EXHIBIT 10.2
EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into as of this 4th day of
June, 2004 by and between Xxxxx Xxxxxx ("Executive"), MAAX Corporation, a Nova
Scotia unlimited company (the "Company") and MAAX Canada Inc., a Canadian
corporation ("MAAX Canada," and together with the Company, the "Companies").
WHEREAS, MAAX Canada desires to obtain the benefit of the experience,
supervision and services of Executive in connection with the operation of its
business, and MAAX Canada desires to employ Executive upon the terms and
conditions hereinafter set forth, and Executive is willing and able to accept
such employment on such terms and conditions.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Companies and Executive agree
as follows:
1. Agreement to Employ; No Conflicts. Upon the terms and subject to the
conditions of this Agreement, MAAX Canada hereby employs Executive, and
Executive hereby accepts continued employment with MAAX Canada. Executive
represents that (a) he is entering into this Agreement voluntarily and that his
employment hereunder and compliance with the terms and conditions hereof will
not conflict with or result in the breach by him of any agreement to which he is
a party or by which he may be bound, (b) he has not, and in connection with his
employment with MAAX Canada will not, violate any non-competition,
non-solicitation or other similar covenant or agreement by which he is or may be
bound and (c) in connection with his employment with MAAX Canada, he will not
use any confidential or proprietary information he may have obtained in
connection with employment with any prior employer (other than MAAX Inc. or any
of its subsidiaries prior to the Closing).
2. Employment Duties. During the Term (as defined below), subject to
the direction and control of the Board of Directors of the Company (the
"Board"), Executive shall serve as President and Chief Executive Officer of MAAX
Holdings, Inc. ("Holdings"), MAAX Canada and the Company, shall oversee and
direct the operations of Holdings and the Companies and shall perform such other
duties as are consistent with the responsibilities of a President and Chief
Executive Officer. Executive shall also serve on request during all or any
portion of the Term as a director of Holdings, MAAX Canada and/or the Company,
and as an officer or director of any of Holdings' subsidiaries or affiliates
without any additional compensation therefor other than as specified in this
Agreement. During the Term, Executive shall devote all of his business time,
energy, experience and talents to such employment, shall devote his best efforts
to advance the interests of the Companies and shall not engage in any other
business activities, as an employee, director, consultant or in any other
capacity, whether or not he receives any compensation therefor, without the
prior written consent of the Board; provided, however, that Executive shall be
permitted to serve as a director of one other company, with the prior written
consent of the Board (which shall not be unreasonably withheld), provided that
such directorship does not interfere in any way with the performance of
Executive's duties hereunder.
3. Indefinite Employment. The Executive's employment hereunder shall
commence on the date of this Agreement and continue indefinitely; unless
terminated as provided in Section 6 hereof (the "Term").
4. Place of Employment. Executive's principal place of employment shall
be Sainte-Xxxxx, Quebec; provided however, that no later than September 2004,
Executive's principal place of employment shall be Montreal, Quebec. In the
event that the principal place of employment of Executive is relocated after
September 2004 to a site that is outside of Montreal, Quebec, MAAX Canada may,
subject to Section 6.6(c) hereof, require Executive to relocate Executive's
principal residence to within 50 miles of such site. Notwithstanding the
foregoing, Executive acknowledges that the duties to be performed by Executive
hereunder are such that Executive may be required to travel.
5. Compensation; Reimbursement. During the Term, MAAX Canada shall pay
or provide to Executive, in full satisfaction for his services provided
hereunder, the following:
5.1. Base Salary. During the Term, MAAX Canada shall pay Executive a base
salary of C$500,000 per year ("Base Salary"), payable in accordance with the
payroll policies of MAAX Canada for senior executives as from time to time in
effect, less such amounts as may be required to be withheld by applicable
federal, provincial and local law and regulations (the "Payroll Policies"). The
Board will review Executive's salary annually during the Term.
