Exhibit 10.3
September 22, 1998
Xxxxxx Xxx
c/o JetForm Corporation
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
Re: Employment Agreement
We are pleased to confirm the terms and conditions of the employment of
Xxxxxx Xxx ("you" or the "Executive") with JetForm Corporation (the
"Corporation"). The Corporation believes that it is reasonable and fair to the
Corporation that you receive fair treatment in the event of the termination
without cause or adverse modification without cause of your employment. In
consideration thereof, and by your execution of this Agreement below, you wish
to abide by various non-competition and confidentiality restrictions contained
herein, your violation of which would be highly detrimental to the Corporation,
and both you and the Corporation wish formally to agree as to the terms and
conditions contained herein that will govern the termination or modification of
your 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 July 15,
1996.
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 sum of:
(i) the annual salary of the Executive, payable to the
Executive by the Corporation at the Date of
Termination or as at the end of the month
immediately preceding the month in which
termination occurs (the "Prior Month"), whichever
is greater, and if an annual salary has not been
established, it shall be calculated by multiplying
the monthly salary of the Executive in effect for
the Prior Month by 12; and
(ii) the aggregate amount of all remuneration,
salaries, bonuses and benefits (including, without
limitation, health, dental and disability
coverage) not included in clause (i) above that
the board of directors of the Corporation acting
reasonably estimates would be payable to the
Executive during the 12 month period following the
termination of the Executive's employment by the
Corporation assuming: (1) the employment of the
Executive was not terminated during such period;
and (2) the Executive benefited from and
participated in such remuneration, salaries,
bonuses and benefits on a basis consistent with
practices in effect for senior executives of the
Corporation immediately prior to the Date of
Termination;
(b) "Date of Termination" shall mean the date of termination of
the Executive's employment, whether by the Executive or by
the Corporation or by death of the Executive;
(c) "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;
(d) "Good Reason" shall include, without limitation, the
occurrence of any of the following without the Executive's
written 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 in a
manner which is consistent with industry practices
generally in effect prior to such reduction or
change.
(ii) any failure by the Corporation to continue in
effect any substantive benefit, bonus, profit
sharing, incentive, remuneration or compensation
plan, pension plan or retirement plan in which the
Executive was participating or entitled to
participate immediately prior to such failure
other than a failure to continue such benefits,
bonuses or plans on a basis consistent with
industry practices generally in effect prior to
such failure, or the Corporation taking any action
or failing to take any action, the failure of
which would adversely affect the Executive's
participation in or reduce his rights or benefits
under or pursuant to any such plan other than an
action or failure to take an action on a basis
consistent with industry practices generally in
effect prior to such action or failure, or the
Corporation failing to increase or improve such
rights or benefits on a basis consistent with
industry practices generally in effect prior to
such failure; or
(iii) any material breach by the Corporation of any
provision of this Agreement; or
(iv) 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; and
(g) "Just Cause" shall mean:
(i) gross insubordination;
(ii) the continued failure or refusal by the Executive
to substantially perform his duties according to
the terms of his employment, after the Corporation
has given the Executive notice of such failure or
refusal and a reasonable opportunity to correct
it, except where such acts or omissions by the
Executive:
(A) 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 criminal act of dishonesty by the Executive
resulting or intended to result directly or
indirectly in personal gain of the Executive at
the Corporation's expense.
Article II - Duties and Compensation
2.1 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 reasonable best
efforts during normal business hours to the business and
affairs of the Corporation;
(b) perform those duties that may reasonably be assigned to the
Executive 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 which he
should reasonably be aware; and
(d) use his reasonable 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
direct line reporting executive and approved where applicable by the
Chief Operating Officer, the President, or the Compensation Committee
of 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 company 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 - Obligations of the Corporation upon Termination
3.1 The Corporation shall have the following obligations in the event that
the Executive's employment is terminated:
(a) Death, Disability or Retirement. If the Executive's
employment is terminated by reason of the Executive's death,
Disability or retirement, the Executive or the Executive's
family, as the case may be, shall be entitled to receive
benefits in a manner consistent with and at least equal in
amount to those made available by the Corporation to senior
executives or surviving families of the senior executives of
the Corporation under such plans, programs and policies
relating to (i) family death benefits, if any, as are in
effect at the date of the Executive's death; or (ii)
Disability or retirement, if any, as are in effect at the
Date of Termination, as the case may be.
