EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") made as of the 27th day of February
2002, between LILT Canada Inc., a corporation duly incorporated under the laws
of Quebec having its head office at: 0000 Xxxxx-Xxxxxx Xxxxxxx, Xx. Xxxxxxx,
Xxxxxx, X0X 0X0 (the "Company") and Mr. Xxxx Xxxxxxx, residing at 0000 Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxx X0X 0X0 (the "Executive").
WHEREAS:
1. The Company is engaged in the fabrication and production of photonic chips
(the "Business");
2. The Company wishes to employ the Executive on the terms and conditions set
out below;
3. The Executive wishes to be so employed by the Company;
THIS AGREEMENT witnesses that the parties have agreed that the terms and
conditions of the relationship shall be as follows:
1. EMPLOYMENT
1.1 DUTIES: The Company appoints the Executive to undertake the duties and
exercise the powers of VICE PRESIDENT AND CHIEF TECHNICAL OFFICER of the
Company. The Executive agrees to be bound by the terms and conditions of
this Agreement. In carrying out his duties he will comply with all
reasonable, general or specific instructions as may be given by the
President of the Company.
1.2 ADDITIONAL DUTIES: In addition to the duties and responsibilities set forth
above, the Executive agrees to perform such additional duties and
responsibilities as may from time to time be determined to be necessary by
the Company.
1.3 CHANGES TO DUTIES: The Executive agrees that his reporting relationship,
duties and responsibilities may be changed unilaterally by the Company as
the Company deems appropriate. The Executive agrees that any of the changes
which may occur pursuant to this Article 1.3 will not affect the
application of this Agreement.
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2. TERM
2.1 EMPLOYMENT: Subject to the provisions of this Agreement concerning the
termination of employment, the employment of the Executive shall be for an
indeterminate term.
2.2 HIRING DATE: For the purpose of this Agreement, the date of hiring of the
Executive and the date from which the Executive will be deemed to have
started accumulating years of service with the Company will be July 1st
1998.
3. COMPENSATION
3.1 BASE SALARY: The Executive shall be paid a gross annual base salary of two
hundred and seventy five thousand Canadian dollars ($275,000 CAN). Said
salary shall be subject to all tax and statutory withholdings and other
deductions and shall be paid bi-monthly the 15th and the last day of each
month (24 pay periods per year), by direct bank transfer. Subject to the
following, the Executive agrees and recognizes that the above annual base
salary is inclusive of all activities and work performed to the benefit of
the Company.
3.2 BONUS: In addition to the annual base salary outlined above, the Executive
will be entitled to participate in such bonus program, which the Company
may introduce from time to time. Nothing herein shall require the Company
to offer bonus program or prevent it from amending or terminating them.
Bonuses will be provided in accordance with the formal bonus program and
any issues with respect to entitlement to or payment of any bonus will be
governed by the terms of such program establishing the bonus.
3.3 STOCK OPTIONS: As an incentive for the Executive to remain in the service
of the Company, the Company has granted to the Executive on the 27th day of
February 2002 an option to acquire up to a maximum of one hundred thousand
(100,000) common shares of the capital stock of the Company (the "Stock
Options") subject to the Company's Stock Option Plan. The Stock Options
will vest and become exercisable immediately. The exercise price of the
Stock Options will be the closing price of the Company's common stock on
the Nasdaq National Market on the last trading day immediately preceding
the date of grant.
The Stock Options will be considered null and void upon:
a) the employment of the Executive being terminated by the Company with
or without cause;
b) the Executive resigning from his employment with the Company;
Such Stock Options cannot be assigned or transferred. Upon the death
of the Executive, such Stock Options will be considered null and void.
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Any outstanding Stock Options will automatically expire without
compensation at the end of the employment of the Executive with the
Company, however caused.
Furthermore, the present Stock Options are subject to the Company
Stock Options Agreement, unless as modified above.
3.4 AUTOMOBILE: The Company shall lease for the Executive an automobile (Audi
TT) and shall reimburse the Executive, upon proper receipts, all expenses
and costs related to the use of the said automobile.
3.5 CHANGES IN COMPENSATION: After each year of the Executive's employment, the
Executive's base salary may be reviewed at the discretion of the Company.