5.2. Cash Bonus. For each fiscal year of MAAX Canada during the Term,
Executive will be eligible to receive from MAAX Canada a cash bonus of up to
100% of his Base Salary (the "Maximum Bonus Amount"), if the Company achieves
(as determined jointly by Executive and the Board (or Compensation Committee, if
any)) the EBITDA (as defined below), Working Capital (as defined below) and/or
strategic objective targets for such year, all as set forth in the Company's
annual management budget, as approved by the Board. In each year during the
Term, Executive will be entitled to (i) 40% of the Maximum Bonus Amount if the
Company achieves the EBITDA target for such year (the "Annual EBITDA Target"),
and will be entitled to a pro rata portion thereof if the Company achieves at
least 95% of the EBITDA achieved in the prior year, calculated based on a linear
extrapolation between 95% of EBITDA achieved in the prior year and the
applicable year's Annual EBITDA Target (e.g., if the actual EBITDA for the
applicable year is US$105 million, 95% of prior year EBITDA is US$95 million and
the Annual EBITDA Target for the applicable year is US$115 million, Executive
will be entitled to receive a bonus equal to 20% of the Maximum Bonus Amount
[(US$105 million-US$95 million)/(US$115 million-US$95 million) x 40% = 20%],
(ii) 40% of the Maximum Bonus Amount if the Company achieves the Working Capital
(as defined below) target (the "Annual Working Capital Target") for such year,
as set forth in the Company's annual management budget, and (iii) 20% of the
Maximum Bonus Amount if the Company achieves certain other strategic objectives
(e.g., lean initiatives, new customers, personnel matters, acquisition
initiatives, etc.), as determined jointly by Executive and the Board (or
Compensation Committee, if any) for each fiscal year during the Term, prior to
the beginning of such fiscal year. In the event the Company makes an acquisition
or disposition of a company or line of business or other substantial change
(including a substantial increase or decrease in capital expenditures) to the
business of the Company, the Annual EBITDA Target, Annual Working Capital Target
and other strategic objectives may be adjusted by the Board, in good faith, to
adjust for such acquisition, disposition or other change. For the purpose
hereof,
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"EBITDA" shall mean, in any fiscal year, EBITDA, as defined in the Stockholders
Agreement, dated as of June 4, 2004, by and among Holdings and the stockholders
set forth therein. For the purpose hereof, "Working Capital" shall mean, in any
fiscal year, accounts receivable of the Company and its subsidiaries, plus
inventory of the Company and its subsidiaries, minus accounts payable of the
Company and its subsidiaries, all as calculated in accordance with generally
accepted accounting principles consistently applied, as reflected in the
Company's audited consolidated financial statements for such fiscal year.
Notwithstanding the foregoing, for fiscal year 2005, Executive shall be entitled
to a pro rata portion of his bonus for the period from June 1, 2004 through
February 28, 2005, based on EBITDA, Working Capital and/or strategic objective
targets to be agreed upon by Executive and the Board. The calculation of EBITDA,
Working Capital and strategic objective targets for any fiscal year will be
adjusted such that items originally denominated in Canadian dollars will be
translated into U.S. dollars at the exchange rate used in the preparation of the
Company's annual management budget. Management shall provide to the Board
financial statements for the subsidiaries of the Companies that report their
results in Canadian dollars which correspond to the audited financial statements
for the applicable fiscal year. Such financial statements shall be accompanied
by an analysis prepared by management that reconciles the difference, if any,
between the calculation of EBITDA, Working Capital and strategic objective
targets, to the extent set forth therein, based on the exchange rate used in the
preparation of the Company's annual management budget and the calculations
thereof based on the exchange rate used for the audited financial statements for
the applicable fiscal year.
5.3. Expenses. MAAX Canada shall pay or reimburse Executive for business
expenses reasonably incurred by him in the performance of his duties as an
employee of MAAX Canada in accordance with MAAX Canada's usual policies upon
receipt from Executive of written substantiation of such expenses.
5.4. Benefits. During the Term, Executive shall be entitled to
participate in all health, life, disability, sick leave and other benefits
generally made available to MAAX Canada's senior executives from time to time.
5.5. Retirement Plan. MAAX Canada will contribute to Executive's
Registered Retirement Savings Plan as follows: (i) C$15,500 for calendar year
2004, (ii) C$16,500 for calendar year 2005, (iii) C$18,000 for calendar year
2006 and (iv) C$18,000 for each calendar year thereafter, such amounts to be
paid by the Company with respect to each such year not later than February of
the immediately following year, provided that Executive continues to be employed
by MAAX Canada or any of its subsidiaries. Such contributions shall be in lieu
of participation in the Company's or its subsidiaries' 401(k) plan or similar
benefit plan.
5.6. Automobile. MAAX Canada will provide Executive with a vehicle of a
similar category to the vehicle provided to Executive by MAAX Inc. as of March
10, 2004 and will assume the related expenses on the same terms as provided on
such date.
