EXHIBIT 4.24
[GRAPHIC OMITTED]
[LOGO - EXFO]
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") dated as of September 1, 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 Xxxxx Xxxxxx (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 commencing on or about September 1, 2000 to act as
Vice-President, North American Sales of EXFO America Inc., the
Corporation's wholly owned subsidiary, 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. 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 President and Chief Executive
Officer of the Corporation.
The Employee shall carry out his duties in the Corporation's office
indicated in Schedule A.
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.
-1-
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 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. Details of such benefits as of
the date hereof are set forth in Schedule B of this Agreement.
2.4 VACATION
Employee may take paid vacation during each year as set forth
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 and eighty (180) consecutive days, or (b) for more
than one hundred eighty (180) days in any consecutive twelve
(12) month period and this incapacity has not been remedied by
the end of the twelfth (12th) month of such consecutive twelve
(12) month period, 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.
-2-
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. 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 majority vote
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 set forth in Schedule A at his then current base
salary and commission (such commission being based on the
amount paid to the Employee as commission over the twelve (12)
month period preceding the termination) as set forth in
Schedule A for a twelve (12) month period after termination if
such termination shall occur prior to the events mentioned in
Section 3.4, otherwise the terms of Section 3.4 shall apply.
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 severance
benefits as described below based on length of service with
the Corporation:
LENGTH OF SERVICE SEVERANCE BENEFITS
0 to 5 years 12 months' remuneration plus health
benefits;
more than 5 years 18 months' remuneration plus health
benefits.
-3-
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 the Employee may choose to exercise such
stock options at the time of such termination, otherwise these
stock options shall be automatically terminated immediately
following the termination of Employee's employment. For
purposes of this Section 3.4, Employee shall be entitled to
treat a material demotion in title or function as termination
under this Section 3.4, but only if Employee expressly so
notifies the Corporation and terminates his employment
hereunder within thirty (30) days of such demotion or
relocation. If Employee is offered a substantially similar
position with the surviving entity, 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.
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, a copy of
which is joined hereto as Annexe C.
-4-
4.3 NOTICES
Any notice or communication given by any party hereto to the
other party shall be in writing and personally delivered or
mailed by certified mail, return receipt requested, postage
prepaid, to the addresses 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.
-5-
4.8 GOVERNING LAW, INTERPRETATION
This Agreement shall be construed in accordance with and
governed for all purposes by the laws applicable in the state
of Texas, U.S.A. Service of process 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: /s/ Xxxxxxx Xxxxxxx /s/ Xxxxx Xxxxxx
------------------- ----------------
XXXXXXX XXXXXXX XXXXX XXXXXX
-6-
SCHEDULE A
TO
XXXXX XXXXXX EMPLOYMENT AGREEMENT
REMUNERATION, VACATION, PLACE OF WORK
-------------------------------------
1. REMUNERATION
From September 1, 2000 to August 31, 2001:
(i) Base salary of US$145,000 per annum.
(ii) A variable portion of remuneration of US$14,500 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 does not
fully attain the Health Indicator for the year in question or
surpasses the Health Indicator, the variable portion of the
remuneration shall be paid in the same proportion as the
attainment of the Health Indicator. The variable portion shall
be paid twice yearly, after the end of the Corporation's
second quarter and after the end of the financial year.
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
not be payable for the half of the financial year during which
the employment terminated for such reasons.
(ii) Commission on Total Bookings (as defined in Schedule 4
hereof):
During the period from September 1, 2000 to February 28, 2001,
commissions will be payable to Employee on a monthly basis in
amounts equal to the following percentages of Total Bookings
made by the North American Sales department in the territory
covered by such department:
For Total Bookings from US$0 to US$49,875,000 - 0.1395% of
the Total Bookings figure is payable;
For Total Bookings exceeding US$49,875,000 and up to
US$66,500,000 - 0.2791% of the Total Bookings figure is
payable; and
For Total Bookings exceeding US$66,500,000 - 0.4186% of the
Total Bookings figure is payable.
