EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is entered into as of September 19, 1996 by
and between Xxxx Xxxxxx ("Xxxxxx") and Xxxxxx Industrial Software Inc., an
Alberta corporation (the "Company").
R E C I T A L S:
A. The Company desires to employ Xxxxxx as an executive officer of the
Company and Xxxxxx desires to be so employed by the Company, all on the terms
and subject to the conditions set forth herein.
B. The Company desires to bind Xxxxxx to certain restrictive covenants
and Xxxxxx agrees to be so bound, all on the terms and subject to the conditions
set forth herein.
A G R E E M E N T :
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. TERM. Subject to the terms and conditions set forth herein and unless
sooner terminated as hereinafter provided, the Company shall employ Xxxxxx and
Xxxxxx agrees to serve as an employee of the Company from the date hereof to and
including September ___, 1999 (the "Employment Term"). After the expiration of
the Employment Term, Xxxxxx'x employment hereunder shall automatically renew for
successive one year periods (each, a "Renewal Term") unless either party hereto
delivers written notice to the other party hereto, at least ninety (90) days
prior to the expiration of the Employment Term or any Renewal Term thereof, as
the case may be, of his or its desire to terminate Xxxxxx'x employment with the
Company. The Employment Term and any Renewal Term thereof are collectively
referred to herein as the "Term".
2. EMPLOYMENT DUTIES. During the Term, Xxxxxx shall serve as the
___________ of the Company and as the head of the TESS Business Unit. Xxxxxx
shall report directly to the Board of Directors of the Company. Xxxxxx shall
faithfully, diligently and competently perform such duties and responsibilities
as may from time to time be assigned to him by the Board of Directors of the
Company (the "Board"). Xxxxxx agrees that at all times during the Term and
thereafter, (a) the Company shall have the right to display, and may use in its
advertising the name and portrait of Xxxxxx; (b) if applicable, the Company
shall have the right to advertise its business as being carried on in the manner
and tradition and according to the standards established by Xxxxxx; and (c)
Xxxxxx will not knowingly or intentionally do any act or say any thing which
will or may impair, damage, or destroy the good will and esteem for the Company
of its suppliers, employees, patrons, customers and others who may at any time
have or have had business relations with the Company.
3. COMPENSATION. As compensation for the services to be performed and
the duties and responsibilities to be assumed by Xxxxxx during the Term, the
Company shall pay to Xxxxxx a salary (the "Salary") in an amount equal to $U.S.
125,000 per annum. The Company shall review the Salary payable to Xxxxxx after
the expiration of each one year period during the Term beginning on the date
hereof and any increases in Salary shall be made at the sole discretion of the
Company. The Salary shall be payable to Xxxxxx in accordance with the Company's
ordinary payment practices for salaried employees.
4. BENEFITS.
(a) During the Term, Xxxxxx shall be entitled to participate in such
employee benefit plans and programs as are maintained by the Company, to
the extent that his position, tenure, compensation, age, health and other
qualifications make him eligible to participate. The Company does not
promise the adoption or continuance of any particular plan or program
during the Term, and Xxxxxx'x (and his dependents') participation in any
such plan or program shall be subject to the provisions, rules, regulations
and laws applicable thereto.
(b) During the Term, Xxxxxx shall be entitled to such other fringe
benefits as are provided to employees of the Company with comparable
positions, tenure and compensation as Xxxxxx.
5. REIMBURSEMENT OF EXPENSES. During the Term, Xxxxxx shall be entitled
to prompt reimbursement for ordinary, necessary and reasonable out-of-pocket
trade or business expenses which Xxxxxx incurs in connection with performing his
duties under this Agreement. The reimbursement of all such expenses shall be
made upon presentation of evidence reasonably satisfactory to the Company of the
amounts and nature of such expenses and shall be subject to the reasonable
approval of the Board.
