EMPLOYMENT AGREEMENT
1
Exhibit
10.1
THIS
AGREEMENT
is made
as of the 11th day of June 2007.
BETWEEN:
|
|
Xxxxxx
X. Xxxxxx
|
|
of
the City of Xxxx Xxxxxx, XX 00000
|
|
(hereinafter
referred to as the "Employee")
|
|
AND:
|
|
a
corporation incorporated under the laws of Canada
|
|
(hereinafter
referred to as the "Employer")
|
WHEREAS:
The
Employer wishes to employ the Employee and the Employee wishes to serve the
Employer upon the terms and subject to the conditions herein
contained.
NOW
THEREFORE
in
consideration of the premises and the mutual covenants herein and other good
and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged by each of the parties, the parties hereto covenant and agree
as
follows:
1.
|
DEFINITIONS
|
|
In
this agreement, unless the context otherwise specifies or requires,
the
following terms shall have the following meanings:
|
||
1.1
|
"Agreement,"
"hereto," "herein," "hereof," "hereunder"
and similar expressions refer to this Agreement and not to any particular
section or any particular portion of this Agreement and includes
all
schedules attached to this Agreement;
|
|
1.2
|
“President”
shall mean the President of Enterprise Software for the
Company;
|
|
1.3
|
"Court"
shall mean a Court of competent jurisdiction;
|
|
1.4
|
"Parties"
shall mean the Parties to this Agreement and "Party" shall mean one
of the
Parties to this Agreement.
|
2.
|
EMPLOYMENT
|
||
2.1
|
The
Employer agrees to employ the Employee and the Employee agrees to
act as
Chief Financial Officer or in such other employment as the Employer
and
the Employee may from time to time agree and the Employee agrees
to serve
the Employer upon the terms and subject to the conditions set out
in this
Agreement.
|
||
2.2
|
The
Employee specifically undertakes and agrees with the Employer that
he
shall be responsible for the following:
|
||
2.2.1
|
for
fulfilling the title and role of the CFO of the Employer; and
|
||
2
2.2.2
|
such
other duties as may be reasonably required.
|
||
2.2.3
|
the
starting date of Employee would be no later than June 11th,
2007
|
3.
|
TERM
|
|
3.1
|
The
Initial Term of this Agreement shall be a period of one (1) year
from the
date hereof. Unless written notice is given by either party at least
ninety (90) days before the end of the Initial Term or any one (1)
year
extension thereof (each, a “Renewal Term”), that they wish this Agreement
to terminate at the end of the Initial or respective Renewal Term,
whichever may apply, this Agreement will be automatically extended
by
successive one year Renewal Terms. Any references herein to the “Term”
shall include both the Initial Term and any and all Renewal Terms.
|
REMUNERATION
|
|||
4.1
|
In
consideration of the Employee’s undertaking and the performance of the
obligations contained in this Agreement, the Employer shall, unless
otherwise agreed upon by all parties to this Agreement, pay and grant
the
following remuneration to the Employee:
|
||
4.1.1
|
Base
Salary.
The Employee shall be entitled to receive a salary, not less than
$225,000.00 (U.S.) per year.
|
||
4.1.2
|
Bonus. In
addition to the base salary specified in section 4.1.1 the Employee
shall
be entitled to an aggregate annual bonus of up to $100,000.00 (U.S.)
based
on certain targets being achieved. The Parties will mutually agree
to
these targets. Achievement of targets will be assessed on a quarterly
basis, and any bonus earned for a particular quarter, as reasonably
determined by the Employer, will be paid to the Employee within 30
days
after the close of the quarter
|
||
4.1.3
|
Stock
Options.