5.7. Vacation. Executive shall be entitled to four (4) weeks of paid
vacation per year during the Term without carryover accumulation.
5.8. Club Membership. Executive will be entitled to an executive club
membership in a club of his choosing, provided that MAAX Canada will not be
obligated to pay membership and other fees in connection therewith in excess of
C$6,000 annually.
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5.9. Stock Options. In addition to the compensation payable to Executive
as set forth in this Section 5, Executive shall receive grants of stock options
on the date hereof.
6. Termination. Executive's employment hereunder may be terminated as
follows:
6.1. Upon Disability. If during the Term, Executive shall become
physically or mentally disabled, whether totally or partially, either
permanently or so that Executive, in the good faith judgment of the Board, is
unable substantially and competently to perform his duties hereunder for a
period of 180 consecutive days or for 180 days during any one year period during
the Term (a "Disability"), MAAX Canada or the Company may terminate Executive's
employment hereunder. In order to assist the Board in making that determination,
Executive shall, as reasonably requested by the Board, (a) make himself
available for medical examinations by one or more physicians chosen by the Board
and (b) grant any such physicians access to all relevant medical information
concerning him or arrange to furnish copies of all relevant medical records to
such physicians chosen by the Board. If Executive's employment is terminated for
Disability, Executive shall be entitled to (i) the Severance Amount (as defined
below), (ii) salary payments for services already rendered, (iii) expenses
incurred through the date of termination and (iv) a pro rata portion of
Executive's bonus in respect of the portion of the fiscal year which has elapsed
at the time of termination; provided that such bonus shall be based upon the
actual bonus that Executive would have received had Executive remained employed
by MAAX Canada or a subsidiary thereof for the full fiscal year, and shall not
be payable until calculated by the Company after the end of such fiscal year. It
is acknowledged and agreed by the parties that the actual damages to Executive
in the event of termination under this Section 6.1 would be difficult if not
impossible to ascertain, and, therefore, the Severance Amount and the other
payment provisions set forth hereinabove shall be Executive's sole and exclusive
remedy in the case of termination under this Section 6.1 and shall, as
liquidated damages or severance pay or both, be considered for all purposes in
lieu of any other rights or remedies, at law or in equity, which Executive may
have in the case of such termination. "Severance Amount" shall mean (A) an
amount equal to Executive's Base Salary for 18 months, plus an amount equal to
1.5 times the Maximum Bonus Amount for the year in which termination occurs,
which Severance Amount will be payable in equal installments over 18 months in
accordance with the Payroll Policies and (B) benefits (other than short-term and
long-term disability coverage), to the maximum extent permissible under the
benefit plans generally made available to MAAX Canada's senior executives from
time to time, for 18 months following the date of termination.
6.2. Upon Death. If Executive dies during the Term, Executive's
employment hereunder shall automatically terminate as of the close of business
on the date of his death, and all of Executive's rights to payments and any
other benefits otherwise due hereunder shall cease immediately, provided,
however, that Executive's estate shall be entitled to (i) salary payments for
services already rendered, (ii) expenses incurred through the date of
termination and (iii) a pro rata portion of Executive's bonus in respect of the
portion of the fiscal year which has elapsed at the time of termination;
provided that such bonus shall be based upon the actual bonus that Executive
would have received had Executive remained employed by MAAX Canada or a
subsidiary thereof for the full fiscal year, and shall not be payable until
calculated by the Company after the end of such fiscal year.
