THIS AGREEMENT IS made as of the 29th day of August, 2001,
BETWEEN:
NORSKE XXXX CANADA LIMITED, a corporation continued under the laws of
Canada,
(the "Company")
OF THE FIRST PART,
AND
XXXXXXX X. XXXXXX
(the "Executive"),
OF THE SECOND PART.
WHEREAS:
A. The Company recognizes the valuable services that the Executive has
provided and is continuing to provide to the Company and its subsidiaries
and believes that it is reasonable and fair to the Company that the
Executive receive fair treatment in the event of a Control Change (as
hereinafter defined);
B. The Company further recognizes that the Executive has acquired special
skills relating to and extensive familiarity with the business of the
Company and its subsidiaries;
C. In the event of a Control Change, there is a possibility that the
employment of the Executive would be terminated without cause or adversely
modified and the Executive has expressed concern in that regard to the
Company;
D. The directors of the Company determined on July 26, 2001 that it would be
in the best interests of the Company to induce the Executive to remain in
the employ of the Company and its subsidiaries by indicating that in the
event of a Control Change, the Executive would have certain automatic and
guaranteed rights and by providing an incentive to the Executive to assist
the Company in managing any Control Change which may be proposed;
E. Both the Company and the Executive wish formally to agree as to the
terms and conditions that will govern the termination or modification of
the employment of, and payments to be made to, the Executive following a
Control Change;
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
the parties, the parties agree as follows:
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1. RECITALS
1.1. The parties agree, and represent and warrant to each other, that the above
recitals are true and accurate.
2. INTERPRETATION
2.1. The headings of the sections, subsections and clauses herein are inserted
for convenience of reference only and shall not affect the meaning or
construction hereof.
2.2. This Agreement shall be construed and interpreted in accordance with the
laws of the Province of British Columbia and the federal laws of Canada
applicable therein. Each of the parties hereby irrevocably attorns to the
jurisdiction of the courts of the Province of British Columbia with respect
to any matters arising out of this Agreement.
2.3. For the purposes of this Agreement, the following terms shall have the
following meanings, respectively:
(a) "Annual Salary" shall mean the sum of:
(i) the annual salary of the Executive, payable to the Executive by
the Company and its subsidiaries as at the end of the month
immediately preceding the month in which a Control Change occurs
(the "Prior Month") and if an annual salary has not been
established, it shall be calculated by multiplying the monthly
salary of the Executive in effect for the Prior Month by 12; and
(ii) an amount equal to the target bonus of the Executive (currently
62% of base salary) under the Short Term Incentive Plan of the
Company for the fiscal year of the Company in which the Control
Change occurs;
(b) "Approved Control Change" shall mean a Control Change wherein the
actions causing the Control Change shall have been approved by the
affirmative votes of at least a majority of the Incumbent Directors,
it being understood that this Agreement in no way delimits a period of
time during which the Incumbent Directors must decide whether to so
approve any Control Change;
(c) "Control Change" shall mean:
(i) any change in ownership, direct or indirect, of shares of the
Company and/or securities ("Convertible Securities") convertible
into, exchangeable for or representing the right to acquire
shares of the Company, as a result of or following which Norske
Skogindustrier ASA ("NSI") beneficially owns, directly or
indirectly, or exercises control or direction over, shares of the
Company and/or Convertible Securities such that, assuming only
the conversion, exchange or exercise of Convertible Securities
beneficially owned by NSI, NSI would beneficially own, directly
or indirectly, or exercise control or direction over, shares of
the Company that would entitle the holders thereof to cast more
than 50% of the votes attaching to
3
all shares of the Company that may be cast to elect directors of
the Company;
(ii) any change in ownership, direct or indirect, of shares of the
Company and/or Convertible Securities, as a result of or
following which an Acquiror (as defined in paragraph (v) below)
beneficially owns, directly or indirectly, or exercises control
or direction over, shares of the Company and/or Convertible
Securities such that, assuming only the conversion, exchange or
exercise of Convertible Securities beneficially owned by the
Acquiror,
A. the Acquiror would beneficially own, directly or indirectly,
