EMPLOYMENT CONTRACT
EMPLOYMENT CONTRACT, dated as of June 30, 1997, between CANMAX RETAIL
SYSTEMS, INC., a Texas corporation with offices at 150 West Carpenter Freeway,
Irving, Texas 75039 (the "Company"), CANMAX INC., a Wyoming corporation
("Canmax") and PHILIP M. PARSONS, residing at 3814 W. Beverly Drive, Dallas,
Texas 75209 (the "Executive").
RECITALS:
A. The Company desires to continue to employ Executive as an executive
officer of the Company.
B. Executive has agreed to continue his employment with the Company
pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, the Company, Canmax and Executive hereby agree as follows:
1. TERM AND RENEWAL.
The Company agrees to employ Executive, and the Executive agrees to
serve, on the terms and conditions of this Agreement for a period commencing
on July 1, 1997 and ending June 30, 1998, or such shorter period as may be
provided for herein. On each anniversary of this Agreement, the term shall be
extended for an additional period of one (1) year unless the Board of
Directors of Canmax elects, at the directors' meeting immediately following
the annual stockholders' meeting, not to extend this Agreement. In the event
that this Agreement is not extended by the Board of Directors of Canmax, this
Agreement shall remain in effect for only the remainder of the term then in
effect. Notwithstanding the foregoing, this Agreement shall not be extended
beyond the time that Executive has attained the normal retirement age (which
shall be no earlier than age 65) established by the Board of Directors of
Canmax for the Company's executives. The period during which Executive is
employed hereunder is hereafter referred to as the "Employment Period."
2. DUTIES AND SERVICES.
During the Employment Period, Executive shall be employed as an
Executive Vice President and the Chief Financial Officer of the Company and
Canmax and shall also perform services in a responsible executive or
managerial capacity for any of the Company's or Canmax's subsidiary
corporations when and as requested by the Company. In performance of his
duties, Executive shall be subject to the direction of the Chief Executive
Officer of the Company and Board of Directors of Canmax. Executive agrees to
his employment as described
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EMPLOYMENT CONTRACT - PAGE 1
in this Section 2 and agrees to devote substantially all of his time and
efforts to the performance of his duties under this Agreement. Executive
shall be available to travel as the needs of the business require.
3. COMPENSATION.
(a) As compensation for his services hereunder, the Company shall pay
Executive, during the Employment Period, a base salary payable in equal
monthly installments at the annual rate of $125,000. Executive shall also
participate in any bonus programs for the Company's executive officers, as
provided by the Board of Directors of Canmax, including, without limitation,
the Company's current Management Incentive Plan. During the term of this
Agreement, the Company may increase the base salary payable to the Executive,
but cannot reduce the base amount of Executive's salary. Executive will also
be eligible to participate in the regular employee benefit programs and stock
option plans now or hereafter established by the Company and in any special
executive benefits and perquisites established by the Board of Directors of
Canmax.
(b) Executive shall be entitled to receive warrants ("Performance
Warrant") to acquire 100,000 shares of common stock of Canmax. The
Performance Warrant will have an exercise price equal to the closing price of
the common stock of Canmax as reported on the Nasdaq SmallCap Market on the
date that the issuance of such Performance Warrant is approved by the
Company's compensation committee and shall provide for the registration of
any shares of common stock issuable upon the exercise of such Performance
Warrant, as further set forth therein. The Performance Warrant will expire
ten (10) years from the date of issuance, and shall vest as follows:
(i) fifty percent (50%) upon until the occurrence of the earlier of
the following (such date being referenced to herein as the "Trigger Date"):
(A) the earning per share (after tax) of Canmax equals or
exceeds $.30 per share during any fiscal year;
(B) the closing price of the common stock of Canmax as
reported on the Nasdaq SmallCap Market (or other national
automated quotation system or national stock exchange on which
the common stock of Canmax may be listed) equals or exceeds $8.00
per share for a period of sixty-five (65) consecutive trading
days; or
(C) the occurrence of a Change of Control (as defined below);
and
(ii) the remaining fifty percent (50%) on the date which is one (1)
year following the Trigger Date.
(c) The number of shares of Canmax common stock issuable upon the
exercise of the Performance Warrant, the exercise price thereof, and the
earnings per share and closing price targets set forth in Section 3(b) above
shall each be subject to appropriate adjustment for stock splits, stock
dividends or similar recapitalizations.
