MANAGEMENT SERVICE AGREEMENT
DATED 1 April 2007
PARTIES
1. OLYMPUS PACIFIC MINERALS INC, a British Columbia company having its head
office at 10 King Street, Toronto, Ontario M5C IC3; Canada ("the Company")
2. WHOLESALE PRODUCTS TRADING LIMITED, a duly incorporated company having its
registered office at 00 Xxx Xxxxx Xxxx, Xxxxx, Xxxxxxxx, Xxx Xxxxxxx ("the
Consultant")
WHEREAS
A. The Company wishes to retain the services of the Consultant's director
Xxxxx Xxxxxxxxx ("Manager") as Chief Financial Officer and Company
Secretary of the Company on the terms and conditions of this management
service agreement.
B. The Consultant and the Company have agreed to enter into this Agreement to
ensure that the Manager will provide his services to the Company and
further to evidence the compensation and other benefits to be received by
the Consultant in respect to such services.
AGREEMENT
NOW THEREFORE in consideration of the mutual covenants and promises herein
contained, in consideration of the Manager continuing to provide his services to
the Company, and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged by the parties) the Consultant and
the Company hereby agree as follows.
L. INTERPRETATION
1.1 For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
"AFFILIATE" has the meaning given to it by the Canada Business Corporations
Act;
"AGREEMENT" means this management service agreement as from time to time
supplemented or amended by one more agreements entered into pursuant to the
applicable provisions hereof;
"BOARD" means the Board of Directors of the Company;
"COMPETITIVE ACTIVITY" means the Manager's participation, without the
written consent of an officer of the Company, such consent not to be
unreasonably withheld, in the management of any Competitive Operation, and
shall not include (i) the mere ownership of securities in any enterprise or
(ii) participation in the management of any enterprise or any business
operation thereof, other than in connection with a Competitive Operation of
such enterprise;
"COMPETITIVE OPERATION" means any business operation engaging in
substantial and direct competition with any mineral exploration activity or
mining operation actively conducted by the Company or its subsidiaries on
the date of termination of this Agreement;
For the purposes of Clause 13, mineral exploration activity or a mining
operation shall be considered in substantial and direct competition with
the Company if such mining operation is conducted within the countries of
Laos and Vietnam.
"COMPANY" shall be as defined in the preamble to this Agreement and include
any successor to its business or assets which executes and delivers the
agreement provided for in Clause 6 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law;
"NOTICE OF TERMINATION" means a notice that shall indicate the specific
termination provision of this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Manager's services;
"PERSON" has the meaning given to it by the Canada Business Corporations
Act;
"SET OBJECTIVES" means the corporate and operational objectives mutually
set and agreed by the Board and the Manager;
"TAKEOVER OF CONTROL" shall be evidenced by the acquisition by any person,
or by any person and its affiliates, and whether directly or indirectly, of
common shares of the Company which, when added to all other common shares
of the Company at the time held by such person and its affiliates, totals
for the first time 50% or more of the outstanding common shares of the
Company;
"TSX" means Toronto Stock Exchange.
1.2 The words "HEREIN", "HEREOF", and "HEREUNDER" and other words of similar
import refer to this Agreement as a whole and not to any particular
paragraph, sub-paragraph or other subdivision.
1.3 All references to CURRENCY mean Canadian currency, unless expressly stated
otherwise.
1.4 A reference to an ENTITY includes any entity that is a successor to such
entity.
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1.5 The HEADINGS are for convenience only and are not intended as a guide to
interpretation of this Agreement or any portion hereof.
1.6 A reference to a STATUTE includes all regulations made pursuant thereto,
all amendments to the statute or regulations in force from time to time,
and any statute or regulation that supplements or supersedes such statute
or regulations.
2. ENGAGEMENT
2.1 The Company hereby engages the Manager as Chief Financial Officer and
Company Secretary of the Company and the Manager hereby accepts such
engagement by the Company upon and subject to the terms and conditions
hereinafter set forth.
