EXHIBIT 10.8
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
MEMORANDUM OF AGREEMENT made effective as of the 20th day of November, 2000.
BETWEEN:
XXXXXX INTERNATIONAL INC., a Massachusetts business trust
organized under the laws of the State of Washington with an
office at Xxxxxxxxxxxxxxxxx 00, 0000 Xxxxxx, Xxxxxxxxxxx
(hereinafter referred to as the "Corporation")
OF THE FIRST PART
AND:
XXXXX X.X. XXX, Businessman
(hereinafter referred to as the "Executive")
OF THE SECOND PART
WHEREAS:
A. The Corporation recognizes the valuable services that the Executive has
provided and is continuing to provide to the Corporation and its
subsidiaries and believes that it is reasonable and fair to the
Corporation that the Executive receive fair treatment, in particular,
in the event of a Change of Control (as hereinafter defined);
B. The Corporation recognizes that the Executive has acquired outstanding
and special skills relating to the business of the Corporation and its
subsidiaries and desires, in the best interests of the Corporation, to
have the Executive continue employment with the Corporation, including
up to and after such a Change of Control;
C. The Executive is willing to remain in the employment of the Corporation
but desires assurance that in the event of any such Change of Control
the Executive will continue employment with the Corporation, including
during the period up to and after such Change of Control, and will
continue to have the responsibility and status that the Executive has
earned; and
D. Both the Corporation and the Executive wish formally to agree to the
terms and conditions of the Executive's employment and the terms and
conditions that will, in certain circumstances hereinafter set forth,
govern in the event of a termination of the employment of the Executive
by the Corporation.
NOW THEREFORE in consideration of the premises hereof and of the mutual
covenants and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each of the parties hereto, the parties hereby covenant and agree as follows:
ARTICLE I
RECITALS
1.1 RECITALS. The parties hereby represent and warrant that the above recitals
are true and correct.
ARTICLE II
INTERPRETATION
2.1 HEADINGS. The headings of the Articles, Sections and subsections herein are
inserted for convenience of reference only and shall not affect the meaning
or construction hereof.
2.2 DEFINITIONS. For the purposes of this Agreement, the following terms shall
have the following meanings, respectively:
(a) "Accrued Benefits" has the meaning ascribed to such term in subsection
4.1(b)(iv) hereof;
(b) "Agreement" means this Amended and Restated Employment Agreement and
all schedules and amendments hereto;
(c) "Annual Bonus" has the meaning ascribed to such term in Section 3.6(a)
hereof;
(d) "Banking Day" means a day on which banks are open for business in
Geneva, Switzerland;
(e) "BBA" means the British Bankers' Association;
(f) "BBA Libor" means the twelve (12) month United States Dollar
denominated London Inter-Bank Offered Rate fixed daily by the BBA;
(g) "Base Salary" has the meaning ascribed to such term in Section 3.6(a)
hereof;
(h) "Board" means the board of Trustees of the Corporation;
(i) "Change of Control" means the occurrence of any of the following
events:
(i) The receipt by the Corporation of a Schedule 13D or other
statement filed under Section 13(d) of the Exchange Act
indicating that any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act): (a) has become the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation
representing more than 20% of the Common Shares; or (b) has sole
and/or shared voting, or dispositive, power over more than 20% of
the Common Shares; or
(ii) A change in the composition of the Board occurring within a
two-year period prior to such change, as a result of which fewer
than a majority of the Trustees are Incumbent Trustees.
"Incumbent Trustees" shall mean Trustees who are either: (a)
Trustees of the Corporation as of the Effective Date; or (b)
elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the Trustees who had
been Trustees two (2) years prior to such change and who were
still in office at the time of such election or nomination; or
(iii) The solicitation of a dissident proxy, or any proxy not approved
by the Incumbent Trustees, the purpose of which is to change the
composition of the Board with the result, or potential result,
that fewer than a majority of the Trustees will be Incumbent
Trustees; or
(iv) The consummation of a merger, amalgamation or consolidation of
the Corporation with or into another entity or any other
corporate reorganization, if more than 50% of the combined voting
power of the continuing or surviving entity's securities
outstanding immediately after such merger, amalgamation,
consolidation or reorganization are owned by persons who were not
stockholders of the Corporation immediately prior to such merger,
amalgamation, consolidation or reorganization; or
(v) The commencement by an entity, person or group (other than the
Corporation or a wholly owned subsidiary of the Corporation) of a
tender offer, an exchange offer or any other offer or bid for
more than 20% of the Common Shares; or
(vi) The consummation of a sale, transfer or disposition by the
Corporation of all or substantially all of the assets of the
Corporation; or
(vii) The commencement of any proceeding by or against the Corporation
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding-up, reorganization, arrangement, adjustment,
protection, relief or composition of the Corporation or its
debts, under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or for the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial
part of its property; or
(viii) The approval by the shareholders of the Corporation of a plan
of complete liquidation or dissolution of the Corporation.