6. RESTRICTIVE COVENANTS. Xxxxxx acknowledges and agrees that (a)
through his past and continuing services to the Company, he will learn valuable
trade secrets and other proprietary information relating to the Company's
business; (b) Xxxxxx'x services to the Company are unique in nature; (c) the
Company's business is international in scope; and (d) the Company would be
irreparably damaged if Xxxxxx was to provide services to any person or entity in
violation of the restrictions contained in this Agreement. Accordingly, as an
inducement to the Company to enter into this Agreement, Xxxxxx agrees that
during the Term and for two years thereafter (such period being referred to
herein as the "Restricted Period"), Xxxxxx shall not, directly or indirectly,
either for himself or for any other person or entity, without the prior written
consent of the Company:
(a) anywhere in the United States or Canada, engage or participate
in, or assist, advise or be connected with (including as an employee,
owner, partner, shareholder, officer, director, advisor, consultant, agent
or (without limitation by the specific enumeration of the foregoing)
otherwise), or permit his name to be used by or render services for, any
person or entity engaged in, or making plans to engage in, a business that
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competes with the business conducted by, or proposed to be conducted by,
the Company or Total Control Products, Inc. ("TCP"), the majority
shareholder of the Company (a "Competing Business");
(b) solicit, attempt to solicit, aid in the solicitation of or accept
any orders from any person or entity who is or has been a customer of the
Company or its Affiliates, at any time during the period beginning one year
prior to the expiration of the Term through the Restricted Period, to
purchase products or services from any person or entity which products or
services could have been supplied or performed, as the case may be, by the
Company or its Affiliates (other than from the Company or its Affiliates);
(c) solicit, attempt to solicit or aid in the solicitation of any
person or entity who is or has been a customer, supplier, licensor,
licensee or person or entity having any other business relationship with
the Company or any of its Affiliates, at any time during the period
beginning one year prior to the expiration of the Term through the
Restrictive Period, to cease doing business with or alter its business
relationship with the Company or its Affiliates; or
(d) solicit or hire any person or entity who is a director, officer,
employee, independent contractor or agent of the Company or any of its
Affiliates to perform services for any person or entity other than the
Company or its Affiliates or to terminate his or her employment with the
Company or its Affiliates.
Additionally, as an inducement to the Company to enter into this Agreement,
Xxxxxx agrees that during the Term, Xxxxxx shall not, directly or indirectly,
either for himself or for any other person or entity, without the prior written
consent of the Company, take any action which might divert from the Company or
any of its Affiliates (as defined herein) any opportunity (each, an
"Opportunity") which would be within the scope of the Company's or such
Affiliate's then business and shall offer each Opportunity to the Company, which
the Company may, in its sole discretion, decide to pursue or not. As used
herein, an "Affiliate" shall mean and include any person or entity which
controls a party, which such party controls or which is under common control
with such party. For purposes of this Agreement, the Affiliates of the Company
shall specifically include TCP. "Control" means the power, direct or indirect,
to direct or cause the direction of the management and policies of a person or
entity through voting securities, contract or otherwise. Notwithstanding the
foregoing, the ownership of up to 5% of the issued capital stock of any publicly
traded company by itself shall not constitute a violation of any provision of
this Section 6. Notwithstanding the foregoing, actions taken by Xxxxxx pursuant
to the terms of that certain Secured Note dated as of the date hereof executed
by the Company in favor of Xxxxxx shall not constitute a violation of the
provisions of this Section 6.
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7. DISCLOSURE OF CONFIDENTIAL INFORMATION. Xxxxxx recognizes that he
will occupy a position of trust and confidence with the Company as to
Confidential Information (as herein defined) pertaining to the Company and its
Affiliates. As an inducement for the Company to enter into this Agreement,
Xxxxxx therefore agrees that:
(a) for the longest period permitted by law from the date of this
Agreement, Xxxxxx and each Affiliate of Xxxxxx shall hold in the strictest
confidence and shall not, other than as required by law, without the prior
written consent of the Company, use for his own benefit or that of any
third party or disclose to any person, firm or corporation (except the
Company, an Affiliate of the Company or employees of the Company and its
Affiliates) any Confidential Information. For purposes of this Agreement,
intending that the term shall be broadly construed to include anything
protectible as a trade secret or confidential information under applicable
law, "Confidential Information" shall mean all information, and all
documents and other tangible items which record information relating to or
useful in connection with the Company's business (including the business of
any of the Company's Affiliates), which at the time or times concerned is
protectible as a trade secret or confidential information under applicable
law, and which has been or is from time to time disclosed to or known by
Xxxxxx either before or after the date hereof.
(b) Xxxxxx and each Affiliate of Xxxxxx (and if deceased, their
personal representatives) shall promptly following a request therefor from
the Company return to the Company, without retaining copies, all tangible
items which are or which contain Confidential Information. Xxxxxx shall
also surrender all computer print-outs, laboratory books, floppy disks and
other such media for storing software and information, work papers, files,
client lists, telephone and/or address books, rolodex cards, internal
memoranda, appointment books, calendars, keys and other tangible things
entrusted to Xxxxxx by the Company or authored in whole or in part by
Xxxxxx within the scope of his duties to the Company even if such things do
not contain Confidential Information; and
(c) at the request of the Company made at any time or from time to
time during the Restricted Period, Xxxxxx and each Affiliate of Xxxxxx (and
if deceased, their personal representatives) shall make, execute and
deliver all applications, papers, assignments, conveyances, instruments or
other documents and shall perform or cause to be performed such other
lawful acts as the Company may reasonably deem necessary or desirable to
implement any of the provisions of this Agreement, and shall give testimony
and cooperate with the Company, its Affiliates or their respective
representatives in any controversy or legal proceedings involving the
Company, its Affiliates or their respective representatives with respect to
any Confidential Information.
