EMPLOYMENT AGREEMENT
This Employment Agreement is executed between Cantar/Polyair Canada Limited
and its affiliated companies, having its executive offices located at 000
Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx, X0X 0X0, (the "Company") and Xxxx Xxxxxx, an
individual, residing at 000 Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx X0X 0X0 (the
"Executive"),
In consideration of the terms and conditions hereinafter set forth, the parties
hereto agree as follows:
1. Emplovment The Company will continue the employment to the Executive
for a term (the "Term") commencing as of March 1, 2004, (the
"Commencement Date") and continuing indefinitely until terminated
pursuant to Section 6. Each fiscal year of the Company or part thereof
within such Term shall be referred to as a "Year".
2. Duties (a) The Executive agrees to use his full time best efforts to
serve the Company well and faithfully as President of the Company's
Cantar/Polyair Packaging Division (the "Division"). The Executive will
report to the Chief Executive Officer of the Company (the "CEO") or to
such individual as the CEO designates from time to time. Unless
modified by the CEO, the Executive shall have the following
responsibilities:
a) Managing the sales and marketing organizations.
b) Developing concepts for product research and development.
c) Ensure compliance with pricing, margin and credit policies.
d) Satisfactory compliance with sales and expense budgets.
e) Responsibility for advertising subject to budget constraints.
f) Responsible for efficient and accurate reporting on responsible
areas.
g) All other functions and duties as directed by the CEO or his
designate which are consistent with the Executive's status,
reputation and experience. h) Review acquisition and new product
opportunities.
(b) The proposed new Organizational Structure is attached as Schedule
A.
(c) The Executive's title, duties, and reporting structure may be
changed at the discretion of the CEO of Polyair Inter Pack Inc.
3. Compensation -*Note all dollars are stated in $CDN
3.1 As compensation for all services to be rendered by the Executive
hereunder, the Company agrees to pay to executive a salary (the
"Salary") of $330,000 per Year. The Board of Directors will
review the Salary on January 1st of each year.
3.2 The Company agrees to pay the Executive a Bonus (the "Bonus") up
to 25% of the Executive's Salary subject to the following
conditions:
3.2.1 The Executive will receive a guaranteed bonus of $95,000
for the fiscal year ending October 31,2004.
3.2.2 The Bonus will be for each fiscal year (a "Fiscal Year")
commencing with the fiscal year ending October 31, 2005.
3.2.3 For each Fiscal Year the Division's pre-tax unaudited
profit as determined by the Board of Directors (acting
reasonably and consistent with past practices in allocating
overhead, etc.) between the Division and the Company's other
units must meet or exceed the Threshold. The Threshold for
any Fiscal Year will be set at the sole discretion of the
Board of Directors acting reasonably and consistent with
past practices.
3.2.4 The Threshold for any Fiscal Year will never be less than
that established for the prior Fiscal Year.
3.2.5 In the event that the Executive reaches between 80% -100%
of the Threshold for any Fiscal Year, the Bonus as described
in Section 3.2 will be pro rated and reduced accordingly.
3.3 For each Fiscal Year the Company would also pay the Executive an
additional bonus of 10% of the Executive's Salary (the "Extra
Bonus") for each full percentage point by which the Division's
Pre-Tax Profit exceeds 6% of sales for such fiscal year (the
"Special Threshold") {e.g. Pre-Tax Profit of 7% of sales means an
additional $33,000 based on the current Salary}.
3.4 Payment of the Bonus and/or Extra Bonus will accrue in lieu of
payment if and to the extent that such payment is not permitted
by the Company's credit facility.
3.5 It is understood by the parties of this Agreement that in the
event that the Division acquires or divests of product lines or
companies in which the Executive is involved, that the Salary,
Bonus and Extra Bonus may require review and possible adjustment
based on both parties acting in good faith and considering all
factors including, without limitation whether (i) the disposal of
an asset or business deprives the Executive of the opportunity to
meet the Threshold or Special Threshold; (ii) whether the
Executive was otherwise compensated directly or indirectly in
connection with the disposal of the asset or business; or (iii)
whether the acquisition of an asset or business automatically or
without significant effort on the part of the Executive
materially assists or hampers the Executive's attainment of the
Threshold or the Special Threshold.
3.6 Bonus to be paid on pro rata basis for the period of employment
after the finalization of the year end results in the event the
Executive is terminated.
