EXHIBIT 10.38
April 13, 2000
Xxxxx Xxxxxxx
x/x XxxXxxx Xxxxxxxxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
Re: Employment Agreement
We are pleased to confirm the terms and conditions of the employment of
Xxxxx Xxxxxxx ("you or the "Executive") as Chief Executive Officer with JetForm
Corporation (the "Corporation"). The Corporation believes that it is reasonable
and fair that you receive fair treatment in the event of the termination without
cause or material adverse modification without cause of your employment. In
consideration thereof and your employment with the Corporation (or continued
employment, as the case may be) you and the Corporation agree to the following
terms and conditions of employment.
Article I - Preamble and Interpretation
1.0 The parties agree that the Executive's original date of employment with the
Corporation for the purposes of this agreement is May 15, 2000.
1.1 The parties agree, and represent and warrant to each other, that the above
preamble is true and accurate and is incorporated into the terms of this
Agreement.
1.2 The headings of the Articles, sections, subsections and clauses herein are
inserted for convenience of reference only and shall not affect the meaning or
construction hereof.
1.3 For the purposes of this Agreement, the following terms shall have the
following meanings, respectively:
(a) "Annual Salary" means the annual base salary of the Executive, payable to
the Executive by the Corporation at the notice of termination or
resignation is given and if an annual base salary has not been established,
it shall be calculated by multiplying the monthly salary of the Executive
in effect for the month prior to the month in which the notice of
termination or resignation is given by 12. Notwithstanding the generality
of the foregoing, and for greater clarity, Annual Salary does not include
any amounts paid or payable to the Executive or to any other employee of
the Corporation on account of incentive compensation, bonus, profit
sharing, stock options, loans, discounts, commissions, benefits allowances,
or any other form of compensation or reward based on individual or
Corporate performance.
(b) "Change of Control" shall mean: the acquisition by a person or persons
acting jointly of the Corporation's voting shares, such that the
acquiror(s) would beneficially own shares equal to greater than 51% of the
votes attaching to the Corporation's voting shares
(c) "Date of Termination" shall mean the date the Executive's active employment
ceases, as set out in a notice of termination or resignation and as
provided for in Article III, regardless of whether the Executive continues
to receive remuneration or benefits from the Corporation subsequent to that
date, whether by the Executive or by the Corporation or by death of the
Executive.
(d) "Disability" shall mean the Executive's failure to substantially perform
his duties on a full-time basis for a period of six months out of any
18-month period, where such failure is a result of physical or mental
illness. Without limiting the generality of the foregoing, the Executive
shall be irrevocably deemed to be disabled on the date which is 60 days
after the date on which he is entitled to receive disability payments (i.e.
60 days after the date which is 120 days after the date of the disabling
injury), provided the Executive is receiving or is entitled to receive long
term disability payments under the applicable benefit plan on that 60th
day.
(e) "Good Reason" shall mean the occurrence of any of the following without the
Executive's consent (except in connection with the termination of the
employment of the Executive for Just Cause or Disability).
(i) a material reduction by the Corporation of the Executive's salary,
benefits or any other form of remuneration or any change in the basis
upon which the Executive's salary, benefits or any other form of
remuneration payable by the Corporation is determined other than a
reduction or change which occurs after the Executive has received
three months written notice of the reduction or change, or when the
reduction or change is consistent with similar reductions or changes
established by the Corporation which similarly affects the majority of
the employees of the Corporation who are employed at a level similar
to that of the Executive.
(ii) any material breach by the Corporation of any provisions of this
Agreement; or
(iii)the failure by the Corporation to obtain, in a form satisfactory to
the Executive acting reasonably, an effective assumption of its
obligations hereunder by any successor to the Corporation, including a
successor to a material portion of its business in which the Executive
is employed; or
(iv) the Corporation requiring the Executive to relocate to a place of work
located greater than 100 kilometres from Executive's current place of
work.
For the purposes of this Article, where the Executive continues in the
employ of the Corporation for a period of at least three (3) months following
the occurrence of any of the events listed above without triggering a
termination for Good Reason as provided for in Article 3.1 (d), the Executive
shall be deemed to have irrevocably consented to the occurrence and cannot
thereafter trigger a termination for Good Reason based upon that occurrence.
(f) "Just Cause" shall include:
(i) gross insubordination;
(ii) the failure or refusal by the Executive to substantially perform his
duties according to the terms of his employment, except where such
acts or omissions by the Executive:
(a) are caused by and follow an event defined herein as "Good
Reason"; or
(b) result from the Executive's Disability.
(iii)dishonesty by the Executive affecting the Corporation;
(iv) use by the Executive of drugs or of alcohol in a manner which
materially affects his ability to perform his employment duties;
(v) any improper act by the Executive that the Executive knows or should
reasonably know is substantially inconsistent with his duties as an
Executive; or
(vi) any material breach by the Executive of any provisions of this
Agreement.