In the case of the occurrence of any of the events set forth in
subsection 2.2.(i)(vii), a Change of Control shall be deemed to occur
immediately prior to the occurrence of any such events. An event shall
not constitute a Change of Control if its sole purpose is to change
the jurisdiction of the Corporation's organization or to create a
holding company, partnership or trust that will be owned in
substantially the same proportions by the persons who held the
Corporation's securities immediately before such event. Additionally,
a Change of Control will not be deemed to have occurred, with respect
to the Executive, if the Executive is part of a purchasing group that
consummates the Change of Control event;
(j) "Common Shares" means the issued and outstanding shares of beneficial
interest of the Corporation;
(k) "Compensation Committee" means the independent committee of the Board
consisting of two or more Trustees, not employed by the Corporation
and each of whom is a Disinterested Trustee (as defined in the Plan),
which committee is responsible for making any and all decisions to
award Stock Options under the Plan to officers of the Corporation, in
the event the Corporation does not have a Compensation Committee all
references herein to Compensation Committee shall be deemed to refer
to the Board as a whole;
(l) "Date of Termination" means the date of termination of the Executive's
employment with the Corporation;
(m) "Disability" shall mean the Executive's failure to substantially
perform his material duties for the Corporation on a full-time basis
for twelve (12) consecutive months as a result of physical or mental
incapacity;
(n) "Disability Termination" has the meaning ascribed thereto in Section
4.1 hereof;
(o) "Effective Date" means the date first above written;
(p) "Exchange Act" means the SECURITIES EXCHANGE ACT OF 1934, as amended;
(q) "Good Reason" means, without the express written consent of the
Executive, the occurrence of any of the following events:
(i) Any material reduction or diminution (except temporarily during
any period of physical or mental incapacity or disability of the
Executive) in the Executive's titles, status or positions, any
material reduction or diminution in the Executive's authority,
duties or responsibilities with the Corporation (including any
position or duties as a Trustee of the Corporation and the
failure to re-elect the Executive as a Trustee and to the Board),
it being acknowledged that, in the event any entity becomes the
owner, directly, indirectly, beneficially or otherwise of more
than 20% of the Common Shares, it shall be Good Reason if the
Executive is not the Chief Executive Officer of such entity;
(ii) A breach by the Corporation of any material provision of this
Agreement, including, but not limited to, a breach of the
obligations of the Corporation under Sections 3.2, 3.6, 6.1, 7.6
and 7.9 (other than a reduction in the Executive's Base Salary
that does not exceed an aggregate of ten percent (10%) of the
Executive's then current Base Salary and which reduction applies,
in equal percentages, to all senior officers of the Corporation)
or any failure to timely pay any part of the Executive's
compensation hereunder, including, without limitation, the
Executive's Base Salary, Annual Bonus and any other bonuses
payable to him or to materially provide, in the aggregate, the
level of benefits contemplated herein;
(iii) The failure of the Corporation to obtain and deliver to the
Executive a written agreement, in the form satisfactory to the
Executive, to be entered into with any successor, assignee or
transferee of the Corporation to assume and agree to perform this
Agreement in accordance with Section 7.11 hereof;
(iv) Any failure by or of the Corporation to continue in effect any
benefit, bonus, profit sharing, incentive, remuneration,
compensation, stock ownership, stock purchase, stock option, life
insurance, disability, pension or retirement plans in which the
Executive is participating or entitled to participate, or the
Corporation takes, or fails to take, any action that materially
adversely affects the Executive's participation in, or reduces
his rights or benefits, under or pursuant to such plans, or the
Corporation fails to increase or improve such rights or benefits
on a basis consistent with practices in effect prior to such
failure, or with practices implemented subsequent to a Change of
Control, with respect to senior officers of the Corporation;
(v) The relocation of the Executive by the Corporation to a place
other than the location at which he performed his duties for the
Corporation immediately prior to such relocation, except for
required travel on the Corporation's business to an extent
substantially consistent with the Executive's business
obligations to the Corporation;
(vi) Any failure by the Corporation to provide the Executive with the
number of paid vacation days to which he is entitled, as set
forth herein, or the Corporation failing to increase such paid
vacation days on a basis consistent with practices in effect
prior to such failure, or with practices implemented subsequent
to a Change of Control, with respect to the senior officers of
the Corporation; and
(vii) The Corporation taking any action to deprive the Executive of
any material fringe benefit enjoyed by him immediately prior to
such deprivation or the Corporation failing to increase or
improve such material fringe benefits on a basis consistent with
practices in
effect prior to such deprivation, or with practices implemented
subsequent to a Change of Control, with respect to senior
officers of the Corporation;
(r) "Incumbent Trustees" has the meaning ascribed thereto in Section
2.2(i)(ii);
(s) "Just Cause" means the occurrence of any of the following events:
(i) Serious misconduct, dishonesty or disloyalty of the Executive
directly related to the performance of his duties for the
Corporation which results from a willful act or omission or from
gross negligence and which is materially injurious to the
operations, financial condition or business reputation of the
Corporation;
(ii) Willful and continued failure by the Executive to substantially
perform his duties under this Agreement (other than any such
failure resulting from his incapacity due to physical or mental
disability or impairment); or
(iii) Any other material breach of this Agreement by the Executive.
For purposes of this Agreement, no act, or failure to act, by the
Executive shall be "willful" unless it is done, or omitted to be done,
in bad faith and without a reasonable belief that the act or omission
was in the best interests of the Corporation;
(t) "Libor" means BBA Libor or if no such published rate is then
available, the rate of interest calculated by the Executive, as being
the arithmetic average (rounded up, if necessary, to the nearest full
multiple of 1/16 of one percent) at which, in accordance with normal
practice, leading banks in the London interbank market would be
prepared to offer to other leading banks in the London interbank
market for delivery on such date and for the applicable period based
on the number of days comprised therein, deposits in United States
Dollars of amounts comparable to the amount payable or the balance
outstanding thereof during such period, at or prior to 11:00 a.m.
G.M.T. on the second Banking Day prior to such date;
(u) "Market Price" means on any date, the average market price of the
Common Shares calculated as the simple average of the closing price of
the Common Shares as quoted through NASDAQ on each of the 10 business
days preceding such date on which a closing price was quoted;
(v) "NASDAQ" means the National Association of Stock Dealers Automated
Quotation System;
(w) "Plan" has the meaning ascribed to such term in Section 3.6(b)(i)
hereof;
(x) "Prorated Bonus" has the meaning ascribed to such term in subsection
4.1(c) hereof;
(y) "SEC" means the United States Securities and Exchange Commission;
(z) "Securities Act" means the SECURITIES ACT OF 1933, as amended;
(aa) "Stock Options" has the meaning ascribed to such term in Section
3.6(b)(i) hereof; and
(bb) "Trustees" means the trustees of the Corporation, and "Trustee" means
any one of them.
ARTICLE III
TERMS AND CONDITIONS OF CONTINUING EMPLOYMENT
3.1 EMPLOYMENT. The parties acknowledge and agree that the Executive is
employed by the Corporation and will, from the Effective Date, continue to
be employed by the Corporation and will serve the Corporation as the
President and Chief Executive Officer, and in such other related senior
capacity as the Board may from
time to time reasonably require. The Executive shall report to the Board
and shall have such authority as the Board may from time to time delegate
to the Executive. The Executive's duties shall include those duties set
forth in Schedule A hereto and any other duties consistent with the
Executive's position in the Corporation.
3.2 APPOINTMENT AS TRUSTEE. During the term of this Agreement, the Corporation
agrees to nominate the Executive to the position of Trustee and Chairman of
the Board and support the Executive in seeking office as a Trustee and
Chairman of the Board.
3.3 ORDERS OF BOARD. The Executive shall always act in accordance with any
reasonable decision of and obey and carry out all lawful and reasonable
orders given to him by the Board.
3.4 TIME AND ENERGY. Unless prevented by ill health, or physical or mental
disability or impairment, the Executive shall, during the term hereof,
devote sufficient business time, care and attention to the business of the
Corporation in order to properly discharge his duties hereunder. It is
acknowledged and agreed that the Executive is currently, and will continue
to act as, a director, trustee, officer, shareholder or investor in other
businesses, ventures, entities, institutions and organizations during the
term of this Agreement and may devote time, care and attention thereto so
long as his doing so does not materially adversely affect the ability of
the Executive to devote sufficient time and energy to properly discharge
his duties hereunder.
3.5 FAITHFUL SERVICE. The Executive shall well and faithfully serve the
Corporation and use his reasonable efforts to promote the interests thereof
and shall not use for his own purposes, or for any purposes other than
those of the Corporation, any non-public information he may acquire with
respect to the business, affairs and operations of the Corporation.
