporation agree that the Corporation is entitled to protect its business
interest and that of its affiliates and subsidiaries from any unfair advantage
taken by the Executive in the event of and subsequent to his termination under
Article 4 herein, which unfair advantage includes but is not limited to engaging
in any activity proscribed by Article 6.02.
6.02 Solicitation:
For a period of one year from the date of termination of this Agreement, the
Executive shall refrain from interfering with the employment arrangements
between the Corporation (or any of its affiliates or subsidiaries) and its
employees and will not in any way solicit, recruit, hire, assist others in
recruiting or hiring, or discuss employment with any employees of the
Corporation or any of its affiliates or subsidiaries and the Executive shall
refrain from soliciting, contracting with, making regular presentations to
or
otherwise being concerned with the customers of the Corporation or any of its
affiliates or subsidiaries, or aid or abet any solicitation of employees or
customers to transfer business from the Corporation or any of its affiliates
or
subsidiaries, to any other person or entity, provided that this prohibition
shall not apply to advertising of a general nature, speaking or writing
engagements for general publication or to similar activities and provided that
this prohibition shall not preclude the Executive from providing services to
existing clients of any new employer of the Executive.
6.03 Time
and
Scope Reduction: The Executive agrees that if the period of time, geographical
coverage or the scope of the restrictive covenant contained in this Article
should be adjudged unreasonable in a proceeding before a court of competent
jurisdiction, then the period of time shall be reduced by such number of months,
or the coverage or scope shall be reduced, by elimination of such portion
thereof deemed unreasonable, so that the covenant herein may be enforced in
such
coverage and scope and during such period of time as may be adjusted to be
reasonable.
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ARTICLE
7
MISCELLANEOUS
PROVISION
7.01 Amendment
and Waiver: No amendment, modification or waiver of any provision of this
Agreement or consent to any departure by the parties from any provision of
this
Agreement is effective unless it is in writing and signed by the parties and
then the amendment, modification, waiver or consent is effective only in the
specific instance and for the specific purpose for which it is
given.
7.02 Further
Assurances: The Executive and the Corporation shall do, execute, acknowledge
and
deliver or cause to be done, executed, acknowledged and delivered such further
acts and documents as shall be reasonably required to accomplish the intention
of this Agreement.
7.03 Applicable
Law and Jurisdiction: This Agreement and all of the rights and obligations
arising herefrom shall be interpreted and applied in accordance with the laws
of
the Province of Ontario and the courts of the Province of Ontario shall have
exclusive jurisdiction to determine all disputes relating to the Agreement
and
all of the rights and obligations created hereby. The Executive and the
Corporation hereby irrevocably attorn to the jurisdiction of the courts of
the
Province of Ontario.
7.04 Other
Provisions: At all times while engaged by the Corporation, the Executive will
at
his own expense maintain a valid passport. The Executive acknowledges that
as a
condition of his engagement he will be required to travel to various locations
worldwide from time to time to carry out his duties on behalf of the
Corporation.
7.05 Prohibitive
Provisions: In the event that any provision or any part of any provision is
deemed to be invalid by reason of the operation of any law or by reason of
the
interpretation placed thereon by a court, this Agreement shall be construed
as
not containing such provision or part of such provisions and the invalidity
of
such provision or such part shall not affect the validity of any other provision
or the remainder of such provision hereof. All other provisions thereof which
are otherwise lawful and valid shall remain in full force and
effect.
7.06 Notice
Provisions:
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(a)
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Except
as otherwise expressly provided herein, all notices shall be in writing
and either delivered personally or by registered or certified mail,
telex,
telegram cable or telecopier. In the case of the Corporation, notice
shall
be at the Corporation’s office at 000 Xxxx Xxxxxx Xxxx, 00xx
Xxxxx, Xxxxxxx, XX X0X 0X0. In the case of the Executive, notice
shall be
delivered to the most current address of his residence on file with
the
Corporation.
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(b)
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Any
notice which is delivered personally shall be effective when delivered
and
any notice which is delivered by telex, telecopier, cable or telegram
shall be effective on the business day following the day of
sending.
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(c)
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Any
notice given by telex, telecopier, cable or telegram shall immediately
be
confirmed by registered or certified
mail.
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7.07 Entire
Agreement: This agreement supersedes all prior agreements, oral or written,
between the parties hereto with respect to the subject-matter hereof. This
agreement contains the final and entire understanding and agreement between
the
parties hereto with respect to the subject-matter hereof, and they shall not
be
bound by any terms, conditions, statements, covenants, representations, or
warranties, oral or written, not herein contained with respect to the
subject-matter hereof.
7.08 Independent
Legal Advice: The Executive acknowledges that he has read and understands this
agreement, and acknowledges that he has had the opportunity to obtain
independent legal advice with respect to it.
7.09 Binding
Effect: This Agreement and all of its provisions shall enure to the benefit
of
and be binding upon the parties, the successors and assigns of the Corporation
and to the heirs, executors and administrators of the Executive.
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IN
WITNESS WHEREOF the parties here have caused this Agreement to be executed
and
delivered as of the date first above written.
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SIGNED,
SEALED AND DELIVERED
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in
the presence of:
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)
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/s/
Xxxxxx X. Xxxxxxx
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(Witness)
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)
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Xxxxxx
X. Xxxxxxx
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Per:
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/s/
Xxxxxxxxxxx Xxxxx
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Name:
Xxxxxxxxxxx Xxxxx
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President of Sales
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