or exercise control or direction over, shares of the Company
that would entitle the holders thereof to cast more than 35%
of the votes attaching to all shares of the Company that may
be cast to elect directors of the Company, and
B. if NSI then beneficially owns, directly or indirectly, or
exercises control or direction over, shares of the Company
that would entitle holders thereof to cast more than 35% of
the votes attaching to all shares of the Company that may be
cast to elect directors of the Company, the Acquiror would
beneficially own, directly or indirectly, or exercise
control or direction over, shares of the Company that would
entitle the holders thereof to cast more of the votes
attaching to all shares of the Company that may be cast to
elect directors of the Company than may be cast by holders
of shares of the Company beneficially owned, directly or
indirectly, or over which control or direction is exercised,
by NSI; or
(iii) the acquisition by NSI or an Acquiror of all or substantially
all of the assets of the Company resulting in a realization by
the holders of shares of the Company of all or a substantial part
of their investment;
and for the purposes of this clause2.3(c)
(iv) the expression "NSI" shall include any group of persons which
includes NSI, any persons acting jointly or in concert with NSI
and any persons associated or affiliated within the meaning of
the Securities Act (British Columbia) with NSI, or any such group
of persons or persons acting jointly or in concert;
(v) the expression "Acquiror" shall mean a person, group of persons
or persons acting jointly or in concert, or persons associated or
affiliated within the meaning of the SECURITIES ACT (British
Columbia) with any such person, group of persons or persons
acting jointly or in concert, but shall not include an Acquiror
as so defined which consists of or includes NSI; and
4
(vi) the terms "change in ownership" and "acquisition" include a
transaction or series of transactions by way of takeover bid,
purchase, amalgamation, merger, reorganization, arrangement,
recapitalization, liquidation or other business combination;
(d) "Control Change Period" shall mean the period commencing on the date
of a Control Change and ending on the earlier of: (i) the second
anniversary of the date of the Control Change; and (ii) the
Executive's Normal Retirement Date;
(e) "Date of Termination" shall mean the date of termination of the
Executive's employment, whether by death of the Executive, by the
Executive or by the Company;
(f) "Disability" shall mean the physical or mental illness of the
Executive resulting in the Executive's failure to substantially
perform his duties on a full-time basis;
(g) "Good Reason" shall include, without limitation, the occurrence of any
of the following without the Executive's written consent (except in
connection with the termination of the employment of the Executive for
Just Cause or Disability);
(i) a change (other than those that are clearly consistent with a
promotion) in the Executive's position or duties,
responsibilities (including, without limitation, to whom the
Executive reports and who reports to the Executive), title or
office in effect immediately prior to the Control Change, which
includes any removal of the Executive from or any failure to
re-elect or re-appoint the Executive to any such positions or
offices;
(ii) a reduction by the Company or any of its subsidiaries of the
Executive's salary, benefits or any other form of remuneration or
any change in the basis upon which the Executive's salary,
benefits or any other form of remuneration payable by the Company
or its subsidiaries is determined or any failure by the Company
to increase the Executive's salary, benefits or any other forms
of remuneration payable by the Company or its subsidiaries in a
manner consistent (both as to frequency and percentage increase)
with practices in effect immediately prior to the Control Change
or with practices implemented subsequent to the Control Change
with respect to the senior executives of the Company and its
subsidiaries, whichever is more favourable to the Executive; or
(iii) any failure by the Company or its subsidiaries to continue in
effect any benefit, bonus, profit sharing, incentive,
remuneration or compensation plan, stock ownership or purchase
plan, pension plan or retirement plan in which the Executive is
participating or entitled to participate immediately prior to the
Control Change, or the Company or its subsidiaries taking any
action or failing to take any action that would adversely affect
the Executive's participation in or reduce his rights or benefits
under or pursuant to any such plan, or the Company or its
subsidiaries failing to increase or improve such rights or
benefits on a basis consistent with
5
practices in effect immediately prior to the Control Change or