-7-
During the period from March 1, 2001 to August 31, 2001,
commissions will be payable to Employee on a monthly basis in
amounts equal to the following percentages of Total Bookings
made by the North American Sales department in the territory
covered by such department including all sales of products of
Burleigh Instruments, Inc. ("BII") with the exception of : (a)
the products not included in BII's Instrument Division and
Nano-Positioning Division; (b) sales to Newport Corporation;
(c) sales from BII to the Corporation; and (d) sales of
products of Burleigh Automation Inc. (still to be determined):
For Total Bookings from US$0 to US$56,250,000 - 0.1237% of
the Total Bookings figure is payable;
For Total Bookings exceeding US$56,250,000 and up to
US$75,000,000 - 0.2475% of the Total Bookings figure is
payable; and
For Total Bookings exceeding US$75,000,000 - 0.3712% of the
Total Bookings figure is payable.
(iii) Bonus for improvement of gross margin: (DETAILS TO COME -
MAXIMUM OF US$14,500)
(iv) Quarterly bonus: After the end of each of the Corporation's
financial quarters, the Employee shall be paid a bonus of
US$2,500 if the following Total Bookings objectives by the
North American Sales department for each such quarter are
attained:
1st Quarter: US$14,500,000 3rd Quarter: US$17,000,000
2nd Quarter: US$16,000,000 4th Quarter: US$19,000,000.
In the event the annual Total Bookings objective for the North
American Sales department of US$66,500,000 for the financial
year ending August 31, 2001 (the "Annual Objective") is
attained, notwithstanding the non-attainment of some of the
above-noted quarterly objectives, the Employee shall be paid a
bonus for the year totalling US$10,000, taking into account
any quarterly payments that may have been made for attainment
of the quarterly objectives.
In the event the Annual Objective is exceeded by 10% or more,
an additional bonus of US$10,000 shall be paid to Employee and
if the Annual Objective is exceeded by 20% or more, a further
additional bonus of US$10,000 shall be paid to Employee.
(v) Options: The following stock options will be issued to the
Employee in accordance with the terms of the Corporation's
Stock Option Plan and the terms set forth herein:
o On September 1, 2001, additional stock options, as
indicated below, will be issued to Employee in relation to
the percentage of attainment of the Annual Objective:
-8-
- more than 110% of Annual Objective attained: 10,000
stock options;
- more than 125% of Annual Objective attained : 20,000
stock options;
- more than 140% of Annual Objective attained: 30,000
stock options.
The subscription price of such options shall the closing
price of the Corporation's shares the day preceding the
grant; one-quarter of these options will vest on the
second day following the disclosure of the Corporation's
financial results for each of the financial years ended
August 31, 2002, 2003, 2004 and 2005; these options will
remain in force until the 10th anniversary of the date of
grant.
(vi) The Annual Objective will be increased by an amount of
US$9,487,500 in the territory covered by the North American
Sales department for the six (6) month period commencing March
1, 2001.
(vii) The Employee shall receive a monthly car expense allowance of
US$700.00.
(viii) The provisions governing the payment of commission and the
reimbursement of expenses are set forth in Schedule D hereof.
(ix) Annual reviews of remuneration shall occur on or about every
September 1, commencing with September 1, 2001.
2. PLACE OF WORK
The Employee shall exercise his functions out of the office of EXFO
America Inc. located in Richardson, Texas, U.S.A.
3. VACATION
Four (4) weeks of paid vacation annually.
4. DEFINITIONS
For the purposes of this Agreement, the meaning of the term
"Corporation" shall be deemed to include EXFO America Inc.
-9-
SCHEDULE B
TO
XXXXX XXXXXX EMPLOYMENT AGREEMENT
BENEFITS
--------
The Employee shall receive all benefits as set forth in the EXFO America Inc.
benefit package.
-10-
SCHEDULE C
TO
XXXXX XXXXXX EMPLOYMENT AGREEMENT
EXCLUSIVITY, CONFIDENTIALITY, ASSIGNMENT OF WORK PRODUCT,
NON-COMPETITION AND NON-SOLICITATION AGREEMENT
----------------------------------------------
See attached.
