EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into on
_____________, 1996, by and between Ted Anderson, an individual residing in the
Province of Ontario, Canada ("Executive"), and Ref Retail Systems Corporation,
a corporation incorporated pursuant to the laws of the Province of Ontario,
Canada (the "Company") and Premis Corporation, a Minnesota Corporation
("Premis").
RECITALS
WHEREAS, the Company desires to employ the Executive in the capacity of
President and Chief Executive Officer of the Company on the terms and
conditions set forth herein;
AND WHEREAS, the Executive desires to serve in such capacity on behalf of
the Company and to provide to the Company the services described herein on the
terms and conditions set forth herein;
AND WHEREAS, the Company is owned by Premis and therefore Premis shall
benefit from the employment of the Executive with the Company;
AND WHEREAS, Premis has requested as a condition of the purchase and sale
of the shares of the Company that the Executive continue as the President and
Chief Executive Officer of the Company on the terms and conditions contained
herein;
NOW, THEREFORE, in consideration of the foregoing recitals, the terms and
conditions set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Executive and the
Company hereby agree as follows:
1. EMPLOYMENT BY THE COMPANY AND TERM.
a) FULL TIME AND BEST EFFORTS. Subject to the terms set forth herein,
the Company agrees to employ the Executive as President and Chief
Executive Officer and the Executive hereby accepts such employment.
The Executive shall report directly to the Chief Executive Officer
of Premis and all other employees of the Company shall report
through the President and Chief Executive Officer of the Company.
During the term of his employment with the Company, the Executive
will devote his full time, attention and ability to the business of
the Company. The Executive shall use his best efforts in the
performance of his duties hereunder and in the promotion of the
business and affairs of the Company. The Executive shall have full
authority to operate the Company subject only to approval by the
Chief Executive Officer of Premis. The Executive shall be entitled
to sit as a member of the board of directors of other companies
with the prior approval of the Chief Executive Officer of Premis,
provided that any such position does not interfere or conflict with
the Executive's position as a director and employee of the Company.
b) DUTIES. The Executive shall serve in an executive capacity and shall
perform such duties as are customarily associated with the position
of President and Chief Executive Officer. Such duties shall
include, without limitation, participating as a member of the
Company's management team in developing and implementing strategic,
marketing, distribution and operating plans, executing day-to-day
general management of the Company, developing relationships with
new customers, maintaining and solidifying relationships with the
Company's existing customers and promoting growth and efficiency at
the Company and existing and future entities affiliated with the
Company. The primary business focus of the Company shall be the
development of retail automation products for sale by the Company
into the Canadian market and for sale by Premis into other markets.
To a reasonable extent the Executive shall assist Premis with
product sales into other markets.
c) COMPANY POLICIES. The employment relationship between the parties
shall be governed by the general employment policies and practices
of the Company applicable to all employees of the Company as they
may exist from time to time, including but not limited to those
relating to protection of confidential information and assignment
of inventions, except that when the terms of this Agreement differ
from or are in conflict with the Company's general employment
policies or practices, this Agreement shall govern.
d) TERM. The initial term of employment of the Executive under this
Agreement shall begin as of the date hereof and end on the sixtieth
(60th) month following the date hereof (such sixty (60) month
period, the "Initial Term"), subject to the provisions for
termination set forth in Section 5 below and renewal as provided in
Section 1 (f) below.
e) LOCATION. The Executive shall be required to attend to the business
of the Company at the Company's head office in Markham, Ontario.
The parties agree that under no circumstances shall the Executive
be requested to relocate the head office of the Company beyond ten
(10) miles from downtown Markham, Ontario, but in no event further
south than Steeles Avenue. Any forced relocation without the
express written consent of the Executive shall be deemed to be a
termination of the Executive's employment with the Company on a
without cause basis and the provisions of paragraph 5(d) shall
apply with respect to compensation to be paid to the Executive.
f) RENEWAL. The Executive shall notify the Company, in writing at least
one hundred twenty (120) days prior to the end of the Initial Term,
as to whether or not the Executive wishes to extend the term of
this Agreement or negotiate terms of a new agreement. The Company
at least ninety (90) days prior to the end of the Initial Term
shall notify the Executive in writing as to whether or not the
Company wishes to extend the term of this Agreement or negotiate
terms of a new agreement. If the Executive has not notified the
Company as set out above this
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Agreement shall automatically be terminated at the end of the Initial
Term. If the Company, after receiving notification from the
Executive has not notified as to whether or not it intends to
extend this Agreement the Executive then this Agreement shall be
automatically extended for a period of one year, such procedure to
be followed in each such successive period. Each extended term
shall continue to be subject to the provisions for termination set
forth herein.
