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EXHIBIT 10.15
Form of Employment Agreement of Xxxxxxx Xxxxxxx.
This Employment Agreement (the "Agreement"), dated as of May 29, 2000, is
entered into by and between EXFO Electro-Optical Engineering Inc., a corporation
having its principal place of business at 000 Xxxxx Xxxxxx, Xxxxxx, Xxxxxx,
X0X 0X0, Xxxxxx (the "Corporation") and Xxxxxxx Xxxxxxx, an individual with an
address at 4310, Cure-Xxxxxx, Cap Rouge (Qu#bec) X0X 0X0 (the "Employee").
TERMS OF AGREEMENT
In consideration of this Agreement and the continued employment of the Employee
by the Corporation, the parties agree as follows :
1. EMPLOYMENT
The Corporation hereby agrees to continue to employ Employee, on
a full-time basis to continue to act as President and Chief Executive
Officer of the Corporation and to perform such acts and duties and furnish
such services to the Corporation in connection with and related to that
position as is customary for persons with similar positions in like
companies, as the Corporation's Board of Directors shall from time to time
reasonably direct. Employee hereby accepts said employment. Employee shall
use his best and most diligent efforts to promote the interests of the
Corporation; shall discharge his duties in a highly competent manner; and
shall devote his full business time and his best business judgement, skill
and knowledge to the performance of his duties and responsibilities
hereunder. This Agreement shall not be interpreted to prohibit Employee
from making passive personal investments or conducting private business
affairs if such activities do not materially interfere with the services
required under this Agreement. Employee shall report to the Board of
Directors of the Corporation.
2. COMPENSATION AND BENEFITS
2.1 SALARY
During the term of this Agreement, the Corporation shall pay Employee
the remuneration indicated in Schedule A. The Employee's remuneration
may be adjusted in accordance with the Corporation's policies and
procedures.
2.2 DISCRETIONARY BONUS
During the term of this Agreement, the Employee may participate in
such bonus plan or plans of the Corporation as the Board of Directors
or its Human Resources Committee may approve for the Employee. Nothing
contained in this
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Section 2.2 shall be construed to require the Board of Directors to
approve a bonus plan or in any way grant to Employee the right to
receive bonuses not otherwise approved.
2.3 BENEFITS
During the term of this Agreement, the Employee shall receive such
benefits as customarily provided to other officers and employees of
the Corporation, as applicable. Details of such benefits as of the
date hereof are set forth in Schedule B of this Agreement.
2.4 VACATION
Employee may take the number of weeks of paid vacation during each
year that is indicated in Schedule A at such times as shall be
consistent with the Corporation's vacation policies and (in the
Corporation's judgement) with the Corporation's vacation schedule for
officers and other employees.
2.5 EXPENSES
Pursuant to the Corporation's customary policies in force at the time
of payment, Employee shall be promptly reimbursed, against
presentation of vouchers or receipts therefor, for all authorised
expenses properly incurred by him on the Corporation's behalf in the
performance of his duties hereunder.
3. TERMINATION
3.1 DISABILITY
If during the term of this Agreement, Employee becomes ill, disabled
or otherwise incapacitated so as to be unable to perform his usual
duties (a) for a period in excess of one hundred twenty (180)
consecutive days and this incapacity has not been remedied within one
(1) year of the first day of disability, or (b) for more than two
hundred and seventy (270) days in any consecutive eighteen (18) month
period and this incapacity has not been remedied within eighteen (18)
months of the first day of disability, then the Corporation shall have
the right to terminate this Agreement, subject only to applicable
laws, on thirty (30) day's notice to Employee. Termination pursuant to
this Section 3.1 shall not affect any rights Employee may otherwise
have under any disability insurance policies in effect at the time of
such termination.
3.2 DISCHARGE FOR CAUSE
The Corporation may discharge Employee and terminate his employment
under this Agreement for cause without further liability to the
Corporation by the
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positive vote of 2/3 of the members of the Board of Directors of the
Corporation except that the Employee, if a Director, shall not be
entitled to vote thereon. As used in this Section 3.2, "cause" shall
mean any or all of the following;
(a) gross or wilful misconduct of Employee during the course of his
employment;
(b) conviction of any criminal offence involving dishonesty, breach
of trust or moral turpitude during the term of this Agreement; or
(c) Employee's breach of any of the material terms of this Agreement.
3.3 TERMINATION WITHOUT CAUSE
Upon thirty (30) days prior written notice, the Corporation may
terminate this Agreement without cause by a positive vote of 2/3 of
the members of the Board of Directors of the Corporation except that
the Employee, if a Director, shall not be entitled to vote thereon.
The Corporation shall incur no liability in this regard except that it
shall continue to pay Employee the remuneration in accordance with the
terms of Schedule A at his then current rate for a twenty-four (24)
month period after termination if termination shall occur prior to the
events mentioned in Section 3.4. In addition, any outstanding stock
options that have not vested in accordance with their terms, will
become fully vested and shall be exercised by Employee within a period
of twelve (12) months from the time of such termination or shall be
automatically terminated immediately following such twelve (12) month
period.
3.4 TERMINATION FOLLOWING MERGER OR ACQUISITION
If the Corporation merges or consolidates with another corporation, if
substantially all of the assets of the Corporation are sold, or if a
majority of the outstanding stock of the Corporation is acquired by
another person and Employee's employment is subsequently terminated by
the Corporation or surviving entity other than for cause as described
in 3.2, Employee shall be entitled to 24 months' remuneration plus
health benefits.
In addition to the foregoing, any outstanding stock options (including
substituted stock options of the acquiring or surviving corporation in
such merger or acquisition) which have not vested in accordance with
their terms will become fully vested and shall be exercised by
Employee within a period of twelve (12) months from the time of such
termination or shall be automatically terminated immediately following
such twelve (12) month period. For purposes of this Section 3.4,
Employee shall be entitled to treat a material demotion in title or
function or a physical relocation of worksite of more than 50 km as
termination under this Section 3.4, but only if Employee expressly so
notifies the Corporation and terminates his employment hereunder
within thirty (30)
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days of such demotion or relocation. If Employee is offered a
substantially similar position with the surviving entity and no
physical relocation (beyond a 50 km radius form Employee's regular
worksite) is required by such position, Employee's refusal to accept
such position shall not be treated as subject to this Section 3.4, but
rather shall be treated as a voluntary termination by Employee under
Section 3.5.
3.5 VOLUNTARY TERMINATION BY EMPLOYEE
In the event of voluntary termination by Employee, Employee shall be
entitled only to those amounts that have accrued to the date of
termination in accordance with the terms hereof or are expressly
payable under the terms of the Corporation applicable benefit plans or
are required by applicable law. In addition, any outstanding stock
options that have not vested in accordance with their terms, will
become fully vested and shall be exercised by Employee within a period
of twelve (12) months from the time of such termination or shall be
automatically terminated immediately following such twelve (12) month
period. The Corporation may, in its sole and absolute discretion,
confer such other benefits or payments as it determines, but Employee
shall have no entitlement thereto.
4. MISCELLANEOUS
4.1 INSURANCE
The Corporation hereby represents that it is presently the holder of
directors and officers insurance in an amount and having a coverage
that is recommended by its legal advisors and insurance broker as
adequate taking into account the status of the Corporation, its size
and the nature of its activities. The Corporation undertakes to ensure
that such insurance shall remain in force throughout the term of this
Agreement and in the event such insurance is cancelled, the
Corporation shall immediately advise the Employee in writing.
4.2 ADDITIONAL AGREEMENTS
Upon execution of this Agreement, the Employee shall execute and
deliver to the Corporation, unless previously delivered, an
Exclusivity, Confidentiality, Assignment of Work Product,
Non-Competition and Non-Solicitation Agreement.
4.3 Notices
Any notice or communication given by any party hereto to the other
party with regard to this Agreement shall be in writing and personally
delivered or mailed by certified mail, return receipt requested,
postage prepaid, to the addresses
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provided above. All notices shall be deemed given when actually
received. Any person entitled to receive notice (or a copy thereof)
may designate in writing, by notice to the others, such other address
to which notices to such person shall thereafter be sent.
4.4 ENTIRE AGREEMENT
This Agreement contains the entire understanding of the parties in
respect of its subject matter and supersedes all prior agreements and
understandings between the parties with respect to such subject
matter, provided, however that nothing in this Agreement shall affect
the Employee's obligations under the Exclusivity, Confidentiality,
Assignment Of Work Product, Non-Competition And Non-Solicitation
Agreement signed by the Employee.
4.5 AMENDMENT WAIVER
This Agreement may not be amended, supplemented, cancelled or
discharged, except by written instrument executed by the party
affected thereby. No failure to exercise, and no delay in exercising,
any right, power or privilege hereunder shall operate as a waiver
thereof. No waiver of any breach of any provision of this Agreement
shall be deemed to be a waiver of any preceding or succeeding breach
of the same or any other provision.
4.6 BINDING EFFECT, ASSIGNMENT
Employee's rights or obligations under this Agreement may not be
assigned by Employee. The rights and obligations set forth in this
Agreement shall bind and inure to the benefit of the Corporation and
its successors and assigns. The Corporation will require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets
of the Corporation to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the
Corporation would be required to perform it as if no such event had
taken place. As used in this Agreement, "Corporation" shall mean the
Corporation as herein before defined any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
4.7 HEADINGS
The headings contained in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this
Agreement.
4.8 GOVERNING LAW, INTERPRETATION
This Agreement shall be construed in accordance with and governed for
all purposes by the laws applicable in the province of Quebec.
Service of process
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in any dispute shall be effective (a) upon the Corporation, if service
is made on any officer of the Corporation other than the Employee; (b)
upon the Employee, if served at Employee's residence last known to the
Corporation with an information copy to the Employee at any other
residence, or care of a subsequent employer, of which the Corporation
may be aware.
4.9 FURTHER ASSURANCES
Each of the parties agrees to execute, acknowledge, deliver and
perform, or cause to be executed, acknowledged, delivered and
performed at any time, or from time to time, as the case may be, all
such further acts, deeds, assignments, transfers, conveyances, powers
of attorney and assurances as may be necessary or proper to carry out
the provisions or intent of this Agreement.
4.10 LANGUAGE
This Agreement has been written in English at the express request of
the parties. Cette entente a ete redigee en anglais a demande
expresse des parties.
4.11 SEVERABILITY
If any one or more of the terms, provisions, covenants or restrictions
of this Agreement shall be determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
EXFO ELECTRO-OPTICAL
ENGINEERING INC.
BY: ________________________ _________________________
Authorized Signatory XXXXXXX XXXXXXX
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SCHEDULE A
TO
XXXXXXX XXXXXXX EMPLOYMENT AGREEMENT
REMUNERATION AND VACATION
1. REMUNERATION
(i) Salary from date of Employment Agreement to August 31, 2000:
$275,000 per annum (no variable portion applicable during this
period).
(ii) Remuneration from September 1, 2000 to August 31, 2001: Base
salary of $275,000 per annum, plus a variable portion of
remuneration which is $137,500 per annum upon attainment by the
Corporation of 100% of the Health Indicator established by the
Board of Directors of the Corporation for that financial year.
In the event the Corporation: (a) does not fully attain, or (b)
exceeds, the Health Indicator for the year in question, the
variable portion of the remuneration shall be paid in the same
proportion as the attainment of the Health Indicator up to a
maximum of 150%. The variable portion shall be paid within sixty
(60) days of the end of each of the Corporation's financial years
commencing with the financial year ending August 31, 2001.
In the event the Employee's employment is terminated by the
Corporation with cause or the Employee voluntarily terminates his
employment, the variable portion of the remuneration shall be
payable on a proportionate basis for the financial year during
which the employment terminated for such reasons.
(iii) Participation in the Corporation's Stock Option Plan: Upon
adoption by the Corporation of its draft Stock Option Plan, the
Employee shall be granted 30,000 options in accordance with the
terms of the Stock Option Plan and subject to vesting conditions
that extend over 4 years, up to a maximum of 5 years, and that
are tied to the Corporation's Health Indicator (full details will
be available at the granting of the options).
(iv) The first review of remuneration shall occur on or about
September 1, 2001 and on or about every September 1 thereafter.
(v) The Corporation shall provide the Employee with an automobile
responding to the requirements of the Employee's position in the
Corporation.
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2. VACATION
Four (4) weeks of paid vacation annually from the date hereof onwards.
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SCHEDULE B
TO
XXXXXXX XXXXXXX EMPLOYMENT AGREEMENT
BENEFITS
The description below is a summary of the Corporation's present benefit package.
It is expected that this package will evolve in the future.
1. The Corporation offers to management a long-term disability plan that
covers two-thirds of salary for life. The Corporation pays the premium,
thus this income would be taxable.
2. Management is covered by collective insurance that is paid by the
Corporation in the following proportions: 40%, 60%, 80% and 100% in years
1, 2, 3 and 4 respectively. This insurance covers vision correction,
chiropractor, etc. but excludes dental coverage. It also includes life
insurance.
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