EMPLOYMENT AGREEMENT
BETWEEN:
LOWER LAKES TOWING LTD.
(the "Company")
- and -
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(the "Executive")
(collectively referred to as the "Parties")
RECITALS:
A. The Executive has been employed with the Company in the position of
President and Chief Executive Officer since August 1, 1995.
B. The Executive has specialized knowledge and valuable skills and
experience, which are critical to the management of the Company and its
affiliates, Lower Lakes Transportation Company and Grand River Navigation
Company, Inc. (each a "Member Company"), and to the continuing success of
the business of the Company and the Member Companies.
C. The Company wishes to secure the continued services of the Executive.
NOW THEREFORE, for value received the Parties agree as follows:
1. DUTIES AND RESPONSIBILITIES
1.1 Positions, Duties and Responsibilities
(a) The Company confirms the continuing appointment of the Executive in
the position of President and recognizes for all purposes the
Executive's past service with the Company. The Executive will be
responsible for the general supervision and control over the day to
day operations of the Company and each Member Company (to the extent
permissible under laws and regulations applicable to the business of
each such Member Company), and shall have such duties and
responsibilities consistent therewith, including those duties and
responsibilities set out in Schedule A to this Agreement. All senior
management of the Company and each Member Company (to the extent
permissible under laws and regulations applicable to the business of
each such Member Company) will report directly to the Executive. The
Executive will report to the Board of Directors of the Company (and
the board of directors of each such Member Company, as applicable)
which shall have overall decision making authority for the Company
(or for such Member Company). The Company will appoint the Executive
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to the Board of Directors of the Company effective on the date of
this Agreement. The Executive will also serve as the President of
Lower Lakes Transportation Company, and as an officer and director
of each such other Member Company and of Rand Acquisition
Corporation ("Rand") to the extent desired by the Board of Directors
of each such other Member Company or Rand, in each case without
additional compensation therefor.
(b) The Executive shall devote all of his business time, attention and
energies, on a full time and exclusive basis, to the business and
affairs of the Company and the Member Companies, shall use his best
efforts to advance the best interests of the Company and the Member
Companies, and shall not during the Term be engaged in any other
business activities, whether or not such business activities are
pursued for gain, profit or other pecuniary advantage, without
approval of the Board of Directors of the Company; provided,
however, that, it shall not be a violation of this Agreement for the
Executive to (i) serve on corporate, civic or charitable boards or
committees or (ii) manage passive personal investments, in either
case so long as any such activities do not interfere with the
performance of his responsibilities as an employee of the Company in
accordance with this Agreement or adversely affect or negatively
reflect upon the Company or the Member Companies.
1.2 Reassignment
The Company shall not reassign the Executive to another position within the
Company or within a Member Company, or alter the duties, responsibilities,
title, or reporting lines of the Executive in a manner inconsistent with this
Agreement or past practice. The Company shall not change the location of the
Executive's employment unless the Executive agrees to such change.
1.3 Travel
The Executive shall be employed at the Company's location in Port Dover,
Ontario. The Executive shall be available for such business-related travel as
may be required for the purposes of carrying out the Executive's duties and
responsibilities.
2. TERM OF EMPLOYMENT
This Agreement will commence on the closing of the Purchase Agreement and will
continue for an initial term of two years therefrom (the "Term") subject to
section 9. The Term may be extended upon mutual written agreement of the
Parties.
3. BASE SALARY
The Executive will be paid an annual salary in the amount of Cdn $190,000,
subject to applicable statutory deductions and discretionary annual increases to
the extent determined by the Board of Directors of the Company (the "Base
Salary"). The Executive's Base Salary will be payable in accordance with Company
practices and procedures as they may exist from time to time. Base Salary will
be reviewed on an annual basis by the Board of Directors of the Company, with
input from the Executive.
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4. BONUS
4.1 Bonus Plan
The Executive shall be a "Participant" in the Management Bonus Program attached
as Schedule B to this Agreement (the "Bonus Plan").
