Exhibit 10.24
EXECUTIVE COMPENSATION AGREEMENT
THIS AGREEMENT made as of the 1st day of January, 2000.
AMONG:
TUCOWS INTERNATIONAL CORPORATION
A corporation incorporated under the laws of the Province of
Ontario
(hereinafter referred to as the "Corporation")
OF THE FIRST PART,
- and-
Xxxxxxx Xxxxxxxxx, an individual residing in the City of Xxxxxxxxx
in the Province of Ontario.
(Hereinafter referred to as the "Executive"),
OF THE SECOND PART,
WHEREAS the business of the Corporation consists of the distribution of digital
content and related services on a global basis:
AND WHEREAS the Corporation wishes to retain the services of the Executive to
provide the services hereinafter described during the term hereinafter set:
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which is acknowledged, the parties
agree as follows:
1. TERM
The Corporation shall employ the Executive for an indefinite term subject to any
termination provisions that form part of this Agreement.
2. DUTIES
The Executive shall serve the Corporation in the capacity of Chief Financial
Officer ("CFO"). He will report to the Chief Executive Officer of the Company,
as appointed by the Board of Directors, and shall perform such duties and
exercise such powers of the position of CFO as more fully described in the job
description for CFO, attached hereto.
Without limitation of the foregoing, the Executive shall:
(a) devote his 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) use his best efforts to promote the interests and goodwill of the
Corporation; and
The Executive acknowledges that these duties supersede any previous duties or
responsibilities of the Executive under any previous contracts.
3. REMUNERATION
The intent of this Compensation Agreement is to entitle the Executive to an
annual compensation package for his services considering the role and
performance of the Executive and the size and stage of development of
Corporation, which is equal to the higher of: a) fair market value or b) to the
extent compensation levels for comparable senior executives of the Corporation
exceed fair market value, the compensation levels of such comparable senior
executives. Such fair market compensation is to be comprised of a base salary
and annual bonuses and options and other perquisites of office, and is to be
exclusive and not considerate of share dividends and other corporate benefits
which executives receive in their capacity as shareholders.
A. BASE SALARY:
The annual base salary payable to the Executive for his services hereunder shall
be at an annual rate of $150,000 commencing on January 1, 2000 which amount
shall be exclusive of bonuses, options, share dividends, benefits and other
compensation. The base salary shall be paid on the normal payroll cycle of the
Corporation.
B. COMPENSATION REVIEW
The Executive's compensation shall be reviewed annually by the Compensation
Committee of the Board of Directors within three months of the Corporation's
year-end and will be effective from the year end date.
C. BONUS STRUCTURE
In addition, the Executive will be entitled to participate as appropriate in any
bonus plan that we may institute from time to time.
D. EMPLOYEE BENEFITS
The Executive shall be entitled to participate in all of the Corporation's
benefit plans made generally available to its senior executive employees from
time to time in accordance with the terms thereof at the Corporation's expense.
The Corporation shall also pay on behalf of the Executive, health club
membership and other fees in an amount not to exceed $1,400 annually. The
Corporation will pay the Benefit premiums excluding Long term disability.
E. CAR ALLOWANCE AND PARKING SPACE
The Corporation shall pay to the Executive a monthly car allowance of $500 plus
taxes. The Corporation shall also provide the Executive with a parking space at
the Corporation's office in which the Executive is primarily working, at its
expense.
F. VACATION
During the term of this Agreement, the Executive shall be entitled to four weeks
vacation. Such vacation shall be taken at a time or times acceptable to the
Corporation having regard to its operations.
G. OPTIONS
The Executive will be granted stock options to purchase 150,000 common shares of
TUCOWS, exercisable at a strike price of $3.89 per share. The options will be
granted per the Corporation's option plan. The options shall vest in accordance
with the Corporation's option plan commencing on October 31, 2000.
If a change of control has occurred, and the Executive is terminated without
cause, then all options granted to the Executive will vest immediately.
H. D&O INSURANCE AND INDEMNITY
The Executive will be an Officer of the Corporation and will be covered under
the Corporation's D&O insurance policy. To the extent that the corporation lacks
sufficient insurance to fully indemnify Executive (e.g. does not have E&O
insurance), the Corporation agrees that it shall indemnify the Executive with
regard to legal defense costs and liability costs. For greater certainty the
Corporation will pay the legal fees when presented with an invoice rather than
requiring Executive to pay same and claim reimbursement. The Corporation shall
have the right to choose whether or not to defend or settle and to appoint
counsel of its choice.