6.3. For Cause. MAAX Canada or the Company may terminate Executive's
employment hereunder at any time, effective immediately upon written notice to
Executive and a reasonable opportunity to cure (except in the case of matters
which the Board determines in good faith are not able to be cured), for Cause
(as defined below) and all of Executive's rights to
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payments (other than salary payments for services already rendered and expenses
incurred through the date of such termination) and any other benefits otherwise
due hereunder shall cease immediately. MAAX Canada shall have "Cause" for
termination of Executive if any of the following has occurred, and has not been
cured (if capable of cure) within 30 days after receipt of notice thereof from
MAAX Canada:
(1) Executive's dishonesty, theft or fraud in connection with the
performance of his duties;
(2) Executive's continued failure to perform substantially his
duties (other than as a result of a disability);
(3) Executive's conviction of, or entering a plea of guilty or
nolo contendere to, a crime that constitutes a felony or a misdemeanor involving
moral turpitude;
(4) any willful act or omission on Executive's part which is
materially injurious to the financial condition or business reputation of
Holdings or any of its subsidiaries;
(5) Executive's breach of any material covenant or provision
contained in this Agreement;
(6) Holdings, the Company or MAAX Canada, after reasonable
investigation, finds that Executive has violated material written policies and
procedures of Holdings or any of its subsidiaries, including, but not limited
to, policies and procedures pertaining to harassment or discrimination;
(7) a failure or refusal by Executive to comply with a written
directive from the Board pertaining to a material business matter (unless such
directive represents an illegal act);
(8) a confirmed positive illegal drug test result for Executive;
or
(9) the discovery of outstanding indebtedness for borrowed money
incurred during the Term by Holdings or any of its subsidiaries in favor of
Executive which was not approved by the Board prior to such incurrence.
6.4. Without Cause. MAAX Canada or the Company may terminate Executive's
employment hereunder without Cause at any time upon written notice to Executive,
and if Executive's employment is terminated by MAAX Canada without Cause,
Executive shall be entitled to receive (i) the Severance Amount, (ii) salary
payments for services already rendered, (iii) expenses incurred through the date
of such notice and (iv) a pro rata portion of Executive's bonus in respect of
the portion of the fiscal year which has elapsed at the time of termination;
provided that such bonus shall be based upon the actual bonus that Executive
would have received had Executive remained employed by MAAX Canada or a
subsidiary thereof for the full fiscal year, and shall not be payable until
calculated by the Company after the end of such fiscal year. It is acknowledged
and agreed by the parties that the actual damages to Executive in the event of
termination under this Section 6.4 would be difficult if not impossible to
ascertain, and, therefore, the Severance Amount and other payment provisions set
forth hereinabove shall be Executive's sole and exclusive remedy in the case of
termination under this Section 6.4 and shall, as liquidated damages or severance
pay or both, be considered for all purposes in lieu of any
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other rights or remedies, at law or in equity, which Executive may have in the
case of such termination.
6.5. Resignation Without Good Reason. Executive shall have the right at
any time to terminate his employment hereunder upon 30 days' written notice to
MAAX Canada, and upon such termination, all of Executive's rights to payments
and any other benefits otherwise due hereunder shall cease immediately,
provided, however, that Executive shall be entitled to receive (i) salary
payments for services already rendered, (ii) expenses incurred through the date
of such resignation and (iii) a pro rata portion of Executive's bonus in respect
of the portion of the fiscal year which has elapsed at the time of termination;
provided that such bonus shall be based upon the actual bonus that Executive
would have received had Executive remained employed by MAAX Canada or a
subsidiary thereof for the full fiscal year, and shall not be payable until
calculated by the Company after the end of the fiscal year during which
termination occurs.
6.6. Resignation For Good Reason. Executive shall have the right to
terminate his employment hereunder at any time, effective upon two weeks'
written notice to MAAX Canada, for Good Reason (as defined below), and if
Executive terminates his employment for Good Reason, Executive shall be entitled
to receive (i) the Severance Amount, (ii) salary payments for services already
rendered, (iii) expenses incurred through the date of such resignation and (iv)
a pro rata portion of Executive's bonus in respect of the portion of the fiscal
year which has elapsed at the time of termination; provided that such bonus
shall be based upon the actual bonus that Executive would have received had
Executive remained employed by MAAX Canada or a subsidiary thereof for the full
fiscal year, and shall not be payable until calculated by the Company after the
end of such fiscal year. It is acknowledged and agreed by the parties that the
actual damages to Executive in the event of termination under this Section 6.6
would be difficult if not impossible to ascertain, and, therefore, the Severance
Amount and other payment provisions set forth hereinabove shall be Executive's
sole and exclusive remedy in the case of termination under this Section 6.6 and
shall, as liquidated damages or severance pay or both, be considered for all
purposes in lieu of any other rights or remedies, at law or in equity, which
Executive may have in the case of such termination. Executive shall have "Good
Reason" for termination of his employment hereunder if, other than for Cause,
any of the following has occurred:
(1) his Base Salary has been reduced, other than in connection
with an across the board reduction of executive compensation imposed by the
Board on all senior executives in response to negative financial results or
other adverse circumstances affecting the Company or its subsidiaries;
(2) Holdings, the Company or MAAX Canada has substantially reduced
or reassigned the duties of Executive hereunder as President and Chief Executive
Officer and such action has not been rescinded within 20 business days after
Executive notifies the Board that he objects thereto; or
(3) the movement by the Company or MAAX Canada, without
Executive's consent, of Executive's principal place of employment to a site
outside of Sainte-Xxxxx or Montreal, Quebec prior to September 2004 or outside
of Montreal, Quebec after September 2004.