-11-
EXCLUSIVITY, CONFIDENTIALITY, ASSIGNMENT OF WORK PRODUCT,
NON-COMPETITION AND NON-SOLICITATION AGREEMENT
FOR SALES PERSONNEL
The undersigned, Xxxxx Xxxxxx, as Employee of EXFO Electro-Optical Engineering
Inc. (hereinafter "EXFO"), expressly agrees to comply with all of the
commitments set out below. For the purposes hereof "EXFO" includes any entity
controlled by EXFO.
LOYALTY
The Employee agrees to use all of his best efforts and diligence in the
performance of his duties; he furthermore agrees to loyally promote the
interests of EXFO and to devote all of his time and energy to the
exclusive service thereof.
CONFIDENTIALITY
2.1 The Employee acknowledges that, throughout the term of his
employment with EXFO, he may, by reason of such employment and
his duties, have access to certain confidential information
specifically relating to the operation and activities of EXFO,
its clients, other employees, management, finances,
transactions, marketing of products and services offered by
EXFO or, generally, to the business thereof.
2.2 Consequently, the Employee agrees, throughout the term of his
employment and at all times following the termination thereof
for any reason whatsoever, to neither disclose, use,
communicate, reveal nor make available to any person
whomsoever in any manner whatsoever, any Confidential
Information produced or held by EXFO, its suppliers or clients
unless it is in the performance of his work with, and to the
exclusive benefit of, EXFO.
2.3 If the employee is required by applicable law, stock exchange
regulations or court order to disclose any Confidential
Information, he shall first notify EXFO in writing
sufficiently in advance so as to provide EXFO with reasonable
opportunity to seek to prevent such disclosure or to seek to
obtain a protective order for such Confidential Information.
2.4 Without limiting the generality of the foregoing, any
information relating to any secret, invention, licence,
manufacturing process, know-how, supply source, sales
condition of a supplier, components of a product, technique,
production and marketing method, price list, client list,
discount policy and detail respecting the specific needs of
EXFO clients shall be deemed "Confidential Information".
-12-
OWNERSHIP OF CREATIONS
3.1 The Employee hereby assigns to EXFO, which accepts, without
restriction as to territory, duration or otherwise, any right
which is or may be granted to him or acknowledged as his
pursuant to any Canadian or foreign legislation regarding
patents, copyrights, trade-marks, industrial designs,
integrated circuitry topography, protection of know-how, trade
secrets, or confidential information, and any other provision
of a statute, principle of common law or civil law respecting
intellectual property, whether or not such rights are
registered, including the right to obtain any protection
afforded by law by filing an application for registration or
otherwise, with respect to any of the foregoing rights (the
"Intellectual Property Rights") with respect to any work
(including computer software), invention, trade-xxxx,
industrial design, integrated circuit topography, know-how,
trade secret, confidential information or other matter that is
or may be protected by an Intellectual Property Right
("Intellectual Property") directly or indirectly developed,
carried out or improved by the Employee, either alone or with
another person, throughout the term of his employment with
EXFO, whether or not during regular business hours, on the
work premises or using the property or services of EXFO, and
whether such Intellectual Property Rights relate to any
product, service, method, or procedure used or operated, or
the use or operation of which is contemplated by EXFO or its
subsidiaries, as part of the operations and activities of EXFO
or its subsidiaries. To the extent that the employee holds any
Intellectual Property Rights with respect to any of the
Intellectual Property described above, he hereby assigns to
EXFO, which accepts, all such Intellectual Property Rights
without restriction as to territory, duration or otherwise.
3.2 Moreover, the Employee waives all of his moral rights with
respect to any work protected by copyright in favour of EXFO
and any third party authorized by EXFO to use such work.
3.3 The Employee undertakes to immediately notify EXFO of any
Intellectual Property he may develop, carry out or improve
and, upon request by EXFO to that effect, undertakes to
cooperate, diligently and in good faith, with any patent agent
or other professional EXFO may designate for the purposes of
identifying said Intellectual Property Rights and, as the case
may be, to take any action and prepare or execute any document
EXFO may deem necessary or useful to ensure that EXFO may
obtain, protect or exercise Intellectual Property Rights
relating thereto, or to acknowledge or give full effect to
this Agreement; to that end, the Employee appoints EXFO as his
exclusive and irrevocable agent to execute, on his behalf, any
document the purpose of which is to acknowledge or give full
effect to such assignment, including as part, or for the
purposes, of any application to obtain, amend or maintain a
patent.
