Document:

exv10w3

 

Exhibit 10.3

October 29, 2002                

Mr. Peter Goodwin

2329 Edgemere Lake Circle

Marietta, Georgia

U.S.A. 30062

Dear Peter:

     This letter (the “Agreement”) shall serve to set forth our mutual
understanding and agreement as at October 29, 2002 (the “Effective Date”)
regarding your continued employment as President, Zemex Industrial Minerals
(“Zemex Industrial”) which is a subsidiary of Zemex Corporation (the
“Corporation”), pursuant to the following terms and conditions:

	1.	 	Definitions. Unless otherwise defined herein, capitalized terms have the
meaning set out in Schedule “A” annexed to this Agreement.
	 
	2.	 	Term. This Agreement and your employment shall continue from the
Effective Date for an indefinite term unless terminated in accordance with
the terms and conditions set forth in this Agreement.
	 
	3.	 	Duties. Subject always to the control and direction of the Chief
Executive Officer of the Corporation in accordance with the Corporation’s
corporate governance practices from time to time, you shall:

	 	(a)	 	faithfully serve Zemex Industrial and carry out those
responsibilities as are necessary to perform the functions
associated with the position of President, Zemex Industrial;
	 
	 	(b)	 	devote all of your working time, skill, experience and
attention to carry out the responsibilities consistent with the
position of President, Zemex Industrial and not at any time engage
in conduct which would significantly interfere with the performance
of your duties or which would constitute a conflict with the
interest of the Corporation or its Subsidiaries;

 

 

	 	(c)	 	comply with all applicable laws, rules and regulations, and
all requirements of all applicable regulatory, self-regulatory and
administrative bodies; comply with the Corporation’s rules,
procedures, policies, requirements and directions; and not engage in
any other business or employment without the written consent of the
Chief Executive Officer of the Corporation, except as otherwise
specifically provided herein, it is being understood that the
management of your personal investment and affairs not relating to
the business shall not contravene your obligations under this
Agreement.

	4.	 	Remuneration. As compensation for the performance of your duties
hereunder:

	 	(a)	 	the Corporation shall cause to be paid to you a salary at the
rate of U.S.$225,000.00 per annum (the “Base Salary”), payable
semi-monthly in arrears less those deductions, withholdings or
contributions which are required by law. Your Base Salary shall be
reviewed by the Chief Executive Officer of the Corporation from time
to time and may be increased by such amount as the Chief Executive
Officer of the Corporation in his sole discretion shall determine;
and
	 
	 	(b)	 	you shall be entitled to participate in any incentive
compensation plan which is implemented by the Corporation in the
manner and to the extent that senior executives of the Corporation
or its Subsidiaries are permitted to participate as determined by
the Chief Executive Officer of the Corporation and the Board.

	5.	 	Expenses. The Corporation shall reimburse you for all out-of-pocket
expenses reasonably and properly incurred by you in connection with your
duties hereunder, provided that you shall furnish in a timely manner to
the Corporation statements and reports for all such expenses.
	 
	6.	 	Benefits. You shall be entitled to continue to participate in all of the
employee Benefit Plans for senior management of Zemex Industrial resident
in the United States in effect from time to time in accordance with the
terms of such Benefit Plans. It is understood and agreed that the Benefit
Plans may be amended by the Corporation from time to time. Your vacation
entitlement will continue to be covered by company policy in effect as of
the Effective Date.
	 
	7.	 	Stock Options. In addition to any Options held by you as at the
Effective Date, you shall be eligible for consideration to participate in
and receive Options pursuant to the Stock Option Plan and any other share
compensation arrangements of the Corporation in effect from time to time
in which senior management of the Corporation or its Subsidiaries resident
in the United States are generally eligible to participate.

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	8.	 	Pension and Supplemental Pension Arrangement. In addition to your
continued participation in the Zemex U.S. Corporation’s pension plan, in
accordance with the terms thereof, as such may be amended from time to
time, you will be eligible for Supplemental Pension Benefits in accordance
with the terms of the Supplemental Pension Agreement set out in Schedule
“B”.
	 
	9.	 	Termination
	 
	9.1	 	Your employment hereunder may be terminated by either the Corporation or
by you, as the case may be, exercised by notice in writing at any time
upon the happening of any of the following events, in which event your
employment shall terminate upon the date specified in such notice:

	 	(a)	 	by the Corporation for Cause;
	 
	 	(b)	 	by the Corporation in the event of your death;
	 
	 	(c)	 	by the Corporation without Cause (and other than for the
circumstances in paragraph 9.1(b) or 9.1(d) or 9.1(e) or 9.2), in
which case you will receive the following:

	 	(i)	 	a lump sum equivalent to eighteen (18) months
Base Salary payable at the date of termination (the “Notice
Period”);
	 
	 	(ii)	 	an amount in lieu of the value of any bonus
contemplated under paragraph 4(b) that you would have earned
had you been employed for the length of the Notice Period
(such amount to be determined based on the greater of the
bonus compensation earned by you in the previous completed
year and the Corporation’s reasonable forecast of the value of
such bonus as if you had actually been employed throughout the
said Notice Period);
	 
	 	(iii)	 	continuation, during the Notice Period or until
such time as you secure alternate comparable benefits, of your
participation in the Benefit Plans (excluding short-term
disability, long-term disability and life insurance benefits
which shall cease on the date of termination) in which you
participated at the date of termination or if a plan or
program does not permit the continuance of all or some of the
benefits for some or all of the Notice Period, the Corporation
shall make other arrangements at its own expense to make
substantially similar benefits available to you. The
Corporation’s obligation hereunder is conditional on you
continuing to pay your share, if any, of the premiums;

