UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 17, 2013
Vitran Corporation Inc.
(Exact name of registrant as specified in its charter)
| Ontario, Canada | 001-32449 | 98-0358363 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 185 The West Mall, Suite 701, Toronto, Ontario, Canada |
M9C 5L5 | |||
| (Address of principal executive offices) | (Zip Code) | |||
416-596-7664
Registrant’s telephone number, including area code
Not applicable.
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
| (e) | Material compensatory plan, contract or arrangement with principal executive officer |
On June 17, 2013, Vitran Corporation Inc. (the “Company or “Vitran”) entered into an executive employment agreement with William S. Deluce, the Company’s Interim President and Chief Executive Officer, with his employment being effective as of June 19, 2013.
Executive Employment Agreement
The employment agreement is for an indefinite term, and may be terminated: by mutual agreement; if the Company has cause for termination; or with a payment if the Company does not have cause for termination as described below. Under the employment agreement, Mr. Deluce has agreed that during the year following his termination: (i) he will not solicit any person who is employed by the Company or any affiliate; and (ii) he will not contact any customers of the Company or any of its affiliates for the purpose of selling them any products or services which are competitive with the products and services sold by the Company or any of its affiliates. Mr. Deluce has also agreed that all confidential records, material and information concerning the Company or its affiliates shall remain the exclusive property of the Company, and Mr. Deluce shall not divulge such information to any person.
Compensation. During the employment period, Mr. Deluce will receive a base salary of CDN$50,000 per month. The Company may, in the sole and absolute discretion of the Board, pay Mr. Deluce a performance bonus in respect of each year, based on criteria to be determined by the Board.
Other Benefits. Mr. Deluce is also entitled to: (i) receive a car allowance of CDN$1,575 per month; (ii) reimbursement of a portion of his annual club membership dues, and any expenses incurred at the club, to the extent incurred in connection with or relating to his duties as the Company’s Interim President and Chief Executive Officer; and (iii) participate in medical and extended health care benefits plans of the Company.
Termination without cause. If the employment of Mr. Deluce is terminated by the Company and the Company does not have cause for such termination, Mr. Deluce shall be entitled to receive the greater of (i) a lump sum amount equivalent to three months’ base salary, plus continuation of medical and extended health care benefit plans for a period of three months, at standard premium rates, or (B) notice or pay in lieu of notice, benefits continuation, severance and/or other required payments prescribed under any applicable legislation.
Entitlements as Director. Mr. Deluce has agreed that he shall not be entitled to any annual or meeting directors’ fees, but he shall be entitled to participate in the Company’s deferred share unit plan for directors, for so long as he is a member of the Board.
Consulting Agreement.
Mr. Deluce was appointed Interim President and Chief Executive Officer on April 4, 2013, following the resignation of the Company’s previous President and Chief Executive Officer. On June 17, 2013, the Company also entered into a letter agreement with Wicklow Consulting Inc. (“Wicklow”), a private company owned by Mr. Deluce, documenting a consulting arrangement between the parties whereby Wicklow agreed to provide consulting services to Vitran, including the services of Mr. Deluce as Interim President and Chief Executive Officer of the Company, with effect from April 4, 2013.
Under the consulting agreement, Wicklow is entitled to a fee of CDN$54,807.69 per month, plus Ontario harmonized sales tax at the rate of 13%. The consulting arrangement documented by the letter agreement has been terminated effective June 19, 2013, with the result that it covers the period from April 4, 2013 through June 19, 2013 (being the effective date of Mr. Deluce’s employment with the Company under the executive employment agreement described above).
| Item 9.01 | Financial Statements and Exhibits |
| Exhibit No. |
Exhibit | |
| 10.1 | Employment agreement dated June 17, 2013 between the Registrant and William S. Deluce * | |
| 10.2 | Consulting letter agreement dated June 17, 2013 between Wicklow Consulting Inc. and the Registrant * | |
| * | Filed herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| VITRAN CORPORATION INC. | ||||||
| DATE: June 20, 2013 | By: | /s/ Fayaz D. Suleman | ||||
| Fayaz D. Suleman | ||||||
| Vice President of Finance and Chief Financial Officer | ||||||
Exhibit 10.1
Execution Copy
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT signed this 17th day of June, 2013 and effective as of the 19th day of June, 2013 (the “Effective Date”).
BETWEEN:
WILLIAM S. DELUCE
(hereinafter the “Executive”)
and
VITRAN CORPORATION INC.
