{"id":39823,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/executive-employment-agreement-celestica-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"executive-employment-agreement-celestica-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/executive-employment-agreement-celestica-inc.html","title":{"rendered":"Executive Employment Agreement – Celestica Inc."},"content":{"rendered":"

EXECUTIVE EMPLOYMENT AGREEMENT<\/u><\/strong><\/p>\n

MEMORANDUM OF AGREEMENT amended and restated as of the 26 day of July, 2007.\n<\/p>\n

BETWEEN<\/p>\n

CELESTICA INC.<\/strong>, a corporation incorporated under the
\nlaws of the Province of Ontario
\n(hereinafter called the “Corporation”),<\/p>\n<\/p>\n

OF THE FIRST PART,<\/p>\n

– and –<\/p>\n

CELESTICA INTERNATIONAL INC.<\/strong>,
\na corporation incorporated under the laws of
\nthe Province of Ontario, (hereinafter included as the
\nCorporation),<\/p>\n<\/p>\n

OF THE SECOND PART,<\/p>\n

– and –<\/p>\n

CELESTICA CORPORATION<\/strong>, a Delaware
\nCorporation (hereinafter included as the
\nCorporation)<\/p>\n<\/p>\n

OF THE THIRD PART,<\/p>\n

– and –<\/p>\n

CRAIG H. MUHLHAUSER<\/strong> of Princeton, New Jersey,
\n(hereinafter called the “Executive”),<\/p>\n<\/p>\n

OF THE FOURTH PART.<\/p>\n

WHEREAS the Executive has been appointed as Chief Executive Officer of the
\nCorporation, and the Corporation wishes to continue to retain the services of
\nthe Executive to provide the services hereinafter described and the Executive
\nwishes to continue to provide the Executive153s services to the Corporation as
\nhereinafter set forth;<\/p>\n

AND WHEREAS the Corporation considers the establishment and maintenance of a
\nsound and vital management to be essential to protecting and enhancing the best
\ninterests of the Corporation and its shareholders;<\/p>\n

AND WHEREAS the Executive is a key management executive of the Corporation
\nand is considered by the Corporation and the Board of Directors to be a valued
\nemployee of the Corporation who has acquired outstanding and special skills and
\nabilities and an<\/p>\n

\n

<\/p>\n

extensive background in and knowledge of the Corporation153s business and
\nindustry in which it operates;<\/p>\n

AND WHEREAS the Corporation recognizes the valuable services that the
\nExecutive has provided and is continuing to provide to the Corporation and
\nbelieves that it is reasonable and fair to the Corporation that the Executive
\nreceive fair treatment upon any termination of the Executive153s employment, in
\nthe event of a Change in Control (as hereinafter defined) and upon any
\ntermination of the Executive153s employment during the Change in Control Period
\n(as hereinafter defined);<\/p>\n

AND WHEREAS the Executive also acknowledges that the Executive153s position has
\ngiven and will give the Executive access to confidential information of
\nsubstantial importance to the Corporation, its subsidiaries and their businesses
\nand that the compensation set out in this Agreement is, in part, in
\nconsideration for the covenants set out in Section 13;<\/p>\n

AND WHEREAS the Corporation and the Executive acknowledge that the
\ncompensation and benefits payable hereunder are reasonable having regard to all
\nof the circumstances of the Executive153s employment with the Corporation and
\nhaving regard to executives in similar circumstances in large global companies;\n<\/p>\n

AND WHEREAS the Board (as hereinafter defined) has determined that it would
\nbe in the best interests of the Corporation to induce the Executive to continue
\nin the employ of the Corporation by indicating, among other things, that in the
\nevent of a Change in Control, the Executive would have certain automatic and
\nguaranteed rights;<\/p>\n

NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
\ncovenants and agreements herein contained and for other good and valuable
\nconsideration, the parties agree as follows:<\/p>\n

1.<\/strong> Interpretation<\/strong><\/p>\n<\/p>\n

In this Agreement, unless the context otherwise requires or unless otherwise
\nindicated, the following terms shall have the following meanings, respectively:\n<\/p>\n

(a) “Annual Base Salary” shall have the meaning set out in section 4(a) of
\nthis Agreement;<\/p>\n<\/p>\n

(b) “Board” means the Board of Directors of Celestica Inc.;<\/p>\n<\/p>\n

(c) “Cause” means the occurrence of any of the following:<\/p>\n<\/p>\n

(i) wilful and continued failure by the Executive to substantially perform
\nthe Executive153s duties (other than any such failure resulting from the
\nExecutive153s incapacity due to physical or mental illness or the Executive
\nbecoming Permanently Disabled) after a demand for substantial performance is
\ndelivered in writing to the Executive from the Board, which specifically
\nidentifies the manner in which the Executive has not substantially performed the
\nExecutive153s duties and specifically identifies<\/p>\n<\/p>\n

2<\/p>\n

\n

<\/p>\n

the manner in which such failure might be corrected, granting the Executive a
\nperiod of thirty (30) days in which to effect such correction;<\/p>\n

(ii) wilful engaging by the Executive in gross misconduct which is
\ndemonstrably and materially injurious to the Corporation, monetarily or
\nreputationally;<\/p>\n<\/p>\n

(iii) the conviction of the Executive of a criminal offence involving
\ndishonesty, fraud or other moral turpitude;<\/p>\n<\/p>\n

(iv) the receipt by or on behalf of the Executive or any member of the
\nExecutive153s immediate family (other than in his or her capacity as a shareholder
\nof the Corporation) of any personal profit arising out of or in connection with
\na transaction to which the Corporation is a party without making disclosure to
\nand obtaining the prior written consent of the Corporation;<\/p>\n<\/p>\n

(v) the failure by the Executive to honour the Executive153s fiduciary duties
\nto the Corporation; or,<\/p>\n<\/p>\n

(vi) the failure by the Executive to follow the direct written instructions
\nof the Board, provided that such instructions are not contrary to applicable law
\nor generally accepted moral standards of business conduct,<\/p>\n<\/p>\n

provided that for purpose of subparagraphs (i) and (ii) of this definition,
\nno act or failure to act by the Executive shall be considered “wilful” unless
\ndone or omitted to be done by the Executive in bad faith and without reasonable
\nbelief that the Executive153s action or omission was in the best interests of the
\nCorporation;<\/p>\n

(d) “Change in Control” means the occurrence of any of the following after
\nthe date hereof:<\/p>\n<\/p>\n

(i) the acquisition by any person or entity of beneficial ownership of
\nsecurities of the Corporation which, directly or following conversion or
\nexercise thereof, would entitle the holder thereof to cast more than 50% of the
\nvotes attaching to all securities of the Corporation which may be cast to elect
\ndirectors of the Corporation, other than the additional acquisition of
\nsecurities by a person or entity beneficially owning such number of securities
\non the date hereof;<\/p>\n<\/p>\n

(ii) the consummation of an amalgamation, arrangement, merger or other
\nconsolidation of the Corporation with another corporation or a sale of all or
\nsubstantially all of the assets of the Corporation to another corporation
\npursuant to which, and such that, all the persons who, immediately prior to such
\nconsummation, beneficially owned all of the securities of the Corporation which
\ncould be cast to elect directors of the Corporation, immediately thereafter do
\nnot beneficially own securities of the successor or continuing corporation or
\ncorporation acquiring the assets<\/p>\n<\/p>\n

3<\/p>\n

\n

<\/p>\n

which would entitle such persons, directly or following conversion or
\nexercise thereof, to cast more than 50% of the votes attaching to all securities
\nof such corporation which may be cast to elect directors of that corporation
\n(other than any such amalgamation, arrangement, merger or combination or sale of
\nall or substantially all of the assets which is proposed or initiated, directly
\nor indirectly, by the Executive (other than solely in the Executive153s capacity
\nas an executive or member of the Board acting in the best interests of the
\nCorporation) or any corporation controlled by the Executive); or<\/p>\n

(iii) Incumbent Directors ceasing to constitute a majority of the Board as a
\nconsequence of the solicitation of proxies through a proxy circular by persons
\nother than management;<\/p>\n<\/p>\n

(e) “Change in Control Period” means the Potential Change in Control Period
\nand the three year period after a Change in Control;<\/p>\n<\/p>\n

(f) “Corporation” shall have the meaning first set forth above;<\/p>\n<\/p>\n

(g) “CSUP” means the Celestica Share Unit Plan made as of December 9, 2004 as
\namended from time to time;<\/p>\n<\/p>\n

(h) “Date of Grant” shall have the meaning given to such term in the LTIP;\n<\/p>\n<\/p>\n