8. INVENTIONS. Xxxxxx acknowledges that in his capacity as an executive
officer of the Company, whether before or after the date hereof, he will be
involved in (i) the conception or making of improvements, discoveries,
inventions or the like (whether patentable or unpatentable and whether or not
reduced to practice), (ii) the authorship of copyrightable works or (iii) the
development of trade secrets or confidential information relating to the
Company. Xxxxxx
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acknowledges that all such intellectual property is the exclusive property of
the Company. Xxxxxx hereby waives any rights he may have in or to such
intellectual property, and Xxxxxx hereby assigns to the Company all right,
title and interest in and to such intellectual property, including, without
limitation, all copyright, neighboring rights and similar rights, title or
interest. Xxxxxx waives any moral rights he may have under the Copyright Act
or a similar law. At the Company's request and at no expense to Xxxxxx,
Xxxxxx shall execute and deliver all such papers, including, without
limitation, any assignment documents, and shall provide such cooperation as
may be necessary or desirable, or as the Company may reasonably request, in
order to enable the Company to secure and exercise its rights to such
intellectual property.
9. SPECIFIC PERFORMANCE. Xxxxxx agrees that any violation by him of
Sections 6, 7 or 8 of this Agreement would be highly injurious to the Company
and its Affiliates and would cause irreparable harm to the Company and its
Affiliates. By reason of the foregoing, Xxxxxx consents and agrees that if he
violates any provision of Sections 6, 7 or 8 of this Agreement, the Company and
its Affiliates shall be entitled, in addition to any other rights and remedies
that they may have, to apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce, or prevent
any continuing violation of, the provisions of such section. In the event
Xxxxxx breaches a covenant contained in this Agreement, the Restricted Period
applicable to Xxxxxx with respect to such breached covenant shall be extended
for the period of such breach. Xxxxxx also recognizes that the territorial,
time and scope limitations set forth in Sections 6 and 7 are reasonable and are
properly required for the protection of the Company and its Affiliates and in
the event that any such territorial, time or scope limitation is deemed to be
unreasonable by a court of competent jurisdiction, the Company and Xxxxxx agree,
and Xxxxxx submits, to the reduction of any or all of said territorial, time or
scope limitations to such an area, period or scope as said court shall deem
reasonable under the circumstances. Xxxxxx represents, warrants and
acknowledges that he has available to him sufficient other means of support so
that observance of the covenants contained in Sections 6, 7 and 8 shall not
deprive him of his ability to earn a livelihood or support his dependents.
10. TERMINATION FOR CAUSE. During the Term, Xxxxxx'x employment with the
Company may be terminated by the Board "for cause", which shall include (a)
Xxxxxx'x conviction for an indictable offence or a crime involving moral
turpitude; (b) Xxxxxx'x commission of an act which the Board, in its reasonable
discretion, determines involved personal dishonesty or fraud involving personal
profit in connection with Xxxxxx'x employment with the Company; (c) Xxxxxx'x
commission of an act which the Board shall have found to have involved willful
misconduct or gross negligence on the part of Xxxxxx in the conduct of his
duties hereunder; or (d) Xxxxxx'x breach of any material provision of this
Agreement. In the event of termination under this Section 10, the Company's
obligations under this Agreement shall cease and Xxxxxx shall forfeit all his
rights to receive any compensation or benefits under this Agreement, except that
Xxxxxx shall be entitled to his Salary and benefits for services already
performed as of the date of termination of this Agreement.
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11. DEATH OR DISABILITY.
(a) This Agreement shall terminate upon Xxxxxx'x death.
(b) If Xxxxxx becomes permanently disabled (determined as provided
below) during the Term, his employment with the Company shall terminate as
of the date such permanent disability is determined. Xxxxxx shall be
considered to be permanently disabled for purposes of this Agreement if he
is unable by reason of accident or illness (including mental illness) to
perform the material duties of his regular position with the Company and is
(i) not expected to recover from his disability within a period of six (6)
months from the commencement of the disability; or (ii) not expected to be
able to perform his material duties of his regular position with the
Company for a period of six (6) months in any consecutive twelve (12) month
period as a result of the same disability. If at any time Xxxxxx claims or
is claimed to be permanently disabled, a physician acceptable to both
Xxxxxx, or his personal representative, and the Company (which acceptances
shall not be unreasonably withheld) shall be retained by the Company and
shall examine Xxxxxx. Xxxxxx shall cooperate fully with the physician. If
the physician determines that Xxxxxx is permanently disabled, the physician
shall deliver to the Company a certificate certifying both that Xxxxxx is
permanently disabled and the date upon which the condition of permanent
disability commenced. The determination of the physician shall be
conclusive.