6.7. Release.
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(1) Notwithstanding the foregoing, in order to be eligible for any
of the payments under Section 6.1, 6.4, 6.5 or 6.6, Executive must (i) execute
and deliver to Holdings and the Companies a general release, in a form
reasonably satisfactory to the Board, and (ii) as determined by the Board, be
and remain in compliance in all material respects with his obligations under
this Agreement, including, but not limited to, those obligations set forth in
Sections 7, 8 and 9. In the event the Board determines, with notice to
Executive, that Executive has materially breached his obligations hereunder,
including those obligations set forth in Sections 7.1, 7.2, 7.4, 7.5, 8 and 9,
any and all payments or benefits provided for in Sections 6.1, 6.4, 6.5 or 6.6
shall cease immediately.
(2) In the event that, after the end of his employment, the
Executive engages in any activity described in Section 7.3, THE EXECUTIVE SHALL
CEASE TO BE ENTITLED TO RECEIVE ANY ADDITIONAL SEVERANCE AMOUNTS AS OF SUCH TIME
THAT THE EXECUTIVE ENGAGES IN ANY SUCH ACTIVITY, AND ALL OBLIGATIONS OF THE
COMPANIES HEREUNDER, INCLUDING ANY AND ALL SEVERANCE PAYMENTS, SHALL CEASE
IMMEDIATELY.
7. Protection of Confidential Information; Non-Competition;
Non-Solicitation; Non- Disparagement.
7.1. Acknowledgment. Executive agrees and acknowledges that in the course
of rendering services to the Company and its subsidiaries and their clients and
customers he has acquired and will acquire access to and become acquainted with
confidential information about the professional, business and financial affairs
of the Company, its subsidiaries and affiliates that is non-public, confidential
or proprietary in nature. Executive acknowledges that the Company and its
subsidiaries are engaged in a highly competitive business and the success of the
Company and its subsidiaries in the marketplace depends upon its good will and
reputation for quality and dependability. Executive agrees and acknowledges that
reasonable limits on his ability to engage in activities competitive with the
Company and its subsidiaries are warranted to protect its substantial investment
in developing and maintaining its status in the marketplace, reputation and
goodwill. Executive recognizes that in order to guard the legitimate interests
of the Company, it is necessary for it to protect all of its and its
subsidiaries' confidential information. The existence of any claim or cause of
action by Executive against the Company or its subsidiaries shall not constitute
and shall not be asserted as a defense to the enforcement by the Company or MAAX
Canada of this Agreement. Executive further agrees that his obligations under
this Section 7 shall be absolute and unconditional.
7.2. Confidential Information. During and at all times after the Term,
Executive shall keep secret all non-public information, matters and materials of
the Company (including its subsidiaries and affiliates), including, but not
limited to, know-how, trade secrets, mail order and customer lists, pricing
policies, operational methods, any information relating to the Company's
(including its subsidiaries' and affiliates') products or product development,
processes, product specifications and formulations, artwork, designs, graphics,
services, budgets, business and financial plans, marketing and sales plans and
techniques, employee lists and other business, financial, commercial and
technical information of the Company (including its subsidiaries and affiliates)
(collectively, the "Confidential Information"), to which he has had or may have
access and shall not use or disclose such Confidential Information to any person
other than (a) the Company, its authorized employees and such other persons to
whom Executive has been instructed to make disclosure by the Board, in each case
only to the extent required in the course
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of Executive's service to the Company or its subsidiaries or as otherwise
expressly required in connection with court process, (b) as may be required by
law and then only after consultation with the full Board to the extent possible
or (c) to Executive's personal advisors for purposes of enforcing or
interpreting this Agreement, or to a court for the purpose of enforcing or
interpreting this Agreement, and who in each case have been informed as to the
confidential nature of such Confidential Information and, as to advisors, their
obligation to keep such Confidential Information confidential. "Confidential
Information" shall not include any information which is in the public domain
during the period of service of Executive, provided such information is not in
the public domain as a consequence of disclosure by Executive in violation of
this Agreement or by any other party in violation of a confidentiality or
non-disclosure agreement with the Company or its subsidiaries. Upon termination
of his employment for any reason, Executive shall deliver to the Company all
documents, data, papers and records of any nature and in any medium (including,
but not limited to, electronic media) in his possession or subject to his
control that (i) belong to the Company, its subsidiaries or affiliates or (ii)
contain or reflect any information concerning the Company, its subsidiaries and
affiliates.