g) DIRECTORSHIP. During the term of this Agreement and any extensions
or renewals, the Executive shall be elected as a director of the
Company and Premis. The Company and Premis shall take all actions
necessary and exert their influence and voting rights, so that the
election of the Executive as a director of the Company and Premis
continues during the course of this Agreement and any renewals or
extensions. The non-election of the Executive at any time as a
director of Premis or the Company, or the removal of the Executive
as a director of Premis or the Company shall constitute a dismissal
without cause and the provisions of paragraph 5(d) shall apply.
h) OBLIGATIONS AFTER CLOSING. As long as the Executive owns beneficially
any shares of Premis and/or the Company and is an employee of
Premis and/or the Company, F.T. Biermeier, the principal
shareholder of Premis, shall vote his shares of Premis for the
continued election of the Executive as a director of Premis and
Premis shall use its best efforts to maintain the Executive as a
director of Premis and/or the Company. F. T. Biermeier shall cause
any member of his immediate family or any firm or corporation under
his control to whom F. T. Biermeier may transfer such capital stock
to join in the covenant in this Paragraph 1(h).
2. COMPENSATION AND BENEFITS.
a) SALARY. The Executive shall receive for services to be rendered
hereunder an annual base salary of One Hundred and Fifty Thousand
Canadian Dollars (Cdn $150,000) (the "Base Salary") payable on a
monthly basis in twelve (12) equal monthly installments. The Board
of Directors and the Chief Executive Officer of Premis shall review
the Executive's salary on an annual basis, effective April 1, 1997
and April 1 of each succeeding year, and in good faith, determine
whether to increase the Executive's salary based on the performance
of the Executive and the Company. Effective April 1, 1997 the
Executive's annual Base Salary will, in any event, be increased by
a percentage which is at least the average of the percentage salary
increases of the Chief Executive Officer of Premis and the next
most highly paid
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senior executive of Premis since the effective date of this
Agreement. Commencing April 1, 1998 and on each April 1
thereafter during the term of this Agreement, the Executive's
annual Base Salary shall be increased by a percentage which is at
least the average of the percentage salary increases granted to the
Chief Executive Officer of Premis and the next most highly paid
senior executive of Premis, since the preceding April 1. In no
event, however, shall the Executive's Base Salary be reduced for
any reason.
b) PARTICIPATION IN BENEFIT PLAN. During the term hereof, the Company
shall continue to provide the Executive with coverage under the
Company's health and insurance plans as in effect on the date
hereof, including the Executive's enrollment in the London Life
"cost plus" benefit plan and all related enhancements over the
company's standard benefit plan. If any improvements to such plans
are made after the date hereof and such improvements are made
generally available to executives and/or employees of the Company,
such improvements shall be made available to the Executive on the
same basis as made to the Company's employees generally. Where any
such plan is modified in a manner that is disadvantageous to the
Executive in any material respect, the Company shall provide the
Executive at the time such plan is so modified with benefits
substantially identical to the benefits the Executive was entitled
to receive prior to such modification or, at the Company's
election, shall reimburse the Executive for the costs, including
any tax costs, of the Executive incurred by the Executive to obtain
benefits that are substantially identical to the benefits the
Executive was entitled to receive prior to such modification. In
addition, the Company shall pay for the cost of all premiums for
the Executive's long term disability insurance policy, providing a
benefit of two-thirds of the Executive's monthly salary to a
maximum of $10,000 per month. Within 90 days after execution of
this Agreement, Premis and the Executive shall undertake a review
and comparison of executive benefit plans, provided to similar
Canadian executives in companies comparable in size and revenues in
the Company's Industry and, subject to the approval of the board of
directors of the Company, acting reasonably in the circumstances,
the Company and/or Premis shall make improvements to the benefits
provided to the Executive so that the Executive's benefit plan is
at least equivalent to the mean of those provided by similar
companies to their executives in Canada.
c) VACATION. The Executive shall be entitled to a period of annual
vacation time equal to six weeks per year. The Executive agrees
that prior to taking any such vacation he will provide reasonable
notice to the Company and the Chief Executive Officer of Premis and
cooperate with the Company and the Chief Executive Officer of
Premis in scheduling such vacation during periods of time that
the Company has not reasonably requested that the Executive
make his services available to the Company.
d) AUTOMOBILE. The Company shall lease for the benefit of the Executive,
or shall pay on the Executive's behalf any lease payment with
respect to, an automobile of a general class and type such that
annual lease payments for such automobile do not exceed Ten
Thousand Dollars ($10,000.00). The Executive shall not terminate
such lease prior to its stated expiration without the approval of
the Chief Executive Officer of Premis, and shall arrange for all
normal and customary
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maintenance and repairs to such automobile. On April 1 of each
calendar year during the term hereof, commencing on April 1, 1997,
such automobile allowance shall be increased (but in no event
decreased) in an amount equal to the percentage increase from the
preceding April 1 in the Canadian Consumer Price Index, as reported
by Statistics Canada (Industry, Science and Technology) (or any
successor to such index). On termination of the Executive's
employment hereunder the Executive may, at his sole option, by
notice in writing to the Company within 10 days of the Termination
Date, (i) purchase such automobile for the buyout price as
determined by the company holding the lease on such automobile or
(ii) assume the obligations of the Company pursuant to the lease
(without any further compensation to the Company), provided the
Executive secures from the leasing company a release of the Company
from its obligations under the lease.
