EMPLOYMENT AGREEMENT
THIS
AGREEMENT made as of the ____ day of
___
___, 2001
and effective as of the 2nd day of
April 2001.
BETWEEN:
Zi
CORPORATION, a body
corporate, incorporated under the laws of the Alberta (hereinafter called the
“Corporation”)
| - |
and
- |
XXXX
XXXXXX, an
individual residing in Aurora, Ontario (hereinafter called
“Employee”)
WHEREAS:
A. the
Corporation is desirous of engaging the management services and expertise of the
Employee upon the terms, conditions and for the considerations as hereinafter
set forth; and
B. the
parties desire to enter into this Agreement to set forth their respective rights
and obligations.
NOW
THEREFORE THIS AGREEMENT WITNESSETH that in
consideration of the premises, the mutual covenants and agreements herein
contained and other good and valuable consideration, the parties hereto mutually
covenant and agree as set forth herein.
ARTICLE
1.
CONTRACT
FOR SERVICES
1.01 Subject
to the earlier termination of this Agreement as hereinafter provided and subject
to the condition precedent set forth in paragraph 2.02 hereof, the Corporation
hereby agrees to the services of the Employee on a full-time basis to provide
services to the Corporation and its affiliates in accordance with the terms and
provisions hereof.
1.02 The
Employee shall be responsible for and shall have such authority as is ordinarily
consistent with the position of Chief Financial Officer of the Corporation, with
full power and authority to supervise and manage the business and affairs of the
Corporation and such other matters as the directors may authorize from time to
time except such matters and duties as by law must be transacted or performed by
the board of directors and/or the shareholders of the Corporation. All such
authority of the Employee shall be subject to the power, direction and control
of the board of directors of the Corporation.
1.03 Without
limiting the generality of section 1.02 hereof, the Employee’s services
hereunder shall be provided on the basis of the following terms and
conditions:
| (a) |
the
Employee’s title shall be Chief Financial Officer of the Corporation
reporting to the Chairman and Chief Executive Officer of the
Corporation; |
| (b) |
the
Employee shall faithfully, honestly and diligently serve the Corporation
and cooperate with the Corporation and utilize professional skill and care
to ensure that all services rendered hereunder are to the satisfaction of
the Corporation, acting reasonably, and shall provide any other services
not specifically mentioned herein, but which by reason of his capability
he knows or ought to know to be necessary to ensure that the best
interests of the Corporation are
maintained; |
| (c) |
the
Employee shall assume, implement and execute such duties, directions
responsibilities, procedures, policies and lawful orders as may be
determined or given by the board of directors and/or the Chief Executive
Officer of the Corporation; |
| (d) |
the
Employee shall perform such duties and may exercise such powers as may
from time to time be assigned to or vested in him by the by-laws of the
Corporation; and |
| (e) |
the
Employee will, when it is deemed by the Corporation to be beneficial, join
in or participate with organizations, clubs, associations or groups that
may provide good business contacts and learning facilities for the benefit
of the Corporation provided, however, that the Corporation shall reimburse
the Employee for all reasonable expenses incurred in connection
therewith. |
1.04 Subject
to the terms of the Confidentiality and Non-Competition Agreement appended
hereto as Appendix A, the Employee agrees to devote his full time and attention
and use his best efforts to further the business and interests of the
Corporation during the period of this Agreement to the exclusion of all other
employment, business opportunities, consulting, or contracting.
1.05 It is
acknowledged and agreed between the parties hereto that the services to be
provided by the Employee hereunder are of such a nature that regular business
hours may be impossible and that the Employee may be required to perform
services in excess of eight hours per day or five days per week. It is also
anticipated that there will be certain evenings, Sundays and holidays during
which the Employee may be required to provide services and that the services to
be provided by the Employee are, inter
alia, of a
supervisory nature. The Employee therefore agrees that the consideration herein
set forth shall be in full and complete satisfaction for his work and services
to be provided hereunder, no matter when and how performed and the Employee
releases the Corporation from any additional pay or compensation, whatsoever
which he might have by reason of any existing or future legislation or
otherwise.