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	 	(iv)	 	all Options will vest immediately upon the date
of termination and will cease to be exercisable at the later
of the expiry date of the Option or the end of the Notice
Period provided that the maximum term of any such Option shall
not exceed the period permitted by the Stock Option Plan; and,
	 
	 	(v)	 	entitlement to suitable outplacement counselling
services selected by the Corporation for which the Corporation
shall pay reasonable costs, up to a maximum of 10% of your
annual Base Salary in effect immediately prior to your
dismissal. Notwithstanding the foregoing provisions of this
Section 9.1(c)(v), at your option, the cost to the Corporation
of such outplacement counselling services shall be converted
to a lump sum amount and shall be paid to you immediately.

	 	(d)	 	by the Corporation, in the event of your Disability, in which
case, you shall be entitled, to the extent you continue to qualify,
to receive the long term disability benefits for executives of the
Corporation in effect at such time in lieu of any other compensation
whatsoever, together with all amounts owing to the effective date of
termination; or
	 
	 	(e)	 	by you, by giving three (3) month’s written notice to the
Corporation.

	9.2	 	In lieu and not in addition to the termination payments and benefits
provided in paragraph 9.1 herein, if a Change in Control occurs and if, a
Triggering Event occurs on or before the Expiry Date, you shall be
entitled to elect to terminate your employment with the Corporation and to
receive the following:

	 	(a)	 	an amount equal to 200% of your annual Base Salary in effect
immediately prior to the Triggering Event;
	 
	 	(b)	 	200% of the average of the annual bonus, if any, payable to
you in respect of each of the three fiscal years of the Corporation
ending immediately prior to the Triggering Event;
	 
	 	(c)	 	continuation of the Benefit Plans, as they exist immediately
prior to the Triggering Event for a period of twenty-four (24)
months after your election to terminate your employment pursuant to
paragraph 9.2. or until such time as you acquire comparable
alternate benefits, whichever first occurs. Notwithstanding the
provisions of paragraph 9.2(c), at your option, on the date of
termination, the cost to the Corporation of such Benefit Plans, or
any part of the benefits under such Benefit Plans as shall be
specified by you, shall be converted to a lump sum amount and shall
be paid to you effective immediately; and,

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	 	(d)	 	entitlement to suitable outplacement counselling services
selected by the Corporation for which the Corporation shall pay
reasonable costs, up to a maximum of 10% of your annual Base Salary
in effect immediately prior to your dismissal. Notwithstanding the
foregoing provisions of this paragraph 9.2(d), at your option, the
cost to the Corporation of such outplacement counselling services
shall be converted to a lump sum amount and shall be paid to you
immediately.

	9.3	 	The terms and conditions contained in 9.2 shall not apply if the
Triggering Event follows a Change in Control which involves the sale of
securities or assets of the Corporation with which you are involved as a
purchaser in any manner, whether directly or indirectly (by way of
participation in a corporation or partnership that is a purchaser or by
provision of debt, equity or purchase – leaseback financing).
	 
	9.4	 	All termination rights provided for in section 9.2 are conditional upon
you electing to exercise such rights by notice given to the Corporation up
to six (6) months after the Expiry Date and are exercisable only if you do
not resign from your employment with the Corporation or the Subsidiary
(other than at the request of the Corporation or the Subsidiary) and do
not actively seek alternate employment, in each case for at least 180 days
following the date of the Change in Control.
	 
	10.	 	Mitigation. You shall not be required to mitigate the amount of any
payments provided for under paragraph 9.1(c) or 9.2 by seeking other
employment or otherwise, nor shall the amount of any payment provided for
in such paragraph be reduced by any compensation earned by you as a result
of employment by another employer after the effective date of termination,
or otherwise.
	 
	11.	 	Release. Each of the Corporation and you confirm that the provisions of
paragraph 9.1(c) or 9.2 are reasonable and the total amount payable as
outlined therein is an amount which has been agreed between them to be
payable hereunder and is a reasonable estimate of the damages which will
be suffered by you in the event of a termination without Cause and shall
not be construed as a penalty. You agree to accept the payment provided
for in paragraph 9.1(c) or 9.2 in full satisfaction of any and all claims
you have or may have against the Corporation and you agree to release the
Corporation with respect to same upon payment of said sum.
	 
	12.	 	Confidential Information. You agree that all right, title and interest
in and to the Confidential Information shall remain the exclusive property
of the Corporation and the Confidential Information shall be held in trust
by you for the benefit of the Corporation and its Subsidiaries. You shall
not, directly or indirectly, use or exploit the Confidential Information
for any operational, commercial or other purpose whatsoever or in any
manner detrimental to the

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	 	 	Corporation or its Subsidiaries or disclose, disseminate, impart or grant
access to the Confidential Information to any person for any purpose.
	 
	 	 	You shall not copy, reproduce in any form or store in any retrieval
system or database the Confidential Information without the prior written
consent of the Corporation, except for such copies, reproductions and
storage as may be reasonably required internally by you for the purpose
for which you receive the Confidential Information. You shall return all
Confidential Information to the Corporation on the termination of your
employment or at any other time as may be requested.
	 