(b) Termination by the Corporation for Just Cause and
Termination by the Executive Other Than for Good Reason. If
the Executive's employment is terminated by the Corporation
for Just Cause, or is terminated by the Executive other than
for Good Reason, the Corporation shall pay to the Executive,
if not theretofore paid, the fraction of the Annual Salary
and vacation pay, if any, earned by or payable to the
Executive by the Corporation during the then current fiscal
year of the Corporation for the period to and including the
Date of Termination, and the Corporation shall not have any
further obligations to the Executive under this Agreement or
otherwise.
(c) Termination by the Corporation Other Than for Just Cause,
Disability or Death and Termination by the Executive for
Good Reason. Either party must give 60 days written notice
of such termination. If the Executive's employment is
terminated by the Corporation other than for Just Cause,
Disability, retirement or death or is terminated by the
Executive for Good Reason:
(i) the Corporation shall pay to or to the order of
the Executive the aggregate of the following
amounts (less any deductions required by law):
(A) if not theretofore paid, the Executive's
Annual Salary for the then current
fiscal year of the Corporation for the
period to and including the Date of
Termination; and
(B) an amount equal to the annual salary;
(ii) subject to the provisions of Section 9 of the 1995
Stock Option Plan and Section 16 of the 1993 Stock
Option Plan, the Corporation shall ensure that all
options to acquire common shares of the
Corporation held by the Executive on the Date of
Termination shall continue to vest and be
exercisable for the full period during which
Executive is compensated by the Corporation as set
forth in Section 3.2. As of the last day of such
period, the executive shall have 30 days to
exercise all vested options. On the 31st day, all
unexercised options vested or unvested are
cancelled. Notwithstanding the foregoing, all
options held by the Executive, whether then vested
or not, shall immediately become exercisable (and
shall remain exercisable for the period of thirty
days following the Date of Termination in the
event that the Executive's employment is
terminated by the Corporation (other than for Just
Cause, Disability or Death) within one year
following: the acquisition by any third party of
greater than 50% of the then issued and
outstanding JetForm common shares.
(iii) the Corporation shall not seek in any way to amend
the terms of any loans from the Corporation or its
subsidiaries to the Executive;
(iv) the Corporation shall provide the Executive with
the job relocation counselling services of the
firm acceptable to the Corporation for an amount
not to exceed $15,000;
(v) 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; and
(vi) the Corporation shall pay to the Executive all
outstanding and accrued vacation pay to the Date
of Termination.
Upon compliance with clauses (c)(i) through (vi) above, the
Corporation shall have no further obligations 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 for wrongful dismissal
or termination.
3.2 The benefits payable under this Article III shall be paid as follows:
(a) with respect to that portion of the Annual Salary relating to
salary and related benefits of the Executive, at the Corporation's
regular pay periods and (b) with respect to all other amounts, on a
basis consistent with practices in effect immediately prior to the
Date of Termination. If the Executive secures employment after the
Date of Termination and prior to receiving all amounts owing
hereunder, the Executive shall immediately inform the Corporation and
the Corporation shall have the right to terminate all health, life and
disability benefits being carried by the Corporation for the
Executive.
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; 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 who was a customer of the Corporation or
any of its subsidiaries while the Executive was an Executive
of the Corporation.
Notwithstanding the foregoing, the Executive may hold up to five per
cent of the issued and outstanding securities of any publicly traded
company.
4.2 The Executive shall not while an Executive of the Corporation and for
a period of 12 months thereafter, directly or indirectly, employ or
retain as an independent contractor any employee of the Corporation or
any of its subsidiaries or induce or solicit, or intend to induce, any
such person to leave his/her employment.
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, shall co-operate with the
Corporation in documenting the ownership of the Intellectual Property
by 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.
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 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: Chief Executive Officer
(b) in the case of the Executive, to:
Xxxxxx Xxx
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 enure 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
applicable law, 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 Xxxxxxxx Xxxxxx, Vice President 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 ____________, 1998.
---------------------------------