(hereinafter the “Company”)
WHEREAS the Executive is a member of the board of directors of the Company (the “Board”) and the Company wishes to employ the Executive in the capacity of Interim President and Chief Executive Officer, on the terms and conditions set out in this agreement;
NOW THEREFORE IN CONSIDERATION of the mutual covenants and premises contained in this agreement, the parties hereby agree as follows:
| 1. | EMPLOYMENT POSITION |
The Company hereby employs the Executive and the Executive agrees to serve the Company, effective as of the Effective Date, in the capacity of Interim President and Chief Executive Officer, or in such other offices as may be determined by the Board. The Executive shall report to the Board and shall perform such duties, and exercise such powers as are incidental to his position as Interim President and Chief Executive Officer and such other duties and powers as may from time to time be assigned to him by the Board.
The Executive agrees that he shall devote the whole of his time, attention and ability to the business of the Company insofar as they are directed towards business interests. He shall competently and faithfully serve the Company and use his best efforts to promote the interests thereof.
| 2. | COMPENSATION AND BENEFITS |
| (a) | BASE SALARY |
The Executive shall receive a base monthly gross salary of CDN$50,000 (the “base salary”), prorated for any partial month during the term of this agreement. The base salary shall be payable in accordance with the Company’s customary payment policy.
| (b) | DISCRETIONARY BONUS |
The Company may, in the sole and absolute discretion of the Board, pay the Executive a performance bonus in respect of each year (or partial year if applicable) during the term of this agreement. The amount of such bonus, if any, and the criteria for such bonus shall be determined in the sole and absolute discretion of the Board.
| (c) | CLUB DUES |
The Executive shall be entitled to be reimbursed for a portion of his annual dues in respect of his club membership at the Granite Club and any expenses incurred at such club, in each case to the extent incurred in connection with or relating to his duties under this Agreement and in accordance with Company policy.
| (d) | CAR ALLOWANCE |
The Executive shall be entitled to a Company car allowance in the amount of CDN$1,575 per month, prorated for any partial month during the term of this agreement (as may be revised by the Board from time to time), in accordance with the Company’s policy from time to time regarding car allowances.
| (e) | MEDICAL AND BENEFITS |
The Executive shall be entitled to participate in the medical and extended health care benefit plans made available by the Company to its other senior executives as the same may change from time to time and all in accordance with the terms thereof.
| (f) | EXPENSES |
The Executive shall be reimbursed for all reasonable travel and other out-of-pocket expenses actually and properly incurred by the Executive from time to time in connection with carrying out his duties hereunder, in accordance with the Company’s policy from time to time regarding reimbursement of expenses.
| (g) | ENTITLEMENTS AS DIRECTOR |
The Executive shall not be entitled to any annual or meeting directors’ fees (whether payable in cash or deferred share units (DSUs)); provided that the Executive shall be entitled to participate in the Company’s DSU plan for directors as a member of the Board of the Company, for so long as he is a member of the Board.
| (h) | NO OTHER BENEFITS |
Except as otherwise approved by the Board, the Executive will not be entitled to receive any other benefits, including participation in or under any cash or equity based compensation, incentive or other benefit plan that the Company may provide for its employees or officers from time to time.
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| 3. | TERM AND TERMINATION |
| (a) | TERM |
The Executive shall be employed by the Company for an indefinite term, until terminated in accordance with the terms of this agreement.
| (b) | TERMINATION |
This agreement and the Executive’s employment shall terminate in the following events:
| (i) | by mutual agreement of the parties; |
| (ii) | if the Company has cause for termination at common law, the Company may terminate the Executive forthwith, with no notice or payment in lieu of notice, subject only to any amount or benefit to which the Executive is entitled under applicable employment standards legislation in force from time to time; and |
| (iii) | if the Company terminates the Executive without cause for termination at common law, the Executive shall be entitled to the greater of (A) a lump sum amount equivalent to three (3) months’ base salary, plus continuation of medical and extended health care benefit plans for a period of three (3) months, to the extent that the Company can continue such plans at standard premium rates, or (B) notice or pay in lieu of notice, benefits continuation, severance and/or other required payments prescribed under any applicable legislation. |
| (c) | PAYMENTS IN SATISFACTION |
The Executive acknowledges and agrees that the payments provided for in this Section 3 shall be deemed to include any obligation of the Company to provide notice, pay in lieu of notice and severance pay or any other required payments or benefits under any applicable employment standards legislation, shall be net of all applicable deductions and withholdings and shall be in full and final settlement and satisfaction of any and all claims, demands, actions and suits whatsoever which the Executive may claim to have against the Company and its affiliates and their respective officers, directors, employees and their successors and assigns relating to the Executive’s employment with the Company and the termination of the Executive and this agreement by the Company. The Executive further agrees that if requested by the Company, he will execute and deliver a release in favour of the Company and resignations from any position or office that he then holds with the Company or with any affiliate, in each case in a form reasonably acceptable to the Company in exchange for the payments provided for in this Article 3.
