BCAM INTERNATIONAL INC.
MASTHEAD MANAGEMENT INC.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Dear Sir,
CONSULTING AGREEMENT AND TERMS OF ENGAGEMENT
The purpose of this letter is to set out the terms and conditions of a
Consulting Agreement between BCAM International Inc. (the "Company") and
Masthead Management Inc. ("Masthead").
1. CONSULTING ENGAGEMENT
The Company agrees to retain Masthead as a consultant to provide
management and executive services to the Company. For its part,
Masthead undertakes to provide these services to the Company, and
specifically to retain the services of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇. ▇▇▇▇▇▇")
as its agent for that purpose.
In order to facilitate the provision of services as contemplated
hereby, the Company will procure that ▇▇. ▇▇▇▇▇▇ be appointed as
President and Chief Executive Officer of the HumanCad Systems Division
of the Company, and he will also be appointed as a director of the
Company and be appointed to the office of Vice-Chairman of the Company.
It is acknowledged by both Masthead and ▇▇. ▇▇▇▇▇▇ that his appointment
as a director of the Company and of any subsidiaries, is, together with
all other directors, subject to review by the shareholders of the
Company annually. Whilst the Company agrees to use its best endeavours
to ensure that ▇▇. ▇▇▇▇▇▇ will hold the positions described, it is
neither a condition nor provision of the continued retainer of Masthead
that ▇▇. ▇▇▇▇▇▇ should retain the offices or the directorship described
in the event that shareholders of the Company determine otherwise.
The consulting services to be provided by Masthead shall be provided
from its base in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, and neither Masthead nor ▇▇.
▇▇▇▇▇▇ shall be required to relocate to any other place except with
their respective consent and approval.
The services to be provided by Masthead shall include the procurement
of the services of ▇▇. ▇▇▇▇▇▇ for a basic minimum of 200 business
/working days per year during the term of this Agreement.
2. TERM OF ENGAGEMENT
The appointment under this Agreement shall be for a term of two years
commencing on April 7, 1997, and expiring on April 7, 1999, unless
previously determined in the circumstances provided for below or unless
extended after that expiration date. Prior to April 7, 1999, the
Company and Masthead now express their mutual intent to negotiate
together in good faith for a subsequent renewal of the engagement for a
one year term, which extended term may, by mutual agreement, be renewed
again for further terms of one year or more or less as may be mutually
agreed between the parties.
3. NON-COMPETITION
The parties acknowledge that the Consulting Agreement entered into
hereby will oblige Masthead and ▇▇. ▇▇▇▇▇▇ to provide their services
and devote their principal efforts to the Company's business, though it
does not provide the Company with exclusive rights to the services of
Masthead or of ▇▇. ▇▇▇▇▇▇. Masthead and ▇▇. ▇▇▇▇▇▇ acknowledge that
they will be under a duty not to participate in competitive activities
such as the provision of facilities or services to any corporation or
business which is engaged in a competitive way with any of the
Company's operations.
4. FEES AND REMUNERATION AND EXPENSES
In consideration of the Agreement of Masthead to provide the services
described herein, the Company agrees to make the following payments and
grant the further considerations described below:-
(a) the Company will pay to Masthead a basic consulting fee at the
rate of US$125,000.00 per year, to be paid in twelve equal
monthly instalments, payable without deductions on the last
day of each calendar month;
(b) the Company will pay to Masthead a performance bonus on an
annual basis within 30 days of the end of the Company's fiscal
year. The amount of such bonus shall be fixed by the board of
directors of the Company acting upon recommendations from
Management and its Compensation Committee, provided that the
minimum amount of incentive bonus payable to Masthead in
respect of each of the first two years of the engagement will
be not less than US$25,000.00;
(c) the Company will require Masthead to maintain a motor vehicle
of appropriate quality to reflect the standing of ▇▇. ▇▇▇▇▇▇
in the Company'S hierarchy. In consideration of Masthead'S
agreement to provide such a vehicle, the Company will pay to
Masthead a non-accountable vehicle allowance of US$700.00 per
month and will also reimburse Masthead the cost of insurance
and maintenance of such vehicle upon delivery of properly
vouched evidence of expenditures on such account;
(d) the Company will reimburse Masthead with the costs of
maintaining an executive health plan for ▇▇. ▇▇▇▇▇▇ including
US$300,000.00 Term Life Insurance, such reimbursement to be
made upon presentation of properly vouched evidence of
expenditures on this account;
(e) the Company will maintain an insurance policy for the
protection of its directors and officers and will procure that
▇▇. ▇▇▇▇▇▇ is included as a named insured on such policy;
(f) the Company will reimburse to Masthead all costs and expenses
incurred by Masthead and/or ▇▇. ▇▇▇▇▇▇ in connection with the
provision of services under this Agreement including, but not
limited to promotion travel, long distance telephone, cellular
phone, copier costs, couriers and general ▇▇▇▇▇ disbursements,
as well as accommodation and related costs in respect of any
business conducted or services performed outside Toronto.
