EXHIBIT 12.6
EMPLOYMENT AGREEMENT
BETWEEN
CRYSTALLEX INTERNATIONAL CORPORATION
AND
XXXXXX X. XXXX
MADE AS OF
JULY 1, 2002
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CONFIDENTIAL EMPLOYMENT AGREEMENT
---------------------------------
THIS AGREEMENT made as of the 1st day of July, 2002.
BETWEEN:
CRYSTALLEX INTERNATIONAL CORPORATION, a Corporation
incorporated pursuant to the laws of Canada, having its head
office in the City of Vancouver in the Province of British
Columbia
(hereinafter referred to as the "Employer"),
OF THE FIRST PART,
- and -
XXXXXX X. XXXX, of the City of Toronto, in the Province of
Ontario,
(hereinafter referred to as the "Employee"),
OF THE SECOND PART.
WHEREAS the Employer has employed the Employee since the 1st day of September,
2001 as its Executive Vice President, Corporate Counsel and Secretary, and the
Employer and the Employee wish to continue such employment upon and subject to
the terms and conditions hereinafter set forth.
THIS AGREEMENT WITNESSES that in consideration of the
covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. EMPLOYMENT
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(A) EMPLOYMENT
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Subject to the terms and conditions herein contained, the
Employee shall be employed by the Employer as its Executive Vice President,
Corporate Counsel and Secretary and shall perform such duties and exercise such
powers related thereto as may from time to time be assigned to him by the
President and Chief Executive Officer of the Employer. The requirement that the
Employee devote his time to the business of the Employer shall not preclude him
from
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undertaking other business and personal activities that do not, singly or in
the aggregate, materially impair his ability to fulfil his responsibilities
under this Agreement.
(B) TERM OF EMPLOYMENT
------------------
The employment of the Employee hereunder shall be for a period
of four (4) years and six (6) months to terminate on the 31st day of December,
2006, subject to any renewal of this Agreement pursuant to Section 5 and subject
to earlier termination of this Agreement pursuant to Section 4. The Employer
shall give to the Employee written notice of its intent to renew or terminate
this Agreement at least three (3) calendar years prior to December 31, 2006. In
the event that the Employer fails to give such notice, this Agreement
automatically shall be extended for one year and shall continue to be extended
each year thereafter until the Employer gives such three (3) year written
notice.
2. REMUNERATION
------------
(A) SALARY
------
The Employer shall pay the Employee during the term of this
Agreement a base annual salary of CDN$400,000 payable monthly in arrears. The
base annual salary shall not be reduced during the term of this Agreement but
shall be reviewed by the Employer on or prior to the 1st of November in each
year of the term and may be increased in the discretion of the Employer. Any
changes in base salary shall be as agreed upon in writing between the parties.
(B) BONUS
-----
In addition to the base salary specified in paragraph 2(a),
the Employer shall annually negotiate with and pay to the Employee, if
applicable, a bonus and/or incentive compensation based upon his performance,
which bonus and/or incentive compensation shall be, in any event, at least the
equivalent of fifty percent of the Employee's base salary.
(C) BENEFITS
--------
The Employer shall pay during the term of this Agreement the
full premium cost of the Employee's existing life insurance, disability income,
accident and health insurance, including family health insurance, as described
in Schedule "A" attached hereto, in accordance with the terms thereof.
(D) VACATION
--------
During the term of this agreement the Employee shall be
entitled to five (5) weeks vacation with pay per annum. Such vacation shall be
taken at a time or times acceptable to the Employer having regard to its
operations.
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(E) EXPENSES
--------
The Employee shall be reimbursed for all travelling and other
out-of-pocket expenses actually and properly incurred by him in connection with
his duties hereunder. For all such expenses the Employee shall furnish to the
Employer statements and vouchers as and when required by the Employer. Included
in such expenses shall be the operating costs of the Employee's home office.
(F) DIRECTOR'S OPTIONS
------------------
The Employee shall participate in the Employer's then current
directors' option plan as long as he remains a director of the Employer, such
participation reflecting his membership on the Employer's Board of Directors and
on the Board's standing committees.
3. EMPLOYEE'S COVENANTS
--------------------
(A) DUTIES AND RESPONSIBILITIES
---------------------------
The Employee shall duly and diligently perform all the duties
assigned to him while in the employ of the Employer, and shall truly and
faithfully account for and deliver to the Employer all money, securities and
things of value belonging to the Employer which the Employee may from time to
time receive for, from or on account of the Employer. The Employee shall well
and faithfully serve the Employer and shall use his best efforts to promote the
interests of the Employer.
(B) NON-DISCLOSURE
--------------
The Employee shall not (either during the continuance of the
employment or at any time thereafter) disclose any information relating to the
private or confidential affairs of the Employer or relating to any secrets of
the Employer to any person other than for the Employer's purposes and shall not
(either during the continuance of the employment or at any time thereafter) use
for his own purposes or for any purposes other than those of the Employer any
such information or secrets he may acquire in relation to the business of the
Employer.