4.2 Performance Bonus
In addition to, and separate from, any awards granted to the Executive under the
Bonus Plan, for each fiscal year commencing after the date hereof, the Executive
will be entitled to a bonus (the "Performance Bonus") pursuant to a bonus plan
(the "Performance Bonus Plan") to be adopted by the Company or a Member Company
and in which the Executive shall be entitled to participate. The Performance
Bonus Plan shall be adopted no later than the three month anniversary of the
date of this Agreement, and shall be in form and substance acceptable to the
Company or Member Company and reasonably satisfactory to the Executive. In the
event that the Company or a Member Company fails to adopt a Performance Bonus
Plan that is reasonably satisfactory to the Executive on or prior to the three
month anniversary of the date hereof, the Company or Member Company, as
applicable, shall be obligated to retain, at its expense, the services of a
reputable and recognized executive compensation consultant, which consultant
shall, within mutually agreeable parameters and objectives established by the
Company or Member Company and the Executive (which shall include a bonus plan
structure that (i) provides for the commencement of bonus payments upon
achievement of 100% of targeted EBITDA to be determined with the Executive's
input, (ii) appropriately recognizes operational factors such as vessel
accidents, capital expenditure levels, fuel and other operating costs and
efficiencies) and (iii) provides for the ratable accrual of entitlements over
the relevant fiscal year), recommend the terms of the Performance Bonus Plan for
adoption by the Company or Member Company, which recommendation shall be adopted
by the Company or Member Company.
5. RETIREMENT PLANS AND PENSION
The Company will make annual contributions to the Executive's Registered
Retirement Savings Plan in amounts not less than Cdn$11,500 per calendar year.
6. OTHER BENEFITS
The Executive shall be entitled to participate in or receive benefits under any
health and accident plan or any other employee benefit plan or arrangement made
available now or in the future by the Company to its executives and key
management personnel, as determined by the Board of Directors of the Company.
7. VACATION
The Executive will be entitled to four weeks paid (at then current Base Salary)
vacation per calendar year commencing with the 2006 calendar year. Unused
vacation days may not be carried over from one calendar year to the next, and
any unused vacation days as of the end of a calendar year shall be forfeited by
the Executive. The Executive will arrange vacation time to suit the essential
business needs of the Company.
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8. PERQUISITES AND EXPENSES
8.1 Automobile
The Company will continue to lease an automobile for the Executive (the "Lease")
to be used at the Executive's discretion at a maximum monthly cost to the
Company of not more than Cdn$860.00. In addition to the Lease, the Company will
pay all related expenses (maintenance and repair, service, insurance, gasoline,
etc.) related to the business user of such automobile.
8.2 Reimbursement of Expenses
The Company recognizes that the Executive will incur expenses in the performance
of the Executive's duties. The Company shall reimburse the Executive for any
reasonable out-of-pocket expenses incurred in the course of employment.
9. TERMINATION OF EMPLOYMENT; NON-COMPETITION; NON- SOLICITATION
9.1 Terminations Resulting in No Further Obligation to the Company
The Company shall have no further obligations to the Executive hereunder, or
under statute, common law or otherwise, in the event of the following
terminations of employment:
(a) Voluntary Resignation Without Notice
In the event the Executive voluntarily resigns without Good Reason without
at least sixty (60) days advance written notice to the Company.
(b) Cause
In the event the Executive's employment is terminated for Cause, which
term for the purposes of this Agreement shall mean (i) conviction of the
Executive of a criminal offence involving fraud, larceny, misappropriation
of funds, embezzlement or dishonesty; (ii) receipt by or on behalf of
Executive or any member of Executive's immediate family of any personal
profit arising out of in connection with a transaction to which the
Company or a Member Company is party without making full prior disclosure
to the Company or such Member Company; (iii) any misfeasance, nonfeasance
or malfeasance by Executive which causes material harm to the Company or a
Member Company; (iv) breach by the Executive of any material term of this
Agreement, or failure of the Executive to follow and carry out the lawful
instructions of the Board of Directors of the Company or of a Member
Company, in each case after notice and reasonable opportunity for the
Executive to cure such breach or failure; (v) the Executive having been
under the influence of drugs (other than prescription medicine or other
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medically-related drugs to the extent that they are taken in accordance
with their directions) or alcohol during the performance of his duties
under this Agreement (it being understood that the Executive will attend
industry functions at which alcohol will be consumed by the Executive), or
while otherwise under the influence of drugs or alcohol, engages in
inappropriate conduct; or (vi) the Executive having engaged in behavior
that would constitute grounds for liability for sexual harassment or
discrimination.