e) PENSION PLAN. During the term of this Agreement, the Company shall
continue to provide the Executive with the pension plan
administered by London Life. Within 90 days after execution of
this Agreement, Premis and the Executive shall undertake a review
of the Executive's pension plan and, subject to the approval of the
board of directors of the Company, acting reasonably in the
circumstances, the Company and/or Premis shall make improvements so
that the Executive's pension plan is at least equivalent to the
mean of comparable pension plans provided to Canadian executives in
companies in the Company's industry which are comparable in size
and revenues to the Company.
f) MEMBERSHIPS AND EXPENSE ALLOWANCE. The Company shall provide the
Executive with a discretionary expense allowance in an amount
equivalent to ten (10) percent of the Executive's Base Salary,
calculated pursuant to paragraph 2(a) above, per year, to be spent
as the Executive sees fit in his sole and arbitrary discretion.
3. BONUS PLAN AND STOCK OPTIONS.
a) BONUS PLAN. The Executive shall be paid a bonus, or an additional
bonus, upon execution of this Agreement to bring the Executive's
bonus for the Company's fiscal year ending July 31, 1996 up to at
least a minimum of 30% of the Executive's Base Salary. For the
Premis 1996 - 1997 fiscal year the Executive shall participate for
the period from the effective date of this Agreement to March 31,
1997 in the Premis Executive Bonus Plan as described in Schedule A
attached hereto. For subsequent years during the Initial Term of
this Agreement or any renewals thereof, the Executive shall
participate in the Premis Executive Bonus Plan as described in
Schedule A attached hereto or pursuant to the then existing Premis
Executive Bonus Plan, provided that such plan is applicable to all
executives of Premis, in substitution of the plan attached hereto
as Schedule A. Upon execution of the this Agreement the Executive
shall be granted options to
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purchase 600,000 shares of Premis common stock on the terms and
conditions of the Stock Option Agreement attached hereto as
Schedule B.
b) PREMIS SHARES. The authorized capital stock of Premis at December
31, 1995 is as set forth in Schedule "C" attached hereto. Premis
may take action to increase its authorized capital stock prior to
the Closing.
c) OPTION AGREEMENT. Premis represents and warrants that it has all
requisite power and authority to issue and deliver the Stock Option
Agreement in accordance with and upon the terms and conditions set
forth in this Agreement and in Schedule "B". All corporate action
required to be taken by Premis for the due and proper
authorization, issuance and delivery of the Stock Option Agreement
has been validly and sufficiently taken. The shares of Premis
issuable upon exercise of the Stock Option Agreement will be duly
authorized, validly issued, fully paid, and nonassessable.
d) DILUTION. Without the consent of the Executive, Premis shall
take no action to increase its authorized capital stock for a
period of six (6) months from the Closing Date. Subsequent to the
six month period if, during the Initial Term of this Agreement or
any renewals thereof, any anti-dilution protection is afforded to
F.T. Biermeier in connection with his ownership of capital stock of
Premis, or to any member of his immediate family or any firm or
corporation under his control to whom F. T. Biermeier may transfer
such capital stock, Premis shall offer equivalent anti-dilution
protection to the Executive.
4. REASONABLE BUSINESS EXPENSES AND SUPPORT.
The Executive shall be reimbursed for all documented and reasonable
business expenses in connection with the performance of his duties
hereunder and in accordance with the Company's general policies relating
thereto. Without limiting the generality of the foregoing, authorized
expenses shall include all automobile expenses (including fuel,
maintenance, license and insurance costs), travel expenses, all cellular
telephone lease costs (including all air time) and all costs for the
provision of a current "state of the art" personal computer system at the
Executive's home including all necessary upgrades to maintain the computer
system to their current operating levels, including all communications
charges such as Internet access, long distance charges etc. The Executive
shall be furnished reasonable office space, assistance and facilities.
For so long as the Company shall provide any Company credit cards to
executives and/or employees of the Company, the Executive shall be
provided with such a credit card. The Company shall pay for all costs and
expenses with respect to the Executive's enrollment in and maintenance in
good standing of membership in professional organizations such as IEEE and
APEO and any other similar memberships or organizations.
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5. TERMINATION OF EMPLOYMENT.
The date on which the Executive's employment by the Company ceases,
under any of the following circumstances, shall be defined herein as the
"Termination Date."
