EMPLOYMENT CONTRACT
AGREEMENT made the 12th day of April, ▇▇▇▇
▇ ▇ ▇ ▇ ▇ ▇ ▇:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ , of the City of Mississauga,
in the Province of Ontario
(the "Employee")
- and -
NORTHERN ETHANOL, INC., a corporation incorporated
under the laws of Delaware
("Northern" or the "Company")
RECITALS:
WHEREAS the Employee is an experienced senior executive in the
energy industry;
AND WHEREAS Northern wishes to employ the Employee as its Chief
Executive Officer;
AND WHEREAS the Employee is willing to be employed by Northern and
render such services on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and
agreements herein contained and of other good and valuable consideration, the
parties agree with one another as follows:
1. INTERPRETATION
1.1 DEFINITIONS
In this agreement, unless there is something in the subject matter
or context inconsistent therewith,
-2-
"ACT" means the Employment Standards Act of Ontario as the same may
be amended or restated, or any comparable successor legislation;
"AFFILIATE" and "SUBSIDIARY" shall have the respective meanings
ascribed to such terms by the Business Corporations Act (Ontario) on
the date hereof;
"BUSINESS DAY" means any day of the week except Saturday, Sunday or
any statutory or civic holiday observed in Toronto, Ontario;
"CONFIDENTIAL INFORMATION" includes, but is not limited to: any
information, know-how, data, patent, copyright, Intangible Property,
trade secret, process, technique, program, design or formula; any
marketing, advertising, financial, commercial, sales or programming
matter; any customer or supplier lists or pricing information; any
confidential information of customers, suppliers or any other
parties to whom the Company has obligations of confidentiality; any
budget, plan, model or analysis; any written materials,
compositions, drawings, diagrams, computer programs, studies, work
in progress, visual demonstrations, ideas or concepts; any other
data including the terms and conditions of any completed or
potential transaction; and any of the forgoing derived in whole or
in part from Confidential Information whether in oral, written,
graphic, electronic, or any other form or medium whatsoever, of the
or relating to the Company that may be disclosed to, or in the
possession of, the Employee in connection with his employment
hereunder. The term "Confidential Information" shall not include the
following:
(i) information which is now or which hereafter becomes
publicly known or available through no act or failure on
the part of the Employee, whether through breach of this
Agreement or otherwise; or
(ii) information which the Employee is by law, order of a
Court of competent jurisdiction, or other legal
compulsion required to disclose (provided, that
information shall continue to constitute Confidential
Information is subject to a protective order or other
action of the Court or the parties to the proceeding in
order to protect the confidentiality thereof);
"INCLUDING" means "including without limitation" and shall not be
construed to limit any general statement which it follows to the
specific or similar items or matters immediately following it;
-3-
"INTANGIBLE PROPERTY" means all discoveries, inventions,
improvements, techniques, concepts and ideas, whether patentable or
not, know-how and similar intangible property made, discovered,
conceived, invented or improved by the Employee during the term of
his employment hereunder, whether alone or with others and whether
during regular working hours and through the use of the facilities
and property of the Company or any affiliate or otherwise, in any
way relating to the Company; and
"PERSON" includes an individual, corporation, partnership, joint
venture, trust, unincorporated organization, the Crown or any agency
or instrumentality thereof or any other entity recognized by law.
1.2 HEADINGS
The division of this agreement into paragraphs and subparagraphs and
the insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this agreement. The headings in
this agreement are not intended to be full or precise descriptions of the text
to which they refer and shall not be considered part of this agreement.
References to a paragraph or a subparagraph are to the corresponding paragraph
or subparagraph of this agreement.
1.3 NUMBER AND GENDER
In this agreement, words in the singular include the plural and
vice-versa and words in one gender include all genders.
2. EMPLOYMENT
The Company agrees to employ the Employee and the Employee accepts
such employment on and subject to the terms of this agreement. The Employee
shall be the Cheif Executive Officer and shall have the duties and
responsibilities set out in Section 4.