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EMPLOYMENT CONTRACT - PAGE 2
4. EXPENSES.
Executive shall be entitled to reimbursement for travel and other
out-of-pocket expenses incurred by Executive in the performance of his duties
hereunder, upon submission and approval of written statements and bills in
accordance with the then regular procedures of the Company. Executive shall
be entitled to reasonable vacations in accordance with the then regular
procedures of the Company governing executives.
5. NONCOMPETITION; NON-SOLICITATION.
Executive agrees that he will not during the Employment Period engage
in, or otherwise directly or indirectly be employed by, or act as a
consultant or lender to, or be a director, officer, employee, owner or
partner of, any other business or organization that directly or indirectly
competes with the business of the Company or any of its subsidiaries;
provided, however, that notwithstanding the foregoing, the provisions of this
Section 5 will not be deemed breached merely because Executive owns not more
than 1 percent of the outstanding equity securities of an entity, if, at the
time of its acquisition by Executive, such securities are listed on a
national securities exchange, is reported on the Nasdaq Stock Market, or is
regularly traded in the over-the-counter market by a member of a national
securities exchange. Executive agrees that he shall not, during the two-year
period after he voluntarily terminates this Agreement or is terminated
pursuant to this Agreement for "cause" (as defined in Section 7(d) below),
solicit or encourage any employee, consultant, vendor, supplier or customer
of the Company or Canmax to leave the employment of, or cease or diminish its
relations with, the Company or Canmax.
6. CONFIDENTIAL INFORMATION.
All confidential information which Executive may now possess, may obtain
from the Company or its subsidiaries during or after the Employment Period,
or may create prior to the end of the Employment Period or otherwise relating
to the financial condition, results of operations, business, properties,
assets, liabilities, or future prospects of the Company or of any customer or
supplier of any of them shall not be published, disclosed, or made accessible
by him to any other person or entity either during or after the termination
of his employment or used by him except during the Employment Period in the
business and for the benefit of the Company and its subsidiaries, in each
case without prior written permission of the Company. Executive shall deliver
to the Company all tangible evidence of such confidential information prior
to or at the termination of his employment. The provisions of this Section 6
shall survive the termination of this Agreement by either party.
7. TERMINATION.
(a) EXECUTIVE'S DEATH. If Executive shall die during the Employment
Period, this Agreement shall terminate, except that Executive's estate
("Estate") shall be entitled to receive (i) the base salary payable to
Executive, accrued to the last day of the month in which his death occurs,
(ii) for a period of three (3) months following death, payments equal to
fifty percent (50%) of the payments of Executive's base salary effective at
the time of death, each in
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EMPLOYMENT CONTRACT - PAGE 3
accordance with the Company's regular payroll cycle, and (iii) any death
benefits provided under employee benefit plans maintained by the Company. In
addition, if Executive shall die during the Employment Period and
notwithstanding any contrary provisions of any Company stock option, warrant
or stock option plan, the Estate shall have the right to retain and exercise
(y) any vested options or warrants outstanding on the date of death and (z)
any unvested options or warrants outstanding on the date of death that vest
within one year of the date of death, in each case in accordance with their
respective terms.
(b) EXECUTIVE'S DISABILITY. If, during the Employment Period,
Executive shall become Disabled (as defined below), this Agreement shall
terminate effective on such incapacity, and Executive (or his legal
representatives) shall be entitled only to the base compensation earned
through the date of termination with no entitlement to any base salary after
the date of termination; provided, however, that (i) Executive shall be
entitled to receive all benefits to which he may be entitled pursuant to the
Company's employee benefit plans; and (ii) the Company shall not be obligated
to make any payments to Executive under this Section 7(b) to the extent that
such payments, when aggregated with all other salary or disability payments
received by Executive (whether from disability programs maintained by the
Company or otherwise) exceed the then current base salary of Executive. As
used herein, the term "Disabled" or "Disability" shall mean a mental or
physical condition that prevents Executive from performing his usual duties
and services hereunder for a period of six (6) consecutive months or six (6)
non-consecutive months in any twelve (12) month period, as determined in the
reasonable discretion of the Board of Directors of Canmax; provided that if
Executive disputes such determination by the Board of Directors, Executive
(or his legal representatives) shall notify the Board of Directors in writing
and (x) the Board of Directors and Executive (or his legal representatives)
shall each designate a licensed physician practicing in the field to which
the alleged Disability relates within fifteen (15) days of the delivery of
such notice, (y) the designated physicians shall within fifteen (15) days
select a third physician practicing in the field to which the alleged
Disability relates, and (z) the third physician shall determine whether
Executive is or has been Disabled within the meaning of this Agreement.
