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Exhibit 10.5
Xxxxxx Employment Agreement
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EMPLOYMENT AGREEMENT
AGREEMENT, dated November ___, 2000 ("Agreement"), by and between Blue
Giant Equipment Corporation, an Ontario corporation with its principal place of
business located at 00 Xxxxx Xxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxx X0X 0X0
("Company"), and Xxxxxx Xxxxxx, an individual residing at
_____________________________________, Canada ("Executive").
WHEREAS, Company desires to retain Executive's services and Executive
desires to be employed by Company upon the terms and conditions hereinafter
described; and
WHEREAS, Company is a wholly-owned subsidiary of TBM Holdings Inc.
("TBM") and the Board of Directors of TBM ("TBM Board") manages the Company
pursuant to a Unanimous Shareholder Agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto hereby agree as follows:
Section 1: Employment of Executive; Duties and Responsibilities.
1.1 Employment of Executive. Company shall employ Executive and
Executive shall provide services to Company subject to the terms and conditions
hereof.
1.2 Term of Employment. Executive's employment by Company hereunder
shall commence on November 10, 2000 and terminate on October 30, 2003 (as may be
extended hereunder, "Employment Period"), unless sooner terminated pursuant to
the provisions of Section 3.1 hereof. Thereafter, upon expiration, the
Employment Period automatically shall be extended for successive one (1) year
periods unless either party gives notice to the other at least sixty (60) days
prior to the expiration of the then-current Employment Period of its intention
that the Employment Period not be extended, in which case the then-current
Employment Period shall terminate upon its expiration.
1.3 Offices and Positions of Executive. During the Employment
Period, unless otherwise mutually agreed by Company, Executive and TBM,
Executive shall serve as Vice President and General Manager of the Company and,
until otherwise determined by TBM, as a member of the Company's Board of
Directors.
1.4 Duties and Responsibilities. During the Employment Period,
Executive shall perform customary duties and responsibilities as General Manager
of the Company and such other duties as the President or Chief Executive Officer
of the Company or the TBM Board shall reasonably assign to Executive from time
to time during the Employment Period. Executive shall report directly to Xxxxxxx
X. Xxxxxxxx, Chief Executive Officer of the Company.
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Section 2: Compensation; Reimbursement; Benefits.
2.1 Base Salary. Company shall pay to Executive an annual base
salary ("Base Salary") in the amount of Cdn $140,000 per annum. Executive shall
be eligible for any routine or customary annual increases to Base Salary in
accordance with Company's policies for increases to the base salary of senior
executive personnel as determined by and subject to the approval and discretion
of the TBM Board.
2.2 Payment of Base Salary. Company shall pay to Executive the Base
Salary, less appropriate withholding for applicable employment-related taxes and
deductions, in equal installments in accordance with the policy of the Company
as in effect from time to time for the payment of salary to senior executive
personnel.
2.3 Stock Options. Upon commencement of Executive's employment
pursuant to this Agreement, Executive shall receive from TBM options to purchase
5,000 shares of the common stock of TBM ("Options"). The Options shall be
granted pursuant to the TBM Holdings Inc. 1999 Stock Option Plan ("Plan") and
shall be subject to and governed by the Plan. The Options shall vest, provided
that Executive is employed by the Company on the relevant vesting date, as
follows: (i) 25% of the Options shall vest on the first anniversary of the date
of this Agreement; (ii) 35% of the Options shall vest on the second anniversary
of the date of this Agreement; and (iii) 40% of the Options shall vest on the
third anniversary of the date of this Agreement; in each case subject to the
additional conditions set forth in the Plan.
2.4 Other Benefits. Executive shall be entitled to participate in
such employee benefits as are generally made available by Company to its key
executive employees which may include, without limitation, major medical,
disability coverage, vacation pay and participation in any retirement plan or
plans to the extent permitted by the terms thereof; provided, however, that
except as otherwise specifically provided in this Agreement, Executive shall not
be entitled to any performance related or any other special compensation unless
specifically authorized by the TBM Board.
