EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT MADE as of the 1st day of January, 2003.
BETWEEN
STANTEC INC.
a corporation incorporated under the laws of Canada
("STN")
- and -
XXXXXXX X. XXXXXXXXXXXX
of the City of Edmonton, in the Province of Alberta
(the "Executive")
WHEREAS the Executive has represented that he has professional engineering
and management skills relevant to STN's business; and
WHEREAS STN desires to employ the Executive, and the Executive desires to
accept such employment upon the terms and conditions hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
mutual covenants herein contained, the parties agree as follows:
1. EMPLOYMENT
1.1 EMPLOYMENT SERVICES
STN hereby employs the Executive to perform the services described in
Schedule "A" hereto and the Executive hereby accepts such employment by
STN on the terms and conditions as herein provided, unless the parties
hereto agree otherwise.
1.2 GENERAL DUTIES AND OBLIGATIONS OF EXECUTIVE
The Executive:
a) Shall provide his full-time services to STN, and undertake such
assignments as STN may designate, in accordance with STN's policies
and procedures in effect from time to time;
b) During such time as the Executive's full-time services are made
available to STN as aforesaid:
(i) the Executive agrees that he will devote his time, energy and
ability to the furtherance of the business success of STN; and
(ii) the Executive will not, without the prior approval of STN,
carry on or perform any professional or technical services for
his own private advantage, and
c) shall use his best efforts to promote the success of the business
now or hereafter conducted by STN.
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1.3 TERM OF EMPLOYMENT
Subject to Section 3.1 hereof, the employment of the Executive by STN on
the terms and conditions set out in this Agreement shall commence on
January 1, 2003 and shall continue in full force until December 31, 2008
unless, prior to such date, this agreement is modified by mutual written
agreement between the Executive and STN or terminated by either party in
accordance with the terms hereof.
1.4 CHANGE OF EMPLOYER
The Executive covenants and agrees that in the event the Executive is
employed at some later date by any of STN's subsidiary or affiliated
companies (the "NEW EMPLOYER"), this Agreement is still in full force and
effect, and shall be deemed to apply to the New Employer in the same
manner and to the same extent as if the New Employer had signed this
Agreement.
2. REMUNERATION OF EXECUTIVE
2.1 REMUNERATION
In consideration of the Executive providing the services described herein,
STN shall cause to be paid to the Executive an amount determined and
payable in accordance with Schedule "B" hereto.
2.2 OPTIONS
Subject to Section 3.7, the Executive shall be granted options to purchase
STN Common Shares as described on Schedule "C" hereto.
2.3 TRAVEL AND OTHER EXPENSES
STN agrees to reimburse the Executive for travel and entertainment
expenses actually and properly incurred by the Executive in the course of
performing his services hereunder, such payment to be made within fourteen
days of the Executive furnishing STN with reasonable supporting statements
and vouchers in a form and manner acceptable to STN, acting reasonably
2.4 VACATION
The Executive shall be entitled to take four weeks annual paid vacation,
in accordance with STN policies in effect from time to time.
2.5 BENEFITS
The Executive shall be entitled to receive benefits offered by STN to its
Canadian employees as modified from time to time and as currently
described on Xxxx Net.
3. TERMINATION
3.1 TERMINATION BY STN WITH CAUSE
STN may terminate the employment of the Executive for cause at any time
and without notice and without any payment of any remuneration to him
whatsoever save and except for annual Base Salary and Annual Bonus
actually earned to the date of such termination, calculated in accordance
with the provisions of Schedule "B" attached hereto.
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3.2 TERMINATION BY STN WITHOUT CAUSE
Subject to Sections 3.3, 3.5 and 3.6 hereof, if STN terminates the
employment of the Executive for any reason other than cause at any time
during the term of this Agreement:
a) STN shall cause to be paid to the Executive the annual Base Salary
and Annual Bonus actually earned by the Executive to the date of
termination together with a lump sum amount of $750,000, such lump
sum payment to be paid on the date of such termination in lieu of
all future payments for Base Salary, benefits and Annual Bonus, and
b) The Executive shall be entitled to exercise all options vested to
date together with all options which would otherwise have vested in
the calendar year of termination.
3.3 TERMINATION ON DEATH OF EXECUTIVE
The employment of the Executive shall be automatically terminated on death
whereupon STN shall cause to be paid to the executor of his estate the
annual Base Salary and Annual Bonus actually earned by the Executive to
the date of death.