4 Insurance and Other Benefits The Employee shall be entitled to
participate, if the Employee so elects and is eligible therefore, in
any plans for the benefit of all officers and employees of the Company
from time to time in force, including, but not limited to, pension,
disability and medical insurance and group life insurance as in effect
from time to time.
5 Expenses: Automobile, Vacations, Etc.
5.1 Expenses The Executive shall be entitled to reimbursement for
normal and reasonable expenses incurred on behalf of the Company
in furtherance of its business, as supported by vouchers
therefore in accordance with the Company's policies in force from
time to time. The Executive will further be entitled to
reimbursement by the Company for golf membership dues.
5.2 Vacation, etc. The Executive shall be entitled to six weeks of
annual vacations, holidays, and leaves of absence in accordance
with the Company's general policies and practices in force from
to time.
5.3 Use of Automoble The Company shall provide the Executive with an
automobile (similar to that provided on the date hereof) at its
expense in accordance with the Company's general policies and
practices in force from time to time. The Executive shall be
entitled to reimbursement for normal and reasonable car expenses
incurred on behalf of the Company.
6. Termination of Employment
6.1 For Cause The Board of Directors of the Company may terminate the
Executive's employment hereunder and remove the Executive from
his position with the Company at any time for Cause. The term
"Cause" as used in this Agreement shall be deemed to refer to and
include only:
6.1.1. The failure by the Executive to substantially perform his
duties pursuant to the terms of this Agreement without good
cause, after a written demand for substantial performance is
delivered to the Executive by the Board of Directors or by
the CEO.
6.1.2. The willful engaging by the Executive in misconduct or
inaction materially to injurious to the Company. For
purposes of this Section, an act or failure to act shall be
not considered "willful", unless done or omitted in bad
faith without reasonable belief on the Executive's part that
his action or omission was in the best interest of the
Company;
6.1.3 The Executive's conviction for a felony or misdemeanour
involving moral turpitude; or
6.1.4 The involuntary dissolution, liquidation and/or termination
of the business of the Company.
Any dispute under Section 6.1 shall be resolved by binding
arbitration under the National Rules of Arbitration (ADR
Institute of Canada, Inc.) whereby each party shall select
one arbitrator who in turn shall select one additional
arbitrator.
6.2 Disability or Death If, in the judgement of the Company's Board
of Directors or the CEO, the Executive fails to render services
of the character contemplated hereby because of illness or other
incapacity for a period of six (6) consecutive months, or for
shorter periods aggregating more than six (6) months in any
consecutive twelve (12) months, the Board of Directors may
determine that the Executive had become disabled and may elect to
terminate his employment hereunder, effective as of the date of
such determination. In the event of the Executive's death during
the term hereof, this Agreement shall terminate forthwith.
6.3 Without Cause The Company may terminate the Executive for any
reason without "Cause" upon thirty (30) days prior notice, in
which case the provisions of Section 6.4 shall apply.
6.4 Severance If the Executive's employment hereunder is terminated
pursuant to Sections 6.3 or 6.6 but not pursuant to 6.1, 6.2,
6.4.1 or 6.4.2, the Company shall pay the Executive as severance
pay, subject to appropriate deductions, one-twelfth (1/12) of his
annual salary to include payment auto expense of his then current
automobile for the duration of the "Severance Period", as defined
in Section 3.1, for each full month occurring after his
employment termination (hereinafter "Monthly Severance Payment")
during the twenty four (24) month period following termination
(the "Severance Period"). The Executive shall be entitled to
participate, at the Company's expense, in the Company's employee
benefit plans and programs as described in Section 4, and subject
to approval by the applicable insurance company or any equivalent
plans or programs established by the Company, and the Company
shall be responsible for the payment of any unpaid amount on
account of the Severance Period with respect to Salary. The
amounts to be paid are inclusive of any and all entitlements to
termination and/or severance pay pursuant to the Employment
Standards Act, 2000 as amended, or any other applicable statute
arising out of the Executive's employment or the termination
thereof. Under no circumstances will the severance payments set
out herein be less than the Executive's entitlement to
termination and/or severance pay pursuant to the Employment
Standards Act, 2000 as amended.