	13.	 	Non-solicitation. You shall not during the term of this Agreement and
for a period of twelve (12) months following termination of employment for
any reason on your own behalf or on behalf of any Person, whether directly
or indirectly, in any capacity whatsoever, alone or through or in
connection with any Person:

	 	(a)	 	contact, deal with, pursue, accept, receive or solicit any
business from any person who you know to be a prospective, current
or former client (a “Client”) of Zemex Industrial or the Corporation
for the purpose of selling to the Client any products or services
that are the same as or substantially similar to, or in any way
competitive with, the products or services sold or intended to be
sold by Zemex Industrial or the Corporation, to your knowledge;
	 
	 	(b)	 	solicit the employment or engagement of or otherwise entice
away from the employment of Zemex Industrial or the Corporation or
any affiliate any individual who is employed by Zemex Industrial or
the Corporation or any affiliate at the relevant time;
	 
	 	(c)	 	procure or assist any Person to solicit the employment or
engagement of or otherwise entice away from the employment of Zemex
Industrial or the Corporation or any affiliate any individual who is
employed by Zemex Industrial or the Corporation. It is understood,
however, that the giving of a reference, whether verbal or written,
by you to a potential third party, on behalf of an employee will not
constitute a breach of paragraph 13(b).

	14.	 	Survival. Notwithstanding the termination of this Agreement, (a) neither
party shall be released from any obligation that accrued prior to the date
of termination and more; and (b) each party shall remain bound by the
provisions of this Agreement which by their terms impose obligations upon
that party that extend beyond the termination of this Agreement and more
particularly, but not limited to, paragraphs 9, 12 and 13 hereof.

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	15.	 	Assignment. Except as otherwise expressly provided herein, neither this
Agreement nor any rights or obligations shall be assignable by either
party without the prior written consent of the other party hereto.
	 
	16.	 	Amendment and Waiver. No supplement, modification, amendment or waiver
of this Agreement shall be binding unless executed in writing by both
parties. No waiver of any of the provisions of this Agreement shall
constitute a waiver of any other provision (whether or not similar) nor
shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
	 
	17.	 	Successors and Assigns. This Agreement shall enure to the benefit of and
be binding upon the parties and their respective heirs, executors and
administrators or successors and permitted assigns, as the case may be.
	 
	18.	 	Severability. If any provision in this Agreement is determined to be
invalid, void or unenforceable by the decision of any court of competent
jurisdiction, which determination is not appealed or appealable for any
reason whatsoever, the provision in question shall not be deemed to affect
or impair the validity or enforceability of any other provision of this
Agreement and such invalid or unenforceable provision or portion thereof
shall be severed from the remainder of this Agreement.
	 
	19.	 	Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter contemplated herein
and supersedes and replaces any provision of any other document heretofore
entered into by them with respect to the subject matter of this Agreement,
including but not limited to the Supplemental Retirement Plan for key
employees dated January 1, 2001 and the Change in Control Agreement dated
October 1, 1999.
	 
	20.	 	Independent Legal Advice. You acknowledge that you have been advised to
obtain, and that you have obtained or have been afforded the opportunity
to obtain, independent legal advice with respect to this Agreement and
that you understand the nature and consequences of this Agreement.
	 
	21.	 	Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.
	 
	22.	 	Counterparts. This Agreement may be executed by the parties in one or
more counterparts, each of which when so executed and delivered shall be
deemed to be an original and such counterparts shall together constitute
one and the same instrument.

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     If the foregoing correctly sets forth your understanding with respect to
your employment by the Corporation in the capacity of President, Zemex
Industrial, please so indicate by signing where indicated below.

	 	 	 	 	 
	 
	 	ZEMEX CORPORATION
	 
	 
	 
	 	By:	 	/s/  Richard L. Lister
	 
	 	 	 	

	 
	 	 	 	Authorized Signing Officer
	 
	AGREED AND ACCEPTED
	 	 	 	 
	as of the date first written above
	 	 	 	 
	 
	 
	/s/  Peter J. Goodwin
	 	 	 	 
	

	 	 	 	 
	Peter Goodwin
	 	 	 	 

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SCHEDULE “A”

Definitions

     In this Agreement, unless the context otherwise requires, the following
terms shall have the following meanings:

	 	 	“Affiliate” shall have the meaning ascribed thereto in the Securities Act
(Ontario).
	 
	 	 	“Benefit Plans” shall mean the employee benefit plans for senior
management of Zemex Industrial resident in the United States which shall
include: participation in the group insurance benefit program, a golf
club membership, a company car, participation in the stock purchase plan,
and the Stock Option Plan and a cell phone. It is understood and agreed
that the Benefit Plans may be amended by the Corporation from time to
time.
	 
	 	 	“Board” shall mean the board of directors of the Corporation.
	 
	 	 	“Business Day” means a day other than a Saturday, Sunday, statutory
holiday or other day on which banks are generally closed in Georgia.
	 
	 	 	“Cause” shall mean any act or omission by you which would in law permit
an employer to, without notice or payment in lieu of notice, terminate
the employment of an Executive.
	 