3.4 TERMINATION BY EXECUTIVE BY REASON OF CHANGE OF CONTROL OF STN
a) In this Agreement, a change of control is deemed to have taken place
if any one of the following occur after the effective date hereof:
(i) a third person, including a person, firm, syndicate, group or
corporation, becomes the beneficial owner, directly or
indirectly, of shares of STN carrying more than 50% of the
total number of votes that may be cast for the election of
directors of STN; or
(ii) a third person, including a person, firm, syndicate, group or
corporation, becomes the beneficial owner, directly or
indirectly, of shares of STN carrying more than 30% of the
total number of votes that may be cast for the election of
directors of STN and when nominees of the said 30% holder are
elected as a majority of the STN Board of Directors.
b) If during the term of this Agreement, there occurs a change of
control of STN, the Executive shall, in his sole discretion and at
any time within the six month period immediately following the date
of such change of control, be entitled to terminate this Agreement
and STN shall cause to be paid to the Executive the annual Base
Salary and Annual Bonus actually earned by the Executive to the date
of termination together with a lump sum of $750,000, such lump sum
payment to be paid on the date of such termination in lieu of all
future payments for Base Salary, benefits and Annual Bonus.
3.5 TERMINATION BY EXECUTIVE
Subject to Section 3.4, the Executive may terminate this agreement for any
reason by giving STN a written notice of his intention to terminate this
Agreement. The effective date of termination of this Agreement shall be
the later of the date set out in the written notice as the termination
date, or eight weeks after the date the Executive gives STN the written
notice, provided however, that in either case STN shall cause to be paid
annual Base Salary and Annual Bonus actually earned by the Executive to
the date of such termination.
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3.6 TERMINATION ON PERMANENT INCAPACITY OF EXECUTIVE
The employment of the Executive shall be terminated if the Executive is
unable by any reason of illness, disease, mental or physical disability or
incapacity, or otherwise, to perform his services hereunder for a period
of 180 days (whether or not consecutive) during any twelve month period,
whereupon STN shall cause to be paid annual Base Salary and Annual Bonus
actually earned by the Executive to the date of termination. Nothing
herein, however, shall disentitle the Executive from any rights or
entitlements to which the Executive may be entitled pursuant to the
company benefits programs in the event that such permanent incapacity
occurs.
3.7 EXECUTIVE'S OPTION RIGHTS
The Executive and STN agree that the rights of the Executive to exercise
options to purchase securities of STN are contained in a separate
agreement and any limitation on the Executive's rights to exercise options
by reason of termination are contained in such separate agreement and not
in this Agreement.
4. EXECUTIVE'S OBLIGATIONS
4.1 CONFIDENTIALITY
The Executive covenants and agrees with STN that he will not, during his
employment or at any time hereafter, disclose any confidential information
concerning the business or businesses now or hereafter conducted by STN
including information relating to pricing policies, marketing schemes and
sales, distribution and client lists of such business or businesses to any
person, except in the ordinary course of his employment with STN, nor
shall he use the same for any purpose other than with respect to the
business or businesses now or hereafter conducted by STN.
4.2 NON-COMPETITION
The Executive acknowledges and agrees that in the performance of his
duties he will necessarily acquire detailed knowledge of the business and
affairs of STN and that STN will suffer harm in the event that such
confidential information is disclosed to its competitors or in the event
that the Executive uses such confidential information for any purpose
other than the performance of his duties as an employee of STN. Therefore,
the Executive covenants and agrees that for a period of two (2) years
following termination of the Executive's employment with STN under this
Agreement, he will not directly or indirectly as an owner, employee,
servant, consultant, contractor, agent or otherwise, engage in business or
otherwise provide services in competition with STN in the Provinces of
Alberta, British Columbia, Manitoba, Saskatchewan or Ontario.
The foregoing restrictions also apply to other geographic areas, including
international areas, for work in the following categories:
a) work being done or started by STN or any of its affiliated or
subsidiary companies;
b) work for which a previous report or proposal has been prepared or
submitted by STN or any of its affiliated or subsidiary companies
within two (2) years prior to the termination of this Agreement; and
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c) work for which promotional efforts by STN or any of its affiliated
or subsidiary companies, or any one in their employ, had occurred
during the period of two (2) years prior to the termination of this
Agreement.
The Executive has read and understood the provisions of this Section 4.2,
agrees with the restrictions set forth herein and agrees that the time
period and geographic location restrictions are fair, reasonable and
legitimately necessary for the protection of STN's interests. In the event
a Court of competent jurisdiction declares the time period or geographic
location restrictions to be unreasonable, the Executive and STN covenant
and agree that the time period restriction shall be reduced to one (1)
year and the geographic location restriction be limited to the Provinces
of Alberta and Ontario. In the further event that a court of competent
jurisdiction declares the reduced time period or geographic location
restrictions to be unreasonable, the Executive and STN covenant and agree
that the time period restriction shall be further reduced to six (6)
months and the geographic location restriction be further limited to the
Province of Alberta.