6.4.1. Notwithstanding any other subsection, if the Executive's
employment is terminated at age 63 pursuant either to
Sections 6.3 and 6.6, the Executive shall be entitled to a
lump sum payment equivalent to his annual salary, as defined
in Section 3.1, for a twenty four (24) month period. The
Executive shall be entitled to participate, at the Company's
expense, in the Company's employee benefit plans and
programs as described in Section 4 subject to approval by
the applicable insurance company or any equivalent plans or
programs established by the Company.
6.4.2. Notwithstanding any other subsection, if the Executive's
employment is terminated any time between the ages of 63 and
65, the Executive shall be entitled to a lump sum payment
equivalent to his annual salary, as defined in Section 3.1,
for a period until June 1, 2011, the expiry of this
Employment Agreement, as defined in Section 6.8. The
Executive shall be entitled to participate, at the Company's
expense, in the Company's employee benefit plans and
programs as described in Section 4 subject to approval by
the applicable insurance company or any equivalent plans or
programs established by the Company.
6.5 Voluntary Termination If the Executive voluntarily terminates his
employment hereunder other than as provided in Section 6.6, he
shall give (i) three (3) months written notice and (ii) be paid
salary through the date of his termination and shall receive
other compensation and benefits, if any, as provided under the
Company's applicable plans and programs.
6.6 Certain Changes Affecting the Executive's Employment "Certain
changes affecting the Executive's employment" shall mean any
material diminution in benefits or employment conditions as a
result of which the Executive terminates his employment
hereunder, including any of the following:
6.6.1 The Company's failure to pay to the Executive, any portion
of his salary or other amounts due to the Executive under
Section 3 within thirty (30) days of the date such payment
is due;
6.6.2 The Company's failure to continue in effect or continue the
Executive's participation in any compensation plans (unless
such failure is out of the Company's control) which is
material to his total compensation or its failure to
continue to provide him with benefits substantially similar
to those provided to all senior executives.
6.6.3 A material breach by the Company of its obligations under
this Agreement.
6.6.4 In accordance with Section 2(c), the Executive's title,
duties and reporting structure have been materially changed
at the discretion of the CEO of Polyair Inter Pack Inc.
6.6.5 In accordance with Section 3.5, the Division acquires or
divests of product lines or companies in which the Executive
is involved.
6.7 Car Lease In the event of termination under Section 6.1 or 6.4,
the Executive will be liable for the company's automobile lease
for the benefit of the Executive (except that the Company will
remain liable during the notice period of Section 6.5).
6.8 Term Unless otherwise concluded at an earlier date as per the
clauses in Section 6 of this Employment Agreement, the parties
agree that this Employment Agreement will automatically expire on
June 1, 2011. At that time, the Executive will not be entitled to
rely on any of the provisions of this Employment Agreement,
including but not limited to Section 6.
7. Inventions. Confidential Information and Related Matters
7.1 Definitions For purposes of this Agreement, the terms set forth
below shall have the following meanings:
7.1.1 Products Finished and other products being, or being
contemplated to be, manufactured, assembled, processed,
distributed or marketed, in whole or in part, by the
Company's Division or any Affiliate.
7.1.2 Confidential lnformation The secret proprietary information
of the Company or any Affiliate whatever kind or nature
disclosed to the Executive or known by the Executive
(whether or not discovered or developed by the Executive) as
a consequence of or through his employment with the Company.
Such proprietary information shall include information
relating to the Products, processing, manufacturing,
assembly, quality control, know-how, research and
development, sources of supplies and materials, operating
and other cost data, distribution arrangements and Product
proposals and marketing, any of which information is not
generally known in the industry or in related industries in
which the Company or any Affiliate engages in business
(including industries supplying to or purchasing from the
Company of any Affiliate) in the United States and Canada
and shall specifically include all information contained in
manuals, memoranda, formulae, plans, drawings and designs,
specifications, equipment and machinery configurations, and
records of the Company and any Affiliate legend or otherwise
identified by the Company or any Affiliate as Confidential
Information.
7.1.3 Inventions Those discoveries, developments, concepts and
ideas whether or not patentable, relating to the Products
and to the present and prospective activities of the Company
or any Affiliate (which activities are known to the
Executive by reason of his employment with the Company).
7.1.4 Affiliate The Parent, the Company or any subsidiary or
sister Corporation (identical shareholders) of either of
them.
