EXHIBIT 4.34
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EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") dated as of September 1, 2002, 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 Xxxxxx Xxxxxxxxx (the "Employee").
TERMS OF AGREEMENT
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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, 2002 to continue
acting as Vice-President, Finance and Chief Financial Officer of the
Corporation 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 interfere
with the services required under this Agreement. Employee shall
continue to report to the President and Chief Executive Officer of the
Corporation.
2. COMPENSATION AND BENEFITS
2.1 SALARY
During the term of this Agreement, the Corporation shall pay
Employee the remuneration indicated in Schedule A.
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 in addition to the bonuses set forth
in Schedule A hereof. 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.
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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
reasonable 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 the terms of this
Agreement and 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.
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;
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(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 as specifically set forth in Schedule A and that
it shall continue to pay Employee the then current base salary
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 to5 years 12 months' remuneration plus health benefits; more
than 5 years 18 months' remuneration plus health benefits.
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 (i) material demotion in title or function; (ii) a
decrease in salary (taking into account both base salary and
variable remuneration); (iii) a net decrease in the benefit
package; or (iv) a change of location 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 on the same or better conditions, Employee's refusal to
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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's
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.
4.3 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.
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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.
4.8 GOVERNING LAW, INTERPRETATION
This Agreement shall be construed in accordance with and
governed for all purposes by the laws applicable in the
province of Quebec. 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
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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/ XXXXXX XXXXXXXXX
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XXXXXXX XXXXXXX XXXXXX XXXXXXXXX
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SCHEDULE A
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XXXXXX XXXXXXXXX EMPLOYMENT AGREEMENT
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REMUNERATION, VACATION
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1. REMUNERATION (in Canadian dollars)
From September 1, 2002 to August 31, 2003:
(i) Base salary of $175,000 per annum.
(ii) Variable remuneration as follows:
o An amount equivalent to 30% of base annual salary
($52,500) upon:
(a) attainment of 100% of the Health Indicators
established by the Board of Directors of the
Corporation for that financial year by the
Corporation and its subsidiaries in
accordance with the following proportions:
o EXFO Electro-Optical Engineering
Inc. - Quebec Operations: 59%
o EXFO Burleigh Products Group Inc. -
Rochester Operations: 15%
o EXFO Protocol Inc. - Montreal
Operations: 15.5%
o EXFO Photonic Solutions Inc. -
Toronto Operations: 10.5%; and
(b) attainment of 100% of the following personal
objectives in accordance with the indicated
proportions:
o upon evaluation by Employee's
superior that, during the financial
year ending on August 31, 2003,
that Employee attained the
objectives within his
responsibility set forth in the
document attached hereto as
Attachment B for the year ending
August 31, 2003 - 50%
o maintenance of high standards of
integrity, compliance and ethics in
financial reporting by the
Corporation as evaluated by the
Audit Committee of the Board of
Directors: 30%
o generation of US$8 million in cash
from operations (assuming no
acquisitions other than Gnubi),
excluding impact of tax and R & D
credits, calculated proportionately
to attainment given that 0
attainment = US$0 cash from
operations - 30%
o attainment of US$0.05 cash earnings
per share as evidenced by the
consolidated annual financial
statements for the year ending
August 31, 2003 (assuming no
acquisitions other than Gnubi),
calculated
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proportionately to attainment given
that 0 attainment = US$0.00 cash
earnings per share - 15%.
In the event the Health Indicators for the year in
question are not attained or are surpassed, the
amount payable shall be proportional to attainment of
the Health Indicators (0% to 150%) and shall be
calculated using the percentage of the attainment of
each of the Health Indicators within the framework of
the above proportions for each operational unit.
In the event the personal objectives are not fully
attained or are surpassed, the amount payable shall
be proportional to attainment thereof (0% to 125%)
and shall be calculated using the percentage of the
attainment of each of the personal objectives within
the framework of the above proportions for each
personal objective.
METHOD OF CALCULATION: $52,500 X % HEALTH INDICATOR X
% PERSONAL OBJECTIVES
The Health Indicator portion of the variable
remuneration 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 Health
Indicator portion of the variable remuneration shall
not be payable for the half of the financial year
during which the employment terminated for such
reasons and the personal objectives portion shall be
entirely forfeited.
(iii) Annual reviews of remuneration shall occur on or about every
September 1, commencing with September 1, 2003.
2. VACATION
The Employee shall have 4 weeks of paid vacation annually.
3. VARIOUS
The Corporation shall pay Employee's annual chartered accountant
membership fees.
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SCHEDULE B
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XXXXXX XXXXXXXXX EMPLOYMENT AGREEMENT
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BENEFITS
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The description below is a summary of the Corporation's present benefit package.
It is expected that this package will evolve in the future.
1. The Corporation offers to management a long-term disability plan.
2. Management benefits from the following collective insurance coverage
paid by the Corporation in the following proportions: 60% during first
2 years of employment, 80% during third and fourth years of employment
and 100% thereafter:
o health insurance,
o dental insurance,
o life insurance,
o accidental death and dismemberment insurance.
Details of each type of coverage are contained in booklets issued by
the insurer. Long-term disability insurance is obligatory and is paid
for entirely by the Employee.
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