4. TERMINATION OF EMPLOYMENT
-------------------------
(A) TERMINATION BY EMPLOYER FOR CAUSE
---------------------------------
The Employer may terminate this Agreement at any time for
cause by written notice of termination to the Employee. "Cause" for the purposes
of such termination shall be limited to the Employee's willful breach in any
material respect of any of the covenants of this
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Agreement, which breach continues for 30 days following receipt of written
notice given by the Employer specifying the breach and requesting that the
Employee correct the same.
(B) TERMINATION BY EMPLOYEE ON NOTICE
---------------------------------
The Employee may terminate this Agreement upon the giving of
30 days written notice to the Employer in the event of any material breach of
this Agreement by the Employer or in the event that there is any material change
in the ownership or control of the Employer, directly or indirectly. For the
purposes of this Agreement material breach shall include the following:
(i) A material decrease in the authority or responsibility
of the Employee's position; or
(ii) A decrease in compensation, including base salary and
bonus; or
(iii) A failure to pay promptly when due the premium cost of
the benefits provided to the Employee and/or his
family pursuant to this Agreement.
(C) TERMINATION ON DEATH OR DISABILITY
----------------------------------
In the event of the Employee's death, the Employee's employment
hereunder shall terminate, effective as at the date of death, and the Employer
shall pay to the estate of the Employee the compensation, including salary and
bonus, that would otherwise have been paid to the Employee for a period of
eighteen (18) months. If the Employee, due to physical or mental illness, shall
be disabled from performing the essential functions of his employment hereunder
for a continuous period of not less than twelve (12) months, then, in that
event, the Employer or the Employee may, by written notice, terminate the
Employee's employment under this Agreement effective as at a date twenty four
(24) months after the notice is given. The Employee's salary shall not be
reduced during such twelve (12) month period and thereafter, until termination,
shall only be reduced by the amount paid to the Employee under any insurance or
similar benefit to which the Employee is entitled in the event of disability.
(D) CHANGE OF CONTROL
-----------------
Notwithstanding anything herein contained, in the event that
there is a change in control of Employer and the employment of the Employee is
terminated or the Employer otherwise fails to abide by the terms of this
Agreement, the Employer shall pay to the Employee, within thirty (30) days of
such change in control, the grossed up value of the salary, bonuses and benefits
provided to the Employee pursuant to this Agreement from the date of the change
in control until the termination date of this Agreement or for a period of three
(3) years, whichever shall be the greater. For the purposes of this paragraph, a
sale of all or substantially all of the assets of the Employer shall be deemed
to be a change in control.
(E) CONTINUATION OF BENEFITS
------------------------
In the event of termination of this Agreement for any reason
other than cause pursuant to subsection 4(a) hereof, the Employer shall continue
to provide for the benefit of the
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Employee and/or his family, as the case may be, benefits as herein provided for
a period of three (3) years after the date of termination.
(F) RETURN OF PROPERTY
------------------
Upon any termination of this Agreement the Employee shall at
once deliver or cause to be delivered to the Employer all books, documents,
effects, money, securities or other property belonging to the Employer or for
which the Employer is liable to others, which are in the possession, charge,
control or custody of the Employee.
(G) NO MITIGATION OR OFFSET
-----------------------
In the event of the termination of this Agreement for any
reason whatsoever, save and except termination for cause, the Employee shall be
under no obligation to seek other employment, and there shall be no offset
against amounts due to the Employee under the provisions of this Agreement on
account of any remuneration attributable to subsequent employment or that he may
otherwise obtain.
5. RENEWAL OF AGREEMENT
--------------------
(A) OFFER TO RENEW BY EMPLOYER
--------------------------
The Employer may offer to extend this Agreement for a period
of one year and so on from year to year by giving notice in writing to the
Employee by not later three (3) years prior to the date of termination of this
Agreement as such date may then be extended. Such notice shall include the
Employer's proposals for any changes in terms or conditions of employment. The
Employee shall communicate his acceptance of such offer by giving notice in
writing thereof to the Employer no later than two (2) weeks after receipt of the
said offer. Any proposed changes in salary, benefits or other terms and
conditions of employment shall be agreed upon in writing between the parties.
(B) AUTOMATIC RENEWAL
-----------------
This Agreement shall automatically be extended for successive
periods of one year's duration on the same terms and conditions of employment or
on such terms and conditions of employment as are agreed upon in writing between
the parties unless the Employer has given at least (3) years written notice that
this Agreement is to terminate at the end of the initial term of four (4) years
and six (6) months or at the end of any extended term hereunder.