2
1.06 The
services to be carried out and performed by the Employee shall be initially
carried out and performed in the City of Calgary, or such other places as may be
mutually agreed between the Employee and the Corporation.
1.07 The
Corporation acknowledges that it has reviewed the qualifications and experience
of the Employee herein and formed the opinion that the Employee is capable of
carrying out the duties as set forth herein.
ARTICLE
2.
TERM
OF CONTRACT
2.01 Subject
to section 2.02 hereof and to termination pursuant Article 9 herein, the term of
this Agreement shall commence effective as of April 2, 2001.
2.02 Notwithstanding
anything else provided in this Agreement (except as provided in Section 3.04),
this Agreement shall be conditional upon the completion by the Employee of a
three-month probationary period, satisfactory to the Corporation, acting
reasonably. The probation period shall terminate effective July 2, 2001. The
Corporation agrees to and shall advise the Employee on or before July 2, 2001 as
to whether such probationary period has been satisfactorily
completed.
ARTICLE
3.
COMPENSATION
3.01 In
consideration of the services to be provided by the Employee to the Corporation
pursuant to Article 1 hereof, but subject to regulatory approval, the
Corporation shall pay to the Employee a base salary of CDN$180,000 dollars per
annum which is payable in bi-monthly on the 15th and last
day of each calendar month together with such increments as the board of
directors of the Corporation, in their sole discretion, may from time to time
determine.
3.02 The
Employee shall be reimbursed for all reasonable expenses incurred by him in or
about the execution of his services hereunder, including living expenses while
absent from his city of residence, travel and meeting/entertainment expenses.
All such expenses shall be verified by statements, receipts or other reasonable
evidence satisfactory to the Corporation.
3.03 Subject
to regulatory approval, the Employee shall be granted 60,000 options in the
Corporation. The exercise price for such options shall be based on the market
price of the Corporation’s shares as of the date of grant. The options will vest
as follows: 15,000 options to vest six (6) months from date of grant, 15,000
options to vest twelve (12) months from date of grant, 15,000 options to vest
twenty-four (24) months from date of grant, and 15,000 options to vest 30 months
from date of grant. Date of grant is the first day of employment.
3
3.04 The
Employee shall be entitled to participate in all medical, dental and other
health care, life insurance, group accident, long term disability, savings,
profit sharing, share option, share purchase and any other benefit plans of
whatsoever nature which the Corporation may provide from time to time, as of the
effective date of this agreement.
3.05 The
Employee may be granted an annual bonus of up to 40% of base salary based on
performance against mutually agreed to milestones and payable in cash or stock
options from time to time, as shall be determined in the sole discretion of the
board of directors. Any bonus granted hereunder shall be paid annually after the
fiscal year end results have been finalized.
3.06 The
Corporation shall be entitled to withhold and remit from such amounts payable
hereunder as is required by law from time to time.
ARTICLE
4.
REVIEW
OF COMPENSATION
4.01 The
remuneration payable pursuant to section 3.01 hereof shall be reviewed annually
by the board of directors of the Corporation on or before the anniversary date
hereof, at which time the board of directors shall consider such matters as it
may consider relevant and shall determine, in its absolute discretion, whether
to increase the annual remuneration payable by the Corporation to the Employee
hereunder, provided always however, that the remuneration payable to the
Employee pursuant to Article 3 hereof shall not, as a result of such review, be
reduced.
ARTICLE
5.
INCAPACITY
5.01 The
Employee shall be entitled to reasonable time from his services, without loss of
compensation, due to sickness or illness or other incapacity.