(c) TERMINATION WITHOUT CAUSE. This Agreement may be terminated by the
Company or Canmax without cause upon thirty (30) days' prior written notice
thereof given to Executive. In the event of termination without cause, the
Company shall (i) for a period of one (1) year continue to pay Executive the
base salary effective at the time of termination in accordance with the
Company's regular payroll cycle and (ii) for a period of six (6) months pay
to Executive a monthly amount equal to one twelfth of any bonuses paid during
the twelve-month period preceding the date of termination. Additionally,
Executive shall be entitled to continue to participate in all regular
employee benefit plans of the Company for a period of one (1) year following
termination without cause; provided, however, that if Executive accepts
another job during such period that provides employee benefits comparable to
those offered by the Company at such time at a cost to Executive no greater
than the cost of the benefits provided by the Company, the Company's
obligation to extend such benefits to Executive shall cease.
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EMPLOYMENT CONTRACT - PAGE 4
(d) TERMINATION FOR CAUSE. This Agreement may be terminated by the
Company or Canmax "for cause", as defined below, by delivering to Executive
written notice describing the cause and granting Executive thirty (30) days
to respond to the Chief Executive Officer of the Company or the Board of
Directors of Canmax. If this Agreement is terminated by the Company for
cause, Executive shall only be entitled to the base salary earned by him to
the date of termination with no entitlement to any base salary continuation
payments or benefits continuation (except as otherwise provided by the terms
of any employee benefit plan of the Company). The determination as to whether
termination is for cause shall be made by the Chief Executive Officer of the
Company or the Board of Directors of Canmax in the exercise of its business
judgment. Termination of this Agreement by the Company for cause shall be
deemed to have occurred only if:
(i) termination shall have been the result of an act or acts of
dishonesty on the Executive's part constituting a felony or intended to
result directly or indirectly in substantial gain or personal
enrichment to him at the expense of the Company; or
(ii) termination shall have been the result of the Executive's
willful and continued failure substantially to perform his duties and
responsibilities as an officer of the Company (other than such failure
resulting from his incapacity due to physical or mental illness) after
a demand for substantial performance is delivered to the Executive by
the Chief Executive Officer of the Company or the Board of Directors of
Canmax which specifically identifies the manner in which such Board
believes that the Executive has not substantially performed his duties
and the Executive is given a reasonable time after such demand
substantially to perform his duties.
Executive's employment shall in no event be considered to have been
terminated by the Company for cause if the act or failure to act upon which
the termination is based (A) was done or omitted to be done without intent of
gaining therefrom directly or indirectly a profit to which the Executive was
not legally entitled and as a result of his good faith belief that such act
or failure to act was in or was not opposed to the interests of the Company,
or (B) is an act or failure to act in respect of which the Executive meets
the applicable standard of conduct prescribed for indemnification or
reimbursement of expenses under the Bylaws of the Company or the laws of its
state of incorporation.
(e) VOLUNTARY TERMINATION BY EXECUTIVE. Executive may terminate this
Agreement at any time upon delivering thirty (30) days' written notice to the
Company. In the event of such voluntary termination other than for "good
reason", as hereinafter defined, Executive shall be entitled to his base
salary earned to the date of his resignation, but no base salary continuation
payment or benefits continuation (except as provided by the terms of the
Company's employee benefit plans). On or after the date the Company receives
notice of Executive's resignation (other than resignation for good reason),
the Company may, at its option, pay Executive his base salary through the
effective date of his resignation and terminate his employment immediately.
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EMPLOYMENT CONTRACT - PAGE 5
(f) TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive may at any time
voluntarily terminate his employment for "good reason", as defined below,
upon thirty (30) days written notice thereof to the Company; provided that
the Company may, at its option, pay Executive his base salary through the
effective date of his resignation, terminate his employment immediately
(except for the provision of non monetary benefits) and, following the
effective date of such resignation, provide the payments and benefits
provided in Section 7(c). In the event of such voluntary termination for
"good reason", Executive shall be deemed to have been terminated without
cause with the same payments and benefits set forth in Section 7(c) being
applicable to Executive's termination under this Section 7(f).
For purposes of this Agreement, "good reason" shall mean the
occurrence of any of the following events:
(i) removal from the offices Executive holds on the date of this
Agreement or a material reduction in Executive's authority or
responsibility, but not including termination of Executive "for cause";
(ii) reduction in the base salary payable to Executive; or
(iii) the Company otherwise commits a material breach of this
Agreement;
provided that "good reason" shall not include the temporary appointment of
another person to fulfill Executive's responsibilities during any period of
disability of Executive.
