Exhibit 10.3
THIS EMPLOYMENT AGREEMENT made as of the 14th day of August, 1998.
BETWEEN:
CAPITAL ENVIRONMENTAL RESOURCE INC., an Ontario corporation having its head
office at 0000 Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx
(hereinafter called "Capital")
- and -
XXXX XXXXXXX, of 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx
(hereinafter called the "Employee")
WHEREAS:
1. Capital and the Employee are parties to a letter agreement dated August 1,
1997, as amended by letter agreements dated June 17, 1998 and August 14,
1998 setting forth the terms of the Employee's employment with Capital.
2. The parties wish to incorporate and amend certain terms of the letter
agreements into this Employment Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT the parties agree as follows:
1. EMPLOYMENT
1.01 Capital hereby employs the Employee as its Chairman of the Board and Chief
Executive Officer, effective January 30, 1998. As such, the Employee will
act as the senior officer of Capital and shall perform such duties,
commensurate with his position, as may be assigned to him from time to time
by the Board of Directors of Capital. The Employee hereby accepts
employment with Capital upon the terms and conditions contained herein and
agrees to devote his full time, attention and efforts to promote and
further Capital's business.
2. COMPENSATION
2.01 For all services rendered by the Employee to Capital, Capital shall pay and
reimburse the Employee the following amounts:
(a) Effective July 1, 1998, the Employee's base salary shall be
$175,000.00 per annum, payable in advance in equal monthly
instalments, or on any other periodic basis consistent with Capital's
payroll procedures for executive employees. The Employee's base salary
shall be reviewed at least annually and shall be increased as agreed
by Capital and the Employee from time to time. Upon the completion
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of an initial public offering of the shares of common stock of Capital
on a recognized stock exchange (which shall for purposes of this
Agreement include the New York Stock Exchange, the American Stock
Exchange, the NASDAQ National Market and the Toronto Stock Exchange),
the Employee's base salary will be the greater of U.S. $130,000,
converted into Canadian dollars or Cdn $175,000.00.
(b) An annual bonus, payable at the discretion of the Board of Directors
of Capital based on achieving goals fixed by the Board, of not less
than fifty percent (50%) of Employee's base salary. The amount of the
bonus will be fixed by the Board of Directors and paid not later than
ninety (90) days after each fiscal year end of Capital;
(c) Participation at the same level as other executive employees of
Capital in a full benefits package and pension plan;
(d) Four (4) weeks vacation in each fiscal year, to be taken at such times
as mutually agreed between the Employee and Capital. Vacation may only
be taken within the year of entitlement and may not be accumulated
from year to year unless otherwise mutually agreed;
(e) Stock option grants as and when authorized by the Board of Directors
of Capital;
(f) A vehicle commensurate with the Employee's position as Chairman of the
Board, will be leased by Capital and provided to the Employee in lieu
of a car allowance. Capital will pay and/or reimburse all operating,
maintenance and insurance charges in respect of such vehicle. Capital
will provide Employee with a mobile telephone and pay all charges
incurred by Employee in connection with the use thereof;
(g) Reimbursement of all expenses reasonably incurred by Employee in the
performance of his duties, subject to submission of appropriate
documentation in accordance with Capital's expense reimbursement
policy in effect from time to time.
2.02 Capital will, at its expense, throughout the term of this Agreement
maintain directors and officers indemnity insurance for such amount(s) as
the Employee considers appropriate having regard to the standards in the
waste management industry for companies with similar amounts of capital.
Capital agrees to indemnify and save Employee harmless from all losses,
costs and damages suffered by Employee as a result of his employment with
Capital to the fullest extent permitted by law.
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3. TERM/TERMINATION
3.01 The initial term of this Agreement shall be three (3) years, beginning
August 1, 1997 and expiring on July 31, 2000 and unless terminated as
herein provided, shall continue thereafter on a year-to-year basis, on the
same terms and conditions contained herein, unless amended by mutual
agreement.