with practices implemented subsequent to the Control Change with
respect to the senior executives of the Company and its
subsidiaries, whichever is more favourable to the Executive; or
(iv) the Company or its subsidiaries relocating the Executive to any
place other than the location at which he reported for work on a
regular basis immediately prior to the Control Change or a place
within 50 kilometres of that location; or
(v) any failure by the Company or its subsidiaries to provide the
Executive with the number of paid vacation days to which he was
entitled immediately prior to the Control Change or the Company
or its subsidiaries failing to increase such paid vacation on a
basis consistent with practices in effect immediately prior to
the Control Change or with practices implemented subsequent to
the Control Change with respect to the senior executives of the
Company and its subsidiaries, whichever is more favourable to the
to the Executive; or
(vi) the Company or its subsidiaries taking any action to deprive the
Executive of any material fringe benefit not hereinbefore
mentioned and enjoyed by him immediately prior to the Control
Change, or the Company or its subsidiaries failing to increase or
improve such material fringe benefits on a basis consistent with
practices in effect immediately prior to the Control Change or
with practices implemented subsequent to the Control Change with
respect to the senior executives of the Company and its
subsidiaries, whichever is more favourable to the Executive; or
(vii) any breach by the Company of any provision of this Agreement; or
(viii) the good faith determination by the Executive that, as a result
of the Control Change or any action or event thereafter, the
Executive's status or responsibility in the Company or its
subsidiaries have been diminished or the Executive is being
effectively prevented from carrying out his duties and
responsibilities as they existed immediately prior to the Control
Change.
(h) "Incumbent Director" shall mean any member of the board of directors
of the Company who was a member of the board of directors of the
Company immediately prior to a Control Change and any successor to an
Incumbent Director who was recommended or elected or appointed to
succeed any Incumbent Director by the affirmative vote of the
directors when that affirmative vote includes the affirmative vote of
a majority of the Incumbent Directors then on the board of directors
of the Company;
(i) "Just Cause" shall mean:
(i) the continued failure by the Executive to substantially perform
his duties according to the terms of his employment (other than
those: (A) that
6
follow a change (other than those clearly consistent with a
promotion) in his position or duties; or (B) resulting from the
Executive's Disability) after the Company has given the Executive
reasonable notice of such failure and a reasonable opportunity to
correct it;
(ii) the engaging by the Executive in any act that is materially
injurious to the business or reputation of the Company,
monetarily or otherwise, but not including, following a Control
Change, the expression of opinions contrary to those of directors
of the Company who are not Incumbent Directors or those of the
Control Group; or
(iii) the engaging by the Executive in any criminal or dishonest act
resulting or intended to result directly or indirectly in
personal gain of the Executive or any other person at the
Company's expense;
(j) "Normal Retirement Date" shall mean the date as of which the Executive
would be required to retire, determined in accordance with the
Company's practices and policies relating to retirement generally
applicable to its senior executives and in effect immediately prior to
the Control Change or at the Date of Termination, whichever is more
favourable to the Executive and in the absence of any such practices
and policies, the date when the Executive attains the age of 65;
(k) "Resignation" shall mean, if there is a Control Change, the Executive
giving the Company not less than 30 days prior written notice of his
resignation, provided that such notice is given to the Company not
later than 90 days after the Executive learns of the Control Change
and makes express reference to the Control Change; and
(l) "Retirement" shall mean the Executive's retirement from employment on
the Normal Retirement Date.
2.4. Unless otherwise specified, all dollar amounts referred to in this
Agreement are expressed in Canadian dollars.
3. APPLICATION OF AGREEMENT AND TERM
3.1. This Agreement shall apply if a Control Change occurs within the term of
two years after the date hereof or such longer period as the Company may
from time to time specify by notice to the Executive. The obligations of
the Company under section 5 shall survive the expiration of this Agreement
if there is a Control Change prior to the end of the term of this
Agreement.