(i) “Date of Termination” means the date of termination of the employment of
\nthe Executive by the Corporation or the date on which the Executive provides
\nnotice to the Corporation of the termination of the Executive153s employment for
\nGood Reason or Good Reason upon Change in Control and for greater certainty, any
\nsuch date of termination shall be considered to be the last date on which the
\nExecutive is actively at work and shall not be considered to extend to a later
\ndate by virtue of any statutory, contractual or common law notice period;<\/p>\n<\/p>\n

(j) “Employment Period” shall have the meaning set out in section 12(b) of
\nthis Agreement;<\/p>\n<\/p>\n

(k) “Executive” shall have the meaning first set forth above;<\/p>\n<\/p>\n

(l) “Good Reason” for the termination by the Executive of the Executive153s
\nemployment shall mean the occurrence (without the Executive153s express written
\nconsent) of any one of the following acts by the Corporation, or failure by the
\nCorporation to act, unless, in the case of any act or failure to act described
\nin subsection (i), (v), (vi) or (viii) below, such act or failure to act is
\ncorrected prior to the Date of Termination:<\/p>\n<\/p>\n

(i) the assignment to the Executive of any duties inconsistent in any
\nmaterial adverse respect with the Executive153s position, authority, duties or
\nresponsibilities as they exist immediately prior to the time of such assignment
\nor the diminution or adverse alteration in any material<\/p>\n<\/p>\n

4<\/p>\n

\n

<\/p>\n

adverse respect of such position, authority, duties or responsibilities,
\nexcluding, for this purpose, an isolated, insubstantial and inadvertent action
\nnot taken in bad faith and which is remedied by the Corporation promptly after
\nreceipt of notice thereof given by Executive;<\/p>\n

(ii) any reduction in the Executive153s rate of Annual Base Salary, or any
\nreduction in the Executive153s total cash and stock compensation opportunities,
\nincluding Annual Base Salary and incentives, for any fiscal year to less than
\n100% of the total cash and stock compensation opportunities made available to
\nthe Executive immediately prior to the time of such reduction, except a
\nreduction applicable to all executives as determined by the Board in good faith
\nand consistent with past practice and current market conditions or failure by
\nthe Corporation to provide the Executive with total cash and stock compensation
\nopportunities in accordance with any agreement between the Executive and the
\nCorporation;<\/p>\n<\/p>\n

(iii) the relocation of the Executive153s principal place of employment to a
\nlocation more than 100 kilometres outside the City of Toronto except for
\nrequired travel on the Corporation153s business to an extent substantially
\nconsistent with the Executive153s present business travel obligations;<\/p>\n<\/p>\n

(iv) the failure by the Corporation to pay to the Executive any portion of
\nthe Executive153s current compensation within seven days of the date such
\ncompensation is due;<\/p>\n<\/p>\n

(v) the failure by the Corporation to continue to effect any compensation
\nplan in which the Executive participates immediately prior to the time of such
\nfailure which is material to the Executive153s total compensation, unless an
\nequitable arrangement (embodied in an ongoing substitute or alternative plan)
\nhas been made with respect to such plan, or the failure by the Corporation to
\ncontinue the Executive153s participation therein (or in such substitute or
\nalternative plan) on a basis not materially less favourable, both in terms of
\nthe amount or timing of payment of benefits provided and the level of the
\nExecutive153s participation relative to other participants, as existed immediately
\nprior to the time of such failure;<\/p>\n<\/p>\n

(vi) save and except where the Corporation implements a change to the
\nbenefits referred to in this paragraph that applies to all of the Corporation153s
\nemployees in receipt of the benefit as determined by the Board in good faith and
\nconsistent with past practice and current market conditions, the failure by the
\nCorporation to continue to provide the Executive with benefits substantially
\nsimilar to those enjoyed by the Executive under any of the Corporation153s
\npension, life insurance, medical, dental, health and accident or disability
\nplans, programs or arrangements in which the Executive is participating
\nimmediately prior to the time of such failure or the taking of any other action
\nby the<\/p>\n<\/p>\n

5<\/p>\n

\n

<\/p>\n

Corporation which would directly or indirectly materially reduce any of such
\nbenefits or deprive the Executive of any material fringe benefit enjoyed by the
\nExecutive immediately prior to the time of the taking of such action, or the
\nfailure by the Corporation to continue to provide the Executive with the number
\nof paid vacation days to which the Executive is entitled on the basis of years
\nof service with the Corporation in accordance with the Corporation153s normal
\nvacation policy in effect immediately prior to the time of such failure;<\/p>\n

(vii) the failure by the Corporation to obtain the assumption of the
\nagreement to perform this Agreement by any successor as contemplated in Section
\n27 hereof;<\/p>\n<\/p>\n

(viii) any other purported termination by the Corporation of the Executive153s
\nemployment other than for Cause.<\/p>\n<\/p>\n

(m) “Good Reason Upon A Change in Control” for the termination by the
\nExecutive of the Executive153s employment shall mean:<\/p>\n<\/p>\n

(i) the occurrence of any of the acts or failure to act of the Corporation
\nset out in Section 1(l)(i) through (viii) inclusive, unless, in the case of any
\nact or failure to act described in Section 1(l)(i), (v), (vi) or (viii), such
\nact or failure to act is corrected prior to the Date of Termination, where such
\nacts or failure to act occurs during the Change in Control Period; or<\/p>\n<\/p>\n

(ii) any breach of this Agreement by the Corporation during the Change in
\nControl Period;<\/p>\n<\/p>\n

(n) “Incumbent Director” means any member of the Board who was a member of
\nthe Board immediately prior to the occurrence of a transaction, transactions or
\nelections giving rise to a Change in Control (other than a transaction approved
\nby the Board) and any successor to an Incumbent Director who is recommended or
\nelected or appointed to succeed an Incumbent Director by the affirmative vote of
\na majority of the Incumbent Directors then on the Board;<\/p>\n<\/p>\n

(o) “LTIP” means the Corporation153s Long-Term Incentive Plan made as of June
\n28, 1998, as amended and restated as of October 16, 2002, and as may be further
\namended from time to time;<\/p>\n<\/p>\n

(p) “Option” means an option to purchase shares in the capital of the
\nCorporation granted under the LTIP and\/or any other future plans;<\/p>\n<\/p>\n

(q) “Performance-Contingent Option” means an option granted under the LTIP
\nand\/or any other future plans, the vesting of which is determined in accordance
\nwith the achievement of performance targets established by the Board of
\nDirectors at the time of the grant of the option;<\/p>\n<\/p>\n

6<\/p>\n

\n

<\/p>\n

(r) “Permanently Disabled” shall have the meaning set out in section 12(b) of
\nthis Agreement;<\/p>\n<\/p>\n

(s) “Potential Change in Control” shall be deemed to have occurred if any one
\nof the following occurs:<\/p>\n<\/p>\n

(i) the Corporation enters into a binding agreement, the consummation of
\nwhich would result in the occurrence of a Change in Control;<\/p>\n<\/p>\n

(ii) the Corporation publicly announces an intention to take or to consider
\ntaking action which, if consummated, would constitute a Change in Control; or\n<\/p>\n<\/p>\n

(iii) the Board adopts a resolution to the effect that, for purposes of this
\nAgreement, a Potential Change in Control has occurred;<\/p>\n<\/p>\n

(t) “Potential Change in Control Period” shall commence upon the occurrence
\nof a Potential Change in Control and shall lapse immediately following the first
\nto occur of:<\/p>\n<\/p>\n

(i) a Change in Control; or<\/p>\n<\/p>\n

(ii) the first anniversary of the occurrence of a Potential Change in
\nControl;<\/p>\n<\/p>\n

(u) “Right” means a stock appreciation right and includes stock appreciation
\nrights granted under the LTIP and\/or any other future plans;<\/p>\n<\/p>\n

(v) “RSUs” means, as applicable in the circumstances, Performance Units
\ngranted under the LTIP or the CSUP, Restricted Share Units granted under the
\nCSUP and, any share units or similar rights granted or issued under any other
\nplan providing for equity or equity-based incentives or compensation other than
\nthe ESPO Plan or Options;<\/p>\n<\/p>\n

(w) “RSU Rights” shall mean the Executive153s entitlements and rights under and
\ndetermined in accordance with CSUP, the LTIP, or other applicable plan or
\narrangement, or failing such provisions, in accordance with the terms in respect
\nof the change in control or termination set out in the Board resolution
\nauthorizing the grant of such incentive or compensation, or such other, more
\nfavourable terms, that the Board, acting in its discretion, may determine;<\/p>\n<\/p>\n

(x) “Section 409A” shall mean Section 409A of the United States Internal
\nRevenue Code and all regulations thereunder;<\/p>\n<\/p>\n

(y) “Shares” shall have the meaning given to such term in the LTIP;<\/p>\n<\/p>\n

(z) “Target Bonus” means one hundred (100%) of the Executive153s Annual Base
\nSalary or such higher percentage of the Executive153s Annual Base Salary as may be
\napproved by the Board from time to time;<\/p>\n<\/p>\n