5. EXPENSES
The Executive shall be reimbursed for all reasonable travel and other
out-of-pocket expenses actually and properly incurred by the Executive from time
to time in connection with carrying out his duties hereunder. For all such
expenses the Executive shall furnish to the Corporation originals of all
invoices or statements in respect of which the Executive seeks reimbursement.
6. TERMINATION
(a) Death or Disability
In the event of permanent disability or death of the Executive, this agreement
may be terminated by the Corporation by notice to the Executive. The Executive
is deemed to have become permanently disabled if in any year during the
employment period, because of ill health, physical or mental disability, or for
other causes beyond the control of the Executive, the Executive has been
continuously unable or unwilling or has failed to perform the Executive's duties
for 9 consecutive months. The term "any year of the employment period" means any
period of 12 consecutive months during the employment period.
(b) For Cause
The Corporation may terminate the employment of the Executive at any time for
cause without payment of any compensation either by way of anticipated earnings
or damages of any kind or payment in lieu of notice.
(c) Without Cause
The Corporation may terminate the employment of the Executive upon payment of:
all compensation due to date of termination (including a pro rata payment of
bonuses earned); and
a termination sum in the amount of 6 months compensation plus 1 month's
compensation for each year of service. For this purpose compensation is defined
as including, but not limited to, base salary, vacation pay, car allowance and
health club membership, and options which vest during the severance in lieu of
notice period. The Corporation shall not be entitled to provide notice in lieu
of the termination compensation. Furthermore, the termination compensation sum
is payable forthwith after termination, whether or not the Executive seeks or
finds alternative employment within any set time period after termination.
Termination compensation will be payable in equal installments over 6 months if
Executive is satisfied, in his discretion, acting reasonably, that there is
adequate security to ensure that the compensation will in fact be paid in full.
(d) By Executive
The Executive may terminate this Agreement upon providing the Corporation with 3
months notice in writing of his intention to do so.
Continued Benefit Coverage
The Corporation will also continue to provide medical and dental coverage under
all applicable plans for the Executive and all entitled beneficiaries for the
same period.
Notice and Cure Period
In the event that the Corporation wishes to terminate the employment agreement
for cause and in the absence of fraud, the Corporation will provide the
Executive with written notice of the circumstances that entitle the Employer to
so terminate the agreement. The Executive will be given 15 days to cure or
rectify the relevant circumstances or if the circumstances cannot reasonably be
rectified in 15 days, an appropriate period.
Legal Fees for Drafting
All legal fees, including any Executive legal fees pertaining to the drafting or
interpretation, while the Executive is employed by the Corporation, of this
agreement will be at the Corporation's cost.
7. INTELLECTUAL PROPERTY RIGHTS
The Corporation shall be the owner of all work products created by the Executive
or in which the Executive assisted in the creation during the course of his
employment with the Corporation. All intellectual property rights in such work
products, including all patents, trademarks, copyrights, trade secrets and
industrial designs, shall be the exclusive property of the Corporation.
In the event that the Executive acquires any rights or interests in the work
products or in any intellectual property rights relating to the work products,
the Executive hereby assign all such right and interests to the Corporation. The
Corporation shall have the exclusive right to obtain copyright registrations,
letters patent, industrial design registrations, trademark registrations, or any
other protection in respect of the work products and the intellectual property
rights in the work products anywhere in the world. At the expense and request of
the Corporation, the Executive shall both during and after his employment with
the corporation, execute all documents and do all other acts necessary to enable
the Corporation to protect its rights in such work products and the intellectual
property rights in the work products.