3.2. The terms set out in this Agreement are in lieu of (and not in addition to)
and in full satisfaction of any and all other claims or entitlements which
the Executive has or may have upon the termination of his employment after
a Control Change and during the Control Change Period. As a precondition to
receiving any payments or benefits pursuant to this Agreement, the
Executive agrees to execute and deliver to the Company a release document
of all claims which the Executive may then have for whatever reason or
cause in connection with the Executive's employment and in respect of such
7
termination (except for any claims arising in connection with the
performance by the Company of its obligations under this Agreement).
4. OBLIGATIONS OF THE EXECUTIVE
4.1. From and after the date of this Agreement:
(a) The Executive shall not solicit, initiate or encourage proposals or
offers from, or provide information relating to the Company to, any
person, entity or group in connection with or relating to any
acquisition or disposition or all or any material part of the
Company's issued and outstanding shares, any amalgamation, merger,
arrangement, sale of all or any material part of the assets of the
Company or any subsidiary thereof, take-over bid, reorganization,
recapitalization, liquidation, winding-up of, or other business
combination or any similar transaction involving the Company or any of
its subsidiaries, without in each case the approval of the board of
directors of the Company.
(b) The provisions of clause 4.1(a) shall not apply to the sale by the
Executive of any shares of the Company owned by him.
(c) This Agreement shall automatically terminate if the Executive breaches
the provisions of clause 4.1(a).
4.2. If the Executive's employment is terminated by the Executive by Resignation
after the occurrence of a Control Change which is an Approved Control
Change, the Company may require the Executive to continue to provide his
services for a period of up to 90 days after the Control Change, in which
case the Company may require that the Executive's termination of employment
by Resignation be effective on a date which is acceptable to the Company,
provided that such date is not more than 90 days after the date of the
Control Change. Prior to the effective termination of the Executive's
employment by Resignation, the Executive will assist as reasonably required
to accomplish an orderly transition in the management of the business and
affairs of the Company, but nothing in this subsection 4.2 shall limit the
rights of the Executive under any other provisions of this Agreement and
the Date of Termination for purposes of clause 5.1(e) shall be the date
specified in the written notice of Resignation given by the Executive.
5. OBLIGATIONS OF THE COMPANY
5.1. The Company shall have the following obligations in the event that the
Executive's employment is terminated subsequent to a Control Change during
the Control Change Period:
(a) DEATH. If the Executive's employment is terminated by reason of the
Executive's death, the Executive's family shall receive benefits in a
manner consistent with and at least equal in amount to those provided
by the Company and its subsidiaries to surviving families of the
senior executives of the Company and its subsidiaries under such
plans, programs and policies relating to family death benefits, if
any, as are in effect at the date of the Executive's death.
8
(b) DISABILITY. Unless otherwise determined by the Chairman of the Board
of the Company, the employment of the Executive shall automatically
terminate in the event of Disability for a period of six months out of
any 18 month period. If the Executive's employment is terminated by
reason of Disability , the Executive and/or the Executive's family
shall be entitled thereafter to receive reasonable termination and
severance payments and allowances and disability and other benefits in
a manner consistent with and at least equal in amount to those
provided by the Company to disabled senior executives of the Company
and/or their families in accordance with such plans, programs and
policies relating to disability, if any, as are in effect at the Date
of Termination.
(c) RETIREMENT. If the Executive's employment is terminated by reason of
Retirement, the Executive shall be entitled thereafter to receive
reasonable retirement benefits at least equal to those provided by the
Company to senior executives in accordance with such plans, programs
and policies relating to retirement, if any, as are in effect at the
Date of Termination.
(d) TERMINATION BY THE COMPANY FOR JUST CAUSE AND TERMINATION BY THE
EXECUTIVE OTHER THAN FOR GOOD REASON OR BY RESIGNATION. If the
Executive's employment is terminated by the Company for Just Cause, or
is terminated by the Executive other than for Good Reason or by
Resignation, the Company shall pay to the Executive, if not
theretofore paid, the fraction of the Annual Salary earned by or
payable to the Executive by the Company or its subsidiaries during the
then current fiscal year of the Company for the period to and
including the Date of Termination, and neither the Company nor its
subsidiaries shall have any further obligations to the Executive under
this Agreement.