In
addition to the base salary outlined in section 4.1.1 on the first
date of
employment, the Employee shall be granted a stock option to purchase
200,000 shares of common stock of the Employer (the “Option Shares”) at a
price that is the closing price on the NASDAQ market on the date
of the
option grant. These options shall vest one third annually over a
three (3)
year period, beginning on the first anniversary of the date of the
option
grant. Within 60 days of separation for any reason, Employee will
be
entitled to exercise any stock options then vested.
|
||
4.1.4
|
Restricted
Stock Units: In
addition to the base salary outlined in section 4.1.1 on the first
date of
employment, the Employee shall be granted 50,000 Restricted Stock
Units
(the “RSU’s”). These RSU’s shall vest one-third over a three (3) year
period, beginning on the first anniversary of the date of the grant.
Upon
separation for any reason, Employee will be entitled to any Restricted
Stock then vested.
|
5.
|
BENEFITS
|
||
5.1
|
In
consideration of the Employee’s undertaking and the performance of the
obligations contained in this Agreement, the Employer shall, unless
otherwise agreed upon by all parties to this Agreement, pay and grant
the
following benefits to the Employee:
|
3
5.1.1
|
Vacation.
The Employee shall be entitled to vacation time of three (3)
|
||
5.1.2
|
Other
Benefits. The
Employee shall be entitled to participate in all benefit programs
provided
by Employer to its executives effective upon the Employee’s start date.
The Employer shall pay for family coverage premiums for the Employee
for
health and dental (if any) insurance offered by the Employer. The
Employer
shall pay for the Employee’s STD/LTD premiums.
|
||
5.1.3
|
Expenses.
Employer shall pay Employee $500 per month toward a car allowance.
In
addition, the Employer shall reimburse the Employee for all reasonable
and
necessary business expenses, including but not limited to cellular
phone
expenses, upon the presentation to the Employer of appropriate written
documentation and receipts.
|
6.
|
ATTENTION
TO DUTIES
|
|
The
Employee shall devote his whole working time and attention to the
Employer
during the Term of this Agreement and will not engage in any other
capacity or activity which, in the sole opinion of the Employer acting
reasonably, would hinder or interfere with the performance of the
duties
of the Employee.
|
7.
|
CONFIDENTIALITY
|
|
The
parties acknowledge that in carrying out his duties under this Agreement,
the Employee will have access to and become entrusted with confidential
information regarding the business plans and operations of the Employer,
computer systems and technology, unique methodology and other proprietary
information. The Employee acknowledges that the right to maintain
such
detailed confidential information constitutes a proprietary right,
which
the Employer is entitled to protect. Accordingly, the Employee shall
not,
during the Term of this Agreement, or at any time thereafter, disclose
any
of such detailed confidential information or trade secrets of the
Employer
to any person or persons, firm, association or corporation, nor shall
the
Employee use the same for any purpose, in either case, except on
behalf of
the Employer. Notwithstanding the foregoing, the obligations of the
Employee in this Section 7 shall not apply to confidential information
(i) which at the date hereof or thereafter becomes a matter of public
knowledge without breach by the Employee of this Agreement; or
(ii) which is obtained by the Employee from a person, firm, or entity
(other than the Employer or an affiliate of the Employer) under
circumstances permitting its use or disclosure to others.
|
8.
|
OWNERSHIP
OF INVENTIONS
|
|||
8.1
|
The
Employee shall promptly communicate and disclose to the Employer
all
inventions, improvements, modifications, discoveries, designs, formulae,
methods and processes made, discovered or conceived by the Employee
either
alone or jointly with others, during the period of his employment
with the
Employer, providing the same relate to or are capable of being used
by the
corporation or any affiliate thereof in the normal course of their
businesses.
|
|||
8.2
|
The
Employee acknowledges and declares that all inventions, improvements,
modifications, discoveries, designs, formulae, methods, processes,
as are
described in section 8.1 hereof, and all patents and patent applications
relating thereto are the property of the Employer and hereby assigns
to
the Employer all of the right, title and interest of the Employee
in any
such inventions, improvements, modifications, discoveries, designs,
formulae, methods and processes, and in any patents or patent applications
relating thereto. The Employee shall, at the Employer’s expense, execute
all instruments and documents and do all such further acts and things
as
may be necessary or desirable, in the Employer's opinion to carry
out the
provisions of this section.
