EXHIBIT 10.2
EMPLOYMENT AGREEMENT - HARM XXXXXXXXX
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and effective as of June 30, 1997 by and between
Triple-C-Inc., an Ontario corporation ("Triple-C"), and Harm Xxxxxxx Xxxxxx
Xxxxxxxxx, a resident of Ontario ("Executive"), and, for the purposes set forth
in Section 5 of this Agreement, RLD Enterprises, Inc., a Minnesota corporation
("Company").
WHEREAS, Executive has been serving as the Vice President of Sales and Marketing
of Triple-C since its inception;
and
WHEREAS, the Company has acquired all of the capital stock of Triple-C pursuant
to that certain Stock Purchase Agreement dated effective as of June 30, 1997
(the "Purchase Agreement"), between the Company and Triple-C's former
shareholders (including Executive); and
WHEREAS, Triple-C and Executive desire to reduce the terms and conditions of
Executive's employment by Triple-C to writing in accordance with the provisions
of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises
contained in this Agreement, the parties agree as follows:
1. Employment. Triple-C hereby retains and employs Executive as the Vice
President of Sales and Marketing of Triple-C, and Executive accepts such
employment.
2. Responsibilities. Executive shall be responsible for directing and managing
all aspects of Triple-C's business consistent with Executive's office set forth
in Section 1, implementing Triple-C goals and objectives as established from
time to time by Triple-C's board of directors, and such other duties and
responsibilities as may be reasonably established by the Triple-C board of
directors from time to time. Executive shall report directly to Triple-C's
President and perform such additional duties required of the Vice President of
Sales and Marketing of Triple-C in accordance with Triple-C's Bylaws.
3. Term of Employment. The term of this Agreement shall be for a period of three
(3) years commencing on the Effective Date. This Agreement shall automatically
renew for one (1) year renewal terms, unless and until either Triple-C or the
Executive shall give the other six (6) months prior written notice of
termination prior to the expiration of the original or renewal terms.
4. Compensation and Fringe Benefits. In full and complete consideration of all
of the services to be rendered by Executive to Triple-C in any capacity,
Triple-C shall pay Executive the following compensation and fringe benefits:
4.1 Compensation. Triple-C shall pay Executive an annualized base salary of
$140,000 (CND) payable at the rate of $11,667 (CND) per month, reduced by
applicable withholdings for Canadian, provincial, local or other applicable
income taxes and other deductions required by law.
4.2 Bonuses. During the term of Executive's employment, Triple-C shall pay
Executive an annual fiscal year-end bonus based upon the revenue and earnings
criteria for Triple-C, during the applicable timeframes set forth on Exhibit A
hereto ("Earnings Bonus"). The Earnings Bonus shall be computed, and
conclusively determined, from Triple-C's year end audited financial statements
for each fiscal year during the term of this Agreement, The Earnings bonus shall
be prorated on a daily basis to the extent Executive has not been employed by
Triple-C under this Agreement during the entire fiscal year. The Earnings Bonus
shall be paid to Executive within ten (10) days after the completion of each
fiscal year end audit. Executive shall also be entitled to receive such
additional bonuses as the Board of Directors of Triple-C may approve in its sole
and absolute discretion from time to time.
4.3 Reimbursement for Expenses. During the term of Executive's employment,
Triple-C shall reimburse Executive for all reasonable and necessary business
expenses incurred by him in connection with the performance of
his duties under this Agreement. Executive shall maintain and submit to Triple-C
reasonable records justifying reimbursement of any and all such expenses.
Triple-C reserves the right to withhold reimbursing any expenses until such time
as proper documentation and accounting for such expenses are provided to
Triple-C. Executive's reimbursement for business expenses shall be subject to
any and all business expense policies and procedures implemented from
time-to-time by Triple-C for its employees generally.
4.4 Other Benefits. Executive shall be entitled to participate in all other
fringe benefit or employee benefit plans adopted by Triple-C from time-to-time
for the benefit of its employees generally. Nothing contained in this Agreement
shall require Triple-C to adopt, maintain or continue any such fringe benefit or
employee benefit plans, all of which shall be and remain within the sole
discretion of Triple-C.