7<\/p>\n

\n

<\/p>\n

(aa) “Trade Secrets” shall have the meaning set out in section 14(a) of this
\nAgreement;<\/p>\n<\/p>\n

(bb) “USIRC” means the Internal Revenue Code of 1986 of the United States of
\nAmerica or any successor statute of the United States of America, as either may
\nbe amended from time to time (any reference to a particular Section of the USIRC
\nincludes any comparable provision of the Internal Revenue Code of 1986 of the
\nUnited States of America or any such successor statute that may be enacted after
\nthe date of this Agreement); and,<\/p>\n<\/p>\n

(cc) “Year” shall have the meaning given to such term in the LTIP.<\/p>\n<\/p>\n

2.<\/strong> Position – Capacity and Services<\/strong><\/p>\n<\/p>\n

The Executive shall continue to serve the Corporation and any subsidiaries of
\nthe Corporation in such capacity or capacities and shall perform such duties and
\nexercise such powers pertaining to the management and operation of the
\nCorporation and any subsidiaries and associates of the Corporation (as those
\nterms are defined in the Business Corporations Act (Ontario)) as may be
\ndetermined from time to time by the Board consistent with the office of the
\nExecutive. It is acknowledged and agreed that the duties and responsibilities of
\nthe Executive may be adjusted from time to time by the Board as the Board may
\ndetermine to be appropriate in light of growth and other changes in the business
\nand affairs of the Corporation and its subsidiaries and associates (but not in
\nsuch a manner as would constitute Good Reason or Good Reason upon a Change in
\nControl). Without limitation of the foregoing, the Executive shall occupy the
\noffice of Chief Executive Officer and shall:<\/p>\n

(a) devote all of the Executive153s business time and attention and the
\nExecutive153s best efforts to the business and affairs of the Corporation,
\nprovided however, that, in addition to the two boards of directors on which the
\nExecutive serves on the date hereof disclosed to the Corporation, the Executive
\nmay serve as a member of a board of directors of an entity if the Board, or an
\nappropriate committee thereof, determines in its sole discretion that such
\nmembership is not averse to the interests of the Corporation;<\/p>\n<\/p>\n

(b) perform those duties that may reasonably be assigned to the Executive
\ndiligently and faithfully to the best of the Executive153s abilities and in the
\nbest interests of the Corporation; and<\/p>\n<\/p>\n

(c) use the Executive153s best efforts to promote the interests and goodwill of
\nthe Corporation.<\/p>\n<\/p>\n

3.<\/strong> Reporting Procedures<\/strong><\/p>\n<\/p>\n

The Executive shall report to the Board. The Executive shall report fully to
\nthe Board on the Executive153s scope of responsibility and advise to the best of
\nthe Executive153s ability and in accordance with reasonable business standards on
\nbusiness matters that may arise within such scope of responsibility from time to
\ntime.<\/p>\n

8<\/p>\n

\n

<\/p>\n

4.<\/strong> Remuneration<\/strong><\/p>\n<\/p>\n

(a) Annual Base Salary<\/u><\/strong>. The annual base salary (the
\n“Annual Base Salary”) payable to the Executive for the Executive153s services
\nhereunder for the term of this Agreement shall be as determined by the Board
\nfrom time to time, and shall be exclusive of bonuses, benefits and other
\ncompensation. The Annual Base Salary shall be payable in equal bi-monthly
\ninstalments in arrears in accordance with existing practice, or in such other
\nmanner as may be mutually agreed upon, less, in any case, any deductions or
\nwithholdings required by law.<\/p>\n<\/p>\n

(b) Additional Remuneration and Benefits<\/u><\/strong>. The
\nCorporation shall provide the Executive with employee benefits comparable to
\nthose provided by the Corporation from time to time to other senior executive
\nofficers of the Corporation and shall permit the Executive to participate in any
\nbonus plan, incentive plan, share option plan, share purchase plan, retirement
\nplan, or similar plan offered by the Corporation from time to time to its senior
\nexecutive officers in the manner and to the extent authorized by the Board. Such
\nbenefits shall include the lease of a car for the Executive153s use of a type as
\nis reasonable in the circumstances.<\/p>\n<\/p>\n

(c) “Most Favoured Nation”<\/u><\/strong>. The Executive understands
\nthat no employee of the Corporation has or will have remuneration as described
\nin this section 4 which is greater than or superior to the Executive153s and
\nshould the Corporation decide to commit to better terms with a future executive,
\nit will review and where necessary to achieve the intent of this section 4(c),
\nadjust the Executive153s remuneration package.<\/p>\n<\/p>\n

5.<\/strong> Salary and Bonus Adjustments<\/strong><\/p>\n<\/p>\n

(a) The Board shall review the compensation arrangements relating to the
\nExecutive at least once per calendar year, including the Annual Base Salary, any
\nexecutive bonus and any incentive plan(s) applicable to the Executive.<\/p>\n<\/p>\n

6.<\/strong> Additional Payments<\/strong><\/p>\n<\/p>\n

(a) Rental and Commuting Expenses<\/u><\/strong>. The Corporation
\nshall either reimburse the Executive for the reasonable rental costs incurred by
\nthe Executive for the Executive153s rental accommodations in Toronto or lease an
\napartment for the Executive153s use. The Corporation shall reimburse the Executive
\nfor the Executive153s reasonable costs incurred by the Executive in travelling to
\nand from the Executive153s permanent residence. The Executive shall submit an
\nexpense report together with supporting documentation as required under the
\nCorporation153s normal procedures for the submission of expense reports or such
\nother documentation as may be requested by the Corporation from time to time.
\nThe Executive shall have the ability to use the Corporation153s chartered airplane
\nfor business purposes.<\/p>\n<\/p>\n

(b) Tax Equalization<\/u><\/strong>.<\/p>\n<\/p>\n

(i) The Corporation agrees to “equalize” the Executive153s tax position on an
\nannual basis such that the Executive will not bear more tax on an annual basis
\nthan he would bear if he were earning his total compensation in the United
\nStates. To accomplish such equalization, the actual combined United States and
\nCanadian tax (including social security and state and<\/p>\n<\/p>\n

9<\/p>\n

\n

<\/p>\n

local taxes) paid each quarter by the Executive on his total compensation
\n(including any taxable benefits, such as, for example, any housing or commuting
\ncosts and any tax equalization payments made pursuant to this clause or clause
\n(c) or (d) below in such year) (the “actual tax”) will be compared to the
\n“theoretical U.S. tax” (defined below), and the Corporation will reimburse the
\nExecutive for the excess of the actual tax over the theoretical U.S. tax. The
\nparties acknowledge that the quarterly tax equalization calculation will be an
\nestimated tax calculation and that a reconciliation tax equalization calculation
\nwill be done on an annual basis. In the event that pursuant to such
\nreconciliation tax equalization calculation the theoretical U.S. tax is in
\nexcess of the actual tax on an annual basis, the Corporation will be credited
\nwith such excess to be applied by the Corporation against the Corporation153s
\nfuture obligations to the Executive, pursuant to this Agreement or otherwise.\n<\/p>\n

(ii) An estimated tax equalization calculation shall be made within sixty
\n(60) days of any resignation of employment by the Executive or any termination
\nof the Executive153s employment by the Corporation. In the event that, pursuant to
\nsuch estimated equalization tax calculation, (a) the actual tax is in excess of
\nthe theoretical U.S. tax, the Corporation will reimburse the Executive for such
\nexcess; and (b) if the theoretical tax is in excess of the actual tax, the
\nExecutive shall repay such excess to the Corporation by: (i) the Corporation
\ndeducting such excess from any monies payable to the Executive by the
\nCorporation pursuant to this Agreement or otherwise; and (ii) if such excess is
\nnot repaid in full under (i), the Executive shall make payment of the remaining
\nbalance within sixty (60) days of the date of the estimated equalization tax
\ncalculation. A final tax equalization calculation shall be made by March 31 in
\nthe year following the year in which the Executive resigned his employment or
\nthe Executive153s employment was terminated by the Corporation. The Executive will
\nreimburse the Corporation the necessary amount if the estimated tax equalization
\ncalculation is greater than the final tax equalization calculation. The
\nCorporation will reimburse the Executive the necessary amount if the estimated
\ntax equalization calculation is less than the final tax equalization
\ncalculation. Any payment required to be made pursuant to the final tax
\nequalization calculation shall be made on or before April 30 in the year in
\nwhich the final tax equalization calculation is made.<\/p>\n<\/p>\n

(iii) The “theoretical U.S. tax” will be calculated based on the total
\ncompensation (as per the above) received by the Executive, assuming the
\nExecutive is a resident of the U.S. and that his compensation was earned from
\nservices performed there and assuming that the payments provided for in (a) and
\n(d) in this Section are not taxable benefits to the Executive. Federal, state
\nand any local taxes will be included in the calculation, as will social security
\ncontributions. The state tax rate will be that applicable in the state of the
\nExecutive153s current residence (or last<\/p>\n<\/p>\n