	 	 	“Change of Control” means a transaction or series of transactions whereby
directly or indirectly:

				
	 	(i)	 	any person or combination of persons (other than
Dundee Bancorp Inc. or any affiliate thereof) acting jointly
or in concert obtains a sufficient number of securities of the
Corporation to affect materially the control of the
Corporation;
	 
	 	(ii)	 	if the Executive is primarily employed by the
Corporation, the Corporation shall consolidate or merge with
or into, amalgamate with, or enter into a statutory
arrangement with, any other person (other than a Subsidiary of
the Corporation) or any other person (other than a Subsidiary
of the Corporation) shall consolidate or merge with or into,
or amalgamate with or enter into a statutory arrangement with,
the Corporation, and, in connection therewith, all or part of
the outstanding voting shares shall be changed in any way,
reclassified or converted into, exchanged or otherwise
acquired for shares or other securities of the Corporation or
any other person or for cash or any other property;

 

 

				
	 	(iii)	 	if the Executive is primarily employed by the
Corporation, the Corporation shall be liquidated or dissolved
or shall sell or otherwise transfer, including by way of the
grant of a leasehold interest (or one or more of its
Subsidiaries shall sell or otherwise transfer, including by
way of the grant of a leasehold interest) property or assets
(A) aggregating more than 50% of the consolidated assets
(measured by either book value or fair market value) of the
Corporation and its Subsidiaries as at the end of the most
recently completed financial year of the Corporation or (B)
which during the most recently completed financial year of the
Corporation generated, or during the then current financial
year of the Corporation are expected to generate, more than
50% of the consolidated operating income or cash flow of the
Corporation and its subsidiaries, to any other person or
persons (other than the Corporation or one or more of its
Subsidiaries);
	 
	 	(iv)	 	if the Executive is primarily employed by a
Subsidiary, the Subsidiary shall be liquidated or dissolved or
shall sell or otherwise transfer, including by way of the
grant of a leasehold interest (or one or more of its
subsidiaries shall sell or otherwise transfer, including by
way of the grant of a leasehold interest) property or assets
(A) aggregating more than 50% of the consolidated assets
(measured by either book value or fair market value) of the
Subsidiary and its subsidiaries as at the end of the most
recently completed financial year of the Subsidiary or (B)
which during the most recently completed financial year of the
Subsidiary generated, or during the then current financial
year of the Subsidiary are expected to generate, more than 50%
of the consolidated operating income or cash flow of the
Subsidiary and its subsidiaries, to any other person or
persons (other than the Corporation, the Subsidiary or one or
more of its subsidiaries);
	 
	 	(v)	 	if the Executive is primarily employed by the
Corporation, the Corporation shall issue common shares from
the treasury of the Corporation to any person or company other
than Dundee Bancorp Inc. or any affiliate thereof in a
sufficient number to affect materially the control of the
Corporation;
	 
	 	(vi)	 	if the Executive is primarily employed by a
Subsidiary, (A) a transfer of shares of the Subsidiary or (B)
the issue of treasury shares of the Subsidiary, in either case
having the result that any person or combination of persons
acting jointly or in concert beneficially owns shares or other
securities in excess of the number which, directly or
following conversion thereof, would entitle the

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	 	 	 	holders thereof to cast 49.9% or more of the votes attaching
to all shares of the Subsidiary which may be cast to elect
directors of the Subsidiary;
	 
	 	(vii)	 	the Incumbent Directors cease to represent a
majority of the members of the Board of Directors.

	 	 	for the purposes of (i) and (v) above, a person or combination of persons
acting jointly or in concert or beneficially owning common shares or
other securities in excess of the number which, directly or following
conversion thereof, would entitle the holders thereof to cast 20% or more
of the votes attaching to all shares of the Corporation which may be cast
to elect directors of the Corporation, (the “Voting Shares”) shall be
deemed to be in a position to affect materially the control of the
Corporation.
	 
	 	 	“Confidential Information” means non-public information not generally
known about the Corporation and/or its Subsidiaries, which the
Corporation and/or any of its Subsidiaries desires to protect and keep
secret and confidential (including information and trade secrets
conceived, originated, discovered or developed by the officers,
executives or consultants either employed by or retained by the
Corporation or its Subsidiaries) concerning the business and affairs of
the Corporation and/or its Subsidiaries including, without limitation:

				
	 	(a)	 	knowledge of all business or financial opportunities which
are or may be available to the Corporation and/or its Subsidiaries;
	 
	 	(b)	 	all inventions and product enhancements and developments; or
	 
	 	(c)	 	the present and contemplated plans, strategies, costs,
prices, systems, pricing policies and financial information used by
the Corporation or its affiliates in connection with its business
and client lists and information concerning the customers of the
Corporation and/or its Subsidiaries, their names, addresses, needs
and preferences.

	 	 	It is understood, however, that Confidential Information shall not
include Confidential Information that becomes part of the public domain
by publication or otherwise, not due to any unauthorized act or omission
by you.
	 
	 	 	“Disability” shall mean your inability to substantially fulfil your
duties on behalf of the Corporation such that you have been approved for
long term disability benefits pursuant to the Corporation’s long term
disability plan.
	 
	 	 	“Expiry Date” means thirty months after a Change in Control occurs.

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	 	 	“Incumbent Directors” means the members of the Board holding office at
the Effective Date and any additional directors appointed by or with the
consent of a majority of the Incumbent Directors.
	 
	 	 	“Options” means those options granted to the Executive pursuant to the
Stock Option Plan.
	 
	 	 	“Stock Option Plan” means the Corporation’s stock option plan as the same
is in effect at any relevant time.
	 
	 	 	“Subsidiary” shall have the meaning ascribed thereto in the Securities
Act (Ontario) and for greater certainty shall include Zemex Industrial
Minerals.
	 