Changes in base salary once accepted by the Executive, will not affect the
application of this Agreement.
4. BENEFITS
4.1 BENEFIT PLANS: The Executive shall participate in all benefit plans (the
"Benefits") which the Company provides, including medical/hospital and
extended health care benefits, dental care and life insurance. The Company
reserves the right to unilaterally revise the terms of the Benefits.
Benefits will be provided in accordance with the formal plan documents or
policies and any issues with respect to entitlement or payment of benefits
under any of the Benefits will be governed by the terms of such documents
or policies establishing the benefit in issue.
4.2 VACATION: As of May 1st 2002, the Executive shall be entitled to take four
(4) weeks vacation with pay per calendar year. The reference year for
vacation purposes extends from May 1st to April 30th.
4.3 EXPENSES: It is understood and agreed that the Executive will incur
expenses in connection with his duties under this Agreement. The Company
will reimburse the Executive for any expenses provided that the Executive
provides to the Company an itemized written account and receipts acceptable
to the Company within 30 days after they have been incurred.
4.4 DIRECTORS AND OFFICERS INSURANCE: The Executive shall be covered by the
Directors and Officers Liability Insurance Policy maintained by the
Company.
5. EXCLUSIVE SERVICE
5.1 FULL TIME AND ATTENTION: Consistent with his position with the Company, the
Executive shall:
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a) devote the whole of his working time, attention and skill to his
duties hereunder, respecting the fact that he retains his status as a
tenured professor at XxXxxx University; which status shall be
maintained without remuneration and without responsibility by way of
teaching, research or administration with the exception of not more
than five (5) hours per month, and shall not interfere with his
present or ongoing duties;
b) report to the President from time to time;
c) adhere to the directions of the President;
d) use his best efforts to promote the interests of the Company and its
affiliates. The Executive may not serve as a member of the board of
directors of any entity other than charitable organizations, unless
permitted by the President of the Company in its sole discretion.
6. OBLIGATIONS OF LOYALTY, NON-SOLICITATION AND NON-COMPETITION
6.1 NON-COMPETITION: The Executive agrees with and for the benefit of the
Company that during his employment pursuant to this Agreement and for a
period of twelve (12) months from the date of termination of this
Agreement, however caused, he will not for any reason, directly or
indirectly, either as an individual or as a partner or joint venture or as
an employee, principal, consultant, agent, shareholder, (excluding
ownership by the Executive, as a passive investment of less than one
percent (1%) of the outstanding shares of capital stock of any corporation
with one or more classes of its capital stock listed on a Security Exchange
or publicly traded in the over the counter market) officer, director, or
salesperson for any person, firm, association, organization, syndicate,
company or corporation, or in any other manner carry on, be engaged in,
concerned with, interested in, advise, lend money to, guarantee the debts
or obligations of, permit his or her name or any part of it to be used or
employed by, any person, business, firm, association, syndicate, company,
organization or corporation concerned with or engaged or interested in a
business which is the same as, or competitive with, the Business of the
Company, namely, the business consisting in the fabrication and production
of optical components using planar lightwave circuit technology and
process, within the geographical area of Canada and the United States of
America;
6.2 NON-SOLICITATION OF CUSTOMERS: Without restricting the generality of the
foregoing, the Executive agrees with and for the benefit of the Company
that during his employment pursuant to this Agreement and for a period of
eighteen (18) months from the date of the termination of his employment,
however caused, he will not for any reason, directly or indirectly, either
as an individual or as a partner or joint venture or as an employee,
principal, consultant, agent, shareholder, officer, director, or
salesperson for any person, firm, association, organization, syndicate,
company or corporation, or in any other
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capacity, solicit or accept business with respect to products competitive
with those of the Company from any of the Company's customers, wherever
situated. Company's customers include all customers upon the termination of
the Executive and, any prior customers that were the Company's customers at
any time during the twelve (12) month period preceding the Executive's
termination or for which the Company has offered its products or services
at any time during the twelve (12) month period preceding the Executive's
termination.
6.3 NON-SOLICITATION OF PERSONNEL: Without restricting the generality of the
foregoing, the Executive further agrees that, during his employment
pursuant to this Agreement and for a period of eighteen (18) months
following the termination of his employment, however caused, the Executive
will not hire or take away or cause to be hired or taken away any employee
of the Company or, following the termination of the Executive's employment,
however caused, hire any employee who was in the employment of the Company
during the twelve (12) months preceding the date of the termination of his
employment.