2.2 Such engagement will commence on the date of this Agreement and continue
until terminated as hereinafter provided.
2.3 The Manager will manage the Company's financial risks, financial planning,
recordkeeping and reporting, with full authority over such functions
subject to the directions of the Chief Executive Officer (to the extent
necessary to enable the Chief Executive Officer to carry out his
obligations) and to the Board acting through the Chairman of the Company or
where appropriate the Chairman of the audit committee of the Board or such
other person as is nominated by the Board. The Manager's duties and
authority shall be those commonly associated with the above office and as
assigned by the Company.
2.4 The Manager shall be present at and perform his duties primarily from
Auckland and Toronto but, recognising that the position will require a
considerable level of travel, the Manager shall be present at and perform
his duties in other jurisdictions with such frequency and for such duration
as is reasonably necessary for the proper and timely performance of the
Manager's duties hereunder, provided that:
a) the Manager must first provide his consent to any relocation for a
term of greater than three (3) months; and
b) the Manager can not be required to be on the road traveling for the
Company on business more that 60 calendar days in any one year.
2.5 The Manager shall provide approximately 80% of his time, attention, and
ability during regular working hours to the business and affairs of the
Company and shall well and conscientiously serve the Company and use his
best efforts to promote the interests of the Company during the
continuation of its services hereunder.
2.6 In the event that any person, or any person and its affiliates, begins a
tender or exchange offer, circulates a proxy to shareholders or takes other
steps to effect a Takeover of Control of the Company, the Manager agrees
that the Manager will not voluntarily stop providing his services to the
Company, and will render services to the Company in accordance with his
position, and in the best interests of the shareholders, until such person
has abandoned or terminated efforts to effect a Takeover of Control of the
Company or until such a Takeover of Control of the Company has occurred.
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3. COMPENSATION
3.1 The Manager will be paid a monthly fee of US$11,250 (yielding an annual fee
of US$135,000), subject to adjustments made pursuant to the terms of this
Agreement (the "Fee"). The Company shall remit to Revenue Canada the
withholding tax required to be remitted with respect to the Fees (if any)
and the Consultant will file such tax returns and other documents with
Revenue Canada as the Company may reasonably require each year in order to
recover the amounts so remitted as withholding tax.
3.2 For so long as the Manager continues to provide services to the Company
pursuant to this Agreement, the Board or a committee of the Board will
carry out half-yearly reviews of the Manager's performance which will be
measured against Set Objectives. Based on this review the Board may at its
discretion pay a half yearly incentive bonus of up to 12.5% of the Annual
Fee each January and July.
3.3 In addition to the foregoing, the Company will:
(a) Provide the Manager with and pay the business use and upkeep expenses
of a Blackberry or similar-type technology shall also be provided by
the Company for business use; and
(b) Reimburse the Manager for all travel expenses, including business
class airfares actually incurred, car rentals, food and lodging and
sundry expenses, expenses for assignments, relocations, and transfers;
and all other expenses incurred in connection with the business of the
Company of any of its subsidiaries. The Manager shall submit bills and
vouchers reasonably satisfactory to the Board supporting all requests for
reimbursement hereunder.
3.4 A review of the Manager's performance and compensation will be carried out
on 1 February and 1 August 2008. That review will take into account the
Manager's performance against agreed Set Objectives.
3.5 On the date of this Agreement and subject to regulatory acceptance, the
Manager will receive options to purchase capital in the Company at any time
up to and including a date five years from the date of this Agreement
1,000,000 shares in the capital of the Company at $0.65.
3.6 The options will be non-transferable except to an entity controlled by the
Manager and will vest as to 1/3 on issue, 1/3 at the end of one year and
the remaining 1/3 at the end of two years, except in the events set out in
Clauses 3.8 and 5 below, and will otherwise be subject to the rules of such
of the TSX Exchange.