A) TERMINATION FOR CAUSE.
i) TERMINATION; PAYMENT OF ACCRUED SALARY AND VACATION. The Board
of Directors of the Company, provided approval of the Board of
Directors of Premis has been obtained, may terminate the
Executive's employment with the Company at any time for cause,
immediately upon notice to the Executive of the circumstances
leading to such termination for cause. In the event that the
Executive's employment is terminated for cause, the Executive
shall receive payment for all salary and benefits under
benefit plans of the Company owing as of, all vacation pay
accrued to, and all other amounts owing under Section 4 hereof
as of, the Termination Date, which in this event shall be the
date upon which notice of termination is given. The Company
shall also pay to the Executive a prorated bonus based upon
the then applicable bonus plan in an amount equal to the bonus
that would otherwise be paid for the calendar year in which
the Executive is terminated, multiplied by a fraction, the
numerator of which is the number of days that the Executive
was employed during such year, and the denominator of which is
365, it being understood that such prorated bonus will be
payable no later than April 30 of the year following the
calendar year in which the Executive's employment is
terminated; provided however, that no bonus shall be paid to
the Executive where the Executive's employment with the
Company is terminated pursuant to clauses 5(a)(ii)(c),
5(a)(ii)(d) or 5(a)(ii)(f). Except as otherwise required by
law, including without limitation the EMPLOYMENT STANDARDS ACT
(Ontario), the Company shall have no further obligation to pay
any compensation of any kind (including, without limitation,
any bonus or portion thereof (other than any bonus or portion
thereof specifically provided for in this paragraph 5(a)(i))
that otherwise may have become due and payable to the
Executive with respect to the year in which such Termination
Date occurs; provided, however, that in the event of the
termination of this Agreement pursuant to this clause 5(a)(i),
if not paid prior to such termination, the Executive shall
receive payment under Section 3 of the bonus relating to the
calendar year immediately preceding the calendar year in which
such termination occurred, such bonus to be paid at such time
and in such amount as is contemplated by Section 3. All
benefits provided by the Company to the Executive under this
Agreement or otherwise shall cease as of the Termination Date.
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ii) DEFINITION OF CAUSE. "cause" means the occurrence or existence
of any of the following with respect to the Executive, as
determined by the board of directors of Premis, acting
reasonably in the exercise of their business judgment: (a) a
material breach by the Executive of his duty not to engage in
any transaction that represents, directly or indirectly,
self-dealing with the Company or any person or entity directly
or indirectly controlling, controlled by or under direct or
indirect common control with the Company (an "Affiliate")
which has not been approved by the Chief Executive Officer of
Premis, if in any such case such material breach remains
uncured after the lapse of 30 days following the date that the
Company has given the Executive written notice thereof; (b)
the repeated material breach by the Executive of any duty
referred to in clause (a) above as to which at least one
written notice has been given pursuant to such clause (a); (c)
any act of dishonesty, misappropriation, embezzlement,
intentional fraud or similar conduct involving the Company or
any of its Affiliates; (d) any intentional damage of a
material nature to any property of the Company or any of its
Affiliates; (e) the continued failure by the Executive to
substantially perform the Executive's duties with the Company
(other than any such failure resulting from the Executive's
incapacity due to physical or mental illness) after a written
demand for substantial performance is delivered to the
Executive by the Board of Directors of Premis, which demand
specifically identifies the manner in which the Board believes
that the Executive has not substantially performed the
Executive's duties; (f) the engaging by Executive in conduct
which is demonstrably and materially injurious to the Company,
monetarily or otherwise; or (g) the disregard by Executive of
the reasonable and lawful rules, regulations and instructions
of the Company applicable to all employees of the Company now
in force or which may be adopted by the Company in the future
with reasonable notice to Executive; provided however that any
termination of the Executive's employment pursuant to clause
5(a)(ii)(e) shall, while constituting grounds for dismissal,
be deemed for the purposes of compensation payable to the
Executive to be a termination without cause pursuant to clause
5(d)(i) below.
b) VOLUNTARY TERMINATION. The Executive may voluntarily terminate his
employment with the Company at any time upon ninety (90) days prior
written notice to the Company. In the event that the Executive's
employment is terminated pursuant to this Section 5(b), the
Executive shall receive payment for all salary and benefits under
benefit plans of the Company owing as of, all vacation pay accrued
to, and all other amounts owing under Section 4 hereof as of, the
Termination Date, which for purposes hereof shall be the ninetieth
(90th) day after such notice has been received by the Company. The
Company shall also pay to the Executive a prorated bonus based upon
the then applicable bonus plan in an amount equal to the bonus that
would otherwise be paid for the calendar
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year in which the Executive is terminated, multiplied by a fraction,
the numerator of which is the number of days that the Executive was
employed during such year, and the denominator of which is 365, it
being understood that such prorated bonus will be payable no later
than April 30 of the year following the calendar year in which the
Executive's employment is terminated. After the Termination Date,
no other compensation of any kind or severance or other payment of
any kind will be payable under this Agreement.