7. CONFIDENTIALITY
7.1 CONFIDENTIAL INFORMATION: Except in the normal and proper course of the
Executive's duties hereunder, the Executive will not use for the
Executive's own account or disclose to anyone else, during his employment
and for a period of five (5) years following the termination of his
employment, however caused, any confidential or proprietary information or
material (as defined hereinafter) relating to the Company's operations or
business which the Executive obtains from the Company or its officers or
employees, agents, suppliers or customers or otherwise by virtue of the
Executive's employment by the Company or by the Company's predecessor.
Confidential or proprietary information or material includes, without
limitation, the following types of information or material, both existing
and contemplated, regarding the Company or its parent, affiliated or
subsidiary companies: corporate information, including contractual
licensing arrangements, plans, strategies, tactics, policies, resolutions,
patent, trade-xxxx and trade name applications, and any litigation or
negotiations, information concerning suppliers, marketing information,
including sales, investment and product plans, customer lists, strategies,
methods, customers, customer lists, prospects and market research data,
financial information, including cost and performance data, debt
arrangements, equity structure, investors and holdings, operational and
scientific information, including trade secrets; technical information,
including technical drawings and designs and personnel information,
including personnel lists, resumes, personnel data, compensation practices
and procedures, organizational structure and performance evaluations (the
"Confidential Information").
7.2 RETURN OF DOCUMENTS: The Executive agrees that all documents (including,
without limitation, software and information in machine-readable form) of
any nature pertaining to activities of the Company and to its parent and
their respective affiliated, related, associated or subsidiary companies,
including, without limitation, Confidential Information, in his possession
now or at any time during his employment, are and shall
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be the property of the Company and its parent, and their respective
affiliated, related, associated or subsidiary companies, and that all such
documents and all copies of them shall be surrendered to the Company
whenever requested by the Company.
7.3 PROPRIETARY INFORMATION: The Executive hereby acknowledges and agrees that
the Company, or its designee, shall be the sole and exclusive owner of any
and all right, title, and interest in any and all inventions, ideas,
concepts, innovations, algorithms, software, and original works of
authorship (together "Proprietary Works"), whether or not protectable by
patent, copyright, mask work, integrated circuit topography laws,
trademark, industrial design laws, or other proprietary rights, that are
made, developed or conceived by me solely or jointly with others, at any
time during the term of his employment with the Company. Consequently, the
Executive hereby assigns to the Company, or its designee, as its exclusive
property any and all right, title and interest which he may have in and to
the Proprietary Works including, but not limited to any and all copyright,
patent right, moral rights, industrial design right, trademark right, data
bases rights, mask work rights, integrated circuit topography rights and
any other proprietary rights, which assignment of rights, titles and
interests is made without any restriction, for the entire world and for the
duration of such rights, titles and interests including any renewal or
extension of such duration and in perpetuity thereafter. The Executive
hereby waives to the benefit of the Company, or its designees, and its
successors, assignees and licensees any and all moral rights and any other
rights of similar nature which the Executive may hold in any and all of the
Proprietary Works, and such waiver is made without any restriction
whatsoever, for the entire world, for the duration of any such moral rights
including any renewal or extension of such duration, and in perpetuity
thereafter.
7.4 ACKNOWLEDGEMENT: The Executive acknowledges that, in connection with the
Executive's employment by the Company, he will receive or will become
eligible to receive substantial benefits and compensation. The Executive
acknowledges that his employment by the Company and all compensation and
benefits and potential compensation and benefits to the Executive from such
employment will be conferred by the Company upon him only because and on
condition of his willingness to commit his best efforts and loyalty to the
Company, including protecting the Company's right to have its Confidential
Information protected from non-disclosure by him and abiding by the
confidentiality, non-competition and other provisions herein. The Executive
understands his obligations as set forth in Article 6 and agrees that such
obligations would not unduly restrict or curtail his legitimate efforts to
earn a livelihood following any termination of his employment with the
Company. The Executive agrees that the restrictions contained in Articles 6
and 7 are reasonable and valid and all defenses to the strict enforcement
thereof by the Company are waived by him. The Executive further
acknowledges that irreparable damage would result to the Company if the
provisions of Articles 6 and 7 are not specifically complied with by the
Executive, and agrees that the Company shall be entitled to any appropriate
legal, equitable, or other remedy, including injunctive relief, in respect
of any failure or continuing failure to comply with the provisions of
Articles 6 and 7.