3. TERM
The Employee's employment shall commence on May 1st, 2006 or as
mutually agreed and continue until April 30, 2009 unless earlier terminated in
accordance with Section 11 (the "TERM").
4. DUTIES AND RESPONSIBILITIES
So long as this agreement continues in full force and effect, the
Employee shall
(a) devote his full business time and energies to the business and
affairs of NORTHERN;
-4-
(b) well and faithfully serve NORTHERN; and
(c) use his best efforts, skills and abilities to promote the interests
of NORTHERN.
The Employee's duties and responsibilities shall also include:
(i) all marketing, sales, trade, distribution, market access and all
related commercial services necessary or incidental to the sale of
ethanol products in North America;
(ii) business development services; and
(iii) generally providing such services as are required to carry out the
marketing and sales affairs of a company with operations and assets
similar to Northern.
The Employee shall also perform such other tasks and duties related
to the foregoing as may from time to time be determined by the Board of
Directors or such person as the President may designate. The Employee shall, in
carrying out the obligations under this agreement, report directly to the Board
of Directors, or such person as the Board of Directors may designate. The
Employee shall work based out of the Company's offices in Mississauga, Ontario.
The Employee acknowledges that the hours of work involved will vary
and be irregular and are those hours required to meet the objectives of the
Company. The Employee acknowledges that this paragraph constitutes an agreement
to work such hours where such agreement is required by applicable legislation.
The Employee shall also submit to such medical and other
examinations and provide such samples as are reasonably necessary to obtain key
man life insurance on his life.
5. CONFIDENTIAL INFORMATION
The Employee acknowledges that during the course of his employment
with the Company, the Employee will acquire Confidential Information.
Confidential Information is the exclusive property of the Company. Further, the
Employee acknowledges that the Company's business and Northern depend
significantly upon maintaining the confidentiality of Confidential Information.
In partial consideration for the Employee's employment hereunder, the Employee
covenants and agrees that he shall not, at any time during the term of his
employment by the Company or thereafter, until such information becomes part of
the public domain, reveal, divulge or make known to any persons or entity (other
than the Company and its duly authorized Employees) or use for his own or any
other's benefit, or to the detriment of the Company or Northern, the
Confidential Information or his knowledge of any of the business or financial
affairs of Northern, which during or after his employment pursuant hereto is
made known to the Employee.
-5-
6. INVENTIONS AND DISCOVERIES
The Employee agrees to fully and freely (and without expense to the
Company during the Term) communicate to the Company, and the Employee assigns to
the Company, all Intangible Property. All Intangible Property shall be the sole
and exclusive property of the Company and, upon its request at any time or from
time to time during the term or after the termination of the Employee's
employment, the Employee shall deliver to the Company all designs, drawings,
sketches, models, prototypes, notes and other data and records relating to the
Intangible Property, that may be in his possession or otherwise available to
him. The Employee agrees that he will at all times (both during the continuance
of his employment hereunder and at all times thereafter provided the Company
pays for all reasonable and approved expenses related thereto) take all action
and execute and file all such documents to assist the Company or its assignees
in every way to protect the rights of the Company or its assignees under this
paragraph and to vest in the Company or its assignees the entire right, title,
interest and benefits (including without limitation patent and copyright rights)
in and to any and all of the Intangible Property. The Employee shall not (either
during the continuance of his employment hereunder or at any time thereafter)
disclose any of the Intangible Property to any person, firm or company or use
any of the Intangible Property for his own purposes, to the detriment of the
Company or for any purpose other than those of the Company and its affiliates.
Without limiting the foregoing, Employee recognizes and understands that
Employee 's duties at the Company may include the preparation of materials,
including without limitation written or graphic materials, and that any such
materials conceived or written by Employee shall be done as "work made for hire
as defined and used in the United States Copyright Act of 1976, 17 U.S.C. ss. et
seq.". In the event of publication of such materials, Employee understands that
since the work is a "work made for hire", the Company will solely retain and own
all rights in said materials, including right of copyright.