5.02 In the
event the Employee is insured either personally or through the Corporation or
through a group plan provided by the Corporation for loss of income as a result
of disability and the Employee receives compensation or disability income
pursuant thereto, then the amount of remuneration which the Employee is
otherwise entitled to receive hereunder during the period of illness or
incapacity shall be reduced by the amount of compensation or disability income
paid by such insurer to the Employee and the Employee covenants and agrees that
he shall immediately advise the Corporation from time to time of the receipt of
any such disability income paid by such insurer to the Employee.
4
ARTICLE
6.
CONFIDENTIALITY
AND NON-COMPETITION
6.01 The
Employee covenants and agrees to enter into a Confidentiality and
Non-Competition Agreement substantially in the form appended hereto as Schedule
A.
ARTICLE
7.
VACATION
7.01 During
the term hereof, the Employee shall be entitled to not less than three (3) weeks
paid vacation in each calendar year hereof or such other period as shall be
determined by the board of directors.
ARTICLE
8.
NON-ASSIGNABILITY
8.01 This
Agreement and all other rights, benefits, and privileges herein conferred are
strictly applicable to the Employee, and accordingly may not be assigned by the
Employee.
ARTICLE
9.
TERMINATION
9.01
This
Agreement shall be terminated upon the occurrence of any one of the following
events:
| (a) |
the
death of the Employee, at which time the Corporation shall have no further
obligation to the Employee under this Agreement other than to satisfy its
obligations herein; |
| (b) |
the
Employee becoming bankrupt or making an assignment for the benefit of
creditors in general, at which time the Corporation shall have no further
obligation to the Employee under this
Agreement; |
| (c) |
during
the first twelve months, ninety (90) days written notice by either of the
Employee or the Company to the other of such party’s intention to
terminate this Agreement. Alternatively, the Employer may pay the Employee
the cash equivalent of three (3) months Base Salary in lieu of providing
said ninety (90) days written notice; |
|
(d)
|
incapacity
due to illness, disability or injury to the Employee that renders the
Employee unable to perform his duties for a period of longer than six
consecutive months and, as of such date of termination, the Corporation
shall have no further obligation to the Employee under this Agreement;
or |
5
| (d) |
termination
of this Agreement without notice by the Corporation for cause, and as of
such date of termination, the Corporation shall have no further obligation
to the Employee under this Agreement (“cause” shall mean any of the
following and without limiting its meaning at common law, material breach
by the Employee of any of the covenants or terms of this Agreement and
Schedule A hereto; the Employee's deliberate failure to perform adequately
his employment duties; violation by the Employee of any Corporation policy
that may be issued from time to time, including but not limited to
policies concerning harassment and other workplace conduct; or the
criminal conviction of the Employee). |
9.02 In the
event of:
| (a) |
A
change of control of the Corporation (as such term is customarily used in
the Securities Act (Alberta) ) through ownership of its common shares
including a “take-over-bid” or an “issuer
bid”; |
| (b) |
A
change in all or substantially all of the members of the board of
directors of the Corporation; or |
| (c) |
The
Corporation merging, amalgamating or re-organizing with another
corporation that is not an affiliate of the Corporation;
or |
| (d) |
The
sale of all or substantially all of the assets or undertakings of the
Corporation; |
the
Employee shall be given notice of such event or events and shall within 30 days
after receipt of such notice, advise the Corporation in writing as to one of the
following:
| (e) |
that
he shall continue to remain in the services of the Corporation and the
terms of this agreement shall remain in full force and effect;
or |
| (f) |
that
he desires to terminate this agreement, in accordance with the provisions
of paragraph 9.01(c) hereof. |
9.03 If as a
result of a merger, takeover, amalgamation, sale of all or substantially all of
the assets, there is a change of control of the Corporation, all unvested share
options shall be come fully vested.
ARTICLE
10.