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8. TERMINATION OF EMPLOYMENT
8.1 TERMINATION FOR DEATH: The parties understand and agree that the
Executive's employment pursuant to this Agreement may be terminated, by
paying the Executive all accrued base salary, any earned but unpaid bonus
amounts at the date of termination on a prorated basis and any accrued but
unused vacation benefits, all earned through the date of termination, in
the following manner in the specified circumstances:
a) upon the death of the employee;
8.2 TERMINATION FOR CAUSE: The parties understand and agree that the
Executive's employment pursuant to this Agreement may be terminated, for
cause, in the Company's absolute discretion, without any notice or pay in
lieu thereof, by paying the Executive all accrued base salary and any
accrued but unused vacation benefits earned to the date of termination.
Failure by the Company to rely on the provision of this paragraph in any
given instance or instances shall not constitute a precedent or be deemed a
waiver.
8.3 TERMINATION WITHOUT CAUSE: The parties understand and agree that the
Company, in its absolute discretion and for any reason other than the ones
mentioned in Articles 8.1 and 8.2, may terminate the Executive's employment
by paying the Executive all accrued base salary, any earned but unpaid
bonus amounts at the date of termination on a prorated basis and any
accrued but unused vacation benefits, all earned through the date of
termination, and by paying to the Executive and indemnity equivalent to 15
months of base salary.
8.4 FAIR AND REASONABLE NOTICE: The Executive acknowledges that the prior
notice and/or payments contemplated in Article 8.3 above include all of his
entitlements to either notice or pay in lieu of notice and severance pay
under the Civil Code of Quebec and the Act Respecting Labor Standards of
Quebec. The Executive acknowledges and agrees that the notice or pay in
lieu of notice provisions in Article 8.3 is fair and reasonable and is the
result of negotiations between the parties.
8.5 COMPANY'S ABILITY TO ALLEGE CAUSE: The parties understand and agree that
the payment of the indemnity above mentioned to the Executive on
termination of the Executive's employment shall not prevent the Company
from alleging cause for the termination.
8.6 RESIGNATION: The Executive shall have the right to terminate his employment
upon giving the Company a one (1) month written notice. The Employee agrees
and recognizes that the notice provided for in the present Article 8.6 is
for the sole benefit of the Company, and that, as such, the Company, in its
sole discretion, shall have the right to renounce and waive the benefit of
part and/or of the totality of any such notice and the
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Executive will not be entitled to any indemnity or damages of any nature
whatsoever. The Executive shall be paid for his written notice period.
8.7 RESIGNATION FROM OFFICES: On termination of employment the Executive shall
immediately resign all offices held (including directorships) in the
Company and save as provided in this Agreement, the Executive shall not be
entitled to receive any payment or compensation for loss of office or
otherwise by reason of the resignation. If the Executive fails to resign as
mentioned the Company is irrevocably authorized to appoint some person in
his or her name and on the Executive's behalf to sign any documents or do
any things necessary or requisite to give effect to such resignation.
9. COMPANY PROPERTY
9.1 COMPANY PROPERTY: The Executive acknowledges that all items of any and
every nature or kind created or used by the Executive pursuant to the
Executive's employment under this Agreement, or furnished by the Company to
the Executive, and all equipment, automobiles, cellular phones, credit
cards, books, records, reports, files, diskettes, manuals, literature,
confidential information or other materials shall remain and be considered
the exclusive property of the Company at all times and shall be surrendered
to the Company, in good condition, promptly at the request of the Company,
or in the absence of a request, on the termination of the Executive's
employment with the Company. 10. SUCCESSORS AND ASSIGNS 10.1 SUCCESSORS AND
ASSIGNS: This Agreement shall enure to the benefit of, and be binding on,
the parties and their respective heirs, administrators, executors,
successors and permitted assigns. The Company shall have the right to
assign this Agreement to any successor (whether direct or indirect, by
purchase, amalgamation, arrangement, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company
provided only that the Company must first require the successor to
expressly assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform it if no
such succession had taken place. The Executive by his signature hereto
expressly consents to such assignment. The Executive shall not assign or
transfer, whether absolutely, by way of security or otherwise, all or any
part of the his rights or obligations under this Agreement without the
prior written consent of the Company.