3.6 COMPENSATION. During the term of this Agreement, and any extension thereof,
the Corporation shall pay and provide the Executive the following:
(a) CASH COMPENSATION. As compensation for his services to the
Corporation, the Executive shall receive a base salary (the "Base
Salary") and in addition to the Base Salary shall be eligible to
receive in respect of each calendar year (or portion thereof)
additional variable cash compensation, in an amount determined in
accordance with any bonus, profit sharing or short term incentive
compensation program which may be established by the Board either for
the Executive or for senior officers of the Corporation (the "Annual
Bonus"). As of the Effective Date, the Executive's annualized Base
Salary shall be $240,000. During the term of this Agreement the Board
shall review the Executive's Base Salary and Annual Bonus then in
effect at least annually to ensure that such amounts are competitive
with awards granted to similarly situated executives of publicly held
companies comparable to the Corporation and shall increase such
amounts as the Board may approve. The Board shall not reduce the
Executive's Base Salary except as set forth herein. The Board may
reduce the Executive's Base Salary provided such reduction in the
Executive's Base Salary does not exceed an aggregate total of ten
percent (10%) of the Executive's Base Salary in effect as of the
Effective Date and which reduction applies, in equal percentages, to
all senior officers of the Corporation. The Executive's Base Salary
and Annual Bonus shall be payable in accordance with the Corporation's
normal payroll practices, as applicable. No increase in the
Executive's Base Salary and Annual Bonus shall be used to offset or
otherwise reduce any obligations of the Corporation to the Executive
hereunder or otherwise.
(b) EQUITY COMPENSATION.
(i) STOCK OPTIONS. The Corporation has granted to the Executive
non-qualified stock options (the "Stock Options") under the
Corporation's Amended and Restated 1992 Non-Qualified Stock
Option Plan (the "Plan") to purchase a total of 1,685,000 Common
Shares. The Stock Options shall expire at the close of business
on the first day following the tenth (10th) anniversary of the
date of their grant. In the case of termination by the
Corporation without Just Cause, voluntary termination by the
Executive for Good Reason, retirement, death or a Disability
Termination, the Stock Options and any other
options or equity grants by the Corporation then held by the
Executive shall remain exercisable until the earlier of one (1)
year from the Date of Termination or the expiration of such Stock
Options or other options or equity grants. Subject to the
accelerated vesting, and other terms and provisions, set forth in
this Agreement, the Stock Options shall vest and become
exercisable as set forth in certain written stock option
agreements entered into between the Executive and the Corporation
(the "Option Agreements"). As of the Effective Date, 778,333 of
the 1,685,000 Stock Options granted to the Executive have vested
and 906,667 of such Stock Options are unvested. Of such 906,667
unvested Stock Options, 453,333 are scheduled to vest on January
19, 2001 and 453,334 are scheduled to vest on January 19, 2002,
conditioned upon the Executive's continued employment with the
Corporation as of each such vesting date. The Compensation
Committee may issue additional Stock Options to the Executive as
incentive compensation determined in accordance with the Plan or
any other bonus or incentive compensation programs which may be
established by the Board either for the Executive or senior
officers of the Corporation. The determination as to the amounts
of any awards available to the Executive under the Plan and such
programs shall be reviewed at least annually by the Board or the
Compensation Committee, as applicable, to ensure that such
amounts are competitive with awards granted to similarly situated
executives of publicly held companies comparable to the
Corporation.
(ii) TAX LIABILITY. In the event the Executive incurs any withholding
tax liability in connection with the exercise of the Executive's
Stock Options, or any other rights or options to acquire Common
Shares, the Executive may elect to satisfy his resulting
withholding tax obligation by having the Corporation retain that
number of such Common Shares or other stock or equity awards
having a fair market value equal to such withholding tax
obligation.
(iii) ONGOING AWARDS. The Board shall ensure, and shall take the
necessary action to ensure, that the Executive fully participates
in the Corporation's annual Stock Option and any other long-term
incentive programs which may be established by the Board for
senior officers of the Corporation at levels commensurate with
his position.
(c) EMPLOYEE BENEFITS. The Executive shall, to the extent eligible, be
entitled to participate at a level commensurate with his position in
all of the Corporation's employee benefit, welfare and retirement
plans and programs, as well as equity plans, provided by the
Corporation to its senior officers in accordance with the terms
thereof as in effect from time to time.
(d) PERQUISITES. The Corporation shall provide the Executive, at the
Corporation's cost, with all perquisites which other senior officers
of the Corporation are entitled to receive and such other perquisites
which are suitable to the character of the Executive's position with
the Corporation and adequate for the performance of his duties
hereunder. To the extent legally permissible under applicable laws,
the Corporation shall not treat such amounts as income to the
Executive.
(e) BUSINESS AND ENTERTAINMENT EXPENSES. Upon submission of appropriate
documentation in accordance with its policies in effect from time to
time, the Corporation shall pay or reimburse the Executive for all
business expenses which the Executive incurs in the performance of his
duties under this Agreement, including, but not limited to, travel,
entertainment, professional dues and subscriptions, and all dues,
fees, and expenses associated with membership in various professional,
business, and civic associations and societies in which the Executive
participates in accordance with the Corporation's policies in effect
from time to time.
(f) FLEXIBLE TIME OFF. The Executive shall be entitled to paid time off in
accordance with the standard written policies of the Corporation with
regard to its senior officers, but in no event less than twenty (20)
days per calendar year not including, and in addition to, weekends and
statutory holidays.
(g) LOAN TO EXERCISE OPTIONS. The Executive shall be entitled to, from
time to time, request the Corporation to, and the Corporation shall,
lend to the Executive, for the purpose of exercising his Stock
Options, the amount requested by the Executive from time to time to
exercise his Stock Options in an aggregate principal amount not to
exceed the total amount required by the Executive to exercise all his
Stock Options then outstanding and capable of being exercised at the
time of such request (the "Stock Option Loan") against delivery by the
Executive of a promissory note payable to the Corporation in
substantially the form attached hereto as Schedule B. The Corporation
shall make the Stock Option Loan available to the Executive on a
non-recourse basis secured by the Common Shares purchased by the
Executive with the proceeds thereof. The Executive shall provide
written notice to the Corporation setting forth the amount of the
requested Stock Option Loan, the number of Common Shares the Executive
intends to purchase through the exercise of his Stock Options and the
intended date of such exercise. Upon receipt of such notice, the
Corporation shall provide the Stock Option Loan to the Executive, by
certified cheque, bank draft or wire transfer, on or prior to the date
set forth in such notice for the intended exercise of the Executive's
Stock Options, or on such other date and time as agreed to by the
Executive.
(h) LOAN AND PURCHASE OF COMMON SHARES. The Executive shall be entitled
to, from time to time, request the Corporation to, and the Corporation
shall, lend to the Executive, for the purpose of purchasing Common
Shares through NASDAQ, pursuant to a private placement or otherwise on
a private basis, the amount, in an aggregate principal amount not to
exceed $10,000,000, requested by the Executive from time to time to
purchase such Common Shares (the "Market Purchase Loan") against
delivery by the Executive of a promissory note payable to the
Corporation in substantially the form attached as Schedule B hereto.