7.3. Non-Competition. During the Term and for a period of 18 months
thereafter (the "Restrictive Period"), Executive shall not, in any capacity,
whether for his own account or on behalf of any other person or organization,
directly or indirectly, with or without compensation, (a) own, operate, manage,
or control, (b) serve as an officer, director, partner, member, employee, agent,
consultant, advisor or developer or in any similar capacity to or (c) have any
financial interest in, or aid or assist anyone else in the conduct of, any
person or enterprise that competes with the Company or any of its subsidiaries
in any activity in which the Company or any of its subsidiaries is engaged at
the time of termination, or to Executive's knowledge, has definitive PLANS TO BE
ENGAGED IN THE FUTURE, INCLUDING BUT NOT LIMITED TO, THE PRODUCTION,
DISTRIBUTION, MARKETING AND SALE (INCLUDING, WITHOUT LIMITATION, SALES THROUGH
WHOLESALERS, SHOWROOMS, SPECIALTY RETAILERS, DEALERS AND HOME CENTERS) OF
BATHROOM PRODUCTS, KITCHEN CABINETRY, SPAS AND RELATED ITEMS IN THE UNITED
STATES OR CANADA OR WHICH COMPETES WITH ANY PRODUCT LINE OF, OR SERVICE OFFERED
BY, THE COMPANY (INCLUDING ANY SUBSIDIARY OR AFFILIATE OF THE COMPANY) (A
"COMPETITOR"). Nothing in this Section 7.3 shall prohibit Executive from
acquiring or holding not more than five percent of any class of publicly-traded
securities.
7.4. Non-Solicitation. During the Term and during the Restrictive Period,
Executive shall not, in any capacity, whether for his own account or on behalf
of any other person or organization, directly or indirectly, with or without
compensation, (a) solicit, divert or encourage any officers, directors,
employees, agents, consultants or representatives of the Company (including its
subsidiaries and affiliates), to terminate his, her or its relationship with the
Company (including its subsidiaries and affiliates), (b) solicit, divert or
encourage any officers, directors, employees, agents, consultants or
representatives of the Company (including its subsidiaries and affiliates) to
become officers, directors, employees, agents, consultants or representatives of
another business, enterprise or entity, (c) solicit, divert or appropriate any
customers, clients, vendors, distributors or business partners of the Company
(including its subsidiaries and affiliates), or (d) influence or attempt to
influence any of the customers, clients, vendors, distributors or business
partners of the Company (including its subsidiaries and affiliates) to transfer
his, her or its business or patronage from the Company (including its
subsidiaries and affiliates) to any Competitor of the Company (including its
subsidiaries and affiliates).
7.5. Non-Disparagement. During the Term and during the Restrictive
Period, except as required by law, Executive shall not directly or indirectly
(i) engage in any conduct or make any
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statement, whether in commercial or non-commercial speech, disparaging or
criticizing in any way the Company, any subsidiary of the Company, X.X. Childs,
Borealis, OMERS or any affiliate of any of the foregoing entities, or any
products or services offered by any of these entities, or (ii) engage in any
other conduct or make any other statement, in each case, which could be
reasonably expected to (a) impair the goodwill or reputation of the foregoing
entities or (b) the reputation of any of the foregoing entity's products or
services or the marketing of any of the foregoing entity's products or services,
except to the extent required by law and then only after consultation with X.X.
Childs to the extent possible, or in connection with any dispute between
Executive and any of the foregoing entities. During the Term and during the
Restrictive Period, except as required by law, the Company, its subsidiaries,
X.X. Childs, Borealis, OMERS and their respective affiliates shall not directly
or indirectly (i) engage in any conduct or make any statement, whether in
commercial or non-commercial speech, disparaging or criticizing in any way
Executive or (ii) engage in any other conduct or make any other statement, in
each case, which could be reasonably expected to impair the goodwill or
reputation of Executive.