4.3 NON-SOLICITATION OF EMPLOYEES AND CLIENTS
The Executive acknowledges and agrees that during the continuance of his
employment and for a period of two (2) years thereafter, he will not, for
his own private advantage, or for the advantage of any third party:
a) hire any employee of STN or its affiliates or subsidiaries, or
induce or attempt to induce any employee of STN or its affiliates or
subsidiaries to leave their employment with STN; nor
b) contact, solicit, sell, serve, divert or receive any business to or
from any of the clients of STN or its affiliates or subsidiaries.
4.4 EXCEPTION FOR TERMINATION WITHOUT CAUSE
In the event of the termination of this Agreement by STN without cause,
the provisions of Sections 4.2 and 4.3 shall be limited to one (1) year
(or such lesser period if applicable, as set out in Section 4.2 above).
4.5 STN INFORMATION
All notes, records, working papers, files, research material, literature,
drawings, computer software and other proprietary information ("STN's
Information") accumulated or developed by the Executive in connection with
his assignments at STN and any technological concepts or devices resulting
therefrom, whether patentable or otherwise, are considered the property of
STN and the Executive may not copy, secure, transmit, keep, store, gain
from, sell or use STN's Information or property for any purposes other
than in undertaking assignments at STN. To the extent necessary, the
Executive covenants and agrees to execute and deliver to STN, or such of
its subsidiaries or affiliates as STN directs, such documents or
instruments as may be necessary to assign any of the rights or interests
described in this section that are developed by the Executive.
4.6 STANTEC POLICIES
The Executive agrees to comply with all policies and practices established
by STN and communicated to the Executive from time to time. In the event
of a conflict between
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such policies and practices and this Agreement, the terms of this
Agreement shall prevail.
5. INTERPRETATION
5.1 CURRENCY
Unless otherwise indicated, all dollar amounts referred to in this
Agreement are expressed in Canadian funds.
5.2 SECTIONS AND HEADINGS
The division of this Agreement into Articles and Sections and the
insertion of headings are for convenience of reference only and shall not
affect the interpretation of this Agreement. Unless otherwise indicated,
any reference in this Agreement to an Article, Section or a Schedule
refers to the specified Article, Section or Schedule to this Agreement.
5.3 NUMBER, GENDER AND PERSONS
In this Agreement, words importing the singular number only shall include
the plural and vice versa, words importing gender shall include all
genders and words importing persons shall include individuals,
corporations, partnerships, associations, trusts, incorporated
organizations, governmental bodies and other legal or business entities.
5.4 ENTIRE AGREEMENT
Effective January 1, 2003, this Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and
supersedes all prior agreements (including the agreement between STN and
the Executive dated April 1, 1998), understandings, negotiations and
discussions, whether written or oral. There are no conditions, covenants,
agreements, representations, warranties or other provisions, express or
implied, collateral, statutory or otherwise, relating to the subject
matter hereof except as herein provided.
5.5 TIME OF ESSENCE
Time shall be of the essence of this Agreement.
5.6 SEVERABILITY
If any provision of this Agreement is determined by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect, such
determination shall not impair or affect the validity, legality or
enforceability of the remaining provisions hereof, and each provision is
hereby declared to be separate, severable and distinct.
5.7 APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with the
laws of the Province of Alberta and the federal laws of Canada applicable
therein, and each party hereby irrevocably and unconditionally submits to
the exclusive jurisdiction of the courts of Alberta and all courts
competent to hear appeals therefrom.
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5.8 SUCCESSORS AND ASSIGNS
This Agreement shall enure to the benefit of and be shall binding on and
enforceable by the parties and, where the context so permits, their
respective heirs, legal representatives, successors and permitted assigns.
The Executive may not assign any of his rights or obligations hereunder
without the prior written consent of STANTEC.
5.9 AMENDMENT AND WAIVERS
No amendment or waiver of any provision of this Agreement shall be binding
on any party unless consented to in writing by such party. No waiver of
any provision of this Agreement shall constitute a waiver of any other
provision, nor shall any waiver constitute a continuing waiver unless
otherwise expressly provided.
5.10 NOTICE
a) Any notice or other written communication required or permitted
hereunder shall be in writing and:
(i) delivered personally to the party or, if the party is a
corporation, to an officer of the party to whom it is
directed;
(ii) sent by registered mail, postage prepaid, return receipt
requested (provided that such notice or other written
communication shall not be forwarded by mail if on the date of
mailing the party sending such communication knows or ought
reasonably to know of any difficulties with the postal system
which might affect the delivery of mail, including the
existence of an actual or imminent postal service disruption
in the city from which such communication is to be mailed or
in which the address of the recipient is found); or
(iii) sent by facsimile, confirmation of delivery requested.
b) All such notices shall be addressed to the party to whom it is
directed at the following address:
(i) If to the Executive: 000 Xxxxxxx Xxxxxxxx
Xxxxxxxx XX X0X 0X0
Fax No. (000) 000-0000
(ii) If to STN: Attention: Chairman of the Board
#000 00000 000 Xxxxxx
Xxxxxxxx XX X0X 0X0
Fax No. (000) 000-0000
c) Any party may at any time change its address hereunder by giving
notice of such change of address to the other party or parties in
the manner specified in this section. Any such notice or other
written communication shall, if mailed or given by facsimile, be
effective on the day it is first attempted to be delivered to such
party at such address (whether or not such delivery takes place),
and if given by personal delivery, shall be effective on the day of
actual delivery.