10<\/p>\n

\n

<\/p>\n

residence, if no longer a resident of any state). For the purposes of
\ndetermining exemptions and deductions, this calculation will take into account
\nthe Executive153s actual personal\/marital status.<\/p>\n

(c) Foreign Exchange Recalculation and Adjustment<\/u><\/strong>.\n<\/p>\n<\/p>\n

(i) The Executive153s Annual Base Salary is in American dollars and shall be
\npaid in Canadian dollars. The Corporation shall ensure that the amount paid to
\nthe Executive in Canadian dollars is equal to the Executive153s Annual Base Salary
\nin American dollars by conducting, on a quarterly basis, a foreign exchange
\nrecalculation. Such recalculation will be done on the basis of determining the
\naverage daily exchange rate for each month in the quarter, and applying such
\nrate to the amount of the Annual Base Salary payable for each month in the
\nquarter. In the event that such a recalculation results in the Executive having
\nbeen paid less than his Annual Base Salary for such quarter year, the
\nCorporation shall make payment to the Executive of the difference. In the event
\nthat such recalculation results in the Executive having been paid more than his
\nAnnual Base Salary for such quarter year, the Corporation shall be credited with
\nsuch excess amount to be applied by the Corporation against the Corporation153s
\nfuture obligations to the Executive pursuant to this Agreement or otherwise. A
\nfinal foreign exchange recalculation shall be made within sixty (60) days of any
\nresignation of employment by the Executive or any termination of the Executive153s
\nemployment by the Corporation. In the event that, pursuant to the final foreign
\nexchange recalculation, (a) the Executive has been paid less than his Annual
\nBase Salary (pro-rated to such date of resignation or termination), the
\nCorporation shall make payment to the Executive of the difference; and, (b) the
\nExecutive has been paid more than his Annual Base Salary (pro-rated to such date
\nof resignation or termination), the Executive shall repay such excess to the
\nCorporation by: (i) the Corporation deducting such excess from any monies
\npayable to the Executive by the Corporation pursuant to this Agreement or
\notherwise; and (ii) if such excess is not repaid in full under (i), the
\nExecutive shall make payment of the remaining balance within sixty (60) days of
\nthe date of the final foreign exchange recalculation.<\/p>\n<\/p>\n

(ii) The Corporation shall also ensure that the amount paid to the Executive
\nin Canadian dollars for payments under sections 13(c)(i) and (d)(i) is equal to
\nthe Executive153s entitlement in American dollars, by recalculating such amount
\nbased on the foreign exchange rate on the seventh business day preceding the
\nnormal payroll processing date of the Corporation and its applicable subsidiary
\non which such payments are made.<\/p>\n<\/p>\n

(d) Income Tax Return<\/u><\/strong>. The Corporation will pay the
\nfees incurred by the Executive for the preparation and filing of the Executive153s
\nannual income tax return and the<\/p>\n<\/p>\n

11<\/p>\n

\n

<\/p>\n

calculation of any quarterly tax instalments for each year of the Executive153s
\nemployment with the Corporation.<\/p>\n

7.<\/strong> Vacation<\/strong><\/p>\n<\/p>\n

The Executive shall be entitled to paid vacation in each fiscal year of the
\nCorporation in accordance with the Corporation153s vacation policy for employees
\nof the Corporation (including the Executive) that is currently in effect, as it
\nmay change from time to time, provided such vacation shall in no event be less
\nthan four (4) weeks. In the event that the Executive decides not to take all the
\nvacation to which the Executive is entitled in any fiscal year, the Executive153s
\nentitlement to take any such vacation in the next following fiscal year shall be
\ndetermined in accordance with the Corporation153s vacation policy for employees of
\nthe Corporation (including the Executive) in effect from time to time.<\/p>\n

8.<\/strong> Expenses<\/strong><\/p>\n<\/p>\n

The Executive shall be reimbursed for all reasonable travel and out-of-pocket
\nexpenses actually and properly incurred by the Executive from time to time in
\nconnection with carrying out the Executive153s duties hereunder. For all such
\nexpenses the Executive shall furnish to the Corporation originals of all
\ninvoices, receipts or statements in respect of which the Executive seeks
\nreimbursement as and when required by the Corporation153s normal procedures for
\nthe submission of expense reports by employees of the Corporation.<\/p>\n

9.<\/strong> Relocation<\/strong><\/p>\n<\/p>\n

The location at which the Executive shall normally be required to attend for
\nthe purposes of performing his employment duties shall not, without the prior
\nconsent of the Executive, be located more than 100 kilometres outside the City
\nof Toronto, except that this provision shall not be taken to limit the
\nobligation of the Executive to undertake such reasonable business travel from
\ntime to time as is concomitant with the duties and office of the Executive.<\/p>\n

10.<\/strong> Continuation of Employment upon a Change in
\nControl<\/strong><\/p>\n<\/p>\n

Upon a Change in Control, the Corporation agrees to continue the Executive in
\nits employ, in accordance with the terms and provisions of this Agreement, on
\nthe same terms and conditions which were in effect immediately prior to the
\nChange in Control or on such other terms as may be subsequently agreed upon in
\nwriting between the Corporation and the Executive.<\/p>\n

11.<\/strong> Vesting of Options, Stock Appreciation Rights,
\nPerformance-Contingent Options and RSU Rights<\/strong><\/p>\n<\/p>\n

(a) Options and Stock Appreciation Rights<\/u><\/strong>. Upon a
\nChange in Control or upon termination of the Executive153s employment without
\ncause during the Change in Control Period or termination by the Executive of the
\nExecutive153s employment for Good Reason during the Change in Control Period, all
\nunvested and unexercised Options and Rights granted to the Executive shall vest
\nimmediately and shall become exercisable in accordance with the terms of each
\nsuch Option or Right or the plan governing each such Option or Right.<\/p>\n<\/p>\n

12<\/p>\n

\n

(b) Performance-Contingent Options<\/u><\/strong>. Upon a Change in
\nControl or upon termination of the Executive153s employment without cause during
\nthe Change in Control Period or voluntary termination by the Executive of the
\nExecutive153s employment for Good Reason during the Change in Control Period, all
\nunvested and unexercised Performance-Contingent Options granted to the Executive
\nshall become eligible for vesting and shall vest immediately, the extent of such
\nvesting to occur in accordance with the terms governing vesting on Change of
\nControl set out in the Board resolution authorizing the grant of such
\nPerformance Contingent Options or such other more favourable terms as the Board,
\nacting in its discretion, may determine and shall become exercisable in
\naccordance with the terms of each such Performance-Contingent Option or the plan
\ngoverning each such Performance-Contingent Options.<\/p>\n

(c) RSU Rights<\/u><\/strong>. Upon a Change in Control or upon
\ntermination of the Executive153s employment without cause during the Change in
\nControl Period or termination by the Executive of the Executive153s employment for
\nGood Reason during the Change in Control Period, the change of control
\nprovisions of the RSUs shall be deemed to be triggered and the Executive shall
\nbe entitled to the Executive153s RSU Rights in respect thereto.<\/p>\n

12.<\/strong> Termination<\/strong><\/p>\n<\/p>\n

(a) Termination for Cause<\/u><\/strong>. The Corporation may
\nterminate the employment of the Executive for Cause without notice or any
\npayment in lieu of notice.<\/p>\n

(b) Termination on Disability or Death<\/u><\/strong>. The
\nExecutive153s employment hereunder may be immediately terminated by the
\nCorporation by notice to the Executive if the Executive becomes permanently
\ndisabled (“Permanently Disabled”). The Executive shall be deemed to have become
\nPermanently Disabled if in any year during the period of the Executive153s
\nemployment with the Corporation pursuant hereto (the “Employment Period”),
\nbecause of ill health, physical or mental disability, or for other causes beyond
\nthe control of the Executive, the Executive has been continuously unable or
\nunwilling or has failed to perform the Executive153s duties for 120 consecutive
\ndays, or if, during any year of the Employment Period, the Executive has been
\nunable or unwilling or has failed to perform the Executive153s duties for a total
\nof 180 days, consecutive or not. The term “any year of the Employment Period”
\nmeans any period of 12 consecutive months during the Employment Period. This
\nAgreement shall terminate automatically without notice upon the death of the
\nExecutive.<\/p>\n

(c) Resignation by the Executive<\/u><\/strong>. The Executive may
\nresign the Executive153s employment with the Corporation at any time upon giving
\nsixty (60) days153 written notice to the Corporation. The Corporation may waive
\nsuch notice in whole or in part. If the Executive resigns the Executive153s
\nemployment, the Corporation shall have no further obligations or
\nresponsibilities hereunder to the Executive except for any rights accrued or
\nvested prior to the effective date of resignation.<\/p>\n