2.5 Incentive Compensation. (a) In addition to the payment to
Executive of the Base Salary and the other payments and benefits available to
Executive under this Agreement, the TBM Board shall determine on both a
quarterly and annual basis whether Executive is entitled to incentive
compensation ("Incentive Compensation") and, if so, the amount thereof.
Beginning on January 1, 2001, quarterly Incentive Compensation shall be based
upon Executive's achievement of specified criteria each quarter such criteria to
be evaluated and scored in accordance with Attachment 1, attached hereto and
incorporated herein. For purposes of illustration, should the quarterly points
achieved be 47 - 52, Executive shall be eligible for quarterly Incentive
Compensation of Cdn $7,000 for that quarter.
(b) Annual Incentive Compensation shall be based on Executive's
contribution to the achievement of overall Company goals regarding revenues and
profitability. The target range for
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the annual bonus amount payable will be 20% of Base Salary. For purposes of
illustration, should the annual bonus be 20%, Executive shall be eligible for
annual Incentive Compensation of Cdn $28,000 for that year (20% of Base Salary
of Cdn $140,000 = Cdn $28,000 per year).
2.6 Insurance. Executive shall be entitled to participate in any
major medical plan, business travel plan, disability income plan and any other
plan or insurance maintained by Company providing hospitalization, medical,
disability or other similar protection to the extent, in the manner, and
according to the terms and conditions applicable to senior executive personnel
generally.
2.7 Vacation. Executive shall be entitled to four (4) weeks of paid
vacation time each year to be taken at such times as are mutually convenient for
Company and Executive.
Section 3: Termination of Employment
3.1 Termination of Employment Period. The Employment Period shall
terminate as provided in Section 1.2 or earlier as follows:
(a) Termination on Death. The Employment Period shall terminate upon
the death of the Executive.
(b) Termination by Company.
(i) Termination for Cause. Company may terminate the
Employment Period for "cause" at any time upon ten (10) days' prior written
notice to Executive stating the facts constituting such "cause." No ten-day
notice shall be required if Company determines, in its sole discretion, that
Executive's continued presence at the Company shall be detrimental to Company.
For the purpose of this Section 3.1(b) the term "cause" shall mean gross
incompetence, gross negligence, gross insubordination, embezzlement, conviction
of a felony or any crime involving moral turpitude, willful misconduct of a
material nature, or any acts of fraud involving Company or any acts that have a
material adverse effect on Company's reputation by Executive, as determined in
good faith by the TBM Board.
(ii) Termination for Incapacity. Company may terminate the
Employment Period if Executive becomes mentally or physically ill, disabled or
otherwise incapacitated so as to render him unable to perform substantially all
of his duties hereunder for a period of at least six (6) months during any
twelve (12) month period by giving Executive not less than thirty (30) days'
prior written notice.
(iii) Termination for Breach of Agreement. Company may
terminate the Employment Period in the event of a breach by Executive of the
terms and conditions hereof having a material adverse effect on Company upon not
less than thirty (30) days' prior written notice to Executive stating the facts
constituting such breach; provided, however, that Executive
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shall have ten days after receipt of such notice to cure such state of affairs
or facts constituting a breach and thereby continue the Employment Period; and
provided further, that upon a subsequent substantially similar breach hereof by
Executive, the Employment Period may be terminated by Company without affording
the Executive an opportunity to cure.
(iv) Termination Without Cause. Notwithstanding the
Employment Period set forth in Section 1.2 and exclusive of the provisions of
Sections 3.1(b)(i), (ii) and (iii) above, Company may terminate the Employment
Period at any time upon not less than thirty (30) days' prior written notice to
Executive, provided that Company makes the payments required by Section 3.2(a).