3.7 Nothing herein will disentitle the Manager from participating in any profit
sharing or bonus programme, pension, stock option, stock purchase, stock
appreciation, and health or medical insurance, or other benefit plans or
retirement rights from time to time established by the Company and to which
executives of the Company or any of
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its subsidiaries or affiliates are from time to time entitled. As term of
compensation, the Manager will be enrolled in the Company's benefit plans
and stock option plan effective date signing of agreement.
3.8 If the Manager dies during the term of this Agreement all options will
immediately be vested and become exercisable.
4. HOLIDAYS
4.1 The Manager will be entitled to four weeks of annual holidays with pay
during the term of this Agreement with none of such holidays to be carried
through to the next year.
4.2 All holidays are to be taken:
(a) at times mutually agreed between Company and Manager or failing
agreement as reasonably directed by the Company; and
(b) in blocks not exceeding three weeks at any one time.
4.3 The Manager will receive a five-week vacation entitlement upon completion
of his fifth year of service.
5. TERMINATION
5.1 The Manager may terminate this Agreement and by giving the Company at least
six (6) weeks written notice (the "Manager's Termination Notice"), provided
that the Company shall have the right to give written notice to the Manager
that the Company is waiving the full notice period and is permitting this
Agreement and the services of the Manager to be terminated upon a date that
is less than six (6) weeks after the date of the Manager's Termination
Notice as determined by the Company and further provided that all fees,
benefits, and bonuses payable to the Manager hereunder and all other
obligations of the Company to the Manager hereunder shall cease upon such
termination notwithstanding the provisions of Clause 2 or any other Clause
hereof. Any monies owed by the Manager to the Company up to the date of
termination shall then be paid by the Manager to the Company.
5.2 The Company may terminate this Agreement and the engagement of the Manager
without cause, in which event the Company shall be obligated to provide the
Manager with a severance payment in lieu of notice. Such severance payment
shall be payable on the fifth day following the notice of termination (the
"Company's Notice of Termination") and shall consist of the following
amounts:
(a) The Manager's full Fee through to the date of termination at the rate
in effect at the time the Company's Notice of Termination was given,
plus an amount equal to that amount, if any, of any awards previously
made to the Manager which have not been paid;
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(b) In lieu of further fee for periods subsequent to the date of the
Company's Notice of Termination, a severance payment equal to six (6)
months of the Manager's then existing annual fee pursuant to clause 3;
and
(c) The Manager's options on shares of the Company shall remain in full
force and effect for the balance of the term of such options and the
option agreements shall be deemed to have been amended, to the extent
required, to the effect that any such provision which would otherwise
delay the vesting of such options or terminate such options as a
result of the termination of the Manager's services shall be null and
void.
Termination of the Agreement in accordance with this Clause shall relieve
the Company from any and all obligation, liability, or claim by the
Manager, exclusive of monies owing to the Manager up to the date of
termination.
5.3 The Company may at any time terminate the engagement of the Manager and
this Agreement for cause that would in law permit the Company to, without
notice, terminate the Manager, in which event the Manager shall not be
entitled to a severance payment in lieu of notice, and any options granted
to the Manager will be immediately terminated.
5.4 Any termination by the Company pursuant to Clauses 5.2 and 53 shall be
communicated by written Notice of Termination. For purposes of this
Agreement, no such purported termination shall be effective without such
notice.
5.5 On the termination this Agreement for any reason, the Manager agrees to
deliver up to the Company all documents, financial statements, records,
plans, drawings, and papers of every nature in any way relating to the
affairs of the Company and its associated or affiliated companies which may
be in his possession or under his control.
5.6 Notwithstanding the provisions of Sections 5A, 5.2 and 5.3 the parties
acknowledge that, given the particular enterprise and business of the
Company it is crucial and necessary that the Manager maintain a close
relationship with the Board based on mutual loyalty, respect and trust.