13.<\/strong> Severance Payments and Entitlements<\/strong><\/p>\n<\/p>\n

(a) Termination for Cause<\/u><\/strong>. Upon termination of the
\nExecutive153s employment for Cause as described in section 12(a), the Executive
\nshall not be entitled to any payments other than the unpaid Annual Base Salary
\nearned by the Executive before the Date of Termination<\/p>\n

13<\/p>\n

\n

<\/p>\n

calculated pro rata<\/em> up to and including the Date of Termination
\ntogether with any payment for notice or severance to which the Executive is
\nentitled under the applicable employment legislation in force from time to time.
\nThe Executive153s Options, Performance Contingent Options and Rights granted under
\nthe LTIP and any RSUs terminate effective the Date of Termination and may not be
\nexercised thereafter, except for any rights accrued or vested prior to the Date
\nof Termination.<\/p>\n

(b) Termination on Disability or Death<\/u><\/strong>. Upon
\ntermination of the Executive153s employment by reason of the Executive becoming
\nPermanently Disabled or on the death of the Executive as described in section
\n12(b), except as otherwise provided under the ESPO Plan, the LTIP, the RSU
\nRights or under the Corporation153s applicable incentive plans, life insurance,
\npension plan, medical, dental, health and accident and disability plans and
\npension and retiree benefit plans, the Executive or, in the case of death, the
\nExecutive153s family, shall not be entitled to receive any payments other than the
\nunpaid Annual Base Salary earned by the Executive to the date of the Executive
\nbecoming Permanently Disabled or the date of the Executive153s death and, in the
\nevent of the Executive153s death or Permanent Disability, the pro-rata portion, of
\nthe Executive153s annual Target Bonus for the year in which the Executive153s death
\nor Permanent Disability occurs. In the case of Permanent Disability, all such
\npayments shall be made in a single lump sum thirty (30) days after the
\nExecutive153s employment terminates because of such Permanent Disability.
\nNotwithstanding the foregoing, nothing in this provision shall affect the
\nExecutive153s right to claim or receive death or disability benefits provided for
\nin section 4(b) of this Agreement.<\/p>\n

(c) Termination without Cause or for Good Reason<\/u><\/strong>.
\nUpon (i) termination of the Executive153s employment without Cause, or (ii) the
\nExecutive153s termination of his employment for Good Reason:<\/p>\n

(i) the Executive shall be entitled to receive, and the Corporation shall pay
\nto the Executive, within 60 days of the Date of Termination, in lieu of notice
\nof termination, the aggregate of the following amounts (less any deductions
\nrequired by law):<\/p>\n<\/p>\n

(A) if not theretofore paid, that portion of the Annual Base Salary earned by
\nor payable to the Executive during the then current fiscal year of the
\nCorporation for the period to and including the Date of Termination, together
\nwith all benefits, excluding the additional payments provided for in Section 6
\nof this Agreement, payable to the Executive through to and including the Date of
\nTermination under the terms of the Corporation153s benefit plans, programs or
\narrangements as in effect immediately prior to the Date of Termination;<\/p>\n<\/p>\n

(B) a pro rated portion of the Executive153s annual bonus, determined on the
\nbasis of the expected financial results for the fiscal year in which the Date of
\nTermination occurs, (without reference to or inclusion of personal performance
\nfactors but with reference to or inclusion of relative performance factors),
\ncalculated by<\/p>\n<\/p>\n

14<\/p>\n

\n

<\/p>\n

multiplying (1) the bonus amount as so determined by (2) a fraction, the
\nnumerator of which is the number of days in the applicable fiscal year through
\nto and including the Date of Termination and the denominator of which is 365;
\nand<\/p>\n

(C) a lump sum payment in cash equal to two times the sum of (1) the Annual
\nBase Salary at the Date of Termination, and (2) the simple average of the annual
\nbonus determined for the Executive for the two prior completed fiscal years of
\nthe Corporation;<\/p>\n<\/p>\n

(ii) the Executive shall be entitled to receive, and the Corporation shall
\npay to the Executive, within 60 days of the Date of Termination, a cash payment
\nwhich on an after-tax basis is in an amount equal to the then estimated net
\npresent value (as determined by the Board, acting reasonably, assuming that the
\nExecutive would be employed by the Corporation for the ensuing two years and
\nusing as a discount rate the Corporation153s cost of funds under its principal
\nbank working capital credit lines) of all life insurance, medical, dental,
\nhealth and accident and disability plans, programs or arrangements in which the
\nExecutive was entitled to participate immediately prior to the Date of
\nTermination, excluding the additional payments provided for in Section 6 of this
\nAgreement, (or in the case of termination by the Executive for Good Reason upon
\nor following a Change in Control as a result of a reduction in benefits, if more
\nfavourable to the Executive, such coverage and terms as were in effect
\nimmediately prior to the Change in Control) and assuming costs paid by the
\nExecutive no greater than that which the Executive would have paid while
\nemployed for the two-year period following the Date of Termination;<\/p>\n<\/p>\n

(iii) those Options, Performance-Contingent Options and Rights granted to the
\nExecutive that would have otherwise vested and become exercisable during the
\ntwelve-week period following the Date of Termination shall vest and become
\nexercisable during such twelve-week period in accordance with their terms and,
\ntogether with any Options, Performance-Contingent Options and Rights that vested
\nprior to the Date of Termination, shall terminate and may not be exercised after
\nthe earlier of 30 days after the expiry of such twelve week period and the
\noriginal expiry date of such Option, Performance-Contingent Option or Right;<\/p>\n<\/p>\n

(iv) RSUs which are not subject to performance conditions as to vesting shall
\nvest immediately on a pro rata basis based on the number of full years (with no
\ncredit for partial years) of employment completed between the date of grant and
\nthe termination of employment, and unvested RSUs which are subject to
\nperformance conditions as to vesting shall be forfeited and cancelled; and<\/p>\n<\/p>\n

15<\/p>\n

\n

<\/p>\n

(v) the Corporation shall contribute to the Executive153s defined contribution
\npension plan and to its Supplementary Executive Retirement Plan with the
\nCorporation an amount equal to the then estimated net present value (as
\ndetermined by the Board acting reasonably, assuming that the Executive would be
\nemployed by the Corporation for the ensuing three years and using as a discount
\nrate the Corporation153s cost of funds under its principal bank working capital
\ncredit lines) of the Corporation153s pension contributions for the Executive under
\neach such plan for the three year period following the Date of Termination.<\/p>\n<\/p>\n

(d) Termination During the Change in Control Period or for Good
\nReason During the Change in Control Period<\/u><\/strong>. Upon (i) termination of
\nthe Executive153s employment by the Corporation during the Change in Control
\nPeriod other than for Cause, or (ii) termination by the Executive of the
\nExecutive153s employment for Good Reason upon a Change in Control during the
\nChange in Control Period:<\/p>\n<\/p>\n

(i) in lieu of notice, the Corporation shall pay to the Executive the
\naggregate of the following amounts (less any deductions required by law), within
\n60 days of the Date of Termination:<\/p>\n<\/p>\n

(A) if not theretofore paid, that portion of the Annual Base Salary earned by
\nor payable to the Executive during the then current fiscal year of the
\nCorporation for the period to and including the Date of Termination, together
\nwith all benefits, including the additional payments provided for in Section 6
\nof this Agreement, payable to the Executive through to and including the Date of
\nTermination under the terms of the Corporation153s benefit plans, programs or
\narrangements as in effect immediately prior to the Date of Termination;<\/p>\n<\/p>\n

(B) a pro rated portion of the Executive153s annual bonus, determined on the
\nbasis of the expected financial results for the fiscal year in which the Date of
\nTermination occurs, (with reference to and inclusion of personal performance
\nfactors but without reference to or inclusion of relative performance factors),
\ncalculated by multiplying (1) the bonus amount as so determined by (2) a
\nfraction, the numerator of which is the number of days in the applicable fiscal
\nyear through to and including the Date of Termination and the denominator of
\nwhich is 365; and<\/p>\n<\/p>\n

(C) a lump sum payment in cash equal to three times the sum of (x) the Annual
\nBase Salary at the Date of Termination, and (y) the simple average of the annual
\nbonus determined for the Executive for the three prior completed fiscal years of
\nthe Corporation;<\/p>\n<\/p>\n

(ii) the Executive shall be entitled to receive, and the Corporation shall
\npay to the Executive, within 60 days of the Date of Termination, a cash<\/p>\n<\/p>\n