5. INCENTIVE STOCK OPTION PLAN
The Company has an Incentive Stock Option Plan, but is presently
engaged in a reorganization of its share capital and a refinancing. The
Company accordingly agrees to grant to Masthead (or, if necessary
pursuant to applicable provisions of the United States Internal Revenue
Code applicable to such Plans to ▇▇. ▇▇▇▇▇▇ directly), incentive stock
options to purchase the equivalent of 500,000 common shares in the
capital of the Company as now presently (pre-reorganization)
structured. The exercise price of such options shall be equal per share
to the price per share being paid in the presently proposed refinancing
and such options shall all be exercisable within five years from the
date of vesting. Of the 500,000 options so granted, 250,000 shall vest
immediately upon commencement of the consulting arrangement
contemplated by this Agreement, and the remaining 250,000 shall vest on
the first day of the second year of the term of engagement.
6. TERMINATION
This Agreement is for a fixed term of two years and subject to
extensions by mutual agreement thereafter. This agreement may be
terminated at any time by mutual agreement between the Company and
Masthead, provided that any such change shall not be effective or
binding unless recorded in writing and signed by both the Company and
Masthead.
Notwithstanding the fixed term of the engagement, the Company may
terminate the engagement of Masthead at any time for cause including
but not limited to any material breach of the provisions of this
Agreement by Masthead or any servant or agent of Masthead engaged by
Masthead to provide services hereunder. It is acknowledged by Masthead
that in the event that it fails to provide the services of ▇▇. ▇▇▇▇▇▇
for a period in excess of 40 working days total in any six month period
may, in the discretion of the Company, be considered sufficient cause
for the purposes of this provision.
7. CONFIDENTIAL INFORMATION AND NON-COMPETITION
(a) Both Masthead and ▇▇. ▇▇▇▇▇▇ acknowledge that in their
respective positions as consultants and executive of the
Company, each of them will acquire information about certain
matters and things which are confidential to the Company and
which information is the exclusive property of the Company
including but without limiting the generality of the foregoing
the following:-
(i) customer lists;
(ii) pricing policies;
(iii) technology and technological information, whether
patented or not; (iv) market research and product development
information.
(b) Each of Masthead and ▇▇. ▇▇▇▇▇▇ acknowledge that such
information as referred to in subclause (a) above could be
used to the detriment of the Company. Accordingly Masthead and
▇▇. ▇▇▇▇▇▇ undertake to treat confidentially all such
information, and agree not to disclose the same to any third
party, either during, or after its termination for whatever
reason.
(c) Each of Masthead and ▇▇. ▇▇▇▇▇▇ acknowledge that, without
prejudice to all and any rights of the Company, an injunction
is the only effective remedy to protect the Company's rights
and property as set out in subclauses (a) and (b) above.
(d) Masthead and ▇▇. ▇▇▇▇▇▇ acknowledge that as a consultant and
executive officer of the Company respectively, they will gain
a knowledge of the Company's technology and products and a
close working relationship with the Company's suppliers and
customers which knowledge and relationships would, if used
for competitive purposes or made available to a competitor,
injure the Company. Masthead and ▇▇. ▇▇▇▇▇▇ therefore agree
that, for a period of not less than twelve months from the
date of termination of this Agreement for any reason or
cause, they will neither accept engagement or employment or
any other position with the intent of providing information
or services to any developer or manufacturer of products
competitive with those of the Company, nor solicit or accept
business with respect to products competitive with those of
the Company in any State or country in which the Company's
products have been marketed during the period of twenty-four
months prior to the date of such termination.
(e) The Company has established, and may amend from time to time,
a detailed Confidentiality and Non-Competition Agreement for
execution by all of its consultants and employees, which
document may include the foregoing provisions together with
further and more detailed provisions for the protection of the
Company's interests and property; Masthead and ▇▇. ▇▇▇▇▇▇ may
be asked to execute a copy of such Agreement at the
commencement of the engagement, or subsequently, and to
execute and deliver copies of amended versions thereof, if
any, from time to time, and each of them undertakes to execute
the same as and when called upon to do so.
If the foregoing terms are accepted, please countersign and date the original
and the enclosed two copies of this letter at the foot where indicated.
I look forward to a long and mutually beneficial relationship.
Yours truly,
BCAM INTERNATIONAL INC.
\s\ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Per:
MASTHEAD MANAGEMENT INC. AND ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ HEREBY CONFIRM ACCEPTANCE
OF THE FOREGOING TERMS.
MASTHEAD MANAGEMENT INC.
\s\ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Dated: April 7 1997.