c) TERMINATION UPON DISABILITY. The Board of Directors of the Company,
provided approval of the Board of Directors of Premis has been
obtained, may terminate the Executive's employment in the event the
Executive suffers a disability that renders the Executive unable,
as determined by a suitably qualified medical doctor to perform the
essential functions of his position, even with reasonable
accommodation, for six (6) months within any twelve (12) month
period. In the event that the Executive's employment is terminated
pursuant to this Section 5(c), the Executive shall receive payment
for all salary and benefits under benefit plans of the Company
owing as of, all vacation pay accrued to, and all other amounts
owing under Section 4 hereof as of, the Termination Date. The
Company shall also pay to the Executive a prorated bonus based upon
the then applicable bonus plan in an amount equal to the bonus that
would otherwise be paid for the calendar year in which the
Executive is terminated, multiplied by a fraction, the numerator of
which is the number of days that the Executive was employed during
such year, and the denominator of which is 365, it being understood
that such prorated bonus will be payable no later than April 30 of
the year following the calendar year in which the Executive's
employment is terminated. After the Termination Date, which in
this event shall be the date upon which notice of termination is
given, no further compensation of any kind or severance or other
payment of any kind will be payable under this Agreement. All
benefits provided under Section 2(b) hereof shall be extended, at
the Executive's election and cost, to the extent permitted by the
Company's insurance policies and benefit plans, for one year after
the Executive's Termination Date, except as required by law. All
other benefits provided by the Company to the Executive under this
Agreement or otherwise shall cease as of the Termination Date.
d) TERMINATION WITHOUT CAUSE.
i) TERMINATION PAYMENT. The Board of Directors of the Company,
provided the approval of the Board of Directors of Premis has
been obtained, may at any time terminate the Executive's
employment without "cause", as defined above, upon delivery of
written notice from the Company to the Executive of such
election by the Company. The Termination Date for purposes
hereof shall be the date such written notice is so delivered
by the Company to the Executive. In the event of such
termination, the Company shall pay the Executive as severance
an amount
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equal to the greater of: (A) one hundred percent of the base
salary that would have been payable to the Executive for the
balance of the Initial Term (or the extended term, if this
Agreement has been renewed pursuant to Section 1(e) hereof)
had the Agreement not been so terminated by the Company or (B)
two years of the Executive's then current Base Salary, payable
in a lump sum thirty (30) days after the Termination Date. In
the event that the Executive's employment is terminated
pursuant to this clause (d)(1), the Executive shall receive
payment for all accrued salary and benefits under benefit
plans of the Company owing as of, all vacation pay accrued to,
and all other amounts owing under Section 4 hereof as of, the
Termination Date. The Company shall also pay to the Executive
a prorated bonus based upon the then applicable bonus plan in
an amount equal to the bonus that would otherwise be paid for
the calendar year in which the Executive is terminated,
multiplied by a fraction, the numerator of which is the number
of days that the Executive was employed during such year and
the denominator of which is 365, it being understood that such
prorated bonus will be payable no later than April 30 of the
year following the calendar year in which the Executive's
employment is terminated. No other compensation of any kind
or severance or other payment of any kind shall be payable by
the Company after such Termination Date. All benefits
provided by the Company to the Executive under this Agreement
or otherwise shall cease as of the Termination Date.
ii) OTHER CIRCUMSTANCES. In the event of a substantial diminution
in the Executive's duties, authority or responsibility, he may
terminate his employment; provided, however, that the
Executive shall provide the Company thirty (30) days' notice
prior to any such termination and the Company shall have a
reasonable period of time to cure, which shall not exceed
thirty (30) days. A termination in such circumstances shall
be treated as a Company termination without cause and the
Executive shall be entitled to the same severance payments and
benefits provided in paragraph 5(d)(i).
e) TERMINATION UPON DEATH. If the Executive dies prior to the expiration
of the term of this Agreement, the Company shall (i) continue
coverage of the Executive's dependents (if any) under all benefit
plans or programs of the type listed above in Section 2(b) hereof,
if permitted to do so under such plans or programs, for a period of
six (6) months, and (ii) pay to the Executive's estate the
Executive's salary and benefits under benefit plans of the Company
owing as of, all vacation pay accrued to, and all other amounts
owing under Section 4 hereof, through the Termination Date. The
Company shall have no obligation to make any other payment,
including severance or other compensation, of any kind (including,
without limitation, any bonus or portion thereof that otherwise may
have become due and payable to the Executive with respect to the
year in which such Termination Date occurs; provided, however, that
in the event the
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Executive's employment terminates pursuant to this clause (e), if
not paid prior-to such termination, the Executive's estate shall
receive payment under Section 3 of the bonus relating to the
calendar year immediately preceding the calendar year in which
such termination occurred, such bonus to be paid at such time
and in such amount as is contemplated by Section 3. All other
benefits provided by the Company to the Executive under this
Agreement or otherwise shall cease as of the Termination Date.