8. CHANGE OF CONTROL
(a) CONCERNS REGARDING CHANGE OF CONTROL. Executive and the Company
agree that the circumstances surrounding a "Change of Control," as
hereinafter defined, impose unique risks to the Company and the Executive and
that in response to the unique circumstances surrounding a Change of Control,
the provisions of this Agreement shall separately consider the parties
rights' and obligations in the event that a Change of Control occurs. This
Section 8 shall be applicable whether or not a Change of Control is
contemplated at this time. Notwithstanding any other provision of this
Agreement, the severance payments and benefits, if any, payable to Executive
shall be determined solely by reference to this Section 8 in the event that a
Change of Control has occurred, or if Executive is "involuntarily
terminated," as hereinafter defined, in contemplation of a Change of Control.
(b) VOLUNTARY TERMINATION FOLLOWING A CHANGE OF CONTROL. If a Change
of Control has occurred, Executive shall have ninety (90) days in which to
terminate his employment. If Executive voluntarily terminates his employment
within ninety (90) days following a Change of Control he shall be entitled to
receive one (1) year's base salary as a lump sum payment. Upon payment of the
severance compensation described in the preceding sentence, the Company will
have no future obligation to Executive under this Agreement. Except as
otherwise provided in Section 8(c), if Executive does not voluntarily
terminate his employment within ninety (90) days
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EMPLOYMENT CONTRACT - PAGE 6
of a Change of Control, Executive shall not be entitled to any severance
compensation if he voluntarily terminates his employment after that time.
(c) INVOLUNTARY TERMINATION IN CONTEMPLATION OF, OR WITHIN TWO YEARS
FOLLOWING, A CHANGE OF CONTROL. If Executive is involuntarily terminated,
other than "for cause" (as defined in Section 7(d)) in contemplation of, or
within two (2) years following, a Change of Control, the Company shall pay
Executive (i) a lump sum severance payment equal to (A) the Executive's
annualized base salary in effect at the time of involuntary termination plus
(B) fifty percent (50%) of any bonus paid during the preceding twelve-month
period, payable as a lump sum, and (ii) continuation of all employee
benefits, executive benefits and perquisites, or benefits reasonably
equivalent thereto, for a period of one (1) year; provided, however, that if
Executive accepts another job during such period that provides employee
benefits comparable to those offered by the Company at such time at a cost to
Executive no greater than the cost of the benefits provided by the Company,
the Company's obligation to extend such benefits to Executive shall cease.
For purposes of this Agreement, the following shall be deemed to
constitute involuntary termination:
(i) dismissal of Executive (except termination for cause as
defined in Section 7(d) hereof);
(ii) reduction in Executive's base salary;
(iii)reduction in the level of employee benefits received by
Executive, unless substituted with reasonably comparable benefits;
(iv) requesting Executive to relocate more than 100 miles from his
current location other than the relocation of Executive in connection
with the relocation of the Company's corporate headquarters or
relocation to another existing facility of the Company;
(v) removal from the offices Executive holds on the date of this
Agreement or a material reduction in Executive's authority or
responsibility; or
(vi) the Company otherwise commits a material breach of this
Agreement.
In the event that within two (2) years following a Change of
Control, Executive is terminated for cause, Executive shall only be entitled
to his base salary up until the last date of employment pursuant to the date
of termination for cause.
(d) TERMINATION OF THIS AGREEMENT MORE THAN TWO YEARS AFTER A CHANGE OF
CONTROL. The parties' rights and obligations arising from a termination of
this Agreement, whether by Executive or the Company, that occurs more than
two (2) years following a Change of Control shall be governed by Section 7 of
this Agreement.