3.2 Payments on Termination.
(a) Upon termination of the Employment Period by Company pursuant to
Section 3.1(b)(iv) hereof, Company shall continue to pay to Executive, for a
period of one (1) year subsequent to such termination, the Base Salary at the
rate in effect at the time of such termination together with the benefits as are
provided for in Section 2.3 hereof (to the extent permitted under the terms of
the plans and applicable law). Company shall continue to pay such amounts at the
same intervals as was the practice for Company during the Employment Period.
(b) Upon any other termination of the Employment Period pursuant to
Section 3.1, Company shall only be obligated to pay Executive amounts accrued
hereunder through the effective date of termination and Executive will not be
entitled to any severance or termination payments except to the extent required
by statute.
Section 4: Additional Covenants
Executive covenants and agrees as follows:
4.1 Confidentiality. Executive covenants and agrees that except as
specifically required in the performance of Executive's duties hereunder or as
required by law, and as shall be in the best interest of Company, on and after
the date hereof, Executive shall not disclose to any person or business entity,
or use for Executive's personal benefit, gain or otherwise, any confidential or
proprietary information that Executive acquires or has acquired during
Executive's employment with Company, as to the financial position, business
methods, systems, customers, suppliers, techniques, development projects or
results thereof, trade secrets, inventions, knowledge and processes used or
developed by Company, or any other proprietary or confidential information
relating to or dealing specifically with Company. Excluded from Executive's
obligations of confidence is any part of such confidential information that can
be demonstrated to have been in the public domain prior to the date of this
Agreement. Upon termination of the Employment Period, Executive agrees to
deliver to Company any drawings, documents, designs, records or other written
material regarding proprietary information of Company then in Executive's
possession. The foregoing shall be without prejudice to any rights
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or remedies of Company under any state law protecting trade secrets or
information.
4.2 Ownership. Any discovery, invention, process, concept, work or
improvement made or discovered by Executive while employed by Company in
connection with or in any way affecting or relating to the business of Company
(as then carried on or under active consideration) or capable of being used or
adapted for use therein or in connection therewith shall forthwith be disclosed
to Company and shall belong to and be the absolute property of Company.
Executive, if and whenever required so to do by Company, shall at the expense of
Company apply or join with Company in applying for any applicable registration
or protection in Canada or the United States and in any other part of the world
for any such discovery, invention, process, concept, work or improvement and
shall at the expense of Company execute all instruments and do all things
necessary for vesting such registration or protection in Company absolutely and
as sole beneficial owner or in such other person as Company may specify.
4.3 Non-Competition. Executive covenants and agrees that, without
the prior written consent of Company: (i) during the Employment Period, and for
a period of one (1) year following the termination of the Employment Period,
Executive will not, directly or indirectly, engage for his own account or in any
commercial capacity as an owner, officer, director, partner, employee,
consultant or representative of another person or entity, within the province of
Ontario, Canada and each other jurisdiction in which the Company is conducting
business at the time of termination, in any business competitive with the
business conducted by Company at the time of termination; or (ii) during the
Employment Period and for a period of one (1) year following the termination of
the Executive's employment with Company, Executive shall not solicit for
employment or engagement, directly or indirectly, any employee or consultant of
Company who was employed or engaged with Company within the one (1) year period
immediately prior to such solicitation or employment. This Section 4.3 shall not
be applicable in the event that (x) the Employment Period is terminated early by
Company, other than for cause, or (y) the Employment Period is terminated by
Executive as a result of material breach by Company of its obligations
hereunder.
4.4 Injunctive Relief. Executive acknowledges that any violation or
threatened violation of the provisions of Sections 4.1 or 4.2 will cause
irreparable injury to Company, and Executive hereby agrees that, in addition to
any other remedies available to it, Company shall be entitled to temporary or
permanent injunctive relief in connection with any such violation or threatened
violation.