f) TAX EFFECTIVE TREATMENT. The Company agrees and covenants that it
shall take all steps necessary, when requested by the Executive,
and shall make payments, pursuant to this Section 5, to the
Executive or as the Executive may direct, in any manner requested
by the Executive, in order that the Executive may achieve tax
efficiencies or for the Executive's family and estate planning,
provided that any such payments or recharacterization or
reclassification of such payment amounts shall not cause the
Company to suffer any direct negative tax or earnings consequences.
g) CHANGE OF CONTROL. In this Paragraph 5(g), "Change of Control" means
either of the following events:
i) the sale of all or substantially all of the assets of the Company
or Premis (a) to a person who is not affiliated or associated
with the Company or Premis, as the case may be, or (b) to a
person who is not affiliated or associated with any
shareholder of the Company or Premis, as the case may be, who,
together with all affiliates and associates of such
shareholder, holds at the date hereof more than 50% of the
issued common shares of the Company or Premis, as the case may
be; or
ii) any transaction whereby any person, together with affiliates and
associates of such person, or any group of persons acting in
concert, acquires more than 50% of the issued common shares of
the Company or Premis, or any transaction as a result of which
common shares constituting more than 50% in the aggregate of
the issued common shares of the Company or Premis cease to be
held by persons who are shareholders of the Company or Premis,
as the case may be, as at the date hereof, or by affiliates or
associates of such present shareholders;
(for the purposes of this definition, whether persons are
affiliated or associated shall be determined in accordance
with the definitions of "affiliate" and "associate" in the
provisions of the BUSINESS CORPORATIONS Act (Ontario), as such
provisions may be amended, supplemented or replaced from time
to time);
Upon the occurrence of any Change of Control, unless such Change
of Control is expressly agreed to in writing by the Executive,
the Executive's employment, at the sole and exclusive option of
the Executive, shall be
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deemed to be terminated on a without cause basis and the
provisions of paragraph 5(d) shall apply as of the date of the
occurrence of the event constituting a Change of Control.
6. OPTIONS, WARRANTS, RIGHTS, ETC. Provided that the common stock of Premis
shall not have been listed on NASDAQ within 90 days from the Closing
Date, then on the termination of the Executive's employment with the
Company, if the Executive holds any securities convertible into or
exchangeable for securities or shares of the Company or Premis or any
affiliates thereof or any options, rights, warrants or other
entitlements for the purchase or acquisition of shares of the Company or
Premis or any affiliates thereof (all such convertible or exchangeable
securities, options, rights, warrants and other entitlements being
collectively referred to as "Rights"), regardless of whether such Rights
may then be exercisable, all such Rights shall then be deemed to be
available for exercise, notwithstanding any provisions of any
resolution, by-law, agreement, contract or instrument pertaining to or
evidencing the Rights to the contrary, and, if the Executive so elects
by notice in writing to the Company or Premis, as the case may be, such
Rights shall be deemed to have been exercised at the price provided for
in such Rights and the Executive shall be deemed to have immediately
sold the securities arising from such exercise to the Company for the
fair market value thereof (which in the event of dispute shall be
determined at the Company's expense by a valuator satisfactory to both
the Company and the Executive and such determination shall be final and
binding) and the Company shall pay to the Executive, in the manner and
at the time contemplated by paragraph 5(d), the difference between the
aggregate conversion or exercise price for such securities and their
deemed acquisition price to the Company or Premis, as the case may be.
7. KEY-MAN LIFE INSURANCE PROCEEDS. The Company agrees and covenants to
maintain the two million dollar key-man life insurance policy insuring
the life of the Executive or, in the alternative, Premis shall maintain
in force a comparable policy providing the same protection for the
Executive, provided the Executive shall have approved, in writing such
substituted policy, which approval shall not be unreasonably withheld.
On the death of the Executive, the Company shall make the proceeds of
such insurance policy available to Premis and Premis shall use such
proceeds to repurchase the shares of the Company or Premis owned by the
Executive. Where the shares of the Company or Premis owned by the
Executive have a value less than Two Million dollars, any excess
insurance proceeds, over and above the proceeds utilized for the
repurchase of securities owned by the Executive in the Company or Premis
shall be paid to the estate of the Executive without set off or
deduction. The price of the securities of the Company or Premis to be
repurchased pursuant to this paragraph shall be the greater of:.
a) the average bid price of such securities over the 30 day period
immediately preceding the Executive's death, where such securities
are traded on a recognized North American securities exchange,
quoted by the National Market System of the National Association
of Securities Dealers, Inc. or are traded in the over-the-counter
market, and
12
b) the fair market value, not taking into account any minority discount
or discount for lack of marketability, of the securities to be
repurchased as of the date immediately preceding the Executive's
death, to be determined by a qualified business valuator, who shall
be selected, retained and advised by the Company and the Executive's
personal representative or executor of the Executive's estate
jointly, but shall be paid for exclusively by the Company.