(e) TERMINATION BY THE COMPANY OTHER THAN FOR JUST CAUSE, DISABILITY OR
DEATH AND TERMINATION BY THE EXECUTIVE FOR GOOD REASON OR BY
RESIGNATION. If the Executive's employment is terminated by the
Company other than for Just Cause, Disability or death or is
terminated by the Executive for Good Reason or by Resignation:
(i) the Company shall pay to or to the order of the Executive by no
more than two lump sum payments in cash or certified cheque
within ten days after the Date of Termination, the aggregate of
the following amounts (less any deductions required by law):
A. if not theretofore paid, the Executive's Annual Salary for
the then current fiscal year of the Company for the period
to and including the Date of Termination; and
B. as partial compensation for the Executive's loss of
employment, an amount equal to the lesser of: (1) three
times the Annual Salary; and (2) an amount equal to the
result obtained when the Annual Salary is multiplied by a
fraction, the numerator of which is the number of days
between the Date of Termination and the
9
Executive's Normal Retirement Date and the denominator of
which is 365;
(ii) if the Executive holds any options, rights, warrants or other
entitlements for the purchase or acquisition of shares in the
capital of the Company or any affiliate thereof (collectively,
"Rights"), regardless of whether such Rights may then be
exercised, such Rights shall then be deemed to be available for
exercise and, if the Executive so elects by notice in writing to
the Company, such Rights shall be deemed to have been exercised
at the price provided for in such Rights and the Executive shall
be deemed to have immediately sold the securities arising from
such exercise to the Company for the fair market value thereof
(which in the event of dispute shall be determined within 30 days
of the delivery of such notice at the Company's expense by a
valuator satisfactory to both the Company and the Executive using
such assumptions or methods as such valuator may think in its
absolute discretion best reflect the intention of this paragraph
5.1(e)(ii) and such determination shall be final and binding) and
the Company shall pay to the Executive, in the manner and at the
time contemplated by paragraph 5.1(e)(i) the difference between
the aggregate price for such securities and their deemed
acquisition price to the Company;
(iii) all employment benefit and perquisites to which the Executive is
entitled immediately prior to the Date of Termination will
terminate on the Date of Termination, except that the Company
will provide to, continue or maintain for the Executive, as
applicable, the employment benefits and perquisites described in
Schedule A;
(iv) the Executive shall be entitled to receive benefits from the
Norske Xxxx Canada Limited Retirement Plan for Salaried Employees
(the "RPP") and the Norske Xxxx Canada Limited Supplemental
Retirement Plan for Senior Executives (the "Supplemental Plan")
on the following terms:
A. if on the Date of Termination the Executive has not
satisfied a vesting condition under the RPP or the
Supplemental Plan, the Executive will be deemed to have
satisfied such vesting condition;
B. if on the Date of Termination the Executive is required to
have any form of consent from the Company to immediately
receive benefits under the Supplemental Plan, the Executive
will be deemed to have received such a consent;
C. subject to paragraph 5.1(e)(iv)A, the Executive will be
entitled to receive benefits from the RPP in accordance with
its terms on the basis of the Executive's earnings and
service with the Company to the Date of Termination;
10
D. the Executive will be entitled to have a notional
contribution made to the Supplemental Plan equal to the
present value (determined by an actuary acceptable to the
Company and the Executive) of the amounts that would have
been notionally contributed to the Supplemental Plan on the
Executive's behalf in respect of the five year period
following the Date of Termination, and for the purpose of
determining the amount of such notional contributions, the
Company shall be deemed, despite the Supplemental Plan's
terms, to make annual notional contributions to the
Supplemental Plan on the Executive's behalf in an amount
equal to the product of X and Y where:
X = the percentage rate at which notional contributions
are made to the Supplemental Plan, as determined by the
Supplemental Plan's terms in effect on the date of
Control Change or the Date of Termination, whichever is
more favourable to the Executive (it being acknowledged
that as of the date hereof the Supplemental Plan
requires such contributions to be made at a rate of
12%); and
Y = despite the definition of Earnings in the
Supplemental Plan, an amount equal to the amount
specified in clause 2.3(a)(i) plus 50% of the amount
specified in clause 2.3(a)(ii), both determined at the
Date of Termination.