4.5 Acknowledgment. Executive acknowledges and understands that some of the
benefits provided herein may be taxable to Executive as additional compensation,
and Triple-C will be required to report those items of additional compensation
on Executive's income reporting at the end of each calendar year.
4.6 Automobile Bonuses. During the Term of Employment, Executive shall be
entitled to continue to receive Executive's automobile bonus in the amount, and
payable at the times, heretofore received by Executive from Triple-C, all
consistent with past practice and subject to any limitations imposed from time
to time by Revenue Canada.
5. Company Rights and Obligations. The Company has joined this Agreement to
obtain the rights, and agree to the obligations, set forth in this Section 5.
The parties acknowledge that Executive is not employed by, and may not be deemed
employed by, the Company. The Company's obligations to Executive shall be
limited to those matters expressly set forth in this Section 5, and the Company
shall have no other liability or obligation to Executive under this Agreement
whatsoever.
5.1 Option Grant. In consideration of Executive's past, present and future
employment with Triple-C, the Company hereby grants to grant to Executive a
nonqualified option to acquire up to 100,000 shares of Company common stock par
value $.01 per share (the "Options"). The exercise price for the Options shall
be $5.50 (US) per share, and the Options shall expire, if not previously
exercised, on the date which is five (5) years after the date of this Agreement.
The Options shall vest and be exercisable according to the following schedule:
Vesting Date: Options Vesting:
------------ ---------------
June 30, 1998 33,333
June 30, 1999 33,333
June 30, 2000 33,334
The Options may be exercised as to vested Options only be a written notice of
intent to the Company stating the number of shares in respect of which the
Option is being exercised and shall be accompanied by payment for such shares in
cash. In the event that the Executive elects to exercise any Option after
vesting, and if the Company shall be required by reason thereof to withhold any
amounts by reason of any federal, provincial, state or local tax laws or
regulations, the Company shall be entitled to deduct and withhold such amounts
from the payment made by Executive, and the Executive shall pay to Company an
additional amount equal to such withholding. The Options (whether or not vested)
shall automatically terminate, before the end of the five (5) year term, as
follows: (i) six months after the death of the Executive, unless exercised as to
vested Options by the heir or executor of the estate of the Executive, or (ii)
immediately upon the voluntary resignation or termination for cause of the
Executive under this Agreement. The Executive shall provide the Company, at the
time of exercise of any Options, such investment representations as the company
shall reasonably require. Any shares issued pursuant to the Option shall bear
such restrictive legend as the Company shall reasonably require. The Options
shall not be assignable or transferable by Executive other than by will or by
laws of descent and distribution.
5.2 Company's Director Approval. Any decision to be made, and any action or
inaction to be taken, by Triple-C or its board of directors under this
Agreement, whether as to the duties and responsibilities assigned to Executive
from time to time, the extension, termination (and the determination of cause
associated therewith, if any) enforcement or modification of this Agreement, the
compensation (including additional bonuses, if any) available to
Executive hereunder, or otherwise, shall require the concurrence and approval of
at least one member of the board of directors that has been designated by the
Company (which shall not include Executive or any of Triple-C's other former
shareholders).
5.3 Appointment to Board of Directors. The Company, as the sole shareholder of
Triple-C, shall take all action necessary to ensure that Executive is elected to
serve as a member of the board of directors of Triple-C for so long as Company
has any remaining unsatisfied obligations to Executive (or any other former
Triple-C shareholder) under the Purchase Agreement (and the related RLD Purchase
Note, the Repurchase Note and Pledge Agreement, as provided in the Purchase
Agreement). Upon satisfaction of all obligations of Company to Executive (and
such former shareholders), Executive shall no longer be entitled to be elected
to the board of directors.