7.2 Inventions All Inventions which are at any time developed by the
Executive acting alone or in conjunction with others, during the
period commencing with his employment by the Company, until the
termination of this Agreement (or, if based on or related to the
Executive's activities with the Company or on behalf of any
Affiliate or any Confidential Information or Invention(s) made by
the Executive within two years after the termination of
Employee's employment) shall be the property of the Company, free
of any reserved or other rights of any kind on the Executive's
part in respect thereof.
The Executive agrees promptly to make full disclosure of any such
Inventions to the Company, and at its cost and expense to execute formal
applications for patents and also to do all other acts and things
(including, among others, the execution and delivery of instruments of
further assurance or confirmation) deemed by the Company to be necessary or
desirable at any time or times in order to effect the full assignment of
the Company of his rights and title to such Inventions and otherwise to
carry out the purposes of this Section 7.
7.3 Non Disclosure Except as required by his duties hereunder, the
Executive agrees that he will never, during or after his
employment with the Company, directly or indirectly, use,
publish, disseminate or otherwise disclose any Confidential
Information or Inventions without the prior written consent of
the Company.
7.4 .Return of Proprietary Materials Upon termination of his
employment with the Company, all equipment, models, prototypes,
designs, plans, drawings, documents, procedural manuals,
specifications, guides and similar materials, records, notebooks
and similar repositories of or containing Confidential
Information or Inventions, including all whether prepared by the
Executive or others, will be left with or promptly returned by
the Executive to the Company.
7.5 Non-Competition During the period of the Executive's employment
by the Company, and for a period of twenty four (24) months
thereafter, (except in the event of termination under Section 6.3
or 6.6), the Executive shall not, without the prior written
consent of the Company, directly or indirectly, whether as an
officer, director, stockholder, partner, proprietor, associate,
representative, importer, distributor or otherwise, become
employed or otherwise associated with or representing, any other
person, corporation (except the Company and any Affiliate), firm
partnership, or other entity whatsoever engaged, in the United
States or Canada, in any line of business engaged in (or actively
planned to be engaged in) by the Company or any Affiliate;
provided, however, that anything above to the contrary
notwithstanding, the Executive may own, as an inactive investor
during such period, securities of any competitor corporation or
other entity, so long as his holdings in anyone such corporation
or entity shall not constitute more than two (2%) percent of the
voting stock of such public corporation or other entity.
7.6 Survival of Obligations Employee's obligations under this Section
7 shall survive termination of this Agreement pursuant to Section
6.
8. Assignment; Survival Except as provided below, neither party shall
have the right to assign this Agreement or any rights or obligations
hereunder without the consent of the other party; provided, however,
that this Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of the Company, and their respective
successors and assigns, upon liquidation, dissolution or winding up of
the Company, or upon any sale of all or substantially all of the
assets of the Company, or upon any merger or consolidation of the
Company, as though successors and assigns of the Company and their
respective successors and assign were the Company. The Company will
have a right to assign this Agreement to any Affiliate which assignee
would be substituted for the Company for all purposes of this
Agreement. The respective rights and obligations of the parties
hereunder will survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
The Executive's executor or successors by will or descent shall have
the right to enforce any of the Executive's rights under the Agreement
which survive termination.
9. Severability The invalidity or unenforceability of any term or
provision of this Agreement shall not affect the validity or
enforceability of the remaining terms or provisions thereof, which
shall remain in force and effect, and, should any tribunal having
jurisdiction determine that any such term or provision is
unenforceable, by reason of its over breadth, whether as to time,
geographical scope or otherwise, then such term or provision shall be
deemed to be amended to reduce its scope by the degree of such over
breadth.
10. Notices All notices required or permitted hereunder shall be given or
made in writing and shall be sufficiently given ten (10) days after
sending by registered mail to the addresses set forth on Page 1, or to
such other address as either party shall designate by notice so given
to the other.
11. Governing Law This Agreement shall be interpreted and construed under
the laws of the Province of Ontario applicable to contracts executed
and to be performed wholly within such Province.
12. Legal Fees The Executive shall be entitled to reimbursement for normal
and reasonable legal fees incurred by him in relation to reviewing and
executing this Employment Agreement up to a maximum sum of $3,000 plus
GST. The Executive's account for lecgal fees will be subject to review
by the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
CANTAR/POLYAIR CANADA LIMITED
Per: ______________________
Xxxxx Xxxxxxxxxx
President
Per: ______________________
Xxxx Xxxxxx
Date: May 28/04