	 	 	“Triggering Event” means any one of the following events which occurs
without the express or original agreement of the Executive:

				
	 	(i)	 	an adverse change in any of the duties, rights,
discretion, salary or benefits of the Executive as they exist
at the date of this Agreement; or
	 
	 	(ii)	 	a diminution of the title of the Executive as it
exists at the date of this Agreement; or
	 
	 	(iii)	 	a change in the person or body to whom the
Executive reports at the date of this Agreement, except if
such person or body is of equivalent rank or stature or such
change is as a result of the resignation or removal of such
person or persons comprising such body, as the case may be,
provided that this shall not include a change resulting from a
promotion in the normal course of business; or
	 
	 	(iv)	 	a change in the municipality at which the
Executive is regularly required to carry out the terms of this
employment with the Corporation at the date of this Agreement
unless the Executive’s terms of employment include the
obligation to receive geographic transfers from time to time
in the normal course of business.

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SCHEDULE “B”

SUPPLEMENTAL PENSION AGREEMENT

MEMORANDUM OF AGREEMENT entered into at Toronto, Ontario on the 29th day of
October, 2002.

This document constitutes the Supplemental Pension Agreement (“SPA”) between
Peter Goodwin (the “Executive”) and Zemex Corporation or any successor
corporation, whether by amalgamation, merger or otherwise (the “Employer”).

	1.	 	Purpose of the Agreement
	 
	 	 	The purpose of this SPA is to provide the Executive with an incentive to
remain in the employ of the Employer and to reward the Executive for his
valuable service with the Employer.
	 
	2.	 	Definitions

	 	(a)	 	“Best Average Earnings” means the annual average of the
Executive’s Earnings during the three (3) calendar years in which
such Earnings are highest and, for purposes of such calculation, the
Executive’s final calendar year of employment shall be treated as a
full year.
	 
	 	(b)	 	“Commuted Value” shall mean in relation to Supplemental
Pension Benefits that the Executive has a present or future
entitlement to receive, the actuarial present value of those
benefits or the money representing that value.
	 
	 	(c)	 	“Earnings” shall mean the Base Salary paid by the Employer to
the Executive for work done or services rendered which shall exclude
bonuses.
	 
	 	(d)	 	“Normal Retirement Date” shall mean the first day of the
month coincident with or following the Executive’s 65th birthday.
	 
	 	(e)	 	“Pension Plan” means the pension plan of Zemex U.S.
Corporation.
	 
	 	(f)	 	“Pensionable Service” shall mean the number of years
(completed months count as a fraction thereof) of the Executive’s
continuous employment with the Employer.
	 
	 	(g)	 	“Spouse” means, in relation to the Executive, a man or woman
who at the earlier of the date of the commencement of the
Supplemental Pension Benefit and the date of the Executive’s death:

	 	(a)	 	is married to the Executive, or

 

 

	 	(b)	 	is not married to the Executive but is living
together with the Executive in a conjugal relationship,

				
	 	(i)	 	continuously for a period of not less than three years
or,
	 
	 	(ii)	 	is in a relationship of some
permanence, if they are the natural or adoptive parents
of a child, both as defined in the Family Law Act.

	 	(h)	 	“Supplemental Pension Benefit” means the amount payable to
the Executive or his Spouse pursuant to the terms of this SPA.
	 
	 	(i)	 	“Vesting Rate” shall mean 2.5%.

	3.	 	Administration of the SPA
	 
	 	 	The Employer shall administer this SPA. The Employer shall have full
authority to determine all questions arising in connection with the SPA,
including its interpretation, adoption of procedural rules, and may
employ and rely on such legal counsel, such actuaries, such accountants
and such agents as the Employer may deem advisable to assist in the
administration of the SPA. Decisions of the Employer shall be conclusive
and binding on all persons.
	 
	4.	 	Amount of Supplemental Pension Benefit
	 
	 	 	The Employer shall pay to the Executive, in equal monthly instalments,
upon retirement at his Normal Retirement Date, a Supplemental Pension
Benefit the annual amount of which is calculated as (a) minus (b) where
(a) equals 2 1/2% of the Executive’s Best Average Earnings times the
Executive’s Pensionable Service, and (b) equals the annual amount payable
to the Executive from the Pension Plan in the normal form.
	 
	5.	 	Normal Form of Payment

	 	(a)	 	The normal form of the Supplemental Pension Benefit payable
hereunder to the Executive if he has a Spouse shall be an income
payable for the joint lives of the Executive and his Spouse, and
upon his death 60% of such income shall be payable to his Spouse
throughout the Spouse’s lifetime and shall not cease upon
remarriage.
	 
	 	(b)	 	The normal form of the Supplemental Pension Benefit payable
hereunder to the Executive if he does not have a Spouse shall be an
income payable to the retired Executive for life.

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	6.	 	Payment of Early Retirement
	 
	 	 	With the consent of the Employer, the Executive may elect to retire while
in the service of the Employer between age 60 to age 62. Employer
consent shall not be required for early retirement after age 62. Upon
retirement in accordance with this Section 6, the Executive shall be
entitled to receive a Supplemental Pension Benefit calculated in
accordance with Section 4 hereof, based on his Best Average Earnings and
Pensionable Service at his date of early retirement.
	 