3.4 The Employee acknowledges that any Intellectual Property
constitutes confidential information belonging to EXFO,
subject to Section 2 hereof.
-13-
3.5 The Employee undertakes, throughout the term of his employment
with EXFO, to neither develop, carry out, nor improve, for his
own benefit or that of a third party, either alone, jointly or
in collaboration with a third party, whether during regular
working hours, on the work premises or using the property or
services of EXFO, any Intellectual Property regarding any
product, service, method or procedure used or operated, or the
use or operation of which is contemplated by EXFO or its
subsidiaries, as part of the operations or activities of EXFO
or its subsidiaries.
NON-COMPETITION AND NON-SOLICITATION
4.1 The Employee acknowledges that the operation of the business
of EXFO represents the carrying on of a business in a specific
sector requiring highly specialized expertise. As a result,
the Employee undertakes not to compete with EXFO or solicit
its clients and employees in accordance with the following
terms and parameters set forth herein.
4.2 The Employee agrees, throughout his employment with EXFO, and
for a period of eighteen (18) months following termination of
his employment with EXFO for any reason whatsoever, to neither
directly nor indirectly perform, for his own benefit or that
of another person, in any capacity whatsoever, including, but
not limited to, as shareholder, employer, employee, principal,
representative, agent, franchisee, franchiser, distributor or
advisor, any duty or activity in the field of operations of
EXFO, namely research, development and the manufacture and
sale of fibre optic testing and measuring devices in the
territory of North America, given that EXFO services a
clientele spread throughout such territory, in which the
Employee carries out his activities and work.
4.3 The Employee agrees, throughout his employment with EXFO, and
for a period of eighteen (18) months following termination of
his employment with EXFO for any reason whatsoever, to neither
directly nor indirectly, for his own benefit or that of
another person, in any capacity whatsoever, including, but not
limited to, as shareholder, employer, employee, principal,
representative, franchiser, franchisee, distributor or
advisor, solicit the clients of EXFO and its employees, nor to
authorize the use of his name to solicit said clients or
employees and to do no thing that would incite or convince any
person to terminate its business relation with EXFO.
4.4 The Employee acknowledges that the obligations assumed
pursuant to this Section 4 are reasonably limited in light of
the international nature of competition in the fibre optic
field and the clientele and international market which EXFO
serves. Moreover, the Employee acknowledges that the
obligations set out in this Section are required to protect
the legitimate interests of EXFO.
-14-
COMPENSATION AS FORMER EMPLOYEE
5.1 If, during the eighteen (18) month period following the end of
the Employee's employment by EXFO, the Employee receives a
valid offer of employment that he is unable to accept due
solely to the non-competition undertaking set forth in Section
4 hereof, and not because of any restrictions otherwise
imposed by law, the Employee shall notify EXFO in writing of
such firm employment offer, providing a copy of the offer and
giving full information as to the identity of the prospective
employer and the nature of the proposed duties of the
Employee. EXFO shall within ten (10) days after receipt of
each such notice either give its written permission for the
Employee to accept such employment or advise the Employee of
its unwillingness in this regard. During the eighteen (18)
month period following the end of his employment with EXFO,
the Employee shall not accept any part time or full time
employment that would contravene Section 4 hereof without
previously obtaining EXFO's written consent or release from
the non-competition undertaking set forth in Section 4 hereof.
5.2 Beginning with the day upon which EXFO shall receive the first
of any such written notices from the Employee, if EXFO does
not give written permission for the Employee to accept said
offered employment, and thereafter until the expiration of the
eighteen (18) month period following the end of employment,
EXFO shall either:
a) give written permission for the Employee to accept a
specific offered employment;
b) give to the Employee a written release from the
non-competition undertaking set forth in article 4 of
this Attachment "A"; or
c) compensate the Employee in the following manner :
i) if Employee's employment ended for causes of
fraud or refusal to operate in good faith in
the best interests of EXFO, compensation
shall be equivalent to 5% of Employee's base
annual salary;
ii) if Employee's employment ended for cause of
serious lack of performance, compensation
shall be equivalent to 25% of Employee's
base annual salary;
iii) if Employee no longer works for EXFO for any
reason other than the reasons set forth in
paragraphs i) and ii) above, compensation
shall be equivalent to 125% of Employee's
base annual salary;
iv) if Employee no longer works for EXFO due to
his voluntary departure, compensation shall
be equivalent to 75% of Employee's base
annual salary.