6. Severance Payments. In the event Executive's employment with Triple-C is
terminated by Triple-C without cause during the term of this Agreement,
Executive shall be entitled to continue to receive from Triple-C as severance
payments ("Payments") after the effective date of such termination, (i) the
total remaining amount of the base compensation payable to Executive pursuant to
Section 4.1 through the end of the initial term of this Agreement but in no
event for a period of less than six (6) months and payable at the times provided
in Section 4.1, and (ii) the bonuses earned by Executive pursuant to Section
4.2, if any, for the year in which the termination occurs, prorated on a monthly
basis through the effective date of termination, and payable within ten (10)
days after completion of the fiscal year-end audit. In the event this Agreement
is not renewed at any time the Executive shall be entitled to continue to
receive from Triple-C as severance payments the base compensation payable to the
Executive pursuant to Section 4.1 for a period of six (6) months following the
end of the term or any non-renewed period.
7. Innovations and Ideas. Executive agrees and acknowledges that new and
valuable proprietary concepts, methods, processes, discoveries, innovations,
improvements, adaptions, ideas, technology and art work ("Innovations") may be
created, developed, originated, conceived or made by Executive, either alone or
jointly with other, in the course of his employment by Triple-C. All Innovations
shall be deemed "Work Made For Hire" and shall be the property of Triple-C,
which retains all rights to the Innovations, whether or not they are patentable,
trademarkable or copyrightable, and whether or not they are shown or described
in writing or reduced to practice. With respect to all Innovations created,
developed, originated, conceived or made by Executive, whether in whole or in
part, during the term of this Agreement, whether or not during working hours and
whether or not on Triple-C's premises, Executive shall:
(a) Maintain written records of all Innovations which the Executive believes has
commercial value to Triple-C, which written records if any shall be Triple-C's
property;
(b) Promptly and fully disclose and describe all Innovations to Triple-C;
(c) Assign, and Executive hereby does assign, to Triple-C all of his rights to
Innovations (including all inventions), to all applications for patents,
trademarks and copyrights in all countries, to all patents and copyrights
granted with respect to Innovations (including inventions) and all goodwill
attributable thereto worldwide; and
(d) Acknowledge and deliver promptly to Triple-C, without charge to Triple-C but
at the expense of Triple-C, such written instruments and cooperate and do such
other acts as may be necessary in the opinion of Triple-C or the Company to
preserve property rights to such Innovations against forfeiture, abandonment or
loss and to obtain patents, trademarks and copyrights and to vest the entire
right and title thereto exclusively in Triple-C.
8. Agreements Not to Compete and Not to Solicit.
8.1 Covenant Not to Compete. If Executive's employment is terminated for any
reason whatsoever and Triple-C pays the Payments as and when provided in section
6 (whether or not it is legally required to make those Payments), Executive
shall not, either individually or with others, directly or indirectly, and
during the term of this Agreement and for a period of one (1) year following the
termination of Executive's employment with Triple-C, render services as an
employee, representative, agent, consultant, independent contractor, owner or
shareholder of any company, corporation or other entity, which engages in any
geographic area within Canada served by Triple-C or the Company during the term
of this Agreement, in any business or activity in which either Triple-C or the
Company is engaged at the time of termination of Executive's employment. In the
event Triple-C does not make the Payments as and when provided above, Executive
shall not be bound by any of the restrictions contained in this Section 8, but
shall continue to be bound by any similar restrictions contained in or delivered
pursuant to the Purchase Agreement. For purposes of this Section 7 Triple-C and
Company shall each be deemed also engaged in a business or activity at the time
Executive's employment with Triple-C is terminated, if the board of directors of
Triple-C or the Company, as applicable, has adopted a formal resolution
approving that business or activity and Executive has knowledge of such
decision, or either Triple-C or the Company has made a public announcement of
that business or activity, and Triple-C or the Company has made substantial
expenditures or commitments to implement, promote or develop that business or
activity.
8.2 Covenant Not To Solicit. Executive shall not, either individually or with
others, directly or indirectly, and during the term of this Agreement and for a
period of three (3) years following the termination of Executive's employment
with Triple-C, (a) solicit any person, business or entity that was customer,
supplier or distributor of Triple-C or the Company during the Term of
Employment, for purpose of providing or delivering products or services which
compete with the business, products or services of Triple-C or the Company, or
(b) employ or offer to employ any individual employed by Triple-C or the Company
during the Term of Employment, or advise or entice any such individual to leave
the employment of Triple-C or the Company.