The Corporation shall make the Market Purchase Loan available to the
Executive on a non-recourse basis secured by the Common Shares
purchased by the Executive with the proceeds thereof. The Executive
shall provide written notice to the Corporation setting forth the
amount of the requested Market Purchase Loan, the estimated number of
Common Shares the Executive intends to purchase with such proceeds and
the intended date of such purchase. Upon receipt of such notice, the
Corporation shall provide the Market Purchase Loan to the Executive,
by certified cheque, bank draft or wire transfer, on or prior to the
date set forth in such notice for the intended purchase of Common
Shares by the Executive, or on such other date and time as agreed to
by the Executive.
(i) DEMAND REGISTRATION RIGHTS.
(i) REQUEST FOR REGISTRATION. Subject to subsection 3.6(i)(ii) of
this Agreement, the Executive shall be entitled to make a written
request ("Demand Registration Request") to the Corporation for
registration with the SEC under and in accordance with the
provisions of the Securities Act of all or part of the Common
Shares owned by the Executive (a "Demand Registration") (which
Demand Registration Request shall specify the intended number of
Common Shares to be disposed of by the Executive and the intended
method of disposition thereof); provided, that the Corporation
may, if the Board so determines in the exercise of its
reasonable, good faith judgment that due to a pending or
contemplated acquisition or disposition or public offering or
other similar occurrence it would be inadvisable to effect such
Demand Registration at such time, defer such Demand Registration
for a single period not to exceed one hundred eighty (180) days;
provided, however, in the event that the Corporation proposes to
register shares of beneficial interest of the Corporation under
the Securities Act, whether or not for sale for its own account,
during such single period, the Corporation shall, as part of or
in conjunction with such registration, register the Common Shares
set forth in the Executive's Demand Registration Request. Within
ten (10) days after receipt of such request, the Corporation will
use its best efforts to effect the registration under the
Securities Act of the Common Shares which the Corporation has
been so requested to register by the Executive.
(ii) NUMBER OF DEMAND REGISTRATIONS. At any time on or after the
Effective Date, the Executive shall be entitled to make one
Demand Registration Request at any time;
provided that (i) the Corporation shall not be obligated to
effect more than one Demand Registration and (ii) the Executive
shall not be entitled to make a Demand Registration Request
during any period during which (A) all of the Common Shares may
be freely transferred at the same time pursuant to Rule 144
promulgated under the Securities Act, or (B) all of the Common
Shares have been properly registered on a registration statement
under the Securities Act, such registration statement is
effective under the Securities Act and all of the Common Shares
may be freely transferable pursuant to such registration
statement.
(iii) EFFECTIVE REGISTRATION AND EXPENSES. A registration will not
count as a Demand Registration until it has become effective
(unless the Executive withdraws the Common Shares, in which case
such demand will count as a Demand Registration unless the
Executive agrees to pay all the expenses of such registration).
The Corporation shall be solely responsible for any and all costs
and expenses of all registrations and qualifications under the
Securities Act, and of all other actions the Corporation is
required to take in order to effect the registration of Common
Shares under the Securities Act whether pursuant to this
Agreement or otherwise.
(iv) PRIORITY ON DEMAND REGISTRATIONS. If the offering of the
Executive's Common Shares pursuant to such Demand Registration is
in the form of an underwritten offering and the managing
underwriter or underwriters of such offering advise the
Corporation and the Executive in writing that in their opinion
the number of Common Shares requested to be included in such
offering is sufficiently large to adversely affect the success of
such offering, the Corporation will include in such registration
the aggregate number of Common Shares which in the opinion of
such managing underwriter or underwriters can be sold without any
such adverse effect, and such amount shall be allocated in the
following order of priority: (i) first, any Common Shares that
the Corporation or any other holder proposes to sell; and (ii)
second, the Common Shares of the Executive subject to any such
Demand Registration.
3.7 SHARES IN LIEU OF CASH. Subject to receipt of all necessary regulatory
approvals including, but not limited to, any approvals under any securities
legislation and the rules and regulations of NASDAQ, if any, the Executive
may, at his sole option, exercisable by notice in writing to the
Corporation at least seven (7) business days prior to the commencement of
each period in respect of which such election is made, elect to have all or
a portion of his Base Salary and/or Annual Bonus paid by way of delivery of
Common Shares of the Corporation having a fair market value as at the day
prior to the date of issue to the Executive equal to the Base Salary and/or
Annual Bonus or a portion thereof elected to be so paid.
3.8 TERM. This Agreement shall remain in force for a minimum period of
thirty-six (36) months from the Effective Date and such term shall renew
automatically for one (1) additional month for each month that the same
remains in effect such that the outstanding term of this Agreement shall at
all times remain at thirty-six (36) months until such time as the
Corporation serves notice that it shall terminate this Agreement effective
thirty-six (36) months from the last day in the month in which such notice
shall be given in writing to the Executive, such notice to be delivered to
the Executive at the offices of the Corporation.
3.9 AMOUNTS PAYABLE CONSIDERED DEBT. All amounts payable by the Corporation
under this Agreement shall constitute a debt owing by the Corporation to
the Executive.
ARTICLE IV
OBLIGATIONS OF THE CORPORATION UPON TERMINATION
4.1 DEATH OR DISABILITY. The Corporation may terminate the Executive's
employment in the event the Executive has been unable to perform his
material duties hereunder because of Disability by giving the Executive
notice of such termination while such Disability continues (a "Disability
Termination"). The Executive's employment shall automatically terminate on
the Executive's death. In the event the
Executive's employment with the Corporation terminates during the term of
this Agreement by reason of the Executive's death or as a result of a
Disability Termination, then upon and immediately effective the Date of
Termination:
(a) the Executive shall be fully and immediately vested in his unvested
Stock Options, and any other options or equity awards granted by the
Corporation to the Executive, that are unvested on the Date of
Termination so that such Stock Options, options and equity awards are
fully and immediately exercisable by the Executive;
(b) the Corporation shall promptly pay and provide the Executive (or in
the event of the Executive's death, the Executive's estate):
(i) any unpaid Base Salary and any outstanding and accrued regular
and special vacation pay through the Date of Termination;
(ii) any unpaid Annual Bonus and other bonuses accrued with respect to
the fiscal year ending on or preceding the Date of Termination;
(iii) reimbursement for any unreimbursed expenses incurred through to
the Date of Termination; and
(iv) all other payments, benefits or fringe benefits to which the
Executive may be entitled subject to and in accordance with the
terms of any applicable compensation arrangement or benefit,
equity or fringe benefit plan or program or grant, and amounts
which may become due under this Agreement (the payments referred
to herein in subsections 4.1(b)(i) to 4.1(b)(iv) shall,
collectively, be referred to as "Accrued Benefits"); and
(c) the Corporation shall pay to the Executive (or in the event of the
Executive's death, the Executive's estate) at the time other senior
executives are paid under any cash bonus or long term incentive plan,
a PRO RATA Annual Bonus equal to the amount the Executive would have
received if his employment continued (without any discretionary
cutback) multiplied by a fraction where the numerator is the number of
days in each respective bonus period prior to the Executive's
termination and the denominator is the number of days in the bonus
period (the "Prorated Bonus").