	7.	 	Payment on Death Prior to Retirement
	 
	 	 	In the event that the Executive dies prior to retirement and has a Spouse
on the date of his death, there shall be payable to his Spouse a monthly
Supplemental Pension Benefit equal to 1/12 of 60% of the annual amount
determined in accordance with Section 4, calculated assuming that
Pensionable Service would be determined as of the date of death.
	 
	8.	 	Payment on Termination

	 	(a)	 	In the event of voluntary termination of employment of the
Executive, he shall be entitled to receive in equal monthly
instalments a deferred Supplemental Pension Benefit commencing at
his Normal Retirement Date in an amount equal to his Vesting Rate
times his Best Average Earnings multiplied by his Pensionable
Service, less any retirement benefit payable from the Pension Plan.
In no event shall the Supplemental Pension Benefit calculated under
this Section 8(a) exceed sixty percent (60%) of the Executive’s Best
Average Earnings at the date of termination of employment.
	 
	 	(b)	 	In the event of involuntary termination of employment of the
Executive by the Employer (including an involuntary termination
pursuant to Section 9.2 of the employment agreement, and subject to
Sections 9.3 and 9.4 of the agreement) for other than Cause (as
defined in the Executive’s written employment agreement), he shall
be entitled to receive in equal monthly instalments, a deferred
monthly Supplemental Pension Benefit commencing at his Normal
Retirement Date in an amount equal to his Vesting Rate times his
Best Average Earnings multiplied by his Pensionable Service, less
any retirement benefit payable from the Pension Plan. For purposes
of this Section 8(b), Pensionable Service shall not include any
Notice Period (as defined in the Executive’s Employment Agreement).
In no event shall the Supplemental Pension Benefit calculated under
this Section 8(b) exceed sixty percent (60%) of the Executive’s Best
Average Earnings at the date of termination of employment.

- 3 -

 

	9.	 	Security

	 	(a)	 	The Employer shall adequately fund the Supplemental Pension
Benefits or, with the prior agreement of the Employee, provide
adequate security to ensure the payment of those Supplemental
Pension Benefits (as and when they become payable) at the time of a
Change of Control of the Corporation and the Corporation or the
successor to the Corporation following a Change of Control,
(“Successor”) as the case may be, shall, at least once every 3 years
thereafter provide such additional funding or, with the prior
agreement of the Employee, provide such additional security as may
be required to ensure the payment of the Supplemental Pension
Benefits (as and when they become payable).
	 
	 	(b)	 	For the purposes of this Section 9, the adequacy, nature and
extent of the funding and security required to be provided by the
Corporation or the Successor in respect of the Supplemental Pension
Benefits shall collectively, be sufficient to ensure the payment of
all Supplemental Pension Benefits (as when they become payable):

				
	 	(i)	 	by a bank, trust company, or life insurance
company that carries on business in Canada and deals at arm’s
length with the Corporation or the Successor within the
meaning of the Tax Act;
	 
	 	(ii)	 	in priority to any right, entitlement or interest
of, or claim by, the Corporation, any other corporation that
is an affiliate of the Corporation or any Person (other than
the Employee under this Agreement) in, to or in respect of
such funding or security (or the proceeds thereof), and,
	 
	 	(iii)	 	without requiring any funding or security to be
provided by the Corporation or the Successor in addition to
the funding or security provided for at the time of the
actuarial calculation or requiring any claim, proceeding or
other recourse to be made, brought or sought against the
Corporation or the Successor.

	 	 	 	For the purposes of this Section 9(b), the adequacy of the funding
and security shall be such as may be reasonably calculated by a
licensed and/or certified actuary, designated by the Corporation or
the Successor, using reasonable actuarial methods and assumptions
to ensure the payment of the Supplemental Pension Benefits in the
event of a default by the Corporation or the Successor of its
obligations under this Agreement.
	 
	 	(c)	 	Following a Change of Control, the Corporation or the
Successor shall give notice in writing to the Employee or, where the
Employee is not then alive, to the person entitled to receive the
Supplemental Pension Benefits

- 4 -

 

	 	 	 	of any funding or security provided by it from time to time to
ensure payment of the Supplemental Pension Benefits, such notice to
be given within thirty (30) days after such funding or such
security has been provided and to contain such information as may
reasonably be required to evaluate the adequacy of such funding or
security.
	 
	 	(d)	 	For greater certainty, if the Corporation should fail to
obtain the assumption of this Agreement by the Successor then the
Corporation shall, in a manner acceptable to the Corporation and the
Employee acting reasonably, take measures to provide for the
Supplemental Pension Benefits consistent with the requirements of
paragraph 2 herein.

	10.	 	General Provisions

	 	(a)	 	Nothing contained herein shall constitute an agreement or
undertaking by the Executive to remain in the employment of the
Employer for any specific period, nor an undertaking by the Employer
to employ the Executive for any specific period. The length of the
Executive’s employment by the Employer shall be subject to such
distinct and separate mutual agreements as the Executive and the
Employer may make from time to time.
	 
	 	(b)	 	The definition of Change of Control in this SPA shall have
the same meaning as ascribed to such term in Schedule “A” to the
employment agreement dated October 29, 2002 between the parties.
	 
	 	(c)	 	This Agreement may be amended or terminated in whole or in
part by written agreement of both parties to the Agreement.
	 
	 	(d)	 	Nothing herein requires, with the exception of the provisions
contained in paragraph 9 herein, the Employer to establish any fund
or otherwise provide security for any of the benefits to be provided
under this SPA.

- 5 -

 

	 	(e)	 	The payment of pension or other benefits under this SPA shall be in
the lawful currency of the United States.