For greater certainty, it is confirmed that the Company will
make no contributions to the RPP on the Executive's behalf
in respect of the 5 year period, with the result that the
deduction which would normally be applied to the Company's
notional contributions to the Supplemental Plan on the
Executive's behalf on account of such contributions will not
apply;
E. subject to subparagraphs 5.1(e)(iv)A, B and D, the Executive
will be entitled to receive benefits from the Supplemental
Plan on the basis of the Executive's earnings and service
with the Company to the Date of Termination in accordance
with the terms of the Supplemental Plan in effect on the
date of Control Change or the Date of Termination, whichever
is more favourable to the Executive;
(v) the Company shall provide the Executive for a period of up to one
year from the Date of Termination with the job relocation
counseling services of a firm chosen from time to time by the
Executive, at a cost to the Company not to exceed $25,000.
5.2. The benefits payable under this section 5 shall not be reduced in any
respect in the event that the Executive shall secure or shall not
reasonably pursue alternative employment following the termination of the
Executive's employment.
11
6. GENERAL
6.1. 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 Company after termination of
his employment by the Company without Just Cause or for Disability or
termination by the Executive of his employment for Good Reason or by
Resignation; provided that nothing in this subsection 6.1 shall release the
Executive from any obligation to keep confidential and not make use of any
information relating to the business and affairs of the Company.
6.2. The Executive agrees that after termination of his employment by him, he
will tender his resignation from any position he may hold as an officer or
director of the Company or any of its affiliated or associated companies.
Doing so will not reduce the obligations of the Company described herein
where the Executive terminates his employment for Good Reason.
6.3. The Company agrees to pay, without requiring the Executive first to pay
such fees and expenses, all legal fees and expenses that the Executive or
the Executive's legal representatives may reasonably incur or face arising
out of or in connection with this Agreement (but this Agreement only),
including any litigation concerning the validity or enforceability of, or
liability under, any provision of this Agreement or any action by the
Executive or the Executive's legal representatives to enforce his or their
rights under this Agreement (but this Agreement only), provided that the
Executive or the Executive's legal representatives shall reimburse the
Company for such legal fees and expenses paid by the Company in respect of
any such litigation in which the Company is the successful party, and the
Company agrees to pay 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 the prime commercial annual lending rate for
Canadian dollar demand loans announced from time to time by The Royal Bank
of Canada during the period of such nonpayment.
6.4. Any notice required or permitted to be given under this Agreement shall be
in writing and shall be properly given if delivered by hand or mailed by
prepaid registered mail addressed as follows:
(a) in the case of the Company to:
Norske Xxxx Canada Limited
9th Floor, 000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
ATTENTION: Chairman of the Board
(b) in the case of the Executive, to:
the last address of the Executive in the records of the Company and
its subsidiaries
12
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 by registered mail, 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.
6.5. This Agreement shall enure to the benefit of and be binding upon the
Executive and his heirs, executors and administrators and upon the Company
and its successors and assigns.
6.6. Nothing herein derogates from any rights the Executive may have under
applicable law, except as set out in this section. The parties agree that
the rights, entitlements and benefits set out in this Agreement to be paid
to the Executive are in full satisfaction of all rights of the Executive
under the Employment Standards Act (British Columbia) or any successor
legislation from time to time and any rights or entitlements the Executive
may have as against subsidiaries of the Company as a result of the
termination of his employment with such subsidiaries.
6.7. This Agreement may be amended only by an instrument in writing signed by
both parties.
6.8. Neither party may waive or shall be deemed to have waived any right it has
under this Agreement (including under this section) except to the extent
that such waiver is in writing.
IN WITNESS WHEREOF, the parties have executed this Agreement.