9.2 Termination by the Company without Cause or Failure to Renew upon Expiry
of the Term.
The Company may terminate the Executive's employment without Cause at any
time prior to the expiry of the Term, or, upon each successive expiry of
the Term where the Company determines not to renew this Agreement, in each
case by providing the Executive with (A) any then accrued but unpaid Base
Salary and Performance Bonus as of the date of termination or non-renewal
and any outstanding reimbursable expenses incurred by the Executive prior
to the date of termination or non-renewal, (B) payment, in equal monthly
payments, of the Executive's Base Salary in effect at the time of
termination or non-renewal for a period of twenty four (24) months, and
(C) continuation of benefits provided pursuant to Sections 5 and 6 for
such payment period (the foregoing clause (A), (B) and (C) being referred
to as the "Separation Package").
9.3 Termination by the Executive for Good Reason
Should the Executive terminate his employment for Good Reason, as hereinafter
defined, he shall receive the Separation Package set out in section 9.2. Failure
of the Executive to terminate his employment on the occurrence of any event
which would constitute Good Reason shall not constitute waiver of his right
under this section 9.2 should Good Reason continue. "Good Reason" is defined as
the occurrence of any of the following without the Executive's express written
consent:
a) the Company assigning to the Executive duties or responsibilities
inconsistent with or inappropriate for his position as President
with the Company, after notice to the Company of, and reasonable
opportunity of the Company to cure, such alleged Good Reason;
b) failure by the Company to continue the Bonus Plan in effect in
accordance with its terms or to provide the Executive with benefits
and other pension or retirement plans in accordance with Sections 5
and 6 substantially consistent with those plans in which the
Executive has participated in periods immediately prior to the Term;
c) the Company relocating the Executive's principal office outside of
Port Dover;
d) a sale to a person (which, for all purposes hereof, shall include,
without limitation, an individual, sole proprietorship, partnership,
unincorporated association, unincorporated syndicate, unincorporated
organization, trust, body corporate and a trustee, executor,
administrator or other legal representative) or group of persons not
affiliated with the Company of all or substantially all of the
assets of the Company;
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e) any person or group of persons acting in concert not affiliated with
the Company, becomes the beneficial owner, directly or indirectly,
of voting securities of the Company and/or securities convertible
into or exchangeable for voting securities of the Company, in
aggregate representing directly, or following conversion or exchange
thereof, fifty percent (50%) or more of the combined voting power of
the Company or of any successor to the Company (in each case on a
fully-diluted basis) in any manner whatsoever, including, without
limitation, as a result of a take-over bid, reorganization of
capital, share exchange, arrangement, merger, amalgamation or other
combination of the Company with any other entity;
f) any breach by the Company of any material term of this Agreement
after notice to the Company of such breach and reasonable
opportunity to cure such breach.
9.4 Disability and Death
The Executive shall, upon his Disability (as defined below), have the right to
receive the Separation Package and upon his death any then accrued but unpaid
Base Salary and Performance Bonus and any outstanding reimbursable expenses
incurred by the Executive prior to the date of death. For purposes of this
Agreement, a "Disability" shall occur: (i) immediately after the Company has
provided a written termination notice to the Executive supported by a written
statement from a reputable independent physician selected by the Company to the
effect that the Executive shall have become so incapacitated as to be unable to
resume, within 90 days, his employment hereunder by reason of physical or mental
illness or injury; or (ii) upon rendering of a written termination notice by the
Company after the Executive has been unable to substantially perform his duties
hereunder for 90 consecutive days (exclusive of any vacation permitted under
Section 7 hereof) or for 120 days in any 360 day period by reason of any
physical or mental illness or injury. The Executive agrees to make himself
available and to cooperate in any reasonable examination by a reputable
independent physician selected by the Company for the purposes of a
determination of Disability pursuant to this Section 9.4.