16<\/p>\n

\n

<\/p>\n

payment which, on an after-tax basis, is in an amount equal to the then
\nestimated net present value (as determined by the Board, acting reasonably,
\nassuming that the Executive would be employed by the Corporation for the ensuing
\nthree years and using as a discount rate the Corporation153s cost of funds under
\nits principal bank working capital credit lines) of all life insurance, medical,
\ndental, health and accident and disability plans, programs or arrangements in
\nwhich the Executive was entitled to participate immediately prior to the Date of
\nTermination, excluding the additional payments provided for in Section 6 of this
\nAgreement, (or in the case of termination by the Executive for Good Reason upon
\nor following a Change in Control as a result of a reduction in benefits, if more
\nfavourable to the Executive, such coverage and terms as were in effect
\nimmediately prior to the Change in Control) and assuming costs paid by the
\nExecutive no greater than that which the Executive would have paid while
\nemployed for the three-year period following the Date of Termination;<\/p>\n

(iii) all Options and Rights vest pursuant to section 11(a) hereof and shall
\nbe exercisable for the remainder of the term to expiry of each such Option or
\nRight;<\/p>\n<\/p>\n

(iv) all unvested and unexercised Performance-Contingent Options vest
\npursuant to section 11(b) hereof and shall be exercisable for the remainder of
\nthe term to expiry of each such Performance-Contingent Option;<\/p>\n<\/p>\n

(v) unvested RSUs which are not subject to performance conditions to vesting
\nshall immediately fully vest in such event, and RSUs which are subject to
\nperformance conditions as to vesting shall vest at the median (target) level of
\nperformance unless the Board resolution authorizing the grant provides
\notherwise; and,<\/p>\n<\/p>\n

(vi) the Corporation shall contribute to the Executive153s defined contribution
\npension plan and to its Supplementary Executive Retirement Plan with the
\nCorporation an amount equal to the then estimated net present value (as
\ndetermined by the Board acting reasonably, assuming that the Executive would be
\nemployed by the Corporation for the ensuing three years and using as a discount
\nrate the Corporation153s cost of funds under its principal bank working capital
\ncredit lines) of the Corporation153s pension contributions for the Executive under
\neach such plan for the three year period following the Date of Termination.<\/p>\n<\/p>\n

(e) Notice of Termination by the Executive for Good Reason or Good
\nReason upon a Change in Control<\/u><\/strong>. Any termination of employment by
\nthe Executive for Good Reason or for Good Reason upon a Change in Control shall:
\nbe communicated in writing by the Executive; indicate the specific termination
\nprovision in this Agreement relied upon and shall set forth in reasonable detail
\nany facts and circumstances claimed to provide a basis for the<\/p>\n

17<\/p>\n

\n

<\/p>\n

termination of the Executive153s employment under the provision so indicated;
\nand, be delivered within sixty (60) days of the Executive becoming aware of the
\nact or failure to act giving rise to the Good Reason or Good Reason upon a
\nChange in Control. The Executive shall not be required to report to work or
\nperform services for the Corporation subsequent to the Corporation153s receipt of
\nthe Executive153s notice of termination.<\/p>\n

(f) Executive Entitlement When Dispute<\/u><\/strong>. All amounts
\npayable, benefits due or owed or amounts payable in lieu of benefits under
\nSection 13 shall, unless otherwise specifically provided, be paid by the
\nCorporation to the Executive within thirty days of the Date of Termination,
\nnotwithstanding that the Corporation may dispute the Executive153s entitlement to
\nsuch amounts. The Executive is entitled to receive all amounts owing under
\nSection 13, and the Corporation shall not initiate injunctive proceeding in a
\ncourt of competent jurisdiction or any arbitration proceeding pursuant to
\nSection 19 to prevent the Executive from enforcing his right to receive such
\namounts, and should the Corporation initiate any proceeding disputing the
\nExecutive153s entitlement to such amounts, the Corporation agrees to continue to
\nprovide such amounts to the Executive in accordance with the terms of this
\nAgreement, pending final resolution of the dispute by an arbitrator pursuant to
\nSection 19.<\/p>\n

(g) Delay in Payment<\/u><\/strong>. Notwithstanding anything herein
\nto the contrary, in the event that, at the time the Executive153s employment with
\nthe Corporation terminates, the Corporation remains publicly traded (within the
\nmeaning of Section 409A) and the Executive is a “specified employee” (within the
\nmeaning of Section 409A) any amounts under this Section that are payable during
\nthe first six (6) months following the Executive153s termination of employment
\nshall be reduced to the maximum amount allowable under Section 409A; any amounts
\nthat are not paid during such six-month period because of the above limitations
\nshall be paid six months and one day following the Executive153s termination. All
\nother amounts shall be paid in accordance with their terms.<\/p>\n

14.<\/strong> Confidentiality, Non-Solicitation and
\nNon-Competition<\/strong><\/p>\n<\/p>\n

(a) The Executive acknowledges and agrees that:<\/p>\n<\/p>\n

(i) in the course of performing the Executive153s duties and responsibilities
\nas an officer of the Corporation, the Executive has had and will be entrusted
\nwith detailed confidential information and trade secrets (printed or otherwise)
\nconcerning past, present, future, and contemplated products, services,
\noperations and marketing techniques and procedures of the Corporation and its
\nsubsidiaries, including, without limitation, business plans, inventions, pending
\nand undisclosed patents and patent applications, proprietary business methods
\nand proprietary manufacturing operations, proprietary product and proprietary
\nmanufacturing information, know how, and information relating to addresses,
\npreferences, needs and requirements of past, present and prospective clients,
\ncustomers, suppliers and employees of the Corporation and its subsidiaries
\n(collectively, “Trade Secrets”), the disclosure of any of which to competitors
\nof the Corporation or to the general public, or the use of same by the Executive
\nor any competitor of<\/p>\n<\/p>\n

18<\/p>\n

\n

<\/p>\n

the Corporation or any of its subsidiaries, would be highly detrimental to
\nthe interests of the Corporation;<\/p>\n

(ii) in the course of performing the Executive153s duties and responsibilities
\nfor the Corporation, the Executive has been and will continue in the future to
\nbe a representative of the Corporation to its customers, clients and suppliers
\nand as such has had and will continue in the future to have significant
\nresponsibility for maintaining and enhancing the goodwill of the Corporation
\nwith such customers, clients and suppliers and would not have, except by virtue
\nof the Executive153s employment with the Corporation, developed a close and direct
\nrelationship with the customers, clients and suppliers of the Corporation;<\/p>\n<\/p>\n

(iii) the Executive153s services are extraordinary and unique;<\/p>\n<\/p>\n

(iv) the Corporation has a proprietary interest in its customers and clients;\n<\/p>\n<\/p>\n

(v) the Executive, as an officer of the Corporation, owes fiduciary duties to
\nthe Corporation, including the duty to act in the best interests of the
\nCorporation; and,<\/p>\n<\/p>\n

(vi) the right to maintain the confidentiality of the Trade Secrets, the
\nright to preserve the goodwill of the Corporation and the right to the benefit
\nof any relationships that have developed between the Executive and the
\ncustomers, clients and suppliers of the Corporation by virtue of the Executive153s
\nemployment with the Corporation constitute proprietary rights of the
\nCorporation, that the Corporation is entitled to protect.<\/p>\n<\/p>\n

(b) In acknowledgment of the matters set out in (a) above, and in
\nconsideration of the payments to be received by the Executive pursuant to this
\nAgreement, the Executive hereby agrees that the Executive will not, during the
\nterm of the Executive153s employment with the Corporation and for three years from
\neither the Date of Termination or the Executive153s resignation of the Executive153s
\nemployment:<\/p>\n<\/p>\n

(i) directly or indirectly disclose to any person or in any way make use of
\n(other than for the benefit of the Corporation), in any manner, any of the Trade
\nSecrets, provided that such Trade Secrets shall be deemed not to include
\ninformation that is or becomes generally available to the public other than as a
\nresult of disclosure by the Executive or known to the Executive prior to
\nbecoming an employee of the Corporation or a subsidiary of the Corporation;<\/p>\n<\/p>\n

(ii) be a party to or abet any solicitation of customers, clients, or
\nsuppliers of the Corporation or any of its subsidiaries or associates for or
\nwith respect to any business that is in competition with the Business of the
\nCorporation (as defined below), to transfer business from the Corporation or any
\nof its subsidiaries or associates to any other person,<\/p>\n<\/p>\n

19<\/p>\n

\n

<\/p>\n

or seek in any way to persuade or entice any employee of the Corporation or
\nany of its subsidiaries or associates to leave that employment or to be a party
\nto or abet any such action; or,<\/p>\n

(iii) either individually or in partnership or jointly or in conjunction with
\nany person or persons, firm, association, syndicate, company or corporation, as
\nprincipal, agent, shareholder (unless passive investor) or in any other manner
\nwhatsoever, be involved with any business that is in competition with the
\nbusiness of the Corporation which business means the electronics manufacturing
\nservices business (the “Business of the Corporation”). During the same time
\nperiod, the Executive will not carry on or be engaged in or concerned with or
\ninterested in, or advise, lend money to, guarantee the debts or obligations of,
\nor permit the Executive153s name or any part thereof to be used or employed by or
\nassociated with, any person or persons, firm, association, syndicate, company or
\ncorporation in any business that is involved in any similar business in which
\nthe Corporation is involved during the course of the Executive153s employment.<\/p>\n<\/p>\n