7. VACATION
The Employee shall be entitled to 6 weeks of paid vacation per year
to be taken at such times as agreed to by the parties. Any unused vacation shall
accrue to the following year up to a maximum of ten days.
8. EXPENSES
The Company shall pay to the Employee on a monthly basis upon
receipt of a true, complete and accurate monthly expense report with supporting
invoices and other documentation, the Company shall pay or reimburse the
Employee for all traveling and other direct out-of-pocket expenses actually and
properly incurred by him in connection with the performance of his duties
hereunder. With the exception of expenses related to business travel approved by
the Company in advance any single expense over $5,000.00 and any monthly
expenses over $2,000.00 in the aggregate shall only be paid or reimbursed by the
Company if they have been approved by the Company in advance of their
incurrence. The Company anticipates substantial travel and as such will provide
the Employee with a monthly car allowance to cover leasing and insurance in the
amount of $1200.00.
-6-
9. COMPENSATION
9.1 SALARY
The The Employee shall receive a monthly salaryof $15,000.00 payable
on or before the 30th day of each month, subject to applicable statutory
deductions (the "Base Salary"). The Employee monthly salary shall increase to
$25,000 coincident with completion of construction financing allowing for
construction of the first plant. In addition, the Employee monthly salary shall
further increase to $40,000 coincident with of the commencement of production of
the first plant. The Employee shall also be entitled to an annual bonus up to
fifty percent (50%) of his annual compensation. The amount of such bonus shall
be determined by the Board of Directors having regard to its financial
performance and the Employee's individual performance..
9.2 STOCK OPTION PLAN
The Company will implement an incentive stock option plan for its officers,
directors, employees and service providers. Upon implementation (including
receipt of all necessary regulatory approval) of the Company's stock option
plan, the Employee shall be entitled to participate as an executive in such plan
in accordance with the terms and conditions thereof and applicable law. The
Employee shall receive Two Million (2,000,000) options for common shares at a
strike price of $1.00, vesting quarterly in eight equal instalments on the last
day of June, September, December and March. (Option entitlements and exercise
price indicated above are stated after giving effect to a possible 10 for 1
stock split, which may or may not occur at some point in the future.)
10. BENEFITS
The Employee acknowledges and agrees that Company does not currently
maintain any benefit plans for its employees including group life, accident,
sickness and medical insurance or pension plans. The Company intends to adopt a
benefit plan, in its discretion, commensurate with those generally offered to
employees in the advertising media industry. The Employee shall be entitled to
participate at no direct cost as an executive in any such plan in accordance
with the terms and conditions thereof.
-7-
11. TERMINATION
The Employee's employment hereunder may be terminated in each of the
circumstances in subparagraphs 11.1 to 11.5 inclusive:
11.1 DEATH
The Employee's employment hereunder shall automatically terminate
upon his death. For the purposes of Section 12, in the event that the Employee's
employment is terminated pursuant to this Section 11.1 or Section 11.2, all
references to Employee, shall be deemed to be references to the Employee's
heirs, executors, administrators or legal personal representatives, as
applicable in the circumstances.
11.2 DISABILITY
The Company may terminate the Employee's employment hereunder if the
Employee, by reason of physical or mental disability, is unable to fulfill his
obligations and duties hereunder on a full time basis (other than by reason of
authorized vacation or leave) for a period in excess of three consecutive
months, subject to applicable law. It is acknowledged and agreed that the salary
contemplated by Section 9.1 is not payable during periods that the Employee is
unable to fulfill his obligations and duties hereunder on a full time basis
(other than by reason of authorized vacation or leave).
11.3 CAUSE
The Company may terminate the Employee's employment hereunder for
cause. The term "cause" shall include:
(a) any material failure by the Employee to observe and perform any of
his covenants and obligations hereunder, where such failure has not
been cured within two (2) weeks of written notice thereof by the
Company to the Employee.
(b) the voluntary or involuntary bankruptcy of the Employee;
(c) fraud and dishonesty, gross negligence, unethical or immoral conduct
or willful malfeasance by the Employee in connection with the
performance of his duties hereunder; or
(d) a conviction of the Employee for any indictable offence by a court
of final and competent jurisdiction (or the equivalent in a
jurisdiction outside Canada).