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EMPLOYMENT CONTRACT - PAGE 7
(e) DEFINITION OF CHANGE OF CONTROL. For purposes of this Agreement, a
Change of Control shall be deemed to exist upon the occurrence of any of the
following:
(i) any "Person" (as such term is used in Section 13(d) and
Section 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), is or becomes a "beneficial owner" (as defined in
Section 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company or Canmax representing more than thirty
percent (30%) of the combined voting power of the outstanding
securities of the Company or Canmax;
(ii) at any time during the twenty-four (24) month period
following a merger, tender offer, consolidation, sale of assets or
contested election, or any combination of such transactions, at least a
majority of the Board of Directors of the Company or Canmax shall cease
to be "continuing directors" (meaning directors of the Company or
Canmax prior to such transaction or who subsequently became directors
and whose election or nomination for election by the stockholders of
the Company or Canmax, was approved by a vote of at least two-thirds of
the directors then still in office prior to such transaction);
(iii) the stockholders approve an agreement of sale or disposition
by the Company or Canmax of all or substantially all of the assets of
the Company or Canmax;
provided, however, that no Change of Control shall be deemed to have occurred
for purposes of this Agreement by reason of the anticipated merger of
Auto-Gas Systems, Inc. into the Company or the related issuance of shares of
Canmax common stock.
(f) VESTING OF OPTIONS AND WARRANTS. Upon any Change of Control, any
unvested options or warrants held by Executive to acquire shares of Canmax
common stock shall be immediately vested and exercisable by Executive, and
Canmax undertakes to amend any existing stock option or warrant agreements
between Canmax and/or the Company and Executive consistent with this Section
8(f).
(g) NO MITIGATION OF COMPENSATION. Executive shall not be required to
mitigate any severance payments received under this Section 8 due to his
employment with a successor organization.
9. SURVIVAL.
The covenants, agreements, representations, and warranties contained in
or made pursuant to this Agreement shall survive Executive's termination of
employment.
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EMPLOYMENT CONTRACT - PAGE 8
10. MODIFICATION.
This Agreement sets forth the entire understanding of the parties with
respect to the subject matter hereof, supersedes all existing agreements
between them concerning such subject matter, and may be modified only by a
written instrument duly executed by each party.
11. NOTICES.
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, or by Federal Express, Express Mail, or similar overnight
delivery or courier service or delivered (in person or by telecopy, telex, or
similar telecommunications equipment) against receipt to the party to whom it
is to be given at the address of such party set forth in the preamble to this
Agreement (or to such other address as the party shall have furnished in
writing in accordance with the provisions of this Section 11). Any notice
given to the Company shall be addressed to the attention of the Corporate
Secretary. Notice to the estate of Executive shall be sufficient if addressed
to Executive as provided in this Section 11. Any notice or other
communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof. Any notice given by
other means permitted by this Section 11 shall be deemed given at the time of
receipt thereof.
12. WAIVER.
Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of that provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term
of this Agreement on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence
to that term or any other term of this Agreement. Any waiver must be in
writing.
13. BINDING EFFECT.
Executive's rights and obligations under this Agreement shall not be
transferable by assignment or otherwise, such rights shall not be subject to
commutation, encumbrance, or the claims of Executive's creditors, and any
attempt to do any of the foregoing shall be void. The provisions of this
Agreement shall be binding upon and inure to the benefit of Executive and his
heirs and personal representatives, shall be binding upon and inure to the
benefit of the Company and its successors and assigns.
14. HEADINGS.
The headings of this Agreement are solely for the convenience of
reference and shall be given no effect in the construction or interpretation
of this Agreement.
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EMPLOYMENT CONTRACT - PAGE 9
15. ATTORNEYS' FEES.
In the event that any person commences any action or proceeding to
enforce the terms of this Agreement, the prevailing party shall be entitled
to recover from the other his or its reasonable attorney's fees.
16. COUNTERPARTS; GOVERNING LAW.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. It shall be governed by and construed in
accordance with the laws of the State of Texas, without giving effect to the
conflict of laws rules. Any action, suit, or proceeding arising out of, based
on, or in connection with this Agreement, any document or instrument
delivered pursuant to, in connection with, or simultaneously with this
Agreement, any breach of this Agreement or any such document or instrument,
or any transaction contemplated hereby or thereby may be brought only in the
District Courts of Dallas County, Texas or the United States District Court
for the Northern District of Texas, Dallas Division and each party covenants
and agrees not to assert, by way of motion, as a defense, or otherwise, in
any such action, suit, proceeding, any claim that such party is not subject
personally to the jurisdiction of such court, that such party's property is
exempt or immune from attachment or execution, that the action, suit or
proceeding is brought in an inconvenient forum, that the venue of the action,
suit, or proceeding is improper, or that this Agreement or the subject matter
hereof may not be enforced in or by such court.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
COMPANY:
CANMAX RETAIL SYSTEMS, INC.
By:
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Name:
----------------------------------------
Title
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EXECUTIVE:
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PHILIP M. PARSONS
CANMAX INC.
By:
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Name:
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Title
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