Mackenzie Investment Management Inc. Employee Retention Plan

Summary

This agreement outlines Mackenzie Investment Management Inc.'s Employee Retention Plan, which provides severance protection to employees in the event of a change in control of the company between November 15, 2000, and November 15, 2001. If employees are terminated without cause due to such a change, they are entitled to severance pay and continued benefits, unless they resign or decline a comparable position. The plan defines what constitutes a change in control and a comparable position, and requires employees to sign a release before receiving payments.

EX-10.38 11 g66526ex10-38.txt EMPLOYEE RETENTION PLAN 1 EXHIBIT 10.38 MACKENZIE GROUP OF COMPANIES MACKENZIE INVESTMENT MANAGEMENT INC. EMPLOYEE RETENTION PLAN 1. OVERVIEW This communication will clarify the terms of the Retention Plan we have put in place to provide you with additional severance protection during this transition period while we respond to any unsolicited change in control. We have many alternatives to consider and we are all working very hard to come up with the best possible solution for our shareholders, customers and our employees. It is unlikely that there will be any significant loss of employment as a result of a change in control at Mackenzie and the fact that we have designed this plan in no way indicates that we believe this will be the outcome. However, we do want to ensure that we put your minds at ease as much as possible so that you can focus on the success of our day to day operations. 2. PURPOSE The primary purpose of this Retention Plan is to ensure the successful continuance of our business in the event of a change in control. We believe that in these extraordinary circumstances it is essential that the Company stabilize the employee workforce. We also want to prevent employees from being unnecessarily distracted by their particular circumstances, reduce any climate of uncertainty, ensure fair and equitable treatment of staff, and reduce or limit any involvement in unnecessary litigation. 3. BASIC PRINCIPLE Every regular full-time or part-time employee is guaranteed compensation income (which includes salary plus bonus) for the 12 months following the time of approval of this plan by the Board of Directors (4:00 PM, November 15, 2000). During the period of application of this Plan, if an employee is released from his or her employment following a change in control (other than for cause), Mackenzie (or a successor employer) will pay the severance arrangements listed below. Regular full time employees who work less than a full week will be covered on their prorated basis. Please see point #11 for the definition of "change of control." 2 4. TERMS OF THE PLAN If an employee is terminated without cause as a result of a change of control of the company during the period from November 15, 2000 to November 15, 2001, the following severance arrangements will apply. The employee will receive compensation income over a period (the "severance period") which will be the greater of: - compensation income to November 15, 2001, paid at normal semi-monthly pay intervals, OR - one month of compensation income per year of service (to a maximum of 24 months), paid at normal semi-monthly pay intervals. Regular employees who work less than a full week will be paid on a prorated basis. 5. RESIGNATION o Employees who voluntarily resign will not receive any payment under this Plan. o An employee who turns down an offer of a comparable position will not be eligible for any payment under this Plan. The employee will be deemed to have resigned. 6. A COMPARABLE POSITION Employees may be offered a comparable position at Mackenzie after a change of control. To be a comparable position, the position must: o Provide base compensation and benefits that are comparable in the aggregate to the employee's current position, o Provide an opportunity for variable bonus pay that is comparable to the employee's current position, o Not require the employee to increase the daily one way commuting distance from their current place of employment by more than 15 miles; AND o Have job skill requirements and duties that are comparable to either the employee's current position or a position held by the employee within 12 months before the approval date of November 15, 2000. -2- 3 7. ACCRUED COMPENSATION AND BONUSES o An employee who is released from his or her employment during the Retention Plan year as a result of the change of control, and is not offered a comparable position, will be paid their regular pay, accrued and unused vacation through November 15, 2001 and, if applicable, any unpaid portion of their FY 2001 bonus PLUS a pro-rated FY 2002 bonus. o FY 2002 bonus payment for the period from April 1, 2001 to November 15, 2001 will be calculated based on the FY 2002 bonus target. No bonus will be paid if an employee voluntarily resigns or is terminated for reasons not related to the change of control. 8. EMPLOYMENT BENEFITS COVERAGE All group benefits (except the group long-term and short-term disability plans) will continue during the Severance Period, or until the employee obtains another position in which similar benefits are provided, whichever occurs first. Employee contributions to the 401(k) plan as well as employer matching contributions will cease on an employee's termination date. 9. RELEASE Before receiving any payment under this Plan, employees are required to sign a Separation Agreement and General Release acceptable to Mackenzie. 10. STATUTORY ENTITLEMENTS AND DEDUCTIONS The severance pay under this Plan includes notice, or pay in lieu of notice and severance pay. All payments under this plan will be reduced by applicable withholding taxes, and no amounts will be 'grossed up" for tax purposes. 11. CHANGE OF CONTROL In this Plan, "change of control" shall mean: (i) the acquisition in a single transaction or a series of related transactions by any person or persons acting jointly or in concert of fifty percent (50%) or more of the outstanding and voting shares of Mackenzie, whether by way of take-over bid, merger, amalgamation or otherwise; (ii) the sale by Mackenzie of all or substantially all of Mackenzie's undertaking and assets; (iii) the acquisition of control of Mackenzie or of its business by one or more persons who do not now control Mackenzie; (iv) voluntary liquidation, dissolution or winding-down of Mackenzie in connection with which a distribution is made to the holders of Mackenzie's common shares; or (v) a resolution of the Board of Directors of Mackenzie that a Change of Control has occurred or is imminent. For the purposes of this Plan "control" shall mean the possession, directly or indirectly, of the power to cause a change in the direction of the management and policies of Mackenzie or its business whether through the ownership of voting securities, partnership interests or assets or by contract or otherwise -3-