Section 5: General Provisions
5.1 Non-Assignability. Neither this Agreement nor any obligation,
right or interest hereunder shall be assignable by Executive or Executive's
beneficiary or legal representatives without the prior written consent of
Company; provided however, that nothing in this Section 5.1 shall preclude
Executive from designating in writing a beneficiary or beneficiaries to receive
any compensation payable to, or any other benefit receivable by, Executive under
this Agreement
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upon the death or incapacity of Executive, nor shall it preclude the executors,
administrators or any other legal representatives of Executive or Executive's
Estate from assigning any rights hereunder to the person or persons entitled
thereto. Neither this Agreement nor any right or obligation arising hereunder
shall be assignable by Company, its successors, assigns, beneficiaries or legal
representatives either directly by assignment or by a merger, consolidation sale
of assets or other form of business combination, or disposition, without the
prior written consent of Executive.
5.2 Severability. This Agreement shall be deemed severable and any
part hereof that may be held invalid by a court or other entity of competent
jurisdiction automatically shall be deemed excluded from this Agreement and the
remaining parts shall remain in full force and effect.
5.3 Merger. This Agreement contains the entire understanding of the
parties hereto and constitutes the only agreement between Company and Executive
regarding the employment of Executive by Company. This Agreement supersedes all
prior agreements, either express or implied, between the parties hereto
regarding the employment of Executive by Company.
5.4 Amendment. None of the terms and conditions of this Agreement
shall be amended or modified unless expressly consented to in writing and signed
by each of the parties hereto.
5.5 Binding Agreement. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, and their respective heirs, other
legal representatives and permitted successors and assigns, as the case may be.
5.6 Governing Law. This Agreement shall be governed by and construed
under the internal laws of the Province of Ontario, Canada and the laws of
Canada applicable therein.
5.7 Notices. All notices or other communications to be given by the
parties among themselves pursuant to this Agreement shall be in writing, and
shall be deemed to have been duly made if mailed by certified mail, hand
delivered or sent by overnight courier service to Company at its principal
executive offices and to Executive at Executive's address as first set forth
above. Any of the parties hereto may change its respective address upon written
notice to the other given in the manner provided in this Section.
5.8 Waiver. No waiver by any of the parties to this Agreement of any
condition, term or provision of this Agreement shall be deemed to be a waiver of
any preceding or subsequent breach of the same or any other condition, term or
provision hereof.
5.9 Arbitration. Except with respect to any injunctive relief
specifically provided for pursuant to this Agreement, any differences, claims,
or matters in dispute arising between Executive and Company out of this
Agreement or connected herewith shall be submitted for
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arbitration in the Toronto, Ontario area pursuant to the Arbitration Act, 1991
(Ontario), which Act shall, to the extent not inconsistent with this section,
govern such arbitration, and the decision of the arbitrator shall be final and
binding as between the parties hereto and all persons claiming through or under
them and shall not be subject to appeal. The costs of such arbitration shall be
paid as determined by the arbitrator. The arbitration shall be conducted in
accordance with the Rules of Conduct of Arbitrations of the Arbitration and
Mediation Institute of Ontario Inc., in effect at the date of commencement of
such arbitration except to the extent that such rules are modified by or are
inconsistent with this Agreement, in which event the provisions of this
Agreement shall govern.
An award of the arbitrator pursuant to the foregoing provisions is a
condition precedent to the right of either party or any person claiming through
or under a party to bring any suit, action or other proceeding with respect to
this Agreement in any court of law or equity against either party or any person
claiming through or under a party or against the arbitrator in respect of any
matter for which arbitration is herein provided, except for actions seeking a
temporary restraining order or injunction related to the purposes of this
Agreement, or suit to compel compliance with this dispute resolution process.
Judgement upon the award rendered by the arbitrator may be entered in any court
having jurisdiction and thereupon execution or other legal process may issue
thereon. The parties hereto and all persons claiming through or under them
hereby attorn to the jurisdiction of the arbitrator and to the jurisdiction of
any court in which the judgement may be entered. Arbitration may not be waived
except upon delivery by the parties of a written notice to that effect.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date and year first written above.
EXECUTIVE
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Xxxxxx Xxxxxx
BLUE GIANT EQUIPMENT CORPORATION
By:
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Xxxxxxx Xxxxxxxx
Its: Chief Executive Officer
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