NOTICES
10.01 All
notice required or allowed to be given under this agreement shall be made either
personally or by mailing same by prepaid registered post, addressed as
hereinafter set forth or to such other address as may be designated from time to
time by such party in writing, and any notice mailed as aforesaid shall be
deemed to have been received by the addressees thereof on the fifth business day
following the day of mailing:
6
Zi CORPORATION 00X
Xxxxxxxxxx Xxxxxxx X
Xxxxx
000, 500 - 4th Avenue
S.W. Aurora,
Ontario
Xxxxxxx,
Xxxxxxx X0X
0X0
X0X
0X0 Attn:
Xxxx Xxxxxx
Any party
may from time to time change its address for service hereunder by written notice
to the other parties. Any notice may be served by hand delivery or by mailing
same by prepaid, registered post, in a properly addressed envelope, addressed to
the party to whom the notice is to be given at its address for service
hereunder.
ARTICLE
11.
SEVERABILITY
11.01 Each
provision of this Agreement is declared to constitute a separate and distinct
covenant and to be severable from all other such separate and distinct
covenants.
11.02 If any
covenant or provision herein is determined to be void or unenforceable in whole
or in part, it will not be deemed to affect or impair the enforceability or
validity of any other covenant or provision of this agreement or any part
thereof.
ARTICLE
12.
RELIEF
12.01 The
parties to this Agreement recognize that a breach by the Employee of any of the
covenants herein contained would result in damages to the Corporation and that
the Corporation could not adequately be compensated for such damages by monetary
award. Accordingly, the Employee agrees that in the event of any such breach, in
addition to all other remedies available to the Corporation at law or in equity,
the Corporation will be entitled as a matter of right to apply to a court of
competent equitable jurisdiction for relief by way of restraining order,
injunction decree or otherwise, as may be appropriate to ensure compliance with
the provisions of this agreement.
ARTICLE
13.
WAIVER
13.01 The
parties agree that all restrictions in this agreement are necessary and
fundamental to the protection of the Corporation and are reasonable and valid,
and all defences to the strict enforcement thereof by the Corporation are hereby
waived by the Employee.
7
ARTICLE
14.
GENERAL
14.01 The
parties hereto agree that they have expressed herein their entire understanding
and agreement concerning the subject matter of this Agreement and it is
expressly agreed that no implied covenant, condition, term or reservation or
prior representation or warranty shall be read into this agreement relating to
or concerning the subject matter hereof or any matter or operation provided for
herein. In the event of a discrepancy between the agreement and the revised
offer of employment dated March 27, 2001, (the “letter”) the terms of the letter
will prevail.
14.02 The
provisions of this agreement will enure to the benefit of and be binding upon
the heirs, executors, administrators and legal personal representatives of the
Employee and the successors and assigns of the Corporation
respectively.
14.03 Wherever
the singular or masculine or neuter is used in this agreement, the same shall be
construed as meaning the plural or feminine or body politic or corporate and
vice versa where the context of the parties hereto so require.
14.04 Time is
of the essence hereof.
14.05 This
Agreement shall be construed and interpreted in accordance with the laws of
Alberta and Canada and each of the parties hereto hereby irrevocably attorns to
the jurisdiction of such Courts.
14.06 The
Employee acknowledges that he has had the opportunity to have his legal counsel
review and participate in settling the terms of this Agreement.
ARTICLE
15.
INDEMNITY
15.01 The
parties covenant and agree to enter into an Indemnity agreement substantially in
the form appended herto as Schedule “B”.
IN
WITNESS WHEREOF the parties hereto have executed this Agreement effective as of
the date and year first above written.
| Zi CORPORATION | ||
| |
|
|
| Date: | per: | /s/ |
|
Xxxxxxx Xxxxxxxxx | ||
| Chairman & CEO | ||
8
SIGNED,
SEALED AND DELIVERED in
the
presence of:
______________________________ ___________________________
Witness
to the signature of the Xxxx
Xxxxxx
Employee
9
AFFIDAVIT
OF EXECUTION
Calgary ) I,
_________________
TO
WIT: ) _____________
MAKE OATH
AND SAY:
1. I WAS
PERSONALLY present and did see XXXX XXXXXX, the Employee named in the within
instrument, who is personally known to me to be the person named therein, duly
sign and execute the same for the purposes named therein.