4.2 TERMINATION FOR JUST CAUSE. The Corporation may terminate the Executive's
employment for Just Cause. In the event that the Executive's employment
with the Corporation is terminated during the term of this Agreement by the
Corporation for Just Cause, the Executive shall not be entitled to any
additional payments or benefits hereunder, other than the Accrued Benefits
(including, but not limited to, any then vested Stock Options or other
options or equity grants) and the Prorated Bonus which the Corporation
shall pay or provide to the Executive immediately upon the Date of
Termination.
Notwithstanding the foregoing, no event shall constitute or be deemed the
basis for termination of the Executive's employment for Just Cause unless
the Executive is terminated therefor within sixty (60) days after such
event is known to the Chairman of the Corporation, or, if the Executive is
the Chairman, known to a majority of the Board (other than the Executive)
and the Executive shall not be deemed to have been terminated for Just
Cause without:
(a) advance written notice received by the Executive not less than thirty
(30) days prior to the Date of Termination setting forth the
Corporation's intention to consider terminating the Executive and
including a statement of the proposed Date of Termination, the
specific detailed basis for such consideration of termination for Just
Cause and demanding that the Executive remedy the event, conduct,
condition, act or omission that is the basis for such consideration of
termination for Just Cause set forth in such notice (the "Just Cause
Event") within thirty (30) days of receipt of such notice by the
Executive;
(b) an opportunity for the Executive, together with his counsel, to be
heard before the Board at least ten (10) days after the giving of such
notice and prior to the proposed Date of Termination;
(c) the failure on the part of the Executive to remedy the Just Cause
Event within thirty (30) days from receipt of such notice, or any
extension thereof granted by the Board, or the failure on the part of
the Executive to take all reasonable steps to that end during such
thirty (30) day period, or any extension thereof;
(d) a duly adopted resolution of the Board stating that in accordance with
the provisions of the next to the last sentence of this Section 4.2
that the actions of the Executive constituted Just Cause and the basis
thereof; and
(e) a written determination provided by the Board setting forth the acts
and omissions that form the basis of such termination of employment.
Any determination by the Board hereunder shall be made by the
affirmative vote of at least a two-thirds (2/3) majority of all of the
members of the Board (other than the Executive). Any purported
termination of employment of the Executive by the Corporation which
does not meet each and every substantive and procedural requirement of
this Section 4.2 shall be treated for all purposes under this
Agreement as a termination of employment without Just Cause.
4.3 VOLUNTARY TERMINATION FOR GOOD REASON; INVOLUNTARY TERMINATION OTHER THAN
FOR JUST CAUSE. The Executive may terminate his employment with the
Corporation for Good Reason at any time within one hundred eighty (180)
days after the occurrence of the Good Reason event by written notice to the
Corporation. If the Executive's employment with the Corporation is
voluntarily terminated by the Executive for "Good Reason" or is
involuntarily terminated by the Corporation other than for "Just Cause",
then the Corporation shall pay or provide the Executive with the following:
(a) any Accrued Benefits;
(b) a severance amount equal to three (3) times the sum of: (A) the
Executive's then Base Salary; and (B) the higher of (x) the
Executive's then current Annual Bonus and (y) the highest variable pay
and incentive bonus received by the Executive from the Corporation for
the five (5) fiscal years last ending prior to such termination, which
severance amount is payable in substantially equal installments over
twelve (12) months in accordance with the Corporation's standard
payroll practice; provided, however, that:
(i) in the event of a Change of Control following such termination,
the unpaid portion of such severance amount, if any, shall be
paid to the Executive in full in a single lump sum cash payment
immediately following such Change of Control; and
(ii) if such termination occurs in contemplation of, at the time of,
or within three (3) years after a Change of Control, the
Executive shall instead be entitled to a lump sum cash payment
immediately following such termination equal to three (3) times
the sum of: (A) the Executive's then Base Salary; and (B) the
higher of (x) the Executive's then current Annual Bonus and (y)
the highest variable pay and annual incentive bonus received by
the Executive for the five (5) fiscal years last ending prior to
such termination; and
(c) the Executive shall be fully and immediately vested in his unvested
Stock Options and any other options or equity awards granted by the
Corporation to the Executive so that such Stock Options, options and
equity awards are fully and immediately exercisable by the Executive.
4.4 WITHOUT GOOD REASON. The Executive may terminate his employment at any time
without Good Reason by written notice to the Corporation. In the event that
the Executive's employment with the Corporation is terminated during the
term of this Agreement by the Executive without Good Reason, the Executive
shall not be entitled to any additional payments or benefits hereunder,
other than Accrued Benefits (including,
but not limited to, any then vested Stock Options, or other options or
equity grants) and the Prorated Bonus which the Corporation shall pay or
provide to the Executive immediately upon the Date of Termination.
4.5 MITIGATION AND OFFSET. In the event of the termination of the Executive's
employment under this Agreement;
(a) The Executive shall be under no obligation to seek other employment or
otherwise mitigate the value of any compensation or benefits
contemplated by this Agreement, nor shall any such compensation or
benefits be reduced in any respect in the event that the Executive
shall secure, or shall not reasonably pursue, alternative employment
or earnings or benefits that the Executive may receive from any other
source;
(b) The amounts payable by the Corporation hereunder shall not be subject
to setoff, offset, counterclaim, recoupment, defence or other right
which the Corporation may have against the Executive or others; and
(c) The Executive may, at his sole option, set-off or offset any amounts
payable by the Executive to the Corporation, including, but not
limited to, the outstanding balance of any Stock Option Loan and/or
Market Purchase Loan of the Executive, against any amounts payable by
the Corporation to the Executive under this Agreement.
4.6 CHANGE OF CONTROL VESTING ACCELERATION. In the event of a "Change of
Control", immediately effective the date of such Change of Control, the
Executive shall be fully and immediately vested in his unvested Stock
Options, and any other options or equity awards granted by the Corporation
to the Executive, that are unvested on the Date of Termination so that such
Stock Options, and other options and equity awards are fully and
immediately exercisable by the Executive.