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5.11 FURTHER ASSURANCE
Each of the parties shall execute and deliver all such further documents
and do such further acts and things as may be reasonably required from
time to time to give effect to this agreement.
5.12 EXECUTION
This Agreement may be executed in several counterparts, each of which,
when so executed, shall be deemed to be an original, and such counterparts
together shall constitute one and the same instrument.
5.13 LEGAL ADVICE
The Executive hereby represents and warrants to STN and acknowledges and
agrees that he had the opportunity to seek and was not prevented nor
discouraged by STN from seeking independent legal advice prior to the
execution and delivery of this Agreement and that, in the event that he
did not avail himself of that opportunity prior to signing this Agreement,
he did so voluntarily without any undue pressure and agrees that his
failure to obtain independent legal advice shall not be used by him as a
defence to the enforcement of his obligations under this Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement on __________
___________with effect as of the date first above written.
STANTEC CONSULTING LTD.
Per: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx, Chairman
SIGNED, SEALED AND DELIVERED )
in the presence of: )
)
/s/ Xxx Xxxxx ) /s/ Xxxxxxx X. Xxxxxxxxxxxx
-------------------------------- ) ---------------------------------
Witness ) Xxxxxxx X. Xxxxxxxxxxxx
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SCHEDULE "A"
EMPLOYMENT SERVICES
The Executive shall serve as President and Chief Executive Officer of the
Corporation and, as such, shall perform services commensurate with such
position.
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SCHEDULE "B"
REMUNERATION
1. STN shall cause to be paid to the Executive as his remuneration an amount
equal to the aggregate of the following amounts:
a. an annual base salary (the "Base Salary") of $375,000; and
b. an "Annual Bonus" equal to 1.5% of annual income of STN before
employee performance bonuses, executive bonuses and taxes.
PAYMENT DATES
1. The Base Salary shall be paid on a bi-weekly basis.
2. The Annual Bonus payable to the Executive by STN in respect of any fiscal
year of STN shall be payable annually not later than 180 days after the
end of each fiscal year.
3. Any Annual Bonus unpaid when due shall accrue interest at a rate of CIBC
Prime plus 2% until paid.
4. In the event that the employment of the Executive is terminated at a date
other than at the end of STN's fiscal year, the Annual Bonus earned by the
executive in the year of termination shall be equal to the product of the
full-year Annual Bonus that would otherwise have been payable to the
Executive for the year in which the termination occurs, multiplied by a
factor of the number of days in the year prior to the date of termination
divided by three hundred and sixty-five (365).
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SCHEDULE "C"
SHARE OPTIONS
Pursuant to Section 2.2 of the Agreement, the Executive shall be granted options
as follows:
NUMBER OF OPTIONS STRIKE PRICE VESTING DATE EXPIRY DATE
------------------------ ------------------------------ --------------- ---------------
30,000 issued January 3, STN price at close of market January 3, 2004 January 3, 2010
2003 on January 2, 2003
30,000 issued January 3, STN price at close of market January 3, 2005 January 3, 2011
2003 on January 2, 2003 plus two
dollars and seventy-five cents
30,000 issued January 3, STN price at close of market January 3, 2006 January 3, 2012
2003 on January 2, 2003 plus five
dollars and fifty cents
30,000 issued January 3, STN price at close of market January 3, 2007 January 3, 2013
2003 on January 2, 2003 plus eight
dollars and twenty-five cents
30,000 issued January 3, STN price at close of market January 3, 2008 January 3, 2013
2003 on January 2, 2003 plus eleven
dollars
The options shall be issued in accordance with the provisions of the Stantec
ESOP, a copy of which has previously been delivered to the Executive, provided
that:
a) all such options shall be issued and vest immediately in the event
of a change of control of STN as defined in Section 3.4 of this
Agreement; and
b) in the event of the Executive's death or the termination of his
employment by the Corporation other than for cause prior to the
exercise of these options:
i. all such options which have vested on or before the date
of the Executive's death or the termination of his
employment shall not terminate or cease to exist and may
be exercised at any time prior to their expiry date by
the Executive or his legal representative as applicable;
and
ii. all such options which have not vested on or before the
date of the Executive's death or the termination of his
employment shall terminate and cease to exist.
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