7.6. Remedies for Breach. The Company and Executive agree that the
restrictive covenants contained in this Agreement are severable and separate,
and the unenforceability of any specific covenant herein shall not affect the
validity of any other covenant set forth herein. Executive acknowledges that the
Company will suffer irreparable harm as a result of a breach of such restrictive
covenants by Executive for which an adequate monetary remedy does not exist and
a remedy at law may prove to be inadequate. Accordingly, in the event of any
actual or threatened breach by Executive of any provision of this Agreement, the
Company shall, in addition to any other remedies permitted by law, be entitled
to obtain remedies in equity, including, but not limited to, specific
performance, injunctive relief, a temporary restraining order, and/or a
preliminary and/or permanent injunction in any court of competent jurisdiction,
to prevent or otherwise restrain a breach of this Section 7 without the
necessity of proving damages, posting a bond or other security, and to recover
any and all costs and expenses, including reasonable counsel fees, incurred in
enforcing this Agreement against Executive, and Executive hereby consents to the
entry of such relief against him and agrees not to contest such entry. Such
relief shall be in addition to and not in substitution of any other remedies
available to the Company. The existence of any claim or cause of action of
Executive against the Company or its subsidiaries, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company of said covenants. Executive shall not defend on the basis that there is
an adequate remedy at law.
7.7. Modification. The parties agree and acknowledge that the duration,
scope and geographic area of the covenants described in this Section 7 are fair,
reasonable and necessary in order to protect the Confidential Information,
goodwill and other legitimate interests of the Company and that adequate
consideration has been received by Executive for such obligations. Executive
further acknowledges that after termination of his employment with MAAX Canada
or any subsidiary thereof for any reason, he will be able to earn a livelihood
without violating the covenants described in this Section 7 and Executive's
ability to earn a livelihood without violating such covenants is a material
condition to his employment with MAAX Canada or any subsidiary thereof. If,
however, for any reason any court of competent jurisdiction determines that the
restrictions in this Section 7 are not reasonable, that consideration is
inadequate or that Executive has been prevented unlawfully from earning a
livelihood, such restrictions shall be interpreted, modified or rewritten to
include the maximum duration, scope and geographic area identified in this
Section 7 as will render such restrictions valid and enforceable.
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8. Certain Agreements.
8.1. Customers, Suppliers. Executive does not have, and at any time
during the Term shall not have, any employment with or any direct or indirect
interest in (as owner, partner, shareholder, employee, director, officer, agent,
consultant or otherwise) any customer of or supplier to the Company or its
subsidiaries. Nothing in this Section 8.1 shall prohibit Executive from
acquiring or holding not more than five percent of any class of publicly traded
securities of any business.
8.2. Certain Activities. During the Term, Executive shall not (a) give or
agree to give, any gift or similar benefit of more than nominal value to any
customer, supplier, or governmental employee or official or any other person who
is or may be in a position to assist or hinder the Company or its subsidiaries
in connection with any proposed transaction, which gift or similar benefit, if
not given or continued in the future, might adversely affect the business or
prospects of the Company or its subsidiaries, (b) use any corporate or other
funds for unlawful contributions, payments, gifts or entertainment, (c) make any
unlawful expenditures relating to political activity to government officials or
others, (d) establish or maintain any unlawful or unrecorded funds in violation
of Section 30A of the U.S. Securities Exchange Act of 1934, as amended, and (e)
accept or receive any unlawful contributions, payments, gifts, or expenditures.
9. Intellectual Property. All copyrights, trademarks, trade names,
service marks and all ideas, inventions, discoveries, secret processes and
methods and improvements, together with any and all patents that may be issued
thereon, and all other intangible or intellectual property rights that may be
invented, conceived, developed or enhanced by Executive during the Term that
relate to the business or operations of the Company or any subsidiary or
affiliate thereof or that result from any work performed by Executive for the
Company or any such subsidiary or affiliate shall be the sole property of the
Company or such subsidiary or affiliate, as the case may be, and Executive
hereby waives any right or interest that he may otherwise have in respect
thereof. Upon the reasonable request of MAAX Canada, Executive shall execute,
acknowledge and deliver any instrument or document reasonably necessary or
appropriate to give effect to this Section 9 and, at MAAX Canada's cost, do all
other acts and things reasonably necessary to enable the Company or such
subsidiary or affiliate, as the case may be, to exploit the same or to obtain
patents or similar protection with respect thereto.
