Exhibit 10.4
EMPLOYMENT AGREEMENT
THIS AGREEMENT dated as of the Commencement Date (as defined
below) by and between IT STAFFING LTD., a corporation incorporated under the
laws of the Province of Ontario, (the "Company") and DECLAN A. FRENCH, an
individual residing in the Town of Mississauga in the Province of Ontario (the
"Executive").
FOR VALUE RECEIVED by each of the parties hereto, receipt and
sufficiency of which is hereby acknowledged by each of them, it is hereby agreed
as follows:
1. As from the date on which the Company's Registration Statement filed
with the U.S. Securities and Exchange Commission is declared effective
(the "Commencement Date"), the Executive shall be employed by the
Company under the terms of this Agreement.
(1) The Company shall employ the Executive and the
Executive shall continue to hold office and serve the
Company as President and Chief Executive Officer (the
"Appointment"). The Executive shall during the course
of his employment hereunder perform the duties and
exercise the powers consistent with the Appointment,
including the making (subject to the terms hereof) of
all management decisions affecting generally the
Company, and those specific matters which may from time
to time be reasonably assigned to or vested in him by
the Board of Directors of the Company (the "Board"),
and shall from time to time give to the Board all such
information regarding such matters as it shall require
and implement and apply the policy of the Company as
set forth by the Board from time to time,
(2) make any material change in the undertaking of the
business of the Company; or
(3) enter into any Agreements or other obligations with
any person otherwise than in the ordinary course of
the business of the Company.
2. The Appointment shall continue for a period of 2 years from the
Commencement Date (the "Contract Period"), during which the Company
shall not be entitled to terminate the Executive's employment except in
accordance with and upon the occurrence of any of the events or causes
specified in Section 9.
3. (a) The Company shall pay to the Executive during the
continuance of his employment hereunder a salary at the rate
of Cdn.$150,000 per annum, less applicable statutory
deductions, subject to adjustment as provided in Section 4(e)
(the "Salary"), but not exceeding a maximum of Cdn.$500,000
per annum, to accrue from day to day and be payable (by direct
deposit to the Executive's designated bank account) in equal
bi-weekly installments in arrears on the last day of each
bi-weekly period;
(b) the Company shall provide to the Executive during the
continuance of his employment hereunder:
(1) an automobile allowance of Cdn.$1,000 per month; and
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(2) a corporate credit card, to be used by the Executive
for business expenses;
(c) the Company shall pay to the Executive during the continuance
of his employment hereunder a bonus (the "Bonus") of 2% of
Production in respect of each of the Company's fiscal quarters
(a "Quarter"). The payment date for each Quarter shall be
within 15 days after the end of the Quarter. "Production" for
purposes of the Bonus, and in respect of any Quarter, shall
mean the aggregate of the following amounts:
(3) total full time placement fees (exclusive of GST),
before tax, billed by the Company in such Quarter;
and
(4) total spread, representing pre-tax profit to the
Company, for such Quarter, in respect of all bilabial
hours of contract placements and consulting fees;
in each case as determined (such determination to be
conclusive in the absence of manifest error) by the Company's
accountants in accordance with generally accepted accounting
principles, for each such Quarter, and within 7 days of the
end of any such Quarter;
(d) the Company shall pay to the Executive during the continuance
of his employment hereunder a commission (the "Commission") of
1% of every dollar increase over the immediately preceding
year in the combined total revenue of the IT Group per annum,
calculated as of the end of each fiscal year during the term
of this Agreement. "IT Group" for the purposes of the
Commission shall mean the Company, International Career
Specialists Ltd., Systemsearch Consulting Services Inc.,
Systems PS Inc., and any other corporation, partnership, joint
venture, or business division which becomes controlled by any
corporation or any such entity within the IT Group during the
term of this Agreement. The Executive's right to receive
Commission payments from the Company shall continue in full
force and effect for a period of one full year after the
date upon which his employment hereunder ceases, whether as
the result of the expiry of the term hereof or his earlier
resignation or termination, provided that such entitlement
shall cease and determine upon his becoming employed by or
otherwise directly or indirectly interested or concerned in
any business, corporation, partnership, joint venture, firm,
or any such entity carrying on a business in the Province of
Ontario or any other jurisdiction in which the Company may be
carrying on business which is competitive with the business
carried on by the Company (otherwise than through the
Executive's holding or being beneficially interested in any
class of securities in any company if such class of securities
is listed on any recognized stock exchange and the Executive
neither holds nor is beneficially interested in more than a
total of ten per cent of all securities of that class); and
(e) the Company shall, during the continuance of the Executive's
employment hereunder, increase the Salary payable to the
Executive in each fiscal year of the term of this Agreement,
retroactively to the first day of each such fiscal year, by
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an amount equal to the amount of the Commission paid to the
Executive in respect of each such fiscal year.
5. The Company shall also pay to the Executive (on production of such
evidence as the Company may reasonably require) the amount of all
hotel, traveling and other expenses reasonably and properly incurred
by him in the discharge of his duties contemplated hereunder.