(C) NON-RENEWAL
-----------
In the event one of the parties gives written notice that this
Agreement is to terminate at the end of the initial term or any extended term as
set forth in this Agreement, this Agreement shall expire and the employment
hereunder shall terminate without any notice or payment of salary or benefit
plan contributions in lieu of notice at the end of the initial term or such
extended term, as the case may be.
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5. GENERAL
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(A) SECTIONS AND HEADINGS
---------------------
The division of this Agreement into Articles and Sections and
the insertion of headings are for the convenience of reference only and shall
not affect the construction or interpretation of this Agreement. The terms "this
Agreement", "hereof", "hereunder" and similar expressions refer to this
Agreement and not to any particular Article, Section or other portion hereof and
include any agreement or instrument supplemental or ancillary hereto. Unless
something in this subject matter or context is inconsistent therewith,
references herein to Articles and Sections are to Articles and Sections of this
Agreement.
(B) NUMBER
------
In this Agreement words importing the singular number only
shall include the plural and vice versa and words importing the masculine gender
shall include the feminine and neuter genders and vice versa and words importing
persons shall include individuals, partnerships, associations, trusts,
unincorporated organizations and corporations and vice versa.
(C) SCHEDULES
---------
The following are the Schedules annexed hereto and
incorporated by reference and deemed to be part hereof:
Schedule A - Benefit Plans
(D) BENEFIT OF AGREEMENT
--------------------
This Agreement shall enure to the benefit of and be binding
upon the heirs, executors, administrators and legal personal representatives of
the Employee and the successors and permitted assigns of the Employer
respectively.
(E) ENTIRE AGREEMENT
----------------
This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and cancels and supersedes any
prior understandings and agreements between the parties hereto with respect
thereto. There are no representations, warranties, forms, conditions,
undertakings or collateral agreements, express, implied or statutory between the
parties other than as expressly set forth in this Agreement.
(F) AMENDMENTS AND WAIVERS
----------------------
No amendment to this Agreement shall be valid or binding
unless set forth in writing and duly executed by both of the parties hereto. No
waiver of any breach of any provision of this Agreement shall be effective or
binding unless made in writing and signed by the party purporting to give the
same and, unless otherwise provided in the written waiver, shall be limited to
the specific breach waived.
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(G) SEVERABILITY
------------
If any provision of this Agreement is determined to be invalid
or unenforceable in whole or in part, such invalidity or unenforceability shall
attach only to such provision or part thereof and the remaining part of such
provision and all other provisions hereof shall continue in full force and
effect.
(H) NOTICES
-------
Any demand, notice or other communication (hereinafter in this
Section 6 referred to as a "Communication") to be given in connection with this
Agreement shall be given in writing and may be given by personal delivery or by
registered mail addressed to the recipient as follows:
To the Employee:
Xxxxxx X. Xxxx,
000 Xxxxx Xxxxxx Xxxx.,
Xxxx Xxxxxxx, Xxxxxxx,
X0X 0X0
To the Employer:
Crystallex International Corporation,
Ste 902, 000 Xxxx Xxxxxx Xx.,
Xxxxxxxxx, X.X.,
X0X 0X0.
or such other address or individual as may be designated by
notice by either party to the other. Any Communication given by personal
delivery shall be conclusively deemed to have been given on the day of actual
delivery thereof and, if made or given by registered mail, on the third day,
other than a Saturday, Sunday or statutory holiday in Ontario, following the
deposit thereof in the mail. If the party giving any Communication knows or
ought reasonably to know of any difficulties with the postal system which might
affect the delivery of mail, any such Communication shall not be mailed but
shall be given by personal delivery.
(I) FURTHER ASSURANCES
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Each party must from time to time execute and deliver all such
further documents and instruments and do all acts and things as the other party
may reasonably require to effectively carry out or better evidence or perfect
the full intent and meaning of this Agreement.
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(J) GOVERNING LAW
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This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.
(K) ATTORNMENT
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For the purpose of all legal proceedings this Agreement shall
be deemed to have been performed in the Province of Ontario and the courts of
the Province of Ontario shall have jurisdiction to entertain any action arising
under this Agreement. The Employer and the Employee each hereby attorns to the
jurisdiction of the courts of the Province of Ontario provided that nothing
herein contained shall prevent the Employer from proceeding at its election
against the Employee in the courts of any other province or country.
(L) COPY OF AGREEMENT
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The employee hereby acknowledges receipt of a copy of this
Agreement duly signed by the Employer.
IN WITNESS WHEREOF the parties have executed this Agreement.
SIGNED, SEALED AND DELIVERED
In the presence of
/s/ Xxxxx Xxxxxxxxx /s/ Xxxxxx X. Xxxx
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Xxxxx Xxxxxxxxx Xxxxxx X. Xxxx
Crystallex International Corporation
Per /s/ Xxxx X. Xxxxxxxxxxx Pres. & CEO
-----------------------------------
Authorized Officer
SCHEDULE "A"