Provided that where the common stock of Premis has been listed on NASDAQ
within 90 days from the Closing Date then paragraph 7(b) shall not be
applicable with respect to determining the price of the securities of the
Company and/or Premis to be repurchased pursuant to this Section 7.
8. NO REDUCTION IN BENEFITS. The monies and other consideration payable
under this Agreement shall not be reduced in any respect in the event
that the Executive shall secure or shall not reasonably pursue
alternative employment following the termination of the Executive's
employment. In no event shall the Executive be obliged to seek other
employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement.
9. DEDUCTIONS AND WITHHOLDINGS. All payments made to the Executive and or
his heirs as applicable hereunder shall be subject to withholdings on
account of all statutory and other required deductions including,
without limitation, deductions on account of income tax, Canada Pension
Plan, unemployment insurance, and voluntary deductions authorized in
writing by the Executive.
10. ARBITRATION. If any dispute or controversy shall occur between the
parties hereto relating to the interpretation or implementation of any
of the provisions of this agreement, such dispute shall be resolved by
arbitration. Such arbitration shall be conducted by a single arbitrator.
The arbitrator shall be appointed by agreement between the parties or,
in default of agreement, each party shall be entitled to appoint an
initial arbitrator (the "Initial Arbitrators") and the Initial
Arbitrators shall forthwith select an independent third party to act as
the sole arbitrator pursuant to this clause. In the event the Initial
Arbitrators are unable to agree on an arbitrator then such arbitrator
shall be appointed by a Judge of the Ontario Court (General Division)
sitting in the Judicial District of Toronto Region, upon the application
of any of the said parties, provided that such Judge shall not himself
be entitled to act as arbitrator. The arbitration shall be held in the
Municipality of Metropolitan Toronto. The procedure to be followed
shall be agreed by the parties or, in default of agreement, determined
by the arbitrator. The arbitration shall proceed in accordance with the
provisions of the ARBITRATIONS ACT (Ontario). The arbitrator shall have
the power to proceed with the arbitration and to deliver his award
notwithstanding the default by any party in respect of any procedural
order made by the arbitrator. It is further agreed that such
arbitration shall be a condition precedent to the commencement of any
action at law, provided however, that neither party shall be prohibited
from applying for relief from a court of competent jurisdiction in the
event of an alleged breach of any of the provisions of Sections 2, 3 or
5 of this Agreement. The decision arrived at
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by the board of arbitration, howsoever constituted, shall be final and
binding and no appeal shall lie therefrom. Judgment upon the award
rendered by the arbitrator may be entered in any court having
jurisdiction.
11. MISCELLANEOUS.
a) NOTICES. Any notices provided hereunder must be in writing and shall
be deemed effective upon the earlier of personal delivery (including
personal delivery by telecopy or telex) or the third day after
mailing by first class mail to the recipient at the address indicated
below:
To the Company: Ref Retail Systems Corporation
c/o Premis Corporation
15301 Highway 55 West
Plymouth, MN 55447
Attention: F.T. Biermeier
Telephone: 612-550-1999
Facsimile: 612-550-2999
To the Executive: Ted Anderson
384 Amberlee Court
Newmarket, Ontario
L3X 1E8
Telephone: (905) 898-6481
or to such other address or to the attention of such other person as
the recipient party will have specified by prior written notice to the
sending party.
b) SEVERABILILY. If any provision including any section or subsection of
this Agreement is determined to be invalid or unenforceable by a
court of competent jurisdiction from which no further appeal lies
or is taken, that provision shall be deemed to be severed herefrom,
and all remaining provisions of this Agreement shall not be
affected thereby and shall remain valid and enforceable.
c) ENTIRE AGREEMENT. This document constitutes the final, complete, and
exclusive embodiment of the entire agreement and understanding
between the parties related to the subject matter hereof and
supersedes and preempts any prior or contemporaneous
understandings, agreements, or representations by or between the
parties, written or oral. Without limiting the generality of the
foregoing, except as provided in this Agreement, all understandings
and agreements, written or oral, relating to the employment of the
Executive by the Company or the payment of any compensation or the
provision of any benefit in connection therewith or otherwise, are
hereby terminated and shall be of no further force and effect.