5.3 Compensation paid to the Employee under this Section 5 shall
be paid monthly based on the annual base salary (exclusive of
extra compensation of any kind) that was in force at the time
of the termination of the Employee's employment. Each such
payment shall be forwarded to the Employee not later than the
last day of each calendar month.
5.4 Once EXFO has commenced remuneration payments in accordance
with this Section 5, the Employee shall at all times
conscientiously seek suitable employment consistent
-15-
herewith and shall, within ten (10) days after the receipt of
each payment from EXFO, advise EXFO in writing regarding his
efforts to obtain employment. Failure by the Employee to so
advise EXFO shall relieve EXFO of the obligation to send any
further payments to the Employee until such information is
supplied.
5.5 Once the period of eighteen (18) months following the end of
the employment has expired, EXFO shall have no further
obligation to compensate the Employee hereunder and the
Employee shall no longer be bound by the non-competition
undertaking set forth herein and shall be free to accept any
offer of employment that he wishes to accept.
REMEDIES
The Employee acknowledges that failure to comply with Sections 2 and 4
hereof shall result in serious or irreparable damage which a final
judgement will be insufficient to remedy. Consequently, the Employee
acknowledges that, in the event of a breach of any one of these
Sections, EXFO may immediately resort to appropriate proceedings so as
to obtain an interim, interlocutory and permanent injunction order as
soon as possible without prejudice to any cause of action for damages.
DISPUTES AND ARBITRATION
The parties hereto agree that any dispute which arises in the course of
or following the performance of this Agreement will be definitely
settled under the auspices of the Quebec National and International
Commercial Arbitration Centre through arbitration and to the exclusion
of courts of law, in accordance with its Arbitration Rules in force at
the time this Agreement is signed and to which the parties declare to
have adhered.
ACKNOWLEDGEMENT BY EMPLOYEE
The Employee acknowledges having had sufficient time to examine this
Agreement and to ask any question he deemed pertinent, including to his
legal counsel, and is thus aware of the scope of his rights and
obligations.
SEVERABILITY
Should any section, phrase, paragraph or part of this Agreement be
deemed unenforceable for any reason by any court of competent
jurisdiction, such decision shall neither amend the remainder of this
Agreement nor render it void.
LANGUAGE OF AGREEMENT
This Agreement has been drawn up in the English language at the request
of the parties hereto. La presente convention a ete redigee en langue
anglaise a la demande des parties aux presentes.
-16-
SIGNED IN RICHARDSON, TEXAS ON THIS 10TH DAY OF APRIL 2001.
/s/ Xxxxx Xxxxxx
----------------
XXXXX XXXXXX
ACCEPTED IN VANIER QUEBEC THIS 10TH DAY OF APRIL 2001.
EXFO ELECTRO-OPTICAL ENGINEERING INC.
Per: /s/ Xxxxxxx Xxxxxxx
-------------------
Xxxxxxx Xxxxxxx
-17-
SCHEDULE D
TO
XXXXX XXXXXX EMPLOYMENT AGREEMENT
TERMS RELATING TO THE PAYMENT OF COMMISSION
-------------------------------------------
1. DEFINITIONS
In this Schedule D, the following terms shall have the meanings set
forth hereinbelow:
"Total Bookings" shall mean the total amount of Orders received from
any defined territory, as calculated using the Net Invoice Price, to
the extent that the Order is accepted by the Corporation in accordance
with the terms of paragraph 4 of this Schedule D.
"Net Invoice Price" shall mean the total price at which an Order is
invoiced to the customer including any increase or decrease in the
amount of the Order, but excluding commissions payable to distributors,
shipping costs, mailing costs, taxes, custom duties, transportation,
insurance, duties and any allowances or discounts granted to the
customer by the Corporation.
"Order" shall mean any commitment received from the defined territory
to purchase products that the Corporation is in a position to
manufacture or which is subject to split commission in accordance with
paragraph 3 of this Schedule D.