(c) Xxxxxx'x right to his compensation and benefits under this
Agreement shall cease upon his death or disability, except that Xxxxxx (or
his estate or heirs) shall be entitled to his Salary and benefits for
services already performed as of the date of his death or disability.
12. EFFECT OF TERMINATION. The Company may terminate Xxxxxx'x employment
hereunder at any time for any reason. Upon termination of Xxxxxx'x employment
with the Company for any reason other than death, disability or cause, the
Company shall pay Xxxxxx his Salary through the remainder of the Employment Term
in accordance with the Company's ordinary payment practices for salaried
employees; provided, however, that upon termination for any reason other than
death, disability or cause, Xxxxxx shall receive his Salary for at least a
period of twelve months. Xxxxxx shall accept such payment in full satisfaction
of any and all obligations he may have against the Company, whether statutory or
otherwise, and shall thereafter release the Company form any and all claims,
both present and future, that he may have against it.
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13. MISCELLANEOUS.
(a) All notices required or permitted to be given hereunder shall be
in writing and shall be deemed given (i) when delivered in person at the
time of such delivery or by telecopy with receipt of transmission
indicating the date and time (provided, however, that notice delivered by
telecopy shall only be effective if such notice is also delivered by hand
or deposited in the United States or Canadian mail, postage prepaid,
registered or certified mail, on or before two (2) business days after its
delivery by telecopy), or (ii) when received if given by a nationally
recognized overnight courier service, addressed as follows:
if to Xxxxxx:
Xxxx Xxxxxx
0000 - 000 Xxxxxx
Xxxxxxxx, Xxxxxxx
X0X 0X0
with a copy to:
Xxxxxxx Xxxxx
3700, 000 Xxxxx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Attention: Xxxx Xxxxxx
Fax: (000) 000-0000
If to the Company:
c/o Total Control Products, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxx 00000
Attn: Nic Gihl, President
Fax: (000) 000-0000
with a copy to:
X'Xxxxxx & Xxxxxx
00 Xxxxx XxXxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopier: (000) 000-0000
and/or to such other address or addressees as may be designated by notice
given in accordance with the provisions hereof.
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(b) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, successors and permitted
assigns. As to Xxxxxx, this Agreement is a personal service contract and
shall not be assignable by Xxxxxx, but all obligations and agreements of
Xxxxxx hereunder shall be binding upon and enforceable against Xxxxxx and
Xxxxxx'x personal representatives, heirs, legatees and devices.
(c) The parties adopt the Recitals to this Agreement and agree and
affirm that construction of this Agreement shall be guided thereby; this
Agreement contains all of the agreements between the parties with respect
to the subject matter hereof; and this Agreement supersedes all other
agreements, oral or written, between the parties hereto with respect to the
subject matter hereof.
(d) No change or modification of this Agreement shall be valid unless
the same shall be in writing and signed by all of the parties hereto. No
waiver of any provisions of this Agreement shall be valid unless in writing
and signed by the waiving party. No waiver of any of the provisions of
this Agreement shall be deemed, or shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a
continuing waiver, unless so provided in the waiver.
(e) If any provisions of this Agreement (or portions thereof) shall,
for any reason, be invalid or unenforceable, such provisions (or portions
thereof) shall be ineffective only to the extent of such invalidity or
unenforceability, and the remaining provisions of this Agreement (or
portions thereof) shall nevertheless be valid, enforceable and of full
force and effect.
(f) The section or paragraph headings or titles herein are for
convenience of reference only and shall not be deemed a part of this
Agreement.
(g) This Agreement may be executed in multiple counterparts, each of
which shall be deemed to be an original and all of which taken together
shall constitute a single instrument.
(h) Notwithstanding anything to the contrary contained herein,
Xxxxxx'x rights and obligations under Sections 6, 7, 8 and 9 shall survive
the expiration or termination of this Agreement.
(i) This Agreement shall be governed and controlled as to validity,
enforcement, interpretation, construction, effect and in all other respects
by the laws of the Alberta.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
/s/ Xxxx Xxxxxx
-------------------------------
Xxxx Xxxxxx
THE COMPANY:
XXXXXX INDUSTRIAL SOFTWARE INC.
By: /s/ Xxxxxxxx Xxxx
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Title:
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