(g) "TTC" means the Total Target Compensation and equals Executive's Annual
Salary plus the annual incentive payable if certain specified targets are
met. Thje Executice's TTC shall be provided to him in writing prior to or
upon execution of this agreement and shall be reviewd annually in
accordance with Article 2.2 hereof.
Article II - Duties and Compensation
2.2 The Executive shall serve the Corporation and any subsidiaries of the
Corporation in such capacity or capacities and shall perform such duties and
exercise such powers pertaining to the management and operation of the
Corporation and any subsidiaries of the Corporation as may be determined from
time to time by the board of directors of the Corporation consistent with the
office of the Executive. The Executive shall:
(a) devote his full time and attention and his best efforts to the business and
affairs of the Corporation;
(b) perform those duties that are assigned to the Executive and which are
consistent with his position, diligently and faithfully to the best of the
Executive's abilities and in the best interests of the Corporation;
(c) faithfully observe and abide by all the rules, regulations and policies of
the Corporation applicable to the Executive, (including without limitation
the Corporation's policies respecting xxxxxxx xxxxxxx) from time to time in
force which are brought to the attention of the Executive or of which he
should reasonably be aware; and
(d) use his best efforts to promote the interests and goodwill of the
Corporation.
2.2 Subject to Article 3 hereof, the Annual Salary payable to the Executive
shall be determined during the annual review process by the Compensation
Committee of the Board of Directors and approved by the Board of Directors.
2.3 The Executive shall also be entitled to receive the vacation and benefits
set forth on a basis consistent with the Corporation's practice generally in
effect for other executives of the Corporation which benefits may be amended
from time to time by the Corporation but subject always to the provisions of
Article 3 hereof.
Article III - Termination of Employment
3.1 The Executive and the Corporation shall have the following obligations in
the event that the Executive's employment is terminated:
(a) Death or Disability. The Executive's employment shall be terminated by his
death or Disability, without any obligation on the Corporation to provide
notice or take any other action. The rights of the Executive or his
survivors shall be as set out in the applicable benefit and insurance plans
provided to the Executive by the Corporation during his employment. All
stock options held by the Executive on his death, vested and unvested,
shall immediately vest and be transferred to his surviving spouse, or
absent a surviving spouse, to the Executive's Estate.
(b) Retirement or Resignation Other than for Good Reason. The Executive agrees
to provide the Corporation with sixty (60) days notice in writing of his
intention to retire or resign his employment other than for Good Reason.
This notice is for the benefit of the Corporation and it has the right to
waive all or any part of the notice, in which case the Executive's
employment and the obligations of the Corporation shall cease on the date
of such earlier termination as provided to the Executive by the
Corporation, in writing.
(c) Termination by the Corporation for Just Cause and Termination by the
Executive Other Than for Good Reason. The Corporation has the right to
terminate the Executive's employment for Just Cause and without notice or
pay in lieu of notice. If the Executive's employment is terminated for Just
Cause or if the Executive resigns other than for Good Reason, the Executive
shall only be entitled to receive his base salary and unpaid vacation pay
to the Date of Termination and he shall have no other or further claim
against the Corporation.
(d) Termination by the Corporation Other Than for Just Cause, Disability or
Death and Termination by the Executive for Good Reason. The Corporation may
terminate the Executive's employment other than for Just Cause and the
Executive may terminate his employment for Good Reason by giving written
notice of termination. Where the Corporation terminates the employment of
the Executive other than for Just Cause, the Executive on termination shall
be entitled to receive the following, in lieu of reasonable notice of
termination:
i. twenty-four (24) months TTC if the Executive's performance in each of
the completed four quarters prior to the termination date is greater
than or equal to 80% of the target incentive.
ii. Otherwise twelve (12) months TTC
Where the Executive terminates his employment for Good Reason, the
termination of his active employment shall become effective on the date
such notice is provided to the Corporation and the Executive shall be
entitled to receive from the Corporation an amount equal to the pay in lieu
of notice which the Executive would have received had the Corporation
terminated his employment without Just Cause pursuant to this Article.
Notwithstanding that the Executive may have received a notice of
termination or given notice of resignation, he shall remain entitled to any
incentive compensation, bonus, profit sharing, or other similar
compensatory plan applicable to him as at the date such notice is given.
The amount of the Executive's entitlement to such compensation shall be
pro-rated to the Date of Termination and shall be paid to the Executive on
the date that other employees of the Corporation are paid such
compensation.
The Corporation shall take all necessary steps as required by the
provisions of the Corporation's Stock Option Plans so that all options to
acquire common shares of the Corporation held by the Executive on the Date
of Termination shall continue to vest during the period of notice referred
to in this Article and the Executive shall have thirty days from the end of
that notice period to exercise all such vested options. On the 31st day,
all unexercised options, vested or unvested, are cancelled.