4.7 PURCHASE OF SHARES BY THE CORPORATION. The Executive shall be entitled, at
his option, exercisable upon written notice to the Corporation within a
period of 365 days following the earlier of the Date of Termination or the
date of Change of Control, to sell to the Corporation, and the Corporation
agrees to purchase from the Executive, all, or any part, of the Common
Shares in the Corporation that he holds at the Date of Termination or the
date of Change of Control hereof at a price equal to the Market Price of
such securities as at the date such notice is given to the Corporation,
which date shall be deemed to be the date of the acquisition of such
securities by the Corporation and the date of sale of such securities by
the Executive hereunder. The Corporation shall, immediately upon receipt of
such notice (the "Initial Purchase Date") pay the purchase price, by
certified cheque, bank draft or wire transfer, for all the securities in
the Corporation the certificates of which are tendered in transferable form
by the Executive in accordance with this Section (the "Tendered
Securities") unless to do so would result in a breach by the Corporation of
its constating documents or governing legislation respecting the purchase
by the Corporation of its own securities (the "Solvency Requirements") or
would result in the Corporation contravening any applicable federal, state,
or provincial securities legislation. The Corporation shall, upon request
from the Executive to do so, make application or join in an application by
the Executive to the applicable securities commissions and use its best
efforts to obtain requisite approvals or exemptions in order to fulfil its
obligations under this Section as soon as possible after the receipt of the
aforesaid notice of sale from the Executive. In the event that the
Corporation is unable, without breaching the Solvency Requirements and
without contravening applicable securities legislation to purchase all the
Tendered Securities on the Initial Purchase Date, the Corporation shall, as
soon thereafter as it is legally able to do so, purchase (on a PRO RATA
basis) as many of such Tendered Securities and shares in the Corporation
tendered by persons, including the Executive, with rights identical to
those afforded the Executive by this Section as the Corporation may
purchase while complying with the Solvency Requirements and applicable
securities legislation, until such time as either:
(a) the Corporation has purchased pursuant to this Section all the Common
Shares in the Corporation that the Executive held at the Date of
Termination hereof or such lesser number as the Executive may at his
option elect at any time or from time to time to sell to the
Corporation hereunder; or
(b) the Executive has elected not to sell to the Corporation pursuant to
this Section any, or as many, Common Shares in the Corporation as the
Corporation is, at the time of such election, capable of purchasing
from the Executive pursuant to the provisions of this Section.
Following either such event the Executive shall have no further rights
pursuant to this Section.
ARTICLE V
FURTHER EXECUTIVE BENEFITS
5.1 HOUSING. If, at the Date of Termination, the Executive was residing in a
home provided to him by the Corporation, pursuant to a lease or rental
agreement, or other arrangement, between the Corporation and a third party
the Executive may elect, at any time during the sixty (60) days following
the Date of Termination, and the Corporation will permit the Executive, to
assume, or take the assignment of, any such lease or rental agreement, or
other arrangement, respecting such housing in accordance with the terms of
any such lease or rental agreement, or other arrangement, in force between
the Corporation and the party leasing or renting such housing to the
Corporation prior to the Date of Termination.
5.2 OUT OF POCKET AND RELOCATION EXPENSES. Upon termination, the Corporation
shall pay additional reasonable expenses that shall be incurred by the
Executive in connection with the Executive obtaining alternative full-time
employment, including the costs associated with relocation by the Executive
to obtain such alternative employment.
ARTICLE VI
INDEMNIFICATION
6.1 INDEMNIFICATION. The Corporation hereby covenants and agrees that if the
Executive is made a party, or is threatened to be made a party, to any
action, suit or proceeding, whether civil, criminal, administrative or
investigative of any nature whatsoever (a "Proceeding"), by reason of, or
as a result of, the fact that he is or was a Trustee, officer or employee
of the Corporation or is or was serving at the request of the Corporation
as a trustee, director, officer, member, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether or not
the basis of such Proceeding is the Executive's alleged action in an
official capacity while serving as a Trustee, director, officer, member,
employee or agent of the Corporation, the Executive shall be indemnified
and held harmless by the Corporation to the fullest extent legally
permitted or authorized by the Corporation's constating documents or, if
greater, by applicable federal, state or provincial legislation, against
all costs, expenses, liability and losses of any nature whatsoever
(including, without limitation, attorney's fees, judgments, fines,
interest, taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by the Executive in connection therewith
(collectively, the "Indemnification Amounts"), and such indemnification
shall continue as to the Executive even if he has ceased to be a officer,
Trustee, director, member, employee or agent of the Corporation or other
entity and shall inure to the benefit of the Executive's heirs, executors
and administrators. The Corporation shall advance to the Executive the
Indemnification Amounts incurred, or reasonably estimated to be incurred,
by him immediately upon receipt by the Corporation of a written request for
such advance.
6.2 STANDARD OF CONDUCT. Neither the failure of the Corporation or the Board to
have made a determination prior to the commencement of any proceeding
concerning payment of amounts claimed by the Executive under Section 6.1
hereof that indemnification of the Executive is proper because he has met
the applicable standard of conduct, nor a determination by the Corporation
or the Board that the Executive has not met such applicable standard of
conduct, shall create a presumption that the Executive has not met the
applicable standard of conduct.
ARTICLE VII
GENERAL
7.1 NO PROHIBITION ON EMPLOYMENT. The Executive shall not be prohibited in any
manner whatsoever from obtaining employment with or otherwise forming or
participating in a business competitive to the business of the Corporation
after termination of employment with the Corporation.
7.2 RESIGNATION OF POSITIONS. The Executive agrees that after termination of
his employment with the Corporation he will tender his resignation from any
position he may hold as an officer, director or Trustee of the Corporation
or any of its affiliated or associated companies if so requested by the
Board.
7.3 RIGHTS AND OBLIGATIONS SURVIVE. The respective rights and obligations of
the parties hereunder shall survive any termination of the Executive's
employment to the extent necessary to preserve such rights and obligations.
For greater certainty, notwithstanding anything to the contrary in this
Agreement, the parties hereto acknowledge and agree that Sections 4.1, 4.2,
4.3, 4.5, 4.6, 4.7, 5.1, 5.2, 6.1, 7.3, 7.6, 7.8, 7.9, 7.14, 7.15 and 7.17
shall survive the termination of the Executive's employment with the
Corporation and remain in full force and effect.
7.4 BENEFICIARIES. The Executive shall be entitled, to the extent permitted
under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder
following the Executive's death by giving the Corporation written notice
thereof. In the event of the Executive's death or a judicial determination
of his incompetence, reference in this Agreement to the Executive shall be
deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative.
7.5 TAX GROSS-UP. Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payment, award, benefit or
distribution by the Corporation to or for the benefit of the Executive, his
beneficiaries, heirs, successors and assigns (the "Taxable Benefit") would
be subject to any excise or withholding tax as a result of payment upon
termination of the Executive's employment, or any interest or penalties are
incurred by the Executive with respect to such excise or withholding tax,
the Executive shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the Executive
of all taxes (including any interest or penalties imposed with respect to
such taxes) imposed upon the Taxable Benefit and/or the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the excise
or withholding taxes (together with any such interest and penalties imposed
with respect to such taxes) imposed upon the Taxable Benefit and Gross-Up
Payment.