IN WITNESS WHEREOF the parties hereto have executed this Agreement at the place
and as of the date first mentioned above.

	 	 	 	 	 
	/s/ John L. Dentzer	 	/s/ Peter J. Goodwin
	
	 	

	Witness	 	Peter Goodwin
	 
	 
	 	 	ZEMEX CORPORATION
	 
	 
	 	 	By:	 	/s/ Richard L. Lister
	 	 	 	 	

	 	 	 	 	Authorized Signing Officer

- 6 -exv10w4

 

Exhibit 10.4

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT made as of this 11th day of November, 2002.

     B E T W E E N:

Zemex Corporation , a corporation incorporated

under the laws of the Province of Ontario

(the “Employer”)

OF THE FIRST PART

- and -

Peter Gillin, of the City Toronto in the Province of Ontario

(the “Employee”)

OF THE SECOND PART

     WHEREAS the Employer has agreed to employ the Employee in the position of
Chief Executive Officer on a transitional basis and the Employee has agreed to
accept such employment, subject to the terms and conditions contained in this
Agreement;

     AND WHEREAS the Employer and the Employee wish to record the terms and
conditions with respect to the employment relationship between them;

     NOW, THEREFORE, it is agreed:

ARTICLE 1 — ENGAGEMENT

	1.1	 	The Employer hereby agrees to engage the services of the Employee, as the
Employer’s Chief Executive Officer for the period set out in Article 2
below and the Employee hereby accepts this position subject to and upon
the terms and conditions contained in this Agreement.

ARTICLE 2 — TERM

	2.1	 	This Agreement is for a term commencing on November 18, 2002 and ending
on May 1, 2003. Unless either party provides written notice to the other
party at least one month prior to the end of the term that they do not
wish to renew this Agreement, then this Agreement will automatically renew
for one further five month term on the same terms and conditions as set
out in this Agreement.

ARTICLE 3 — DUTIES

	3.1	 	The Employee shall hold the role of Chief Executive Officer of the
Employer. The Employee shall exercise, perform and have those
responsibilities, duties and authorities normally associated with the role
of Chief Executive Officer.

 

-2-

	3.2	 	The Employee’s primary responsibilities as Chief Executive Officer during
the term of this Agreement will be in the following areas:

	 	i.	 	the day to day running of the Employer’s business;
	 
	 	ii.	 	assisting in the search for a permanent Chief Executive
Officer, including advising the Executive Search Committee of the
Board of Directors on that search; and
	 
	 	iii.	 	assisting in the Employer’s strategic planning exercise in
reference to the future direction of the Employer’s business.

	3.3	 	The Employee, in his capacity as Chief Executive Officer, shall be
subject to the direction and supervision of the Board of Directors or such
individual members of the Board of Directors as may be designated by the
Board of Directors.
	 
	3.4	 	The Employee shall comply with all of the rules, regulations and by-laws
of the Employer and with all reasonable orders given to him by the Board
of Directors, or such individual members of the Board of Directors, as may
be designated by the Board of Directors.
	 
	3.5	 	The Employer acknowledges and understands that the Employee has and
continues to maintain an active consulting practise. It is understood and
agreed that the Employee shall predominantly devote his working hours to
the business and affairs of the Employer during the term of this
Agreement.

ARTICLE 4 — REMUNERATION

	4.1	 	The Employee shall be paid U.S. $25,000.00 per month for the services to
be provided under this Agreement, payable on the last day of every month
or in accordance with the Employer’s normal practices.
	 
	4.2	 	The Employee shall be entitled to 3 weeks vacation with pay during the
term of the Agreement to be taken at such time or times as are mutually
convenient to the Employer and the Employee.
	 
	4.3	 	The Employer and Employee will negotiate the terms of a bonus plan (the
“Plan”) to be payable to the Employee on completion of the term of this
Agreement. The maximum amounts payable under the bonus plan will be
consistent with the bonus plan provided to the current Chief Executive
Officer, except that the potential payments will be prorated to reflect a
five and one half month term and will be proportionally higher to reflect
the fact that the Employee is not entitled to participate in the
Employer’s Stock Option or Employee Stock Purchase Plans. The Employee’s
entitlement to payments under the Plan will be determined with regard to
the Employee’s and Employer’s success in the following areas:

	 	i.	 	the Employer’s financial performance during the terms of the
Agreement;
	 
	 	ii.	 	any improvements in the Employer’s stock price during the term
of the Agreement;
	 
	 	iii.	 	the success of the Employer in identifying and hiring a
permanent Chief Executive Officer during the term of the Agreement;
	 
	 	iv.	 	the Employer’s strategic planning exercise in reference to the
future direction of the Employer.

 

-3-

	4.4	 	The Employer shall pay all necessary and reasonable expenses actually and
properly incurred by the Employee in furtherance of or in connection with
the business of the Employer, including but not limited to, travel,
entertainment expenses (whether incurred at the Employee’s offices, while
travelling or otherwise) and parking but subject to the Employer’s then
current policies regarding reimbursement of business expenses by senior
executives. If the Employee pays any such expenses in the first instance,
the Employer shall reimburse him therefore, subject to the receipt by the
Employer’s Chief Financial Officer of statements and vouchers evidencing
these expenses in a form reasonably satisfactory to the Employer.
	 