All loans from the Corporation or its subsidiaries to the Executive shall
become due and payable on the Date of Termination, unless the written terms
of the loan agreement(s) provide otherwise.
The Corporation shall provide the Executive with the job relocation
counselling services of a firm acceptable to the Corporation for an amount
not to exceed $15,000.
If, at the Date of Termination, there were any memberships in any clubs,
social or athletic organizations paid for by the Corporation that were for
the regular use of the Executive at the Date of Termination, the
Corporation will not take any action to terminate such memberships but need
not renew any such membership that expires.
The Corporation shall pay to the Executive all outstanding and accrued
vacation pay and salary to the Date of Termination.
Upon compliance with the obligations set forth above, the Corporation shall
have no further obligation to the Executive under this Agreement or
otherwise and the Executive agrees that notwithstanding any other provision
contained herein, the Executive shall not have any right to commence any
action or make any claim related to the termination of his employment.
(e) Change of Control. The parties agree that the employment of the Executive
shall be deemed to have been terminated for other than Just Cause upon any
Change of Control of the Corporation. In addition to the compensation set
forth in Article 3.1 (d) above, all stock options then granted to the
Executive shall vest immediately upon the Change of Control.
3.3 The benefits payable after the Termination Date under this Article III shall
be paid as follows
(a) with respect to the Annual Salary of the Executive referred to in Section
3.1 at the Corporation's regular pay periods commencing on the Termination
Date; and
(b) the Corporation shall continue the health, life and disability benefits, to
the extent permitted by the plans and policies of insurance from the
Termination Date until the date the Executive secures Alternative
Employment
Article IV - Non-Competition, Confidentiality and Inventions and Patents
4.1 The Executive shall not while an Executive of the Corporation and for a
period of 12 months following the Date of Termination, for any reason
whatsoever, anywhere in North America, directly or indirectly, either
individually or in partnership, or in conjunction with any other persons or
corporations as principal, agent, shareholder, employee, advisor, lender,
guarantor or in any other capacity whatsoever:
(a) carry on or be engaged in or be connected with or interested in or receive
royalties or other compensation from a segment of any business which is
directly or indirectly competitive with the business of the Corporation or
any of its subsidiaries for whom the Executive has provided services during
the 12 months preceding the Termination Date; or
(b) contact or solicit any designated customers of the Corporation or any of
its subsidiaries for the purposes of selling to the designated customers
any products or services which are the same as or are competitive with, the
products or services sold by the Corporation or any of its subsidiaries
during the term of this Agreement. For the purpose of this section, a
designated customer means any person or entity that was a customer of the
Corporation or any of its subsidiaries in the 12 months preceding the
Termination Date. Upon request by the Executive, the Corporation shall
provide in confidence a list of all such designated customers.
Notwithstanding the foregoing, the Executive may hold up to five per cent
of the issued and outstanding securities of any publicly traded company.
For the purposes hereof, if a Change of Control occurs and the Executive's
employment is terminated (whether by the Corporation or the Executive)
within six months of the Change of Control, the business of the Corporation
and its subsidiaries shall be deemed to be the business immediately prior
to the Change of Control.
4.2 The Executive shall not while an Executive of the Corporation and for a
period of 12 months thereafter, directly or indirectly, induce or solicit any
employee of the Corporation to leave employment with the Corporation.
4.3 The Executive acknowledges and agrees that:
(a) in the course of performing his duties and responsibilities as an officer
of the Corporation, he has had and will continue in the future to have
access to and has been and will be entrusted with detailed confidential
information and trade secrets (printed or otherwise) concerning past,
present, future and contemplated products, services, operations and
marketing techniques and procedures of the Corporation and its
subsidiaries, including, without limitation, information relating to past,
present and prospective clients, customers, suppliers and employees of the
Corporation and its subsidiaries (collectively "Trade Secrets"), the
disclosure of any of which to competitors of the Corporation or to the
general public, or the use of same by the Executive or any competitor of
the Corporation or any of its subsidiaries, would be highly detrimental to
the interests of the Corporation;
(b) the Executive, while an officer and/or employee of the Corporation, owes
fiduciary duties to the Corporation, including the duty to act in the best
interests of the Corporation; and
(c) the right to maintain the confidentiality of the Trade Secrets, the right
to preserve the goodwill of the Corporation and the right to the benefit of
any relationships that have developed between the Executive and the
customers, clients and suppliers of the Corporation by virtue of the
Executive's employment with the Corporation constitute proprietary rights
of the Corporation, which the Corporation is entitled to protect.