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d) COUNTERPARTS. This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more
than one party, but all of which taken together will constitute one
and the same agreement.
e) SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and inure
to the benefit of and be enforceable by the Executive and the
Company, and their respective successors and permitted assigns, and
shall not be assignable without the prior written consent of the
parties hereto, provided:
i) that the Company shall be entitled to assign this Agreement on
the condition that the assignee undertakes, in form and
substance satisfactory to counsel for the Executive to be
bound by all of the terms and conditions contained in
this Agreement; and
ii) that Premis and the Company execute acknowledgments and any
other documents requested by counsel for the Executive,
confirming that each of Premis and the Company remains
fully obligated and liable for all of the terms and
conditions contained in this Agreement and that such
assignment does not in any way relieve either of Premis
or the Company of any of their obligations under this
Agreement; and further provided that where the Company
has been discontinued or is otherwise inactive, the
Executive shall not require the Company to execute an
acknowledgment pursuant to this clause 11(e)(ii) where
the assignee has net assets equal to or greater than the
net assets of the Company at the date of such assignment.
f) AMENDMENTS. No amendments or other modifications to this Agreement
may be made except by a writing signed by both parties. No
amendment or waiver of this Agreement requires the consent of
any individual, partnership, corporation or other entity not a
party to this Agreement. Nothing in this Agreement, express
or implied, is intended to confer upon any third person any
rights or remedies under or by reason of this Agreement.
g) CHOICE OF LAW. This Agreement shall be governed by, and interpreted
and enforced in accordance with, the laws in force in the
Province of Ontario, Canada (excluding any conflicts of laws
rule or principle that might refer such interpretation to the
laws of another jurisdiction). Each party irrevocably submits
to the non-exclusive jurisdiction of the courts of Ontario
with respect to any matter arising hereunder or related hereto.
h) CANADIAN DOLLARS. All dollar amounts under this Agreement are in
Canadian Dollars.
12. GUARANTEE. Premis (hereinafter in this Section 12 also referred to as the
"Guarantor") acknowledges that as the shareholder of the Company, Premis
will derive an indirect benefit from the Executive's employment with the
Company. Premis, in
15
consideration for the indirect benefit received by Premis as set out
in this Section, hereby guarantees all of the obligations of the
Company to the Executive. The Guarantor by executing this Agreement
hereby unconditionally guarantees the performance by the Company of
all of the Company's financial obligations contained herein as if
such Guarantor was itself the Company, including but not limited to
all financial obligations such as Base Salary, Bonus or termination
payments owed to the Executive by the Company pursuant to this
Agreement. The Executive shall not be required to exhaust his
remedies against the Company prior to making a demand on the
Guarantor under this guarantee.
13. EXPENSE DEDUCTIBILITY. All of the salary and benefits provided for in
paragraphs 2, 3 and 4 above shall be provided by the Company to the
extent that such benefits are deductible, in whole or in part, as
business expenses of the Company under applicable tax laws and
regulations or are characterized as taxable benefits to the Executive.
14. COVENANTS.
a) NONSOLICITATION AND NONCOMPETITION. The Executive agrees that for
a period of two (2) years following termination of the Executive's
employment with the Company (whether by Company or by Executive)
and whether termination is voluntary or involuntary, all of the
covenants and agreements of the Executive made in that certain
Undertaking of the Executive, in the form of Exhibit C-2 to that
certain Stock Purchase Agreement between Premis Corporation, as
Buyer and the Executive and others, as Sellers, shall be binding
upon the Executive as if incorporated in full in this Agreement.
b) NO INTEREST IN VENTURES. If, during his employment with the Company,
the Executive is engaged in or associated with the planning or
implementing of any project, program or venture involving the
Company or its Affiliates and a third party or parties, all rights
in such project, program or venture shall belong to the Company.
Except as approved by the Company, the Executive shall not be
entitled to any interest in such project, program or venture or to
any commission, finder's fee or other compensation in connection
therewith other than the salary or other compensation to be paid to
the Executive during his employment by the Company.
c) DISCLOSURES AND ASSIGNMENT. The Executive shall promptly disclose
in writing to Company complete information concerning each and
every invention, discovery, improvement, device, design, apparatus,
practice, process, method or product, whether patentable or not,
made, developed, perfected, devised, conceived or first reduced to
practice by the Executive, either solely or in collaboration with
others, during his employment with the Company, whether or not
during regular working hours, relating to any phase of the business
of the Company or its Affiliates as conducted at such time
(hereinafter referred to as
16
"Developments"). The Executive hereby acknowledges that any and
all of said Developments are the property of the Company and hereby
assigns and agrees to assign to the Company and all of the
Executive's right, title and interest in and to any and all of such
Developments.
IN WITNESS WHEREOF, the parties have executed this agreement effective as
of the date first written above.
SIGNED, SEALED AND DELIVERED )
In the Presence of )
)
)
)
- --------------------------- ) ------------------------------------- l/s
Witness ) Ted Anderson
)
)
- --------------------------- ) ------------------------------------- l/s
Witness F. T. Biermeier
REF RETAIL SYSTEMS CORPORATION
By:
--------------------------------- c/s
Authorized Signing Officer
PREMIS CORPORATION
By:
--------------------------------- c/s
Authorized Signing Officer
17