11. NOTICES
11.1 NOTICE TO EXECUTIVE: Any notice required or permitted to be given to the
Executive shall be sufficiently given if delivered to the Executive
personally or if mailed by registered
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mail to the Executive's address last known to the Company, or if delivered
to the Executive via facsimile.
11.2 NOTICE TO COMPANY: Any notice required or permitted to be given to the
Company shall be sufficiently given if mailed by registered mail to the
Company's Head Office at its address last known to the Executive, or if
delivered to the Company via facsimile.
12. SEVERABILITY
12.1 SEVERABILITY: In the event that any provision or part of this Agreement
shall be deemed void or invalid by a court of competent jurisdiction, the
remaining provisions or parts shall be and remain in full force and effect.
13. ENTIRE AGREEMENT
13.1 ENTIRE AGREEMENT: This document constitutes the entire Agreement between
the parties with respect to the employment and appointment of the Executive
and any and all previous agreements, written or oral, express or implied,
between the parties or on their behalf, relating to the employment and
appointment of the Executive by the Company, are terminated and cancelled
and each of the parties releases and forever discharges the other of and
from all manner of actions, causes of action, claims and demands
whatsoever, under or in respect of any agreement.
14. MODIFICATION OF AGREEMENT
14.1 MODIFICATION: Any modification to this Agreement must be in writing and
signed by the parties or it shall have no effect and shall be void.
15. HEADINGS
15.1 HEADINGS: The headings used in this Agreement are for convenience only and
are not to be construed in any way as additions to or limitations of the
covenants and agreements contained in it.
16. GOVERNING LAW
16.1 GOVERNING LAW: This Agreement shall be construed in accordance with the
laws of the Province of Quebec.
17. SATISFACTION OF ALL CLAIMS
17.1 SATISFACTION OF ALL CLAIMS: The terms set out in this Agreement, provided
that such terms are satisfied by the Company, are in lieu of (and not in
addition to) and in full
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satisfaction of any and all other claims or entitlements which the
Executive has or may have upon the termination of the Executive's
employment and the compliance by the Company with these terms will cause a
full and complete release of the Company and its parent and their
respective affiliates, associates, subsidiaries and related companies from
any and all claims which the Executive may have for whatever reason or
cause in connection with the Executive's employment and the termination of
it, other than those obligations specifically set out in this Agreement. In
agreeing to the terms set out in this Agreement, the Executive specifically
agrees to execute a formal release document to that effect and will deliver
upon request appropriate resignations from all offices and positions with
the Company and its parent and their respective affiliated, associated,
subsidiary or related companies if, as and when requested by the Company
upon termination of his employment within the circumstances contemplated by
this Agreement.
18. ACKNOWLEDGEMENT
18.1 ACKNOWLEDGEMENT: The Executive acknowledges that:
a) he has had sufficient time to review this Agreement thoroughly;
b) he has read and understands the terms of this Agreement and the
obligations hereunder;
c) he has been given an opportunity to obtain independent legal advice
concerning the interpretation and effect of this Agreement;
d) he has been provided an adequate explanation of the nature and scope
of each of the terms of this Agreement; and
e) he has received a fully executed original copy of this Agreement.
19. The parties acknowledge that they have agreed that the present Agreement as
well as all documents and notices given pursuant hereto or relating
directly or indirectly hereto may be drawn up in English. Les parties
reconnaissent avoir accepte que la presente convention ainsi que tout
document execute et xxxx xxxxx directement ou indirectement a la suite ou
relativement a la presente convention puissent etre rediges en anglais.
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LILT CANADA INC.
Per: /s/ Xxxx X. Xxxxxxxxx
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XXXX X. XXXXXXXXX
/s/ Xxxxxx Xxxxxxx /s/ Xxxx Xxxxxxx
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WITNESS XXXX XXXXXXX