-8-
11.4 WITHOUT CAUSE
During the nine (9) month period immediately after the commencement of the Term
(the "Earn Out Period"), the Company may only terminate the Employee's
employment for cause pursuant to Section 11.3 hereof, and shall therefore not be
entitled to terminate the Employee during the Earn Out Period by providing
notice or payment in lieu of notice. In the event that the Company elects to
terminate without cause by providing pay in lieu of notice in the amount as set
out above, the Employee shall be entitled to payment of the Base Salary, the
Fixed Expenses, and the continuation of benefits under section 10 hereof during
the applicable notice period. Thereafter, the Company may terminate Employee's
employment hereunder at any time without cause on three (3) months notice (or
pay in lieu of notice). Except as otherwise outlined in this section, after the
effective date of such termination, the Employee shall be entitled to no further
rights or benefits hereunder or in connection with his employment by the Company
whether pursuant to this Agreement, the Act, applicable law or otherwise. After
the termination of the employment of the Employee hereunder for any reason the
Employee shall not, directly or indirectly, take any action to damage the
goodwill of NORTHERN, the business or the relationships of Neutron. The Employee
expressly agrees that the foregoing represents the Company's maximum termination
obligations.
12. COMPETITION AND NON-SOLICITATION
The Employee shall not during the five (5) years following the date
of the Agreement:
(a) work for or be interested in any business which provides services or
products which are directly competitive with services or products
offered by the Company or a subsidiary or affiliate of Company. For
the purpose of this Agreement, the term "work for or be interested
in any business" means that the Employee is a stockholder, director,
officer, employee, partner, individual proprietor, lender or
consultant with that business, but not if (i) his interest is
limited solely to the passive ownership of five percent (5%) or less
of any class of the equity or debt securities of a corporation whose
shares are listed for trading on a national securities exchange or
traded in the over-the-counter market. In the event that any part of
this Section 12 is adjudged invalid or unenforceable by any court of
record, board of arbitration or judicial or quasi judicial entity
having jurisdiction thereof by reason of length of time,
geographical coverage, activities covered, or for any other reason,
then the invalid or unenforceable provisions of this covenant shall
be deemed reformed and amended to the maximum extent permissible
under applicable law and shall be enforced and enforceable as so
amended in accordance with the intention of the parties as expressed
herein.
-9-
(b) directly or indirectly: (i) solicit the trade of, or trade with, any
present or prospective customer of the Company for any business
purpose that directly or indirectly competes with the business of
Company or a subsidiary or affiliate of Company; or (ii) solicit or
induce, or attempt to solicit or induce, any employee of Company to
leave Company for any reason whatsoever, or assist or participate in
the hiring of any employee of Company to work for another entity.
13. GENERAL
13.1 INJUNCTIVE RELIEF
The Employee acknowledges that the injury that would be suffered by
the Company as a result of a breach of the provisions of any provision of
Sections 5 and 12 of this Agreement would be irreparable and that an award of
monetary damages to the Company for such a breach would be an inadequate remedy.
Consequently Company will have the right, in addition to any other rights it may
have, to obtain injunctive relief to restrain any breach or threatened breach or
otherwise to specifically enforce any provisions of Sections 5 and 12 of this
Agreement, subject to applicable law, and the Company will not be obligated to
post bond or other security in seeking such relief.
13.2 TOLLING PERIOD
The non-competition, non-disclosure and non-solicitation obligations
contained in Sections 5 and 12 of this Agreement shall be extended by the length
of time during which Employee shall have been in breach of any of the provisions
of such Sections 5 and 12, regardless of whether the Company knew or should have
known of such breach.
