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 DEBRA L. BURGESS, residing at 724 Castle Creek, Coppell, Texas
75019 (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 her 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 Operating 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 her 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 her employment as described in this
Section 2 and agrees to devote substantially all of her time and efforts to the
performance
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EMPLOYMENT CONTRACT - PAGE 1
of her duties under this Agreement. Executive shall be available to travel as
the needs of the business require.
3. COMPENSATION.
(a) As compensation for her services hereunder, the Company shall pay
Executive, during the Employment Period, a base salary payable in equal monthly
installments at the annual rate of $140,000. 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 125,000 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 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 her 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 she 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 she shall not, during the two-year period after she 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 her to
any other person or entity either during or after the termination of her
employment or used by her 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 her 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 her 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 her 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
she 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 her 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
her 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 her duties and
responsibilities as an officer of the Company (other than such failure
resulting from her 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 her duties and the Executive
is given a reasonable time after such demand substantially to perform her
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 her 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 her base salary
earned to the date of her 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 her base salary through the effective date of
her resignation and terminate her employment immediately.
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EMPLOYMENT CONTRACT - PAGE 5
(f) TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive may at any time
voluntarily terminate her 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 her base salary through the effective
date of her resignation, terminate her 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 her employment. If Executive voluntarily terminates her employment
within ninety (90) days following a Change of Control she 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
her 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 she voluntarily terminates her 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 her
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 her 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 Inc.;
(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 her
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 her
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:
------------------------------------------------
DEBRA L. BURGESS
CANMAX INC.
By:
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Name:
-----------------------------------------
Title:
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