(c) If any court determines that any provision contained in Section 14
\nincluding, without limitation, a restrictive covenant or any part thereof is
\nunenforceable because of the duration or geographical scope of the provision or
\nfor any other reason, the duration or scope of the provision, as the case may
\nbe, shall be reduced so that the provision becomes enforceable and, in its
\nreduced form, the provision shall then be enforceable and shall be enforced;<\/p>\n<\/p>\n

(d) The Executive acknowledges that the Executive153s employment by the
\nCorporation and all compensation and benefits and potential compensation and
\nbenefits to the Executive from such employment were and will be conferred by the
\nCorporation upon the Executive in part because and on condition of the
\nExecutive153s willingness to commit the Executive153s best efforts and loyalty to
\nthe Corporation, including protecting the Corporation153s right to have its Trade
\nSecrets protected from non-disclosure by the Executive and abiding by the
\nconfidentiality, non-competition and other provisions herein. The Executive
\nunderstands the Executive153s duties and obligations as set forth in Section 14
\nand agrees that such duties and obligations would not unduly restrict or curtail
\nthe Executive153s legitimate efforts to earn a livelihood following any
\ntermination of the Executive153s employment with the Corporation. The Executive
\nagrees that the restrictions contained in Section 14 are reasonable and valid
\nand all defences to the strict enforcement thereof by the Corporation are waived
\nby the Executive. The Executive further acknowledges that irreparable damage
\nwould result to the Corporation if the provisions of Sections 14 (b)(i) to (iii)
\nare not specifically enforced, and agrees that the Corporation shall be entitled
\nto any appropriate legal, equitable, or other remedy, including injunctive
\nrelief, in respect of any failure or continuing failure to comply with the
\nprovisions of Sections 14 (b)(i) to (iii);<\/p>\n<\/p>\n

20<\/p>\n

\n

<\/p>\n

(e) The preceding covenants do not prohibit investment, up to a maximum of
\nfive percent (5%) of the outstanding shares, in a corporation whose shares are
\nlisted on a recognized stock exchange and which carries on a business similar to
\nthe Business of the Corporation.<\/p>\n<\/p>\n

15.<\/strong> Return of Materials<\/strong><\/p>\n<\/p>\n

All files, forms, brochures, books, materials, written correspondence,
\nmemoranda, documents, manuals, computer disks, software products and lists
\n(including lists of customers, suppliers, products and prices) pertaining to the
\nbusiness of the Corporation or any of its subsidiaries and associates that may
\ncome into the possession or control of the Executive shall at all times remain
\nthe property of the Corporation or such subsidiary or associate, as the case may
\nbe. On termination of the Executive153s employment for any reason, the Executive
\nagrees to deliver promptly to the Corporation all such property in the
\npossession of the Executive or directly or indirectly under the control of the
\nExecutive. The Executive agrees not to make for the Executive153s personal or
\nbusiness use or that of any other party, reproductions or copies of any such
\nproperty or other property of the Corporation or any of its subsidiaries or
\nassociates.<\/p>\n

16.<\/strong> Duty to Mitigate<\/strong><\/p>\n<\/p>\n

The Executive shall not be subject to any duty or obligation to seek
\nalternate employment or other sources of income or benefits, or to mitigate the
\nExecutive153s damages, or to any similar duty or obligation and any compensation
\nearned by the Executive after the Date of Termination shall not be deducted from
\nany payments to be made to the Executive pursuant to this Agreement following or
\nas a result of: (a) voluntary termination by the Executive of the Executive153s
\nemployment for Good Reason or Good Reason during the Change in Control Period,
\nor, (b) termination of the employment of the Executive by the Corporation other
\nthan for Cause.<\/p>\n

17.<\/strong> Further Assurances<\/strong><\/p>\n<\/p>\n

Each of the Corporation and the Executive agrees to execute and deliver all
\nsuch documents and to do all such acts and things as the other party may
\nreasonably request and as may be lawful and within its powers to do or to cause
\nto be done in order to carry out and\/or implement the provisions or intent of
\nthis Agreement, including, without limitation, seeking all such governmental,
\nregulatory and other third party approvals as may be necessary or desirable.
\nWithout limiting the generality of the foregoing, the Corporation agrees to
\nexecute and deliver all such documents and to do all such acts and things as the
\nExecutive may reasonably request and as may be lawful and within the power of
\nthe Corporation to do or cause to be done in order to minimize any tax
\nconsequences to the Executive or his estate or his legal personal
\nrepresentatives in respect of the payment or performance by the Corporation of
\nthe obligations of the Corporation upon or in respect of payments or actions
\nrequired to be made or taken by or on behalf of the Corporation in the event of
\ntermination of the Executive153s employment hereunder; provided that the
\nCorporation shall in no way be prejudiced thereby.<\/p>\n

21<\/p>\n

\n

<\/p>\n

18.<\/strong> Governing Law<\/strong><\/p>\n<\/p>\n

The Agreement shall be governed by and construed in accordance with the laws
\nof the Province of Ontario and the laws of Canada applicable therein and the
\nparties hereto specifically attorn to the jurisdiction of the courts of the
\nProvince of Ontario.<\/p>\n

19.<\/strong> Arbitration Clause<\/strong><\/p>\n<\/p>\n

(a) With the exception of Section 13, where there is any dispute as to any
\nprovision of this Agreement and the Executive and the Corporation are unable to
\ncome to a mutual agreement within a period of 10 days from the date on which one
\nparty advises the other party, in writing, of the dispute, within 10 days after
\nthe expiry of such period, either party may give written notice of the issue on
\nwhich a mutual decision has not been made to an arbitrator selected from (c)
\nbelow, with a copy of the notice to the other party.<\/p>\n

Upon receipt of such notice, the arbitrator will contact each of the parties
\nand attempt to resolve the matter within 5 days of receipt of the notice,
\nfailing which the arbitrator shall schedule a hearing to commence within 90 days
\nthereafter, that hearing to conclude and the decision to be rendered within 120
\ndays (or such later time as agreed upon between the parties) thereafter.<\/p>\n

It is understood and agreed the arbitrator shall have the sole discretion to
\nestablish a procedure for the conduct of the arbitration, provided only that
\nsuch procedure shall give to each party an opportunity to state and argue their
\nrespective positions, either in writing or orally in the presence of the
\narbitrator and each other party and whether with or without reply or rejoinder.
\nThe decision of the arbitrator shall be final and binding.<\/p>\n

Any arbitration pursuant to this clause shall be in accordance with the
\nArbitrations Act (Ontario)<\/em>.<\/p>\n

(b) It is understood that the Executive and the Corporation would prefer to
\navoid litigation due to a possible breach of Section 14, upon the acceptance of
\na new position by the Executive. As a result, the parties agree that where the
\nExecutive is considering a new position, particularly following termination of
\nemployment, the Executive may seek the prior agreement of the Corporation that
\nsuch new position is not with a competitor of the Corporation. Where there is a
\ndisagreement as to whether this new position is with a competitor of the
\nCorporation (and the Executive has not accepted any offer and commenced
\nemployment in respect thereof), the parties agree to have this issue finally
\ndetermined on an expedited basis by an agreed upon arbitrator as set out in (c)
\nbelow. The process and authority of the arbitrator shall be as described above,
\nexcept that in this case only the hearing must be concluded and the decision
\nrendered within 30 days of the arbitrator receiving notice of the dispute.<\/p>\n

(c) For the purpose of this Agreement, the parties agree that any one of the
\nfollowing can be selected as the arbitrator: Mr. Justice George Adams, William
\nKaplan, Maureen K. Saltman or Daniel J. Baum, or any other arbitrator the
\nparties mutually agree upon should none of these arbitrators be available within
\nthe timelines set out herein.<\/p>\n

22<\/p>\n

\n

<\/p>\n

Each party represents to the other each of these individuals are independent
\nfrom them.<\/p>\n

20.<\/strong> Severability<\/strong><\/p>\n<\/p>\n

With the exception of Section 13, if any provision of the Agreement,
\nincluding the breadth or scope of such provision, shall be held by an arbitrator
\npursuant to Section 19 to be invalid or unenforceable, in whole or in part, such
\ninvalidity or unenforceability shall not affect the validity or enforceability
\nof the remaining provisions, or part thereof, of this Agreement and such
\nremaining provisions, or part thereof, shall remain enforceable and binding.\n<\/p>\n