8.3 Limitation of Scope Equitable Remedies. The parties agree that in the event
the above covenants against competition and solicitation shall be construed by
any court of competent jurisdiction to be too broad in scope, time or area or
otherwise, or any portion thereof is held invalid or unenforceable, then to the
extent that the same is valid and enforceable, it shall remain in full force and
effect, and any invalid or unenforceable provision shall be deemed limited to
the extent necessary to make such provision valid and enforceable while still
giving maximum effect to the expressed intent of the parties as described in
this Section. It is agreed that damages for any breach by Executive of these
covenants against competition and solicitation may be inadequate an that
Triple-C and/or the Company, or their respective successors or assigns shall be
entitled, in addition to money damages, to injunctive and any other relief
available at law or in equity.
9. Termination. The employment of Executive shall continue for the period set
forth in Section 3 hereof, subject to the following:
9.1 Termination for Cause. Triple-C may terminate Executive's employment
hereunder for cause, effective upon notice in writing to the Executive. "Cause,"
for purposes of this Agreement, shall be defined as becoming associated with
another company or other business which is in competition with Triple-C or the
Company, failing to perform the material duties of his employment as described
in Section 2 hereof, or other material breach of this Agreement, the conviction
or admission of committing an indictable offense, a determination by a trier of
fact with competent jurisdiction that Executive has committed a fraud,
dishonesty against Triple-C or the Company, misappropriation of Triple-C or the
Company's assets, embezzlement, or similar occurrence, and upon the giving of
such notice, Executive's employment pursuant to this Agreement shall immediately
terminate and neither Triple-C nor the Company shall have any further obligation
to Executive under this Agreement, except as to obligations of Triple-C
hereunder specifically to be performed following termination of his employment.
9.2 Disability. The employment of Executive shall, at the option of Triple-C,
terminate upon written notice to Executive in the event of the total disability
of Executive for a period of more than twelve (12) months, "Total Disability,"
for purposes of this Agreement, shall mean the physical or mental disability of
Executive as defined for purposes of Executive's long-term disability insurance
policy purchased in accordance with Section 4.4, or if none is in existence at
the time, as defined for purposes of obtaining any available governmental
disability benefits.
9.3 Death. Employment shall terminate upon the death of Executive and no
additional payments shall be made under the terms of this Agreement after the
end of the month in which Executive's death occurs.
9.4 Executive's Right to Terminate. Executive may terminate his employment under
this Agreement upon (a) the expiration of its term; (b) upon Triple-C's
dissolution, liquidation or bankruptcy; or (c) upon a material breach of this
Agreement by Triple-C provided that Executive has given Triple-C written notice
of such breach and Triple-C has not cured such breach within fifteen (15) days
after receipt of such notice.
10. Confidentiality.
10.1 Confidential Information. For all purposes of this Agreement, the term
"Confidential Information" means information not generally known that is
proprietary to or within the unique knowledge of either Triple-C or the Company
from which either of them derives economic value (whether or not conceived,
originated, discovered, or developed in whole or in part by Executive).
Confidential Information includes, but is not limited to, the following types of
information and other information of a similar nature (whether or not reduced to
writing), all of which Executive agrees constitutes the valuable trade secrets
of either Triple-C or the Company: research, development, know-how,
manufacturing plans and processes, marketing plans and techniques, existing and
contemplated products and services, customers and prospective customer names and
related information, prices, sales, inventory, personnel, computer programs and
related documentation, technical and strategic plans, and all financial
information. Confidential information also includes any information of the
foregoing nature that either Triple-C or the Company treats as proprietary or
designates as Confidential Information, whether or not owned or developed by
either Triple-C or the Company. INFORMATION PUBLICLY KNOWN THAT IS GENERALLY
EMPLOYED BY THE TRADE AT OR AFTER THE TIME EXECUTIVE FIRST LEARNS OF SUCH
INFORMATION, OR GENERAL INFORMATION OR KNOWLEDGE THAT EXECUTIVE WOULD HAVE
LEARNED IN THE COURSE OF SIMILAR EMPLOYMENT OR WORK ELSEWHERE IN THE TRADE SHALL
NOT BE DEEMED PART OF THE CONFIDENTIAL INFORMATION.