In acknowledgement of the matters described above, the Executive hereby
agrees that he will not, during the term of this Agreement or any time
thereafter following the termination of employment for any reason, directly
or indirectly disclose to any person or in any way make use of (other than
for the benefit of the Corporation), in any manner, any of the Trade
Secrets, provided that such Trade Secrets shall be deemed not to include
information that is or becomes generally available to the public other than
as a result of disclosure by the Executive.
4.4 Any invention (whether patentable or otherwise), improvement, device,
industrial design, copyright, know-how or other intellectual or industrial
property developed, invented, created or improved by the Executive during the
term of this Agreement or prior to the date hereof while the Executive was
employed by the Corporation in respect of the Corporation's business
(collectively, the "Intellectual Property") shall be the exclusive property of
the Corporation. The Corporation shall have the exclusive right to file patent
applications and to obtain patents, to register industrial designs and copyright
in the name of the Corporation in connection with the Intellectual Property. The
Executive shall execute, from time to time, upon request by the Corporation,
assignments of the Executive's rights in the Intellectual Property to the
Corporation, and shall provide all necessary assistance in the filing and
prosecution of any applications to register the Intellectual Property. The
Executive hereby waives his moral rights to the Intellectual Property at common
law and under section 14.1 of the Copyright Act or successor provisions from
time to time, which are acknowledged to include the right to the integrity of
the Intellectual Property and the right, where reasonable in the circumstances,
to be associated with the Intellectual Property or an author by name or under a
pseudonym and the right to remain anonymous when any translation of the
Intellectual Property is produced, performed or published.
4.5 The Executive acknowledges that a breach or threatened breach by the
Executive of the provisions of any of this Article 4 will result in the
Corporation and its shareholders suffering irrevocable harm which is not capable
of being calculated and which cannot be fully or adequately compensated by the
recovery of damages alone. Accordingly, the Executive agrees that the
Corporation shall be entitled to interim and permanent injunctive relief,
specific performance and other equitable remedies, in addition to any other
relief to which the Corporation may be entitled.
4.6 The provisions of this Article 4 comprise all of Executive's obligations
following any termination of Executive's employment with the Corporation
Article V - General
5.1 The Executive acknowledges that he has had an opportunity to obtain
independent legal advice before signing this Agreement and agrees that either
such advice has been obtained or that he does not wish to seek or obtain such
independent legal advice. The Executive acknowledges that he has read this
Agreement and fully understands the nature and effect of it and the terms
contained herein and that the said terms are fair and reasonable and correctly
set out the Executive's position in the event of termination.
5.2 The Executive agrees that after termination of his employment for whatever
reason, he will tender his resignation from any position he may hold as an
officer of the Corporation or as an officer or director of any of its affiliated
or associated companies, provided that doing so will not reduce or increase the
obligations of the Corporation described herein.
5.3 If any provision of this Agreement is determined to be void or unenforceable
in whole or in part, it shall not be deemed to affect or impair the validity of
any other provision herein and each such provision is deemed to be separate,
distinct and severable.
5.4 Any notice required or permitted to be given under this Agreement shall be
in writing and shall be properly given if delivered by hand or mailed by prepaid
registered mail addressed as follows:
(a) in the case of the Corporation, to:
JetForm Corporation
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
Attention: Chair of the Board of Directors
(b) in the case of the Executive, to:
Xxxxx Xxxxxxx
c/o JetForm Corporation
or to such other address as the parties may from time to time specify by
notice given in accordance herewith. Any notice so given shall be
conclusively deemed to have been given or made on the day of delivery, if
delivered, or if mailed by registered mail, upon the date shown on the
postal return receipt as the date upon which the envelope containing such
notice was actually received by the addressee provided in the event of mail
disruption, delivery may only be made by hand.
5.5 This Agreement shall ensure to the benefit of and be binding upon the
Executive and his heirs, executors and administrators and upon the Corporation
and its successors and assigns.
5.6 Nothing herein derogates from any rights the Executive may have under any
applicable statute, and in particular the parties agree that the rights,
entitlements and benefits set out in this Agreement to be paid to the Executive
shall in no event be less than the Executive's entitlement pursuant to the
Employment Standards Act (Ontario) or any successor legislation from time to
time. Any payments made hereunder are agreed to be inclusive of all payments
required of the Corporation under the said legislation.
5.7 This Agreement may be amended only by an instrument in writing signed by
both parties.
5.8 Neither party may waive or shall be deemed to have waived any right it has
under this Agreement (including under this section) except to the extent that
such waiver is in writing.
************
If you are in agreement with the foregoing terms and conditions, kindly
execute below where indicated and return one fully executed copy of this
Agreement to the attention of Human Resources, JetForm Corporation, 000
Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx X0X 0X0
Yours very truly,
JETFORM CORPORATION
Per:
--------------------------
Authorized Officer
Accepted and agreed this ________ day of April2000
------------------------------
Xxxxx Xxxxxxx