8. NON-COMPETITION
During the term of this Agreement and for a period of 12 months from the date of
termination of this Agreement the Executive hereby covenants and agrees that:
(a) he shall not (without the prior written consent of the Corporation) either
directly or indirectly, in any manner whatsoever, including, without limitation,
either individually or in partnership or jointly, or in conjunction with any
other person as principal, agent, shareholder, employee or in any other manner
whatsoever, carry on or be engaged in the principal business carried on by the
Company as of the date of this Agreement (a "Competitive Business"), or be
concerned with or interested in or lend money to, guarantee the debts or
obligations of or permit his or its name or any part thereof to be used by any
person engaged or concerned with or interested in a Competitive Business within
Canada or the United States; and
(b) that he or it will not (without the prior written consent of the
Corporation), (i) divulge to any person the name of any customer or client of
the Corporation; (ii) knowingly solicit, interfere with or endeavor to entice
away from the Corporation any customer, client or any person in the habit of
dealing with the Corporation; and (iii) interfere with or knowingly entice away
or otherwise attempt to obtain the withdrawal of any employee of the
Corporation.
The Corporation may apply for or have an injunction restraining breach or
threatened breach of the covenants herein contained.
If the Executive has been terminated without cause then period
9. CONFIDENTIALITY
The Executive acknowledges and agrees that:
(a) in the course of performing his duties and responsibilities as an officer
and employee of the Corporation, he has had and will continue 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 addresses, preferences, needs and
requirements of past, present and prospective clients, customers, suppliers, 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 Corporation's
interests;
(b) in the course of performing his duties and responsibilities for the
Corporation, the Executive has been and will continue in the future to be a
representative of the Corporation to its customers, clients, and suppliers, and
as such, has had and will continue in the future to have significant
responsibility for maintaining and enhancing the goodwill of the Corporation
with such customers, clients and suppliers and would not have, except by virtue
of his employment with the Corporation, developed a close and direct
relationship with the customers, clients and suppliers of the Corporation;
(c) the Executive, as an officer of the Corporation, owes fiduciary duties to
the Corporation, including the duty to act in the best interests of the
Corporation, and to disclose any conflicts of interest or potential conflicts of
interest in writing to the Corporation; and
(d) the Corporation is entitled to protect, by way of injunction or otherwise;
i) the right to maintain the confidentiality of the Trade Secrets;
ii) the right to preserve the goodwill of the Corporation; and
iii) 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,
All of which constitute proprietary rights exclusive to the Corporation.
10. NO ASSIGNMENT
The Executive may not assign, pledge or encumber the Executive's interest in
this agreement nor assign any of the rights or duties of the Executive under
this agreement without the prior written consent of the Corporation.
11. SEVERABILITY
If any provision of this agreement, including the breadth or scope of such
provision, shall be held by any court of competent jurisdiction to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the validity or enforceability of the remaining provisions of this
agreement and such remaining provisions, or part thereof, shall remain
enforceable and binding.
12. GOVERNING LAW
This agreement shall be governed in accordance with the laws of the Province of
Ontario.
13. SUCCESSORS
This agreement shall be binding on and enure to be benefit of the successors and
assigns of the Corporation and the heirs, executors, personal legal
representatives and permitted assigns of the Executive.
14. NOTICES
Any notice or other communication required or permitted to be given hereunder
shall be in writing and either delivered by hand or mailed by prepaid registered
mail. At any time other than during a general discontinuance of postal service
due to strike, lock-out or otherwise, a notice so mailed shall be deemed to have
been received three (3) business days after the postmarked date thereof or, if
delivered by hand, shall be deemed to have been received at the time it is
delivered. If there is a general discontinuance of postal service due to strike,
lock-out or otherwise, a notice sent by prepaid registered mail shall be deemed
to have been received three (3) business days after the resumption of postal
service. Notices shall be addressed as follows:
(a) If to the Corporation:
Tucows International Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
(b) If to the Executive:
Xx. Xxxxxxx Xxxxxxxxx
00 Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxx, X0X 0X0
15. LEGAL ADVICE
The Executive hereby represents and warrants to the Corporation and acknowledges
and agrees that he had the opportunity to seek, and was not prevented nor
discouraged by the Corporation from seeking independent legal advice, prior to
the execution and delivery of this agreement and that, in the event that he did
not avail himself of that opportunity prior to signing this agreement, he did so
voluntarily without any undue pressure agrees that his failure to obtain
independent legal advice shall not be used by him as a defense to the
enforcement of his obligations under this Agreement.
IN WITNESS WHEREOF this agreement has been executed by the parties hereto as of
the date first above written.
TUCOWS INTERNATIONAL CORPORATION
Per: /s/ Xxxxxx Xxxx
---------------------------------
Xxxxxx Xxxx - Chief Executive Officer
/s/ Xxxxxxx Xxxxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxxxx
