Exhibit 10.5
DELIVERED BY HAND
PRIVATE & CONFIDENTIAL
----------------------
June 26, 2002
Xxxxxx X. Xxxxxxx
00 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Dear Xxx:
The purpose of this letter is to confirm the terms of your employment with
Maxxcom Inc. This letter supersedes your employment agreement dated October 2,
2000, as amended on November 24, 2001.
POSITION:
Executive Vice President, Corporate Development, Maxxcom Inc. reporting to the
President & CEO.
BASE SALARY:
Effective April 1, 2002, the base salary will be increased from $250,000.00 to
$300,000.00 per annum.
BONUS:
You will be entitled to a guaranteed bonus of $150,000 for each financial year
of Maxxcom, commencing with the financial year 2002, payable quarterly in
arrears commencing with the quarter ended June 30, 2002.
In addition you will be entitled to a discretionary bonus of up to 60% of
earned base salary. Your bonus payment will be based on the overall financial
performance of Maxxcom and your personal contribution to our success. Criteria
for determining the discretionary portion of your bonus will be established as
soon as practical.
If your employment is terminated for any reason other than cause (or voluntary
resignation by you), you will be entitled to your bonus for the previous year
if unpaid and a pro rata bonus for the current year to the date of termination.
RETENTION BONUS:
In the event of a sale of all or a portion of Maxxcom (see Change of Control
below), you will be paid a bonus of one times your annual salary providing that
you do not resign as an employee of Maxxcom within three months following
closing.
CHANGE OF CONTROL:
If any Change of Control shall occur during your term of employment, you shall
continue to honour this agreement and your obligations hereunder for a minimum
period of six (6) months following such Change of Control. In the event that
you conclude, in your sole discretion, that you no longer wish to continue your
employment with Maxxcom following a Change of Control, you may, within sixty
(60) days following such six (6) month period, give notice to the Company of
your retirement, whereupon you will be entitled to be paid within fourteen (14)
days of the Change of Control a lump sum retiring allowance equal to eighteen
(18) months of salary, plus an amount calculated as follows:
(i) in the event a Change of Control occurs in 2003 or later, an
amount equal to the average of the bonuses payable to you in
respect of the immediately preceding two completed financial
years of Maxxcom multiplied by 1.5, or
(ii) in the event a Change of Control occurs in 2002, an amount
equal to the bonus payable to you in respect of the previous
financial year of Maxxcom multiplied by 1.5, or
(iii) in the event that a Change of Control occurs in 2001, an
amount equal to the bonus which would have been paid to you
had you remained employed until bonuses are issued for that
year (in this situation, this portion of the lump sum will be
payable as soon as possible following the year-end).
A "Change of Control" shall mean:
(i) any person or company (other than MDC) or persons or
companies acting jointly or in concert (as such term is
defined in the Securities Act (Ontario)) acquiring (i) more
than twenty percent (20%) of the outstanding voting
securities of the Company, and (ii) more voting securities of
the Company than those beneficially owned by MDC, or
(ii) any person or company (other than MDC) or persons or
companies acting jointly or in concert (as such term is
defined in the Securities Act (Ontario)) acquiring beneficial
ownership of more than forty percent (40%) of the outstanding
voting securities of the Company.
MAXXCOM STOCK OPTIONS:
This will confirm that on May 16, 2002 (the "Grant Date"), the Compensation
Committee approved the grant of Options to purchase 300,000 Maxxcom shares at
$1.60 per share in accordance with the company's Stock Option Plan (subject to
the following): 1/3 of the Options shall vest on the Grant Date; 1/3 of the
Options shall vest one year thereafter and the balance two years after the
Grant Date. The maximum period you may hold the Options is 10 years.
Notwithstanding anything in the Plan, in the event of:
(A) the termination of your employment without cause at law, all Options
granted to you will vest immediately and may be exercised by you; or
(B) resignation of employment by you, you will be entitled to exercise all
options which are then vested,
provided that all such options referred to in paragraphs (A) and (B) must be
exercised within 30 days of the relevant event.
CAR ALLOWANCE:
You will be provided with a car allowance of $1,000 per month to cover the
costs (including lease, gas, maintenance, insurance, etc.) related to the use
of your vehicle in the performance of your duties.
CELLULAR PHONE:
A cellular phone will be provided.
VACATION:
You will be entitled to four (4) weeks of vacation per year.
SEVERANCE:
In the event that your employment is terminated for any reason other than for
cause, you will be entitled to be paid within fourteen (14) days of termination
a lump sum retiring allowance equal to eighteen (18) months of salary plus an
amount calculated as follows:
(i) in the event that termination occurs in 2003 or later, an
amount equal to the average of the bonuses payable to you in
respect of the immediately preceding two completed financial
years of Maxxcom multiplied by 1.5, or
(ii) in the event that termination occurs in 2002, an amount equal
to the bonus payable to you in respect of the previous
financial year of Maxxcom multiplied by 1.5, or
(iii) in the event that termination occurs in 2001, an amount equal
to the bonus which would have been paid to you had you
remained employed until bonuses are issued for that year (in
this situation, this portion of the lump sum will be payable
as soon as possible following the year-end).
Medical and dental will be continued to a maximum of twelve (12) months or
until you have obtained alternative employment, whichever occurs first.
MITIGATION:
For greater certainty, the payment of any lump sum retiring allowance hereunder
is not subject to deduction on account of mitigation.
BENEFITS:
You will qualify for participation in the Maxxcom benefits program. Attached
please find a benefits manual.
EXPENSE REIMBURSEMENT:
You will be reimbursed for travel, mobile phone and entertainment expenses and
parking costs incurred by you in the performance of your duties.
CONFIDENTIALITY:
You agree that you will not, during the period of time that you provide
services to Maxxcom, nor at any time thereafter, disclose to any person, firm
or corporation any confidential information belonging to the Company, including
without limitation, trade secrets, customer lists, financial information,
marketing or product information or any other information or material
designated as confidential by the Company.
Xxx, thank you for your past and ongoing contribution to Maxxcom and we look
forward to our continued success.
Please acknowledge your agreement to these amendments by signing below and
returning a copy of this letter to me.
Regards,
Xxxxx X. Xxxxx
Chairman
Accepted: ________________________________ Date: June 26, 2002
Xxxxxx X. Xxxxxxx
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS AGREEMENT made as of this 24th day of September, 2003
B E T W E E N:
MAXXCOM INC., a corporation incorporated under the
laws of the Province of Ontario
(hereinafter called the "COMPANY")
- and -
MDC CORPORATION INC., a corporation amalgamated
under the laws of the Province of Ontario
(hereinafter called "MDC")
WHEREAS the Company and Xxxxxx X. Xxxxxxx are parties to an employment
agreement dated as of June 26, 2002 (the "EMPLOYMENT AGREEMENT");
AND WHEREAS the Company desires to assign, and MDC desires to assume,
the rights and obligations of Maxxcom under the Employment Agreement;
NOW THEREFORE for good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged), each of the parties hereto hereby
covenants and agrees as follows:
1. Maxxcom hereby assigns to MDC, and MDC hereby assumes and agrees to
perform, all of the rights and obligations of Maxxcom under the Employment
Agreement, effective as of September 24, 2003.
2. This agreement shall be governed by and construed in accordance
with the laws of the Province of Ontario and the federal laws of Canada
applicable therein, and the parties hereto hereby irrevocably attorn to such
jurisdiction.
3. This agreement may be executed in counterpart, each of which when
so executed shall be deemed to be an original and such counterparts together
shall constitute one and the same instrument. Counterparts may be executed
either in original or telecopied form and the parties to this agreement adopt
any signatures received by receiving telecopier machine as original signatures
of the parties.
IN WITNESS WHEREOF, the undersigned have executed this agreement as of
the date first above written.
MAXXCOM INC. MDC CORPORATION INC.
Per: ________________________ Per: ________________________
Authorized Signing Officer Authorized Signing Officer
The undersigned hereby acknowledges and agrees to the assignment and
assumption constituted hereby.
DATED as of this 24th day of September, 2003.
_________________________________
Xxxxxx X. Xxxxxxx