10.2 Preservation of Confidentiality. During any term of this Agreement and at
all times thereafter, Executive agrees to receive, maintain, and use
Confidential Information in the strictest confidence and, except with the
consent of the board of directors of Triple-C or the Company, as applicable, or
as may be necessary for Executive to carry out his duties under this Agreement,
not to directly or indirectly reveal, report, publish, disclose, or transfer any
Confidential Information to any person, firm, corporation, or other entity or
utilize any Confidential Information for his own benefit or intended benefit or
for the benefit or intended benefit of any other person, firm, corporation or
other entity.
10.3 Ownership Return. Executive acknowledges that all notes, data, reference
materials, documentation, business plans, Triple-C or Company business and
financial records, computer programs, and other materials that in any way
incorporate, embody, or reflect any of the Confidential Information, whether
prepared by him or others, are the exclusive property of Triple-C or the
Company, as applicable, and Executive shall forthwith deliver to Triple-C or the
Company, as applicable, all such materials, including all copies or
memorializations thereof, in his possession or control whenever requested to do
so by Triple-C or the Company and in any event upon termination of his
employment with Triple-C.
11. Notices. Any and all notices, requests, demands, and other communications
hereunder shall be in writing, and shall be deemed to have been duly given if
delivered personally or mailed by first class certified or registered mail,
return receipt requested, postage prepaid, and addressed to both Triple-C and
the Company at their registered office or principal corporate headquarters and
to Executive at the last address provided to Company by Executive or at his home
or mailing address, or to such other address or person with respect to any party
as such party shall notify the other in writing as provided above. All such
notices or communications as set forth above shall be effective on the date of
personal delivery or on the date of deposit in the U.S. or Canadian mail, as
applicable.
12. Waiver. No failure on the part any party to exercise, and no delay in
exercising, any right hereunder will operate as a waiver thereof, nor will any
single or partial exercise of any right hereunder by any party preclude any
other or further exercise hereof or the exercise of any other right.
13. Complete Agreement. This Agreement, together with the Purchase Agreement and
any agreements related thereto, contains the entire agreement between the
parties with respect to the employment of the Executive and supersedes all prior
agreements and understandings between the parties with respect to such
employment, whether written or oral.
14. Amendment. Neither this Agreement nor any term or provision hereof may be
changed, waived, discharged or amended in any manner other than by instrument in
writing, signed by the Party against which the enforcement of the change,
waiver, discharge or amendment is sought.
15. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which shall constitute but
one Agreement.
16. Assignment. Executive acknowledges that this Agreement is a personal service
contract and may not be assigned by Executive. This Agreement may be assigned by
Triple-C or the Company to any other third party with the prior consent of
Executive, which consent shall not be unreasonably withheld. This Agreement
shall be binding upon Triple-C and the Company, their respective successors and
assigns, and upon the Executive, his estate, legal representative, heirs and
beneficiaries.
17. Severability. The provisions of this Agreement shall be deemed severable,
and if any provisions of this Agreement or any portion thereof are held to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
any remaining portion of such provisions or of this Agreement.
18. Remedies not Exclusive. No remedy conferred hereunder is intended to be
exclusive and each remedy shall be cumulative and shall be in addition to every
other remedy at law or equity. The election of any one or more remedies shall
not constitute a waiver of any other remedy.
19. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario, Canada.
20. Captions and Headings. Caption and section headings used herein are for
convenience only and are not a part of this Agreement and shall not be used in
construing it.
IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of
the 30 th day of June, 1997.
COMPANY:
RLD ENTERPRISES, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Xxxxx X. Xxxxxx
Its President
TRIPLE-C-INC:
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Xxxxx X. Xxxxxx
Its
-----------------------
EXECUTIVE:
/s/ Harm Xxxxxxx Xxxxxx Xxxxxxxxx
---------------------------------
Harm Xxxxxxx Xxxxxx Xxxxxxxxx