3.02 Notwithstanding the foregoing, if Capital shall complete an initial public
offering of its common shares (or other securities) on a recognized stock
exchange (which shall for purposes of this Agreement include the New York
Stock Exchange, the American Stock Exchange, NASDAQ National Market and the
Toronto Stock Exchange), this Agreement shall be automatically extended for
a further term of three (3) years from the date of completion of such
initial public offering.
3.03 Capital may terminate this Agreement in the following circumstances:
(a) for just and reasonable cause, without notice and without pay in lieu
of notice. For purposes of this Agreement. "just cause" shall include
serious misconduct, habitual neglect of duty, incompetence or conduct
incompatible with Employee's duties, and wilful disobedience of any
proper direction or order of the Board of Directors of Capital;
(b) the Employee's inability to perform his duties under this Agreement
because of illness, physical or mental disability, or other incapacity
which continues for an uninterrupted period in excess of three(3)
months or a cumulative period of six (6) months in any twelve (12)
month period;
(c) without cause and without notice, provided that Capital shall pay to
the Employee the following amounts:
(i) Base salary for a period of twenty four (24) months, to be paid
in a lump sum, at the option of the Employee, at the time of such
termination;
(ii) Bonus of two times (2x) the minimum annual bonus payable to the
Employee, together with any bonus earned by the Employee to the
date of termination. Bonus to be paid in a lump sum, at the
option of the Employee, at the time of such termination;
(iii) All stock options granted to the Employee prior to such
termination shall fully vest effective at the date of such
termination and shall be exercisable for a period of twelve (12)
months thereafter notwithstanding any other provision of the
Stock Option Agreement entered into between the Employee and
Capital.
(iv) All benefits and other entitlements owing to the Employee
hereunder shall be payable for the same period as base salary is
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payable under subsection (c) (i) hereof.
(v) In addition to the above payments, on such termination, the
housing loan outstanding to the Employee shall automatically be
converted to a 3 year term, non-interest bearing, loan, payable
in a lump sum at the end of such three year term.
(d) on the Employee's death, Capital will pay to the Employee's
beneficiary, within 10 days of Employee's death, an amount equal to
accrued compensation owing to the Employee on the date of his death
(including pro rata salary, bonus and other benefits, deferred
compensation and accrued vacation pay). Capital will cause all death
benefits payable as a consequence of the Employee's death to be paid
to the Employee's beneficiary as soon as practicable.
3.04 If:
(i) other than as a result of an initial public offering of the common
shares of Capital, there is a Change of Control of Capital. For
purposes of this provision, a "Change of Control" means (A) a
transaction whereby property constituting all or substantially all of
the assets of Capital and its subsidiaries, taken as a whole, is sold,
in one or more related transactions to any person or group of persons
or (B) an event or series of events (whether a share purchase,
amalgamation, merger, consolidation, pooling or other business
combination or otherwise) by which any person or group of affiliated
persons becomes the beneficial owner of more than 50% of the combined
voting power of the then outstanding securities of Capital, where such
person or group of affiliated persons, immediately prior to the
occurrence of such event or series of events, was not the beneficial
owner of at least 50% of the combined voting power of the then
outstanding securities of Capital; or
(ii) At any time, prior to the completion of an initial public offering of
the common shares of Capital which values the equity of Capital at at
least $250 M (U.S.) (a "Qualified Public Offering"), Capital shall
change the Employee's title or job responsibilities without the
consent of the Employee; or
(iii) At any time in connection with or after the completion of a Qualified
Public Offering, Capital shall change the Employee's title or job
responsibilities such that the Employee shall, after such action, be
neither the Chairman of the Board nor the Chief Executive Officer of
Capital, without the consent of the Employee; or
(iv) Capital shall relocate its corporate head office outside of the
Province of Ontario.