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| 4. | COVENANTS OF THE EXECUTIVE |
| (a) | CONFIDENTIALITY |
All confidential records, material and information, and copies thereof, and any and all trade secrets concerning the business or affairs of the Company, or any of its affiliates, obtained by the Executive in the course and by the reason of his employment shall remain the exclusive property of the Company. During the Executive’s employment, and at all times thereafter, the Executive shall not divulge the contents of such confidential records or any of such confidential information or trade secrets to any person other than to the Company’s qualified employees and the Executive shall not, following the termination of his employment hereunder, for any reason use the contents of such confidential records or other confidential information or trade secrets for any purpose whatsoever.
| (b) | NON-SOLICITATION OF EMPLOYEES |
The Executive shall not, at any time during a period of one year following the resignation of the Executive from his employment or following the termination of his employment by the Company, without the prior written consent of the Company, either directly or indirectly, on the Executive’s own behalf or on behalf of others offer employment to or endeavour to entice away from the Company, or any affiliate thereof, any person who is employed by the Company or any such affiliate.
| (c) | NON-SOLICITATION OF CUSTOMERS |
The Executive shall not, at any time during a period of one year following the resignation of the Executive from his employment or following the termination of his employment by the Company, without the prior written consent of the Company, either directly or indirectly, contact any customers of the Company, or any of its affiliates, for the purpose of selling to those customers any products or services which are the same as, or substantially similar to, or competitive with the products and services sold by the Company or any of its affiliates at such date.
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| 5. | GENERAL CONTRACT PROVISIONS |
| (a) | OTHER ENTITLEMENTS |
For the purposes of this agreement, it is agreed that no other notice of termination or related entitlements, express or implied by law, shall apply, subject only to subject only to such minimum entitlements as are prescribed by applicable employment standards legislation.
| (b) | WITHHOLDING |
The payments provided for in this agreement shall be net of all applicable deductions and withholdings.
| (c) | SEVERABILITY |
In the event that any provisions herein or parts thereof shall be deemed void or invalid by a court of competent jurisdiction, the remaining provisions or parts thereof shall be and remain in full force and effect.
| (d) | WHOLE AGREEMENT |
This agreement constitutes and expresses the whole agreement of the parties hereto with reference to the employment of the Executive by the Company. All prior agreements, promises, representations, collateral agreements and understanding relative thereto and not incorporated herein are hereby superseded and cancelled by this agreement.
| (e) | SUCCESSORS and ASSIGNS |
This agreement shall inure to the benefit of and be binding upon the Executive and his heirs and personal representatives and the Company and its successors and assigns. This agreement is personal to the Executive and may not be assigned by him.
[Signature page follows]
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| (f) | APPLICABLE LAW |
This agreement shall be governed by and construed in accordance with the laws of the Province of Ontario.
VITRAN CORPORATION INC.
| Per: | /s/ Georges L. Hébert |
/s/ William S. Deluce | ||||
| Name: Georges L. Hébert Title: Director – Chair of Compensation Committee |
WILLIAM S. DELUCE |
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Exhibit 10.2
Wicklow Consulting Inc.
1 Chestnut Park Rd.
Toronto, Ontario
M4W 1W4
June 17, 2013
Vitran Corporation Inc.
701-185 The West Mall
Toronto, ON
M9C 5L5
Attention: Board of Directors
This letter will confirm and document the consulting arrangement agreed to between Vitran Corporation Inc. (“Vitran”) and Wicklow Consulting Inc. (“Wicklow”) effective April 4, 2013, pursuant to which Wicklow provides consulting services (the “Consulting Services”) to Vitran, including the services of William S. Deluce to serve as Interim President and CEO of Vitran.
The fees payable to Wicklow for the provision of the Consulting Services are $54,807.69 per month, plus HST. Vitran will also reimburse Wicklow for expenses incurred by Wicklow in providing the Consulting Services, in accordance with Vitran’s policies regarding the reimbursement of expenses for consultants.
The fees for the Consulting Services will be paid by Vitran in accordance with invoices submitted by Wicklow. Wicklow will be responsible for any taxes payable in respect of the amounts payable by Vitran for the Consulting Services.
This arrangement may be terminated at any time with the mutual agreement of Wicklow and Vitran, or by either party upon three months prior notice to the other.
Please sign below to confirm your agreement with the foregoing.
Wicklow Consulting Inc.
Per: /s/ William S. Deluce
Name: William S. Deluce
Title: Principal
The foregoing is hereby acknowledged and agreed to.
Vitran Corporation Inc.
Per: /s/ Georges Hébert
Name: Georges L. Hbert
Title: Director – Chair of Compensation Committee