10. Notices. All notices or other communications hereunder shall be in
writing and shall be deemed to have been duly given (a) when delivered
personally, (b) upon confirmation of receipt when such notice or other
communication is sent by facsimile, (c) one day after delivery to an overnight
delivery courier, or (d) on the fifth day following the date of deposit in the
United States mail if sent first class, postage prepaid, by registered or
certified mail. The addresses for such notices shall be as follows:
(1) For notices and communications to the Company
0000 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx
Xxxxxx X0X 0X0
10
Attention: Chief Financial Officer
Fax: (000) 000-0000
with a copy to:
X.X. Childs Associates, L.P.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxx
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn.: Xxxxxxx X. Xxxxx, Esq.
Fasken Xxxxxxxxx XxXxxxxx LLP
Stock Exchange Tower
800, Place Victoria, Suite 3400
X.X. Xxx 000
Xxxxxxxx, Xxxxxx X0X 0X0
Fax: (000) 000-0000
Attn.: Xxxxxx Xxxx, Esq.
(2) For notices and communications to Executive, to the address or
facsimile set forth below his signature hereto. Any party hereto may, by notice
to the other, change its address for receipt of notices hereunder.
11. General.
11.1. Governing Law; Waiver of Jury Trial. This Agreement shall be
governed by the laws of the Province of Quebec, without regard to any conflicts
of law principles thereof that would call for the application of the laws of any
other jurisdiction.
Any action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement may be brought against either of the
parties in the courts of the Province of Quebec (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world, whether
within or without the Province of Quebec.
Each party hereby waives to the fullest extent permitted by applicable
law, any right it may have to a trial by jury with respect to any litigation
directly or indirectly arising out of, under or in
11
connection with this Agreement or the transactions contemplated hereby or
disputes relating hereto.
11.2. Amendment: Waiver. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument executed by the parties hereto or, in the case of a
waiver, by the party waiving compliance. The failure of either party at any time
or times to require performance of any provision hereof shall in no manner
affect the right at a later time to enforce the same. No waiver by either party
of the breach of any term or covenant contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
11.3. Successors and Assigns. This Agreement shall be binding upon
Executive, without regard to the duration of his employment by MAAX Canada or
reasons for the cessation of such employment, and inure to the benefit of his
administrators, executors, heirs and assigns, although the obligations of
Executive are personal and may be performed only by him. The Company and MAAX
Canada may assign this Agreement and their rights, together with their
obligations, hereunder (a) in connection with any sale, transfer or other
disposition of all or substantially all of its assets or business(es), whether
by merger, consolidation or otherwise; or (b) in whole or in part, to any wholly
owned subsidiary of the Company, provided that the Company and MAAX Canada shall
remain liable for their respective obligations hereunder. This Agreement shall
also be binding upon and inure to the benefit of the Company, MAAX Canada and
their subsidiaries, successors and assigns.
11.4. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be considered to have the force and effect of
an original.
11.5. Attorneys' Fees. In the event that any action is brought to enforce
any of the provisions of this Agreement, or to obtain money damages for the
breach thereof, and such action results in the award of a judgment for money
damages or in the granting of any injunction in favor of one of the parties to
this Agreement, all expenses, including reasonable attorneys' fees, shall be
paid by the non-prevailing party.
11.6. Severability. If any portion of this Agreement is held invalid or
inoperative, the other portions of this Agreement shall be deemed valid and
operative and, so far as is reasonable and possible, effect shall be given to
the intent manifested by the portion held invalid or inoperative.
11.7. Entire Agreement. This Agreement supersedes all prior agreements
between the parties with respect to its subject matter (including without
limitation any employment arrangements between Executive and MAAX Inc. or any of
its subsidiaries and that certain letter agreement dated as of March 10, 2004
among X.X. Childs Equity Funding III, Inc., Borealis, OMERS and Executive) and
is intended (with the documents referred to herein) as a complete and exclusive
statement of the terms of the agreement between the parties with respect
thereto.
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IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the date first above written.
THE COMPANY:
MAAX Corporation
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
Title: Secretary
MAAX CANADA:
MAAX Canada Inc.
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: Vice President and Secretary
EXECUTIVE:
/s/ Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx
Address and Facsimile:
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[Employment Agreement Signature Page]