then, in the circumstances described in subsection (ii) or (iv) above,
Capital shall be
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deemed, upon the occurrence of such event unless the Employee shall have
delivered written notice to Capital waiving his rights hereunder within 30
days of the occurrence of such event or circumstance, to have terminated
the Employee's employment without cause and the Employee shall be entitled
to the payments described in section 3.03 (c) above. In the circumstances
described in subsection (i) (A), (B) or (iii) above, the Employee shall, at
the request of the Corporation, continue to be employed by Capital for a
maximum of six (6) months after the occurrence of such event (the
"Transition Period"). During the Transition Period, the Employee shall
perform such services in the transition of his role as the Board of
Directors of Capital may reasonably require and the Employee shall be
entitled to receive his base salary and additional compensation as provided
in Article 2 hereof. At the expiration of the Transition Period, the
Employee's employment shall be deemed terminated without cause and the
Employee shall thereupon be entitled to the payments described in section
3.03 (c) above, unless the Employee shall have delivered written notice to
Capital waiving his rights hereunder on or before the expiration of the
Transition Period.
3.05 If, during the term hereof, there is an event or series of events (whether
a share purchase, amalgamation, merger, consolidation, pooling or other
business combination or otherwise) by which any person or group of
affiliated persons becomes the beneficial owner of more than 50% of the
combined voting power of the then outstanding securities of Capital, where
such person or group of affiliated persons, immediately prior to the
occurrence of such event or series of events, was not the beneficial owner
of at least 50% of the combined voting power of the then outstanding
securities of Capital, the Employee shall have the irrevocable option
exercisable as hereinafter provided, to require Capital to pay to the
Employee at the time of the occurrence of such event or series of events,
in cash, the difference between the exercise price of all unexercised
options granted to the Employee (which at the date of this Agreement total
60,000) and the market value of the securities to which the Employee would
be entitled upon the exercise of all unexercised options. For purposes of
this provision, the market value of the securities to which the Employee
would be entitled upon the exercise of his unexercised options, shall be
determined on the same basis as the securities of Capital are valued in
such event or series of events described in this section 3.05. The Employee
shall exercise the option granted hereunder by delivering written notice of
the exercise thereof to any officer or director of the Company no later
than three (3) business days prior to the completion of the event or series
of events giving rise to the right to exercise the option granted herein.
If the Employee does not exercise his option as aforesaid, it shall
thereafter expire and be of no further force and effect.
3.06 The Employee shall provide Capital with not less than three (3) months
notice of his intention to resign.
4. NON-COMPETITION/CONFIDENTIALITY
4.01 Simultaneously with and as a condition to Capital offering employment to
the Employee
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on the terms and conditions set out herein, the Employee has executed and
delivered a Non-competition and Confidentiality Agreement in the form
attached hereto, which shall remain in full and force in accordance with
its terms.
5. COMPLETE AGREEMENT
5.01 This Agreement sets forth the entire agreement between the parties
respecting the subject matter hereof and supersedes any and all other
agreements, either oral or in writing between Capital and the Employee with
respect to the employment of the Employee. This Agreement may only be
modified by further agreement in writing signed by the parties.
6. GOVERNING LAW
6.01 This Agreement shall be construed in accordance with and governed by the
laws of the Province of Ontario and the laws of Canada applicable therein.
7. MISCELLANEOUS
7.01 This Agreement shall be binding upon the parties and shall inure to the
benefit of the parties and their respective heirs, executors,
administrators, successors and assigns. If Capital is merged or
consolidated with another entity, such other entity shall automatically
succeed to the rights, powers and responsibilities of Capital hereunder.
IN WITNESS WHEREOF the parties have duly executed this Agreement as of the
date first noted above.
CAPITAL ENVIRONMENTAL RESOURCE INC.
By: /s/ Xxx Xxxxx
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Xxx Xxxxx-Director
/s/ (Illegible) /s/ Xxxx Xxxxxxx
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Witness Xxxx Xxxxxxx