13.3 ENTIRE AGREEMENT
This agreement constitutes the entire agreement between the parties
pertaining to the employment of the Employee by the Company and supersedes all
prior agreements, negotiations, discussions and understandings, written or oral,
between the parties. There are no representations, warranties, conditions, other
agreements or acknowledgements, whether direct or collateral, express or
implied, that form part of or affect this agreement, or which induced any party
to enter into this agreement or on which reliance is placed by any party, except
as specifically set forth in this agreement.
13.4. AMENDMENT
This agreement may be amended or supplemented only by a written
agreement signed by each party.
-10-
13.5. WAIVER OF RIGHTS
Any waiver of, or consent to depart from, the requirements of any
provision of this agreement shall be effective only if it is in writing and
signed by the party giving it, and only in the specific instance and for the
specific purpose for which it has been given. The rights and remedies of the
parties to this Agreement are cumulative and not alternative. Neither the
failure nor any delay by either party in exercising any right, power, or
privilege under this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege.
13.6. APPLICABLE LAW
This agreement shall be governed by and construed in accordance with
the laws in force in the Province of Ontario. Each party irrevocably submits to
the non-exclusive jurisdiction of the courts of Ontario with respect to any
matter arising hereunder or related hereto.
13.7. TIME
Time is and shall remain of the essence of this agreement and all of
its provisions.
13.8. NOTICES
Any notice, demand or other communication (in this Section, a
"notice") required or permitted to be given or made hereunder shall be in
writing and shall be sufficiently given or made if:
(a) delivered in person during normal business hours on a Business Day
and left with a receptionist or other responsible Employee of the
relevant party at the applicable address set forth below;
(b) sent by prepaid first class mail; or
(c) sent by any electronic means of sending messages, including telex or
facsimile transmission, which produces a paper record ("Electronic
Transmission") during normal business hours on a Business Day
charges prepaid and confirmed by prepaid first class mail;
-11-
in the case of a notice to the Employee, addressed to him at:
▇▇▇ - ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
and in the case of a notice to the Company, addressed to it at:
Northern Ethanol Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
Attention: Board of Directors
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Each notice sent in accordance with this Section shall be deemed to
have been received:
(a) on the day it was delivered;
(b) on the third Business Day after it was mailed (excluding each
Business Day during which there existed any general interruption of
postal services due to strike, lockout or other cause); or
(c) on the same day that it was sent by Electronic Transmission, or on
the first Business Day thereafter if it was sent by Electronic
Transmission after 5:00 p.m. local time or the day on which it was
sent by Electronic Transmission was not a Business Day.
The Employee or the Company may change the address for notice by
giving notice to each other as provided in this Section.
13.9. NO THIRD PARTY BENEFITS
The terms and provisions of this Agreement are intended solely for
the benefit of the Employee and Northern and their respective affiliates,
successors or permitted assigns, and it is not the intention of the parties to
confer third party beneficiary rights upon any other person.
13.10. ASSIGNMENT
Neither this agreement nor any rights or obligations hereunder shall
be assignable by the Employee without the prior written consent of the Company.
Subject thereto, this agreement shall enure to the benefit of and be binding
upon the parties and their respective heirs, executors, administrators, legal
personal representatives, successors (including any successor by reason of
amalgamation or statutory arrangement of any party) and permitted assigns.
-12-
13.11 NO PARTNERSHIP OR JOINT VENTURE OF AGENCY
None of the parties to this Agreement are nor shall any of them be
deemed to be partners or joint venturers with one another and nothing herein
shall be construed so as to impose any liability as such on any of them.
13.12. FURTHER ASSURANCES
Each party shall do such acts and shall execute such further
documents, conveyances, deeds, assignments, transfers and the like, and will
cause the doing of such acts and will cause the execution of such further
documents as are within its power as any other party may in writing at any time
and from time to time reasonably request be done and or executed, in order to
give full effect to the provisions of this agreement.
IN WITNESS WHEREOF the parties have duly executed this agreement
this 12th day of April, 2006.
SIGNED, SEALED AND DELIVERED )
In the presence of: )
) /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
) ----------------------------------------------
) ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
)
)
) NORTHERN ETHANOL INC.
)
) /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
) ----------------------------------------------
) Per: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
) Director