Accordingly, the Company agrees that if the Manager elects to terminate his
services based on the sole reason that there has been a Takeover of
Control, then the Manager may give notice in writing to the Board. The
notice must contain at least one month's notice and not more than two
month's notice. The Manager must exercise this right within six months of
the Takeover of Control ("Date of Resignation"). The Company shall be
obligated to provide the Manager with a severance payment on the. fifth day
following the Date of Resignation which shall consist of the following
amounts:
(a) The Manager's full fee through to the Date of Resignation at the rate
in effect at the time notice of termination or notice of resignation
was given, plus an amount equal to the amount, if any, of any awards
previously made to the Manager which have not been paid; and
(b) In lieu of further fee for periods subsequent to the Date of
Resignation, an amount equivalent to one year's fee, calculated on the
Manager's monthly fee at the highest rate in effect during the six
month period immediately preceding the Date of Resignation, exclusive
of any benefits, bonuses, etc; and
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(c) In lieu of common shares of the Company issuable upon exercise of
options, if any, previously granted to the Manager under the Company's
incentive programs and remaining unexercised on the fourth day,
following the Date of Resignation, which options shall be cancelled
upon the payment referred to herein, a cash amount equal to the
aggregate spread between the exercise price of all options held by the
Manager, whether or not then fully exercisable, and the higher of:
(i) The average of the closing prices of the Company's common shares
as reported on the TSX (or such other stock exchange on which the
Company's shares may be listed) for 30 days preceding the Date of
Resignation; or
(ii) The average price actually paid for the most highly priced one
percent (1%) of the Company's common shares, however and for
whatever reason by any person who achieves Takeover of Control of
the Company; and
(d) The Manager shall have the right exercisable up to the fourth day
following the Date of Resignation, to elect to waive the application
of Clause 5.6(c) following termination of the Manager's services. The
Manager may exercise this election on or before 5:00 p.m. Toronto time
on such fourth day by delivering a notice in writing to the Company of
such waiver whereupon:
(i) The Manager's options on shares of the Company shall remain in
full force and effect for one year from the date of termination
and in accordance with the original terms but shall be deemed to
have been amended to the effect that any provision which would
otherwise defer vesting of such options or terminate such options
as a result of the termination of the Manager's services shall be
null and void; and
(ii) The Company shall be relieved of any obligation in connection
with termination of the Manager's services to make the payment in
Clause 5.6(c).
The Manager agrees to accept such payment in full satisfaction of any
and all claims the Manager has or may have against the Company and the
Manager agrees to release the Company with respect to the same upon
payment of said sum, except monies owing by either party to the other
up to the Date of Resignation and any payment under paragraph 5.2(c).
5.7 If the Manager should die during the period of this engagement hereunder,
termination of this Agreement shall be deemed to have been effected by the
Company and the provisions of Clause 5.2 shall apply. In such event, any
payment to be made to the Manager pursuant to this Agreement shall be paid
to the legal representatives of the Manager provided the Company has
received notice of claim from the Manager's legal representative within
sixty (60) days of the Manager's death, provided further that any
outstanding stock options shall continue to be exercisable by the legal
representatives of the Manager until the earlier of the expiry date of the
options and twelve (12) months following the date of death of the Manager.
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5.8 The Manager shall not be required to mitigate the amount of any payments
provided for under any paragraph of this Clause 5 by seeking other
engagement or otherwise nor shall the amount of any payment provided for in
this Clause be reduced by any compensation earned by the Manager as a
result of engagement by another Company after the date of termination or
otherwise.
6. SUCCESSORS - BINDING AGREEMENT
6.1 The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all, or substantially all,
of the business or assets of the Company, by agreement in form and
substance satisfactory to the Manager, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.
6.2 This Agreement shall enure to the benefit of and be enforceable by the
Manager's successors and assigns.