7.6 LEGAL, ACCOUNTING AND PROFESSIONAL EXPENSES. The Corporation shall pay, to
the full extent permitted by law, all legal, accounting and other
professional fees and related expenses the Executive, the Executive's legal
representatives or the Executive's family may reasonably incur in
connection with the negotiation and preparation of this Agreement, any
contest (regardless of the outcome thereof) by the Corporation, the
Executive or others of the validity or enforceability of, interpretation
of, or liability under, any provision of this Agreement or as a result of
any action by the Executive, the Executive's legal representatives or the
Executive's family (regardless of the outcome thereof) to enforce his or
their rights under this Agreement, plus interest, compounded quarterly, on
the total unpaid amount determined to be payable under this Agreement, such
interest to be calculated at a rate equal to 2% in excess of LIBOR in
effect from time to time during the period of such non-payment. The
Corporation shall advance to the Executive such fees and expenses incurred,
or reasonably estimated to be incurred, by him in connection with such
negotiation and preparation, contest or action within seven (7) days after
receipt by the Corporation of a written request for such advance.
7.7 FAIR AND REASONABLE PROVISIONS. The Corporation and Executive acknowledge
and agree that the provisions of this Agreement regarding further payments
of the Executive's Base Salary, Annual Bonus and other bonuses, and the
exercisability and vesting of his Stock Options, and other options or
equity grants, constitute fair and reasonable provisions for the
consequences of such termination, do not constitute a penalty, and such
payments and benefits shall not be limited or reduced by amounts the
Executive might
earn or be able to earn from any other employment or ventures during the
remainder of the agreed term of this Agreement.
7.8 LUMP SUM PAYMENT. Except as otherwise specifically provided in this
Agreement, the Corporation shall pay the Executive any lump sum payment due
to him under this Agreement within seven (7) business days of the Date of
Termination. Any payments due to the Executive under this Agreement that
are not paid within such time shall accrue interest, compounded quarterly,
on the total unpaid amount payable under this Agreement, such interest to
be calculated at a rate equal to 2% in excess of Libor then in effect from
time to time during the period of such non-payment. No payments due to the
Executive under this Agreement may be offset by the Corporation by amounts
due to the Corporation from the Executive.
7.9 LIABILITY INSURANCE. The Corporation shall use its best efforts to obtain
and continue coverage of the Executive under trustees and officers
liability insurance both during and, while potential liability exists,
after the Executive's employment with the Corporation in the same amount
and to the same extent, if any, as the Corporation covers its other
Trustees, officers and directors.
7.10 NO DEROGATION OF RIGHTS. Nothing herein derogates from any rights the
Executive may have under applicable law.
7.11 ASSIGNABILITY. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, heirs (in
the case of the Executive) and assigns. No rights or obligations of the
Corporation under this Agreement may be assigned or transferred by the
Corporation except that such rights or obligations may be assigned or
transferred pursuant to a merger, amalgamation, reorganization, continuance
or consolidation in which the Corporation is not the continuing entity, or
the sale or liquidation of all or substantially all of the assets of the
Corporation, provided that the assignee or transferee is the successor to
all or substantially all of the assets of the Corporation and such assignee
or transferee assumes the liabilities, obligations and duties of the
Corporation, as contained in this Agreement, either contractually or as a
matter of law. The Corporation further agrees that, in the event of a sale
of assets or liquidation as described in the preceding sentence, it shall
take whatever action it legally can in order to cause such assignee or
transferee to expressly assume the liabilities, obligations and duties of
the Corporation hereunder. No rights or obligations of the Executive under
this Agreement may be assigned or transferred by the Executive other than:
(a) his rights to compensation and benefits, in whole or in part, which may
be transferred by the Executive to (i) a corporation owned or controlled by
the Executive or members of the Executive's family, (ii) a trust, the
beneficiaries of which are the Executive or members of the Executive's
family, (iii) a charity, a foundation or trust established for charitable
purposes, or which may be transferred by the Executive's will or the
operation of law; (b) to a corporation through which the Executive shall
provide the services required of him hereunder; and (c) as provided in
Section 7.4 hereof.
7.12 AUTHORIZATION. The Corporation represents and warrants that it is fully
authorized and empowered to enter into this Agreement and perform its
obligations hereunder, which performance will not violate any agreement
between the Corporation and any other person, firm or organization nor
breach any provisions of its constating documents or governing legislation.
7.13 AMENDMENT OR WAIVER. No provision in this Agreement may be amended unless
such amendment is agreed to in writing and signed by the Executive and an
authorized officer of the Corporation. No waiver by either party hereto of
any breach by the other party hereto of any condition or provision
contained in this Agreement to be performed by such other party shall be
deemed a waiver of a similar or dissimilar condition or provision at the
same or any prior or subsequent time. Any waiver must be in writing and
signed by the Executive or an authorized officer of the Corporation, as the
case may be.
7.14 INTERPRETATION OF PLAN AND OPTION AGREEMENTS. In the event of a conflict
between, or inconsistency with, any, or any part, of the terms or
provisions of this Agreement and the terms or provisions of the Plan or the
Option Agreements, as the case may be, the terms and provisions of this
Agreement shall be deemed to govern, supersede, and take precedence over
such inconsistent or conflicting terms and provisions contained in the Plan
and the Option Agreements, as the case may be.
7.15 GOVERNING LAW AND VENUE. This Agreement shall be construed and interpreted
in accordance with the laws of England. Each of the parties hereby
irrevocably attorns to the non-exclusive jurisdiction of the Courts of
London, England with respect to any matters arising out of this Agreement.
7.16 NOTICES. Any notice required or permitted to be given under this Agreement
shall be in writing and shall be properly given if delivered or mailed by
prepaid registered mail addressed as follows:
(a) in the case of the Corporation:
Xxxxxx International Inc.
Xxxxxxxxxxxxxxxxx 00,
0000 Xxxxxx, Xxxxxxxxxxx
(b) in the case of the Executive:
to the last address of the Executive in the records of the Corporation
and its subsidiaries or to such other address as the parties may from
time to time specify by notice given in accordance herewith.
Any notice so given shall be conclusively deemed to have been given or
made on the day of delivery, if delivered, or if mailed as aforesaid,
upon the date shown on the postal return receipt as the date upon
which the envelope containing such notice was actually received by the
addressee.
7.17 SEVERABILITY. If any provision contained herein is determined to be void or
unenforceable for any reason, in whole or in part, it shall not be deemed
to affect or impair the validity of any other provision contained herein
and the remaining provisions shall remain in full force and effect to the
fullest extent permissible by law.
7.18 ENTIRE AGREEMENT. Other than the Trustee's Indemnity Agreement between the
Executive and the Corporation of event date herewith (the "Indemnity
Agreement"), this Amended and Restated Employment Agreement contains the
entire understanding and agreement between the parties concerning the
subject matter hereof and supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or oral,
between the parties with respect thereto. For greater certainty,
notwithstanding anything to the contrary in this Agreement, the parties
hereto acknowledge and agree that nothing contained herein is intended to
modify, abridge, limit or affect any of the rights or obligations of the
parties hereto contained in the Indemnity Agreement.