9.5 Non-Competition
The Executive shall not, during his employment or within 24 months following the
termination of his employment for any reason, within Canada or the United States
serve as an executive, officer, director, employee or in any advisory capacity
with or to any competitor, in whole or in part, of the Company or any Member
Companies, or either individually or in partnership or jointly or in conjunction
with any person, firm, trust, partnership, association, syndicate or company, as
principal, agent, shareholder, trustee or in any other manner whatsoever
otherwise carry on or be engaged in or be concerned with any person, firm,
trust, partnership, association, syndicate or company which is a competitor, in
whole or in part, of the Company or any Member Company, except as a shareholder
holding less than 5% of the outstanding shares of any such corporation whose
shares are listed and posted for trading on a recognized stock exchange.
9.6 Non-Solicitation of Customers
The Executive shall not, during his employment or within 24 months following the
termination of his employment for any reason, directly or indirectly, solicit
any customer of the Company or any Member Company in order to attempt to direct
any such customer away from, or to do less business with, the Company or any
Member Company.
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9.7 Non-Solicitation of Employees
The Executive shall not, during his employment or within 24 months following the
termination of his employment for any reason, directly or indirectly recruit,
solicit or endeavour to entice away from the Company or any Member Company any
individual who is an employee of, or service provider to, the Company or any
Member Company.
10. CHANGES TO AGREEMENT
Any modifications or amendments to this Agreement must be in writing and signed
by all Parties or else they shall have no force and effect.
11. ENUREMENT
This Agreement shall enure to the benefit of and be binding upon the Parties and
their respective successors and assigns, including without limitation, the
Executive's heirs, executors, administrators and personal representatives.
12. GOVERNING LAW, VENUE
Except as otherwise explicitly noted, this Agreement shall be governed by and
construed in accordance with the laws of the Province of Ontario (without giving
effect to the principles of conflicts of law). Each party to this Agreement
irrevocably agrees that any action or proceeding concerning or arising out of
the interpretation, enforcement and defense of the transactions contemplated by
this Agreement (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be
commenced exclusively in the courts located in the Province of Ontario. Each
party and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is improper
or inconvenient venue for such proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY WAIVES ALL
RIGHTS TO A TRIAL BY JURY.
13. NOTICES
13.1 Notice to Executive
Any notice required or permitted to be given to the Executive shall be deemed to
have been received if delivered personally to the Executive or sent by courier
to the Executive's home address last known to the Company.
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13.2 Notice to Company
Any notice required or permitted to be given to the Company shall be deemed to
have been received if delivered personally to, sent by courier, or sent by
facsimile to:
Rand Acquisition Corporation
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Chairman
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Rosenman LLP
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
14. CURRENCY
All dollar amounts set forth or referred to in this Agreement refer to Canadian
currency.
15. WITHHOLDING
All payments made by the Company to the Executive or for the benefit of the
Executive shall be less applicable withholdings and deductions.
16. SAVINGS CLAUSE
The parties hereto agree that if, in any judicial proceeding, a court finds any
portion of this Agreement unenforceable, such portion shall be interpreted to
the maximum extent enforceable and the remainder of this Agreement shall be
unaffected and enforced with its terms or to the maximum extent permitted by
law.
17. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties with respect
to the subject matter herein and supersedes all prior agreements, negotiations
and discussions between the parties hereto, there being no extraneous
agreements.
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IN WITNESS WHEREOF the Parties have duly executed this Agreement this day
of March 3, 2006.
/s/ ▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Witness ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LOWER LAKES TOWING LTD.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
SCHEDULE A
Operations
o Oversee all aspects of operations.
o Evaluation of vessels.
o Oversee labour negotiations.
o Review and approval of monthly equipment, maintenance and capital
expenditures.
o Problem solving.
Sales & Marketing
o Lead business development effort and sales team.
o Customer relationship management and development.
o Pricing for all products, customers and profitability management.
o Contract negotiations with new and existing customers.
o Troubleshooting and problem solving.
o Direct responsibility for key accounts.
o Hire of new personnel.
Administration & Finance
o Delegation of duties to senior management.
o Strategic planning and implementation.
o Oversee accounting functions and IT systems.
o Accounts payable and cheque approvals.
o Budgeting.
o Legal, accounting and professional services assistance.
o Hiring and firing of employees and determination of responsibilities of
employees.
o Corporate finance - oversee all dealings with Company's bankers and other
lenders.