7. NOTICES
7.1 For the purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been
duly given when delivered or mailed in Canada by registered or certified
mail, return receipt when requested, postage prepaid, addressed as follows:
THE MANAGER:
Name: Wholesale Products Trading Limited
Address: 00 Xxx Xxxxx Xxxx, Xxxxxxxxx Xxxx,
Xxxxxxxx,
Xxx Xxxxxxx.
Email: xxxx@xxxx.xx.xx
THE COMPANY:
Name: Olympus Pacific Minerals Inc.
Address: Xxxxx 000, 00 Xxxx Xxxxxx Xxxx Xxxxxxx, XX
XXXXXX X0X 0X0
Fax: x0 000 000 0000
Or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
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8. GOVERNING LAW
8.1 The validity, interpretation, construction, and performance of this
Agreement shall be governed by the laws of the Province of Ontario.
9. MISCELLANEOUS
9.1 No provisions of this Agreement may be modified, waived, or discharged
unless such waiver, modification, or discharge is agreed to in writing
singed by the Manager and the Company. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with any
condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
10. SEVERABILITY
10.1 The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provisions of this
Agreement, which shall remain in full force and effect.
11. COUNTERPARTS
11.1 This Agreement may be executed in one or more counterparts, including by
fax, each of which shall be deemed to be an original but all of which
together will constitute one and the same Agreement.
12. ASSIGNABILITY
12.1 Neither of the parties hereto shall, without the consent of the other,
assign or transfer this Agreement or any rights or obligations hereunder,
except as provided in Clause 6 above. Without limiting the foregoing, the
Manager's right to receive payments hereunder shall not be assignable or
transferable, whether by pledge, creation of a security interest or
otherwise, and in the event of any attempted assignment or transfer
contrary to this paragraph, the Company shall have no liability to pay any
amount so attempted to be assigned or transferred. Notwithstanding the
generality of the foregoing, the Manager may assign his rights and
obligations pursuant to this Agreement, to a company or other entity wholly
controlled by the Manager which undertakes to the Company to make the
Manager's services available to the Company on identical terms and
conditions as this Agreement.
13. COMPETITIVE ACTIVITY
13.1 The Company expressly consents that the Manager will provide part time
consulting services to Zedex Minerals Limited.
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13.2 During the term of this Agreement and for a period of one (1) year
following the date of termination of this Agreement, the Manager shall not
engage in any Competitive Activity.
14. CONFIDENTIALITY
14.1 The Manager shall not either during the term of this Agreement or at any
time thereafter:
a. unless required by law, divulge, publish, or otherwise reveal either
directly or indirectly or through any person, firm, or corporation,
the private affairs or secrets of the Company, its subsidiaries or
affiliates to any person or persons other than the Directors of the
Company; and
b. shall not without the written consent of the Company either during the
continuance of this Agreement or at any time thereafter use for his
own purpose or any purpose other than those of the Company and
information he may acquire in relation to the business and affairs of
the Company.
14.2 The Manager agrees, during the term of this Agreement and at all times
thereafter to keep confidential all information and material provided to
his by the Company, excepting only such information as is already known to
the public, and including any such information and material relating to any
customer, vendor, or other party transacting business with the Company, and
not to release, use, or disclose the same except with the prior written
permission of the Company. The within understanding shall survive the
termination or cancellation of this Agreement, even if occasioned by the
Company's breach or wrongful termination.
SIGNED
SIGNED for and on behalf of
OLYMPUS PACIFIC MINERALS INC.
by its authorized signatory in the /s/ XXXXX XXXXX
presence of: -------------------------------------
AUTHORIZED SIGNATORY
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SIGNED by WHOLESALE )
PRODUCTS TRADING LIMITED )
in the presence of: )
/s/ XXXXX XXXXXXXXX
---------------------------------------- -------------------------------------
DIRECTOR'S SIGNATURE DIRECTOR'S NAME
/s/ X.X. XXXXXXXXX
---------------------------------------- -------------------------------------
DIRECTOR'S SIGNATURE DIRECTOR'S NAME
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