2. THAT THE
SAME was executed in ________________________, Calgary, Alberta and that I am
the subscribing witness thereto.
3. THAT I
KNOW the said Employee, and he/she is, in my belief, of the full age of eighteen
years.
SWORN
BEFORE ME ________________,
in
Calgary, Alberta _______________, this )
this
_____ day of ______________, 2001. )
)
)
)
_______________________________________ _____________________________
A
Commissioner for Oaths / Notary Public in Print
Name of Witness Below:
10
AMENDING
AGREEMENT DATED AS OF ,
2004
BETWEEN
ZI
CORPORATION (the
“Corporation”)
OF THE FIRST PART
OF THE FIRST PART
- and
-
XXXX
XXXXXX (the
“Employee”)
OF THE SECOND PART
OF THE SECOND PART
WHEREAS:
A.
the
Corporation and the Employee are parties to an Employment Agreement dated
the
2nd day of
April, 2001 (hereafter referred to as the “Employment Agreement”), a copy of
which (unexecuted and without schedules) is annexed hereto as Schedule
1;
B.
it is in
the best interest of the Corporation and the Employee to amend certain terms of
the
Employment Agreement in order to provide certainty in respect to the termination
provisions
in the Employment Agreement and to clarify or alter certain of those
provisions;
C.
the
Employee has had the opportunity to avail himself of legal advice respecting the
matter
referred to herein and is executing this agreement of his own free will and
accord and with
an understanding of its provisions, consequences and effect.
NOW
THEREFORE, IN CONSIDERATION in
consideration of the premises, the mutual covenants and agreements herein
contained and other good and valuable consideration (the receipt and sufficiency
of which is hereby acknowledged), the parties hereby agree as
follows:
1. Except as
specifically provided for herein, and as may be necessary to give force and
effect to the
provisions of this Amending Agreement, the terms and conditions of the
Employment Agreement
shall continue in full force and effect.
2. Article
1.03(a) of the
Employment Agreement is hereby amended to provide as follows:
“the
Employee’s title shall be Chief Financial Officer of the Corporation
reporting to the Chief Executive Officer of the Corporation;
3. Article
9.01(c) of the
Employment Agreement is hereby amended to provide as follows:
“The
Corporation may terminate this Agreement for reasons other than
those specified in Article 9.01(d) herein by providing written notice of
termination to the Employee, in which event the Corporation
shall forthwith, and in any event within 10 days of providing
the said written notice, pay to the Employee the following
Termination Payment (less any statutory deductions required
by law):
| (i) |
an
amount equivalent to twelve (12) months base
salary; |
| (ii) |
a
further amount equivalent to 20% of the Employee’s annual
base salary, representing the loss, dimunition, or deprivation
of the benefits, perquisites and potential bonus provided
to the Employee pursuant to Articles 3.04 and 3.05
herein; and |
| (iii) |
the
Termination Payment payable under this Article 9.01(c) shall
not be reduced in any respect in the event that the Employee
shall secure or shall not reasonably pursue alternative
employment, consulting work for other remuneration
following the termination of the Employee’s Employment.” |
| 4. |
Article
10.01 of the Employment Agreement shall be amended to provide that,
henceforth until otherwise notified, Employee’s address for service
is: |
“P.O. Xxx
0000 Xxxxx Xxxxx, Xxxxxxx X0X 0X0”
IN
WITNESS WHEREOF the
Corporation has executed this Agreement by its proper officers
acting in
that capacity and the Employee has executed this Agreement, all as of
,
2004.
_________________ _____________
Witness
XXXX
XXXXXX
_________________
Name of
Witness (Printed)
Per:
_________________
Per:
_________________
ZI CORPORATION
2