2. COMPUTATION AND PAYMENT OF COMMISSION
Commission is payable at the end of the month following the month in
which the Order is accepted, except in case of termination of this
Agreement, in which case the Corporation may withhold payment of
commission in accordance with the terms set forth in paragraph 5 of
this Schedule D.
At the time of payment of commission to Employee, the Corporation will
provide to Employee a monthly commission statement showing commissions
earned during the month, with invoice numbers, copy of invoices,
customer names and commission to be paid on invoices where commission
applies to sales achieved in the applicable quarter.
Commission is not payable on amounts received in payment for compliance
testing, repairs and reworks, research and development, engineering,
special tooling and non-recurring start-up costs.
The following amounts shall be deducted from any amounts of commission
due to Employee:
-18-
i) an amount equal to commission previously paid or credited on
sales of the Corporation's products which have since been
returned by the customer or on allowances credited to the
customer for any reason by the Corporation; and
ii) an amount equal to commission previously paid or credited on a
sale for which the Corporation shall not have been fully paid
by the customer whether by reason of the customer's
bankruptcy, insolvency, or any other reason which, in the
Corporation's judgement, renders the account uncollectible at
anytime. If any such uncollectible accounts were eventually
collected by the Corporation, the Corporation shall pay
Employee the percentage of commission applicable at the time
of the original sale upon the net proceeds of such collection.
3. COMMISSION SPLIT
When engineering, the execution of an Order, or a shipment involves
both territories not part of the territory covered by the North
American Sales department and the territory covered by the North
American Sales department, the Corporation will split the amount of the
Order accounted in the Total Bookings between the territories involved
as follows:
(i) 40% of the amount of the Order shall be credited to the
department or employee, as applicable, in whose territory the
products were engineered or specifications were prepared;
(ii) 40% of the amount of the Order shall be credited to the
department or employee, as applicable, to whose territory the
product is shipped;
(iii) 20% of the amount of the Order shall be credited to the
department or employee, as applicable, in whose territory the
Order is executed.
The Corporation will make this determination and advise the interested
parties, usually at the time the Order is accepted by the Corporation.
The amount payable as commission in such a case shall never exceed the
amount of commission which would have been payable if only one
territory had been involved.
4. ACCEPTANCE OF ORDER
The following conditions shall be fulfilled before acceptance by the
Corporation of an Order: (i) all Orders shall be confirmed to the
Corporation by the purchaser/buyer with a purchase order number, (ii)
the Corporation shall have received confirmation of the "ship to" and
"xxxx to" addresses and the telephone number of the purchaser/buyer and
of the end user, (iii) an authorized officer of the Corporation at its
principal shall have accepted the Order, and (iv) the credit department
of the Corporation shall have accepted the Order.
-19-
The Employee shall provide the Corporation with all information which
may be necessary to pay commission due to the local sales
representatives, collect amounts due from purchasers/buyers, maintain
customers in its data base, etc.
5. PAYMENT OF COMMISSION AND EXPENSES IN CASE OF TERMINATION
In the event of the termination of this Agreement, payment of
commission and reimbursement of expenses will be made by the
Corporation as follows:
(i) COMMISSION: any commission that may be payable for Orders
received before the date of termination shall be withheld by
the Corporation until the occurrence of the latest of the
following events:
(a) all samples or demonstrators of products and all
documentation and equipment, including hardware and
software, belonging to the Corporation that may be in
the Employee's possession have been returned to the
Corporation;
(b) the expiration of a 90 day period following the date
of termination.
(ii) REIMBURSEMENT OF EXPENSES: any reimbursement of expenses
incurred before the date of the termination that may be
payable shall be withheld by the Corporation until the
occurrence of the latest of the following events:
(a) all samples or demonstrators of products and all
documentation and equipment, including hardware and
software, belonging to the Corporation that may be in
the Employee's possession have been returned to the
Corporation;
(b) the expiration of a 90 day period following the date
of termination.
It is understood that reimbursement of expenses is not payable
by the Corporation until it has received a duly completed
expense report and full supporting documents and has had a
reasonable period of time to review the expense report and the
supporting documents.
-20-