6. Subject to Section 9 and to the production of satisfactory evidence
from a registered medical practitioner in respect of any period of
absence in excess of 90 consecutive days, the Executive shall be paid
all of the compensation to which he would otherwise be entitled to
under this Agreement during any period of absence from work due to
sickness or injury.
7. The Executive shall be entitled to 6 weeks holiday with pay in every
calendar year in addition to recognized public holidays. The
entitlement to holiday (and on termination of employment to holiday
pay in lieu of holiday) accrues pro rata throughout each calendar year
of employment.
8. (a) The Executive shall not, either during the continuance of his
employment hereunder except so far as is necessary in the
performance of his duties or thereafter, without the consent
in writing of the Board being first obtained, divulge to any
person, and shall use his best endeavors to prevent the
publication or disclosure of any information, concerning the
business, accounts, finances, dealings, transactions or
affairs of the Company which has or may come to his knowledge
during the course of his employment hereunder or during any
previous service with the Company;
(b) the Executive shall not, during the continuance of his
employment directly or indirectly be interested or concerned
in any business, corporation, partnership, joint venture,
firm, or any such entity carrying on a business in the
Province of Ontario or any other jurisdiction in which the
Company may, from to time, conduct business which is
competitive with the business carried on by the Company,
provided that nothing herein contained shall prevent the
Executive from being the holder of or from being beneficially
interested in any class of securities in any company if such
class of securities is listed on any recognized stock exchange
and the Executive neither holds nor is beneficially interested
in more than a total of ten per cent of all securities of that
class; and
(c) the Executive shall devote his full time and attention to the
affairs and business of the Company during the continuance of
his employment under the terms of this Agreement.
9. The Executive's employment is guaranteed for the entirety of the
Contract Period, without restrictions, provided however that if the
Executive shall:
(2) die;
(3) be adjudged or declared bankrupt or shall take advantage of
any statute for the time being in force offering relief for
insolvent debtors; or
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(4) become a person whose person or estate is liable to be dealt
with under the law relating to mental health;
(5) otherwise become or be unable substantially to perform his
duties hereunder for any reason whatsoever for a period or
periods aggregating at least 180 days in any period of 12
consecutive months; or
(6) commit either by commission or omission, any act giving rise
to cause for termination ("cause" shall include, without
limitation, any material breach of the terms of this Agreement
or any other cause recognized at law);
then the Company may in any such case by written notice to the Executive (or his
representative, as applicable) forthwith terminate his employment hereunder, but
no notice under subsection (d) of this Section shall be given by the Company to
the Executive after the expiration of three calendar months from the end of any
such periods or periods aggregating at least 180 days. Where the Agreement is
terminated pursuant to this Section 9, the Executive will be entitled to his
Salary and holiday vacation pay accrued up to the date of termination, and the
Company shall have no further obligation to make any payments to the Executive,
in particular, pursuant to Section 4 of this Agreement.
10. Any notice in writing required or permitted to be given to the Executive
hereunder shall be sufficiently given if delivered to him personally or if
mailed by registered mail to the Executive's last home address of which the
Company has notice. Any notice in writing required or permitted to be given to
the Company hereunder shall be sufficiently given if delivered or mailed by
registered mail to the Company at its head office c/o the President & Chief
Executive Officer, IT Staffing Ltd., 55 University Avenue, Suite 505, Toronto,
ON M5H 3L9. Any such notices mailed as aforesaid shall be deemed to have been
received on the fifth business day following the date of the mailing. Any
address for the giving of notices hereunder may be changed by notice in writing
in the manner provided in this Section for the giving of notices.
11. This Agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario.
12. Any provision of this Agreement which is invalid or unenforceable shall
not affect any other provision and shall be deemed to be severable.
13. This Agreement shall enure to the benefit of and be binding upon the
heirs, executors, administrators and legal personal representative of the
Executive and the successors and assigns of the Company.
14. This Agreement constitutes and contains the entire and only Agreement
among the parties relating to the matters described herein and supersedes and
cancels any and all previous Agreements and understandings between all or any of
the parties relative hereto. Any and all prior and contemporaneous negotiations,
memoranda of understanding or position, and preliminary drafts and prior
versions of this Agreement, whether signed or unsigned, between the parties
leading up to the execution hereof shall not be used by any party to construe
the terms or affect the validity of this Agreement. There are no
representations, inducements,
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promises, understandings, conditions or warranties express, implied or
statutory, between the parties other than as expressly set forth in this
Agreement.
15. The Executive acknowledges that he has either obtained or waived
independent legal advice in respect of the subject matter of this Agreement.
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IN WITNESS WHEREOF this Agreement has been executed by the
parties hereto on the ____ day of August, 1998, effective as at the
Commencement Date.
SIGNED, SEALED AND DELIVERED )
in the presence of: )
)
)
) /s/ Declan A. French
- ---------------------------------- -------------------------------------
Witness: DECLAN A. FRENCH
IT STAFFING LTD.
Per: /s/ Declan A. French c/s
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Name: Declan A. French
Title: President