21.<\/strong> Representations and Warranties<\/strong><\/p>\n<\/p>\n

The Executive represents and warrants to the Corporation that the execution
\nand performance of this Agreement will not result in or constitute a default,
\nbreach, or violation, or an event that, with notice or lapse of time or both,
\nwould be a default, breach, or violation, of any understanding, agreement or
\ncommitment, written or oral, express or implied, to which the Executive is a
\nparty or by which the Executive or the Executive153s property is bound. The
\nExecutive shall defend, indemnify and hold the Corporation harmless from any
\nliability, expense or claim (including reasonable solicitor153s fees incurred in
\nrespect thereof) by any person in any way arising out of, relating to, or in
\nconnection with any incorrectness of breach of the representations and
\nwarranties in this Section 21.<\/p>\n

22.<\/strong> Rights and Waivers<\/strong><\/p>\n<\/p>\n

All rights and remedies of the parties are separate and cumulative, and none
\nof them, whether exercised or not, shall be deemed to be to the exclusion of any
\nother rights or remedies or shall be deemed to limit or prejudice any other
\nlegal or equitable rights or remedies which either of the parties may have.<\/p>\n

23.<\/strong> Waiver<\/strong><\/p>\n<\/p>\n

Any purported waiver of any default, breach or non-compliance under this
\nAgreement is not effective unless in writing and signed by the party to be bound
\nby the waiver. No waiver shall be inferred from or implied by any failure to act
\nor delay in acting by a party in respect of any default, breach or
\nnon-observance or by anything done or omitted to be done by the other party. The
\nwaiver by a party of any default, breach or non-compliance under this Agreement
\nshall not operate as a waiver of that party153s rights under this Agreement in
\nrespect of any continuing or subsequent default, breach or non-observance
\n(whether of the same or any other nature).<\/p>\n

24.<\/strong> Time of Essence<\/strong><\/p>\n<\/p>\n

Time shall be of the essence of this Agreement in all respects.<\/p>\n

23<\/p>\n

\n

<\/p>\n

25.<\/strong> Headings<\/strong><\/p>\n<\/p>\n

The division of this Agreement into Sections and the insertion of headings
\nare for convenience of reference only and shall not affect the construction or
\ninterpretation of this Agreement.<\/p>\n

26.<\/strong> Full Satisfaction<\/strong><\/p>\n<\/p>\n

The terms set out in this Agreement, provided that such terms are satisfied
\nby the Corporation, are in lieu of (and not in addition to) and in full
\nsatisfaction of any and all other claims or entitlements which the Executive has
\nor may have upon the termination of the Executive153s employment and the
\ncompliance by the Corporation with these terms will effect a full and complete
\nrelease of the Corporation and its parent and their respective affiliates,
\nassociates, subsidiaries and related companies from any and all claims which the
\nExecutive may have for whatever reason or cause in connection with the
\nExecutive153s employment and the termination of it, other than those obligations
\nspecifically set out in this Agreement and other than the Executive153s right to
\nclaim indemnification under corporate law and any agreement of the Corporation
\nto provide indemnification to the Executive. In agreeing to the terms set out in
\nthis Agreement, the Executive specifically agrees to execute a formal release
\ndocument to that effect and will deliver upon request appropriate resignations
\nfrom all offices and positions with the Corporation and its parent and their
\nrespective affiliated, associated subsidiary or affiliated companies if, as and
\nwhen requested by the Corporation upon termination of the Executive153s employment
\nwithin the circumstances contemplated by this Agreement.<\/p>\n

27.<\/strong> Successors; Binding Agreement<\/strong><\/p>\n<\/p>\n

The Corporation will require any successor (whether direct or indirect, by
\npurchase, amalgamation, arrangement, merger, consolidation or otherwise) to all
\nor substantially all of the business and\/or assets of the Corporation to
\nexpressly assume and agree to perform this Agreement in the same manner and to
\nthe same extent that the Corporation would be required to perform it if no such
\nsuccession had taken place. Failure of the Corporation to obtain such agreement
\nprior to the effectiveness of any such succession shall be a breach of this
\nAgreement and shall entitle the Executive to compensation from the Corporation
\nin the same amount and on the same terms as the Executive would be entitled
\nhereunder if the Executive were terminated in circumstances giving rise to the
\npayment of benefits pursuant to Section 13(d) hereof except that for purposes of
\nimplementing the foregoing, the date on which any such succession becomes
\neffective shall be deemed the Date of Termination. The foregoing shall not in
\nany way limit the rights of the Executive hereunder if such succession
\nconstitutes a Change in Control. As used in this Agreement, “Corporation” shall
\nmean the Corporation as hereinbefore defined and any successor to its business
\nand\/or assets as aforesaid which executes and delivers the agreement provided
\nfor in this paragraph or which otherwise becomes bound by all the terms and
\nprovisions of this Agreement by operation of law.<\/p>\n

24<\/p>\n

\n

<\/p>\n

28.<\/strong> No Assignment<\/strong><\/p>\n<\/p>\n

The Executive may not assign, pledge or encumber the Executive153s interest in
\nthis Agreement nor assign any of the rights or duties of the Executive under
\nthis Agreement without the prior written consent of the Corporation.<\/p>\n

29.<\/strong> Statutory Deductions and Withholdings<\/strong>\n<\/p>\n<\/p>\n

All payments provided to the Executive pursuant to this Agreement are subject
\nto necessary statutory deductions and withholdings.<\/p>\n

30.<\/strong> Successors<\/strong><\/p>\n<\/p>\n

This Agreement shall be binding on and enure to the benefit of the successors
\nand assigns of the Corporation and the heirs, executors, personal legal
\nrepresentatives and permitted assigns of the Executive.<\/p>\n

31.<\/strong> Entire Agreement<\/strong><\/p>\n<\/p>\n

This Agreement contains the entire understanding of the Executive and the
\nCorporation with respect to employment of the Executive and supersedes any and
\nall prior understandings, written or oral. This Agreement may not be amended,
\nwaived, discharged or terminated orally but only by an instrument in writing
\nexecuted by both parties.<\/p>\n

32.<\/strong> Notices<\/strong><\/p>\n<\/p>\n

Any notice or other communication required or permitted to be given hereunder
\nshall be in writing and either delivered by hand or sent by facsimile. If
\ndelivery by hand or by facsimile, notice shall be deemed to have been received
\nat the time it is delivered or received. Notices shall be addressed as follows:\n<\/p>\n

(a) If to the Corporation:<\/p>\n<\/p>\n

Celestica Inc.
\n1150 Eglinton Avenue East
\nToronto, ON
\nM3C 1H7<\/p>\n\n\n\n\n
\n

Attention:<\/p>\n<\/td>\n

\n

General Counsel<\/p>\n<\/td>\n<\/tr>\n

\n

Fax No.:<\/p>\n<\/td>\n

\n

(416) 448-2817<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

(b) If to the Executive:<\/p>\n<\/p>\n

Craig H. Muhlhauser
\n94 Library Place
\nPrinceton, NJ
\nU.S.A. 08540<\/p>\n

25<\/p>\n

\n\n\n\n
<\/td>\n<\/td>\n\n

Fax No.: 609-924-1492<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

33.<\/strong> Legal Advice<\/strong><\/p>\n<\/p>\n

The Executive hereby represents and warrants to the Corporation and
\nacknowledges and agrees that the Executive had the opportunity to seek and was
\nnot prevented nor discouraged by the Corporation from seeking independent legal
\nadvice prior to the execution and delivery of this Agreement and that, in the
\nevent that the Executive did not avail himself or herself of that opportunity
\nprior to signing this Agreement, the Executive did so voluntarily without any
\nundue pressure and agrees that the Executive153s failure to obtain independent
\nlegal advice shall not be used by the Executive as a defence to the enforcement
\nof the Executive153s obligations under this Agreement. The Corporation agrees to
\nreimburse the Executive for the reasonable legal fees incurred by the Executive
\nin obtaining such legal advice.<\/p>\n

IN WITNESS WHEREOF the parties hereto have executed this Agreement effective
\nas of the date first above written.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n\n

CELESTICA INC.<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

by<\/p>\n<\/td>\n

\n

\/s\/ Robert Crandall<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Name:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Title:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

CELESTICA INTERNATIONAL INC.<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

by<\/p>\n<\/td>\n

\n

\/s\/ Paul Nicoletti<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Name:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Title:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

CELESTICA CORPORATION<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

by<\/p>\n<\/td>\n

\n

\/s\/ Michael Pashos<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Name:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Title:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SIGNED, SEALED & DELIVERED
\nin the presence of:<\/p>\n<\/td>\n

\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n\n

\/s\/ Craig H. Muhlhauser<\/p>\n<\/td>\n<\/tr>\n

\n

Witness (name):<\/p>\n<\/td>\n

<\/td>\n\n

CRAIG H. MUHLHAUSER<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

26<\/p>\n

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