NORSKE XXXX CANADA LIMITED
by: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Director
/s/ Xxx X. Xxxxxx
-------------------------------
Director
/s/ Xxxxxxx X. Xxxxxx
-------------------------------
XXXXXXX X. XXXXXX
SCHEDULE A
TREATMENT OF BENEFITS AND PERQUISITES
All benefits, privileges and perquisites the Executive might formerly have
received as a result of employment with the Company will cease as of the Date of
Termination except as expressly set out below:
1. Provincial Medical Services Plan (MSP): coverage for Executive and
dependants will cease at the end of the month in which the Date of
Termination occurs and the Company will reimburse the Executive for the
cost of coverage for the Executive and his dependents for an additional 12
months.
2. Life Insurance: the current level of coverage (up to 3 times annual salary)
will continue until the Date of Termination, and the Executive will have 31
days from the Date of Termination to convert this coverage to an individual
life insurance policy, to a maximum of $200,000.
3. Optional Life Insurance: any executive, spousal, or child optional life
insurance coverage the Executive had by reason of employment with the
Company will cease on the Date of Termination. The Executive may convert
all or part of any optional executive and/or spousal insurance, up to a
maximum of $200,000 each, within 31 days of this date, to individual life
insurance policies at prevailing individual, as opposed to group insurance
rates and without medical examination.
4. Accidental Death and Dismemberment Insurance ("AD&D"):
(a) coverage under AD&D will cease on the Date of Termination; and
(b) any executive, spousal, or child optional AD&D coverage the Executive
had by reason of employment will cease on the Date of Termination; the
Executive may elect to convert all or part of any optional executive
and/or spousal insurance, up to a maximum of $200,000 each, within 31
days after the Date of Termination.
5. Health Spending Account: contributions by the Executive will cease on the
Date of Termination. The Executive may submit claims against the balance
accrued to the Date of Termination, until the end of the calendar year in
which the Date of Termination occurs.
6. Disability Benefits: short term and long term disability coverage will
cease at the Date of Termination.
7. Vacation: all accrued regular and extended vacation entitlement, including
pro-rated regular and, if applicable, extended entitlement to the Date of
Termination, will be paid to the Executive at the Date of Termination.
8. Share Purchase Plan: participation and/or contributions through payroll
deduction will cease on the Date of Termination. All amounts in the
Executive's account must be withdrawn within 30 days of the Date of
Termination.
ii
9. Group RRSP: participation and/or contributions by way of payroll deduction
by the Executive will cease at the Date of Termination. Treatment of the
Executive's fund balances will be as per the terms of the Plan.
10. Leased Automobile: the Executive is entitled to elect to purchase the
automobile leased by the Company, and designated for his use, at the Date
of Termination for the then current residual option price of the
automobile. The Executive will bear all sales and other tax costs and any
other costs and taxes which may be associated with any such transfer.
11. Club Memberships:
(a) the payment by the Company of any personal club memberships held by
the Executive will cease on the Date of Termination; and
(b) the payment of any corporate club membership dues in respect of the
Executive will cease on the Date of Termination, and the membership
will remain with the Company.
12. Company Loans, i.e. housing, auto insurance, leased vehicle driver option,
computer purchase, etc.: the balance outstanding on any and all company
loans granted to the Executive will become due and payable in full on the
Date of Termination; provided that the Executive's interest free housing
loan, if any, shall not be repayable in full until the earlier of the date
of commencement of alternate employment which is comparable as to annual
compensation and authorities, duties and responsibilities to the position
held by the Executive immediately prior to the Date of Termination and the
third anniversary of the date of drawing of funds.
13. Canada Savings Bonds: if the Executive was purchasing Canada Savings Bonds
through payroll deductions, he may elect to receive a refund for the amount
already paid, or purchase the bond in full within 5 days after the Date of
Termination.
14. Charitable donations and social club fees: deductions will cease at the
Date of Termination.
15. Post Retirement Medical and Dental Benefits: the Executive will become
eligible on the later of the first of the month following the Date of
Termination or the first of the month following his 55th birth date, to
apply for medical, extended health and dental benefits on the basis of
treatment equivalent to that being received by an employee of the Company
who retired on the Date of Termination.