	4.5	 	The Employee shall be entitled to participate in those benefit plans
currently offered to senior executives of the Employer, including but not
limited to, medical, life insurance and disability plans, but excluding
pension or enhanced pensions plans, on the same terms and conditions
offered to senior executives of the Employer. These benefits will not be
subject to any waiting periods and will commence as of the first day of
this Agreement. Medical and disability plans will continue, to the extent
permitted under the Corporation’s plans, for a period of 5 months after
the expiration of the term.

ARTICLE 5 — TERMINATION

	5.1	 	The Employer shall be entitled to immediately terminate this Agreement
and the Employee’s employment under this Agreement without notice or pay
in lieu of notice for any reason that amounts to just cause at common law.
	 
	5.2	 	In the event the Employee’s employment is terminated for any of the
reasons set out in Article 5.1, the Employer shall give written notice of
termination to the Employee or his legal representative, in accordance
with Article 6.1 below, setting out, in summary form, the reasons for
termination.
	 
	5.3	 	Notwithstanding Articles 2.1. and 5.1 of this Agreement, if the Employer
wishes to terminate this Agreement and the Employee’s employment during
the term of the Agreement then it will be obligated to pay to the
Employee, in a lump sum payment, all of the remaining amounts owing to him
under the Agreement as if he had completed the Agreement.
	 
	5.4	 	If the Employee’s employment is terminated pursuant to Article 5.3, then
the Employer shall also continue to maintain all the Employee’s benefits
for the lesser of five months or the remainder of the term of this
Agreement.

ARTICLE 6 — NOTICE

	6.1	 	Any notice in writing required or permitted to be given to the Employee
under this Agreement shall be sufficiently given if delivered to the
Employee personally or mailed by registered mail, postage prepaid,
addressed to the Employee at his last residential address known to the
Employer. Any notice mailed shall be deemed to have been received by the
Employee on the third (3rd) business day following the date of mailing.
Any notice in writing required or permitted to be given to the Employer
under this Agreement shall be sufficiently given if delivered to the
Employer at its registered office or mailed by registered mail, postage
prepaid, addressed to the Employer at its registered office. Any notice
mailed shall be deemed to have been received by the Employer on the third
(3rd) business day following the date of mailing.

 

-4-

ARTICLE 7 — GOVERNING LAW

	7.1	 	The provisions of this Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of
Canada. Each of the parties to this Agreement irrevocably attorns to the
jurisdiction of the courts of the Province of Ontario.

ARTICLE 8 — ENUREMENT

	8.1	 	The provisions of this Agreement shall enure to the benefit of and be
binding upon the heirs, executors, administrators and legal personal
representatives of the Employee and upon the successors and assigns of the
Employer.

ARTICLE 9 — ASSIGNMENT

	9.1	 	This Agreement shall not be assignable by the Employee under any
circumstances.

ARTICLE 10 — COMPLETE AGREEMENT

	10.1	 	This Agreement constitutes the entire Agreement between the parties and
there are no representations, warranties, covenants, agreements or
understandings relative thereto which are not set forth in this Agreement.
This Agreement replaces all other agreements, understandings and
negotiations whether written or oral, which may have existed between the
parties and constitutes the entire agreement between them. No provision
of this Agreement shall be effectively amended or waived except in writing
signed by the party against whom the amendment or waiver is sought to be
enforced.

ARTICLE 11 — SEVERABILITY

	11.1	 	The Employer and the Employee acknowledge and agree that if any of the
provisions of this Agreement are determined to be illegal or
unenforceable, that provision or provisions shall be severable from this
Agreement to the extent of such illegality or unenforceability without
affecting the remaining provisions of this Agreement.

ARTICLE 12 — MISCELLANEOUS

	12.1	 	Articles and section headings contained in this Agreement are included
solely for convenience and are not intended to be full or accurate
descriptions of the contents of the articles and shall not be considered
as part of this Agreement.
	 
	12.2	 	Each of the parties hereto may extend the time of performance and waive
non performance by any of the other parties to this Agreement of their
respective obligations and agreements under this Agreement, but no act
and/or failure to act by any of the parties shall be deemed to be an
extension or waiver of time and strict performance by the other parties of
this Agreement of such obligations and agreements except to the extent of
notices given to such of the other parties in writing.

 

-5-

ARTICLE 13 — EMPLOYEE ACKNOWLEDGEMENT

	13.1	 	The Employee acknowledges that:

	 	(a)	 	he has read and understood this Agreement; and
	 
	 	(b)	 	he has obtained, or has had the opportunity to obtain,
independent legal advice in connection with this Agreement and the
provisions in this Agreement.

           IN WITNESS WHEREOF this Agreement has been executed by the parties hereto.

	 	 	 	 	 	 	 	 	 
	SIGNED, SEALED AND DELIVERED	 	 	)
	
	 	ZEMEX CORPORATION
		 	 	)
	
	 	
		 	 	)
	
	 	
		 	 	)
		 	
		 	 	)
	 	 	Per:
	 	/s/ Garth A.C. MacRae

		 	 	)
	 	 	
	 	

		 	 	)
	 	 	
	 	Name: GARTH A.C. MACRAE

		 	 	)
	 	 	
	 	Title:   Director

		 	 	)
		 	
		 	 	)
		 	
		 	 	)
		 	
	/s/ Lorna D. MacGillivray	 	 	)
	 	 	
	 	
/s/ R. Peter Gillin
	
	 	 	
	 	 	 	 	

	 	 	 	
	 	 	 	 	PETER GILLIN

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