7.19 CURRENCY. Unless otherwise specified herein all references to dollar or
dollars are references to United States dollars.
7.20 FURTHER ASSURANCES. Each of the Executive and the Corporation will do,
execute and deliver, or will cause to be done, executed and delivered, all
such further acts, documents and things as the Executive or the Corporation
may require for the purposes of giving effect to this Agreement.
7.21 COUNTERPARTS/FACSIMILE EXECUTION. This Agreement may be executed in several
parts in the same form and such parts as so executed shall together
constitute one original document, and such parts, if more than one, shall
be read together and construed as if all the signing parties had executed
one copy of the said Agreement.
7.22 AMENDMENT AND RESTATEMENT. This Amended and Restated Employment Agreement
is hereby amended, ratified and confirmed by each of the parties hereto and
shall amend and restate in its entirety the employment agreement made
between the parties dated July 1, 1994 which is hereby terminated and null
and void.
IN WITNESS WHEREOF the parties have executed this Agreement as of the date first
above written.
XXXXXX INTERNATIONAL INC.
By: ___________________________________________
Name: __________________________________________
Title: _________________________________________
SIGNED, SEALED and DELIVERED )
by XXXXX X.X. XXX )
in the presence of: )
)
______________________________ ) __________________________
Witness ) XXXXX X.X. XXX
)
______________________________ )
Address )
)
______________________________ )
)
______________________________ )
Occupation
SCHEDULE A
EXECUTIVE'S DUTIES
Management of all matters relating to the operations of the Corporation,
including:
1. Performance of the duties of President of the Corporation and Trustee of
the Corporation normally associated with the office of Chief Executive
Officer;
2. Supervision of investor relations and corporate information dissemination;
3. Participation in the development of policies and programs for review and
approval by the Board;
4. The review and assessment of business opportunities presented to the
Corporation;
5. Preparation of business plans as required from time to time for review and
approval by the Board;
6. Monitoring and control of the operations of the Corporation; and
7. Performance of such other duties consistent with the Executive's position
which the Board shall, from time to time, reasonably direct.
SCHEDULE B
PROMISSORY NOTE
$___________________________ ____________, 20___
FOR VALUE RECEIVED, Xxxxx X. X. Xxx, (the "Borrower"), hereby promises to pay to
Xxxxxx International Inc., a Massachusetts business trust organized under the
laws of the State of Washington (the "Holder"), or its registered assigns, the
principal sum _______ in lawful money of the United States of America (the
"Principal Amount") as adjusted from time to time in accordance with the terms
of this Promissory Note, on ______________ (_________________), together with
interest accrued thereon through the date of payment; provided, however, that
(A) with respect to each of the Common Shares, as that term is defined in the
Amended and Restated Employment Agreement dated November 20, 2000 between
Borrower and Holder (the "Employment Agreement"), acquired by the Borrower with
the proceeds of the Principal Amount pursuant to Sections 3.6(g) and/or 3.6(h)
of the Employment Agreement that Borrower subsequently sells in an arms-length
transaction to an unrelated third-party (a "Sale"), Borrower promises to pay to
Holder, or any registered assigns, within thirty (30) days of the closing of
such Sale, as partial payment of the Principal Amount, an amount equal to the
per share consideration received by Borrower as a result such Sale and (B)
Borrower promises to pay to Holder, or any registered assigns, any then unpaid
Principal Amount together with interest accrued thereon through the date of
payment no later than the earlier of: (i) on or prior to the first (1st)
anniversary following the date that Borrower's employment with Holder terminates
as a result of a termination by Holder for Just Cause pursuant to Section 4.2 of
the Employment Agreement or a termination by Borrower without Good Reason
pursuant to Section 4.4 of the Employment Agreement or (ii) on or prior to the
second (2nd) anniversary following the date that Borrower's employment with the
Holder terminates as a result of a termination by Holder other than for Just
Cause pursuant to Section 4.3 of the Employment Agreement, a termination by
Borrower for Good Reason pursuant to Section 4.3 of the Employment Agreement,
the Borrower suffering a Disability pursuant to Section 4.1 of the Employment
Agreement or the Borrower's death pursuant to Section 4.1 of the Employment
Agreement.
This Promissory Note shall bear interest on the outstanding principal balance
hereunder at the rate equal to LIBOR (as defined in the Employment Agreement) in
effect during the period any principal balance hereunder remains outstanding.
Interest shall be calculated on the basis of a 365-day year for the actual
number of days elapsed and shall be payable at maturity. Interest accrued but
unpaid during any Yearly Period shall become part of the Principal Amount
effective at 11:59 P.M G.M.T. on the last day of such Yearly Period. As used
herein, the term "Yearly Period" means each successive twelve-month period,
beginning on the date of this Agreement and ending on the first anniversary of
the date of this Agreement and continuing to each successive anniversary
thereafter, during which the Principal Amount remains outstanding.
All payments hereunder shall be made in immediately available funds in lawful
money of the United States of America.
Except as set forth in the next two sentences, the obligations of Borrower and
the rights of Holder under this Promissory Note shall be absolute and shall not
be subject to any counterclaim, set-off, deduction or defense. This Promissory
Note represents a non-recourse obligation of Borrower. If for any reason
Borrower fails to pay the full amount due hereunder, the liability of Borrower
to Holder, and the sole recourse of Holder against Borrower, shall be limited to
_____________________ Common Shares pledged to Holder in accordance with the
next paragraph.
Borrower hereby pledges to Holder on the date of this Agreement, _______________
Common Shares of Holder acquired by Borrower pursuant to Sections 3.6(g) and
3.6(h) of the Employment Agreement to secure the satisfaction by Borrower of all
his obligations to Holder under this Promissory Note.
All or any portion of the Principal amount evidenced by this Promissory Note may
be prepaid at any time without premium or penalty.
In the event of default under this Promissory Note, Holder shall have all rights
and remedies provided at law and in equity.
No interest or other amount shall be payable in excess of the maximum
permissible rate under applicable law.
This Promissory Note may not be changed, modified or terminated orally, other
than by an agreement in writing signed by the party sought to be charged.
This Promissory Note shall be governed by, and construed in accordance with, the
laws of England. Each of Holder and Borrower irrevocably attorns to the
non-exclusive jurisdiction of the Courts of London, England with respect to any
matter arising out of this Promissory Note.
This Promissory Note shall be binding upon the successors and assigns of
Borrower and shall inure to the benefit of Holder and its successors and
assigns. Transfer of this Promissory Note may be effected only by surrender of
this Promissory Note to Borrower whereupon Borrower shall reissue this
Promissory Note to Holder's transferee as a successor registered Holder.
_________________________
Xxxxx X. X. Xxx