|
4
9.
|
NON-COMPETITION
|
|||
|
The
Employee shall not, without prior written consent of the Employer
for the
period of his employment hereunder or for a period of one (1) year
following the termination of this Agreement or any renewal hereof,
for any
reason be it for cause or not, either alone or in conjunction with
any
individual, firm, corporation, association or any entity, except
for the
Employer, whether as principal, agent, shareholder, employee or in
any
other capacity whatsoever, perform the duties of or provide the services
as are described in section 2.2 hereof in a business which competes
with
the Employer, within any geographical location where the Employer
has
carried on business or expended time and personnel and financial
resources. Furthermore, the Employee also agrees that upon the termination
of his employment he will not attempt to hire or encourage to leave
their
employ, any of the Employer's other employees. Notwithstanding the
foregoing, the Employee shall not be precluded from competing with
the
business of the Employer in the event his employment is terminated
by the
Employee for good reason or by the Employer other than for cause,
unless
the Employer provides the applicable compensation and benefits set
out in
section 10.1.3 hereof, in which case, the Employee shall be precluded
from
competing as described in this section 9 until such time as such
compensation and benefits are terminated.
|
|||
10.
|
TERMINATION
|
|||
10.1
|
The
parties understand and agree that employment pursuant to this Agreement
may be terminated during the Term in the following manner in the
specified
circumstances:
|
|||
10.1.1
|
by
the Employee without good reason (as defined below), on the giving
of not
less than one (1) month prior written notice to the Employer, which
the
Employer may waive, in whole or in part;
|
|||
10.1.2
|
by
the Employee for good reason on the giving of not less than one (1)
month
prior written notice to the Employer, if the Employer has not cured
the
event giving rise to good reason by the end of such notice period.
For
purposes of this Agreement good reason shall mean, absent the Employee’s
prior written consent: (i) the Employer’s failure to timely provide the
Employee with the salary, bonus and equity as set forth in section
4.1
hereof or to provide benefits to the Employee in accordance with
section
5.1 hereof; (ii) a material breach by the Employer of this Agreement
or
any other agreement with the Employee; (iii) a material diminution
by the
Employer in the Employee’s title, responsibilities, authority or reporting
structure; (iv) failure of the Employer to ensure that any successor
or
assign of the Employer agrees in writing to be bound by the terms
of this
Agreement. If the Employee terminates his employment for good reason,
he
shall be entitled to the payments set forth in section 10.1.3 hereof,
to
be provided within thirty (30) days after his termination;
|
|||
10.1.3
|
by the Employer in its absolute discretion without cause upon not less than one (1) month prior written notice to the Employee, on giving the Employee a payment equal to (i) if the employment is terminated during the first six months of full time employment then a payment equal to (3) months base salary at the rate in effect on the Employee’s termination date; or (ii) if the employment is terminated after six months of full time employment then a payment equal to six (6) months base salary at the rate in effect on the Employee’s termination date. The payment representing this aggregate amount shall be paid within thirty (30) days from notice provided herein; |
5
10.1.4
|
by
the Employer for cause. The parties agree that for the purposes of
this
Agreement, “cause” shall mean the following, as reasonably determined by
the Employer in good faith, and that the Employee shall be terminated
immediately upon written notice for such cause:
|
|||
10.1.4.1
|
any
material breach of the provisions of this Agreement or of an established
written policy of the Employer after Employer provided written notice
to
Employee and 10 day opportunity to cure during which time Employee
failed
to cure;
|
|||
10.1.4.2
|
any
intentional or grossly negligent disclosure of any confidential
information as described in section 7 hereof, by the
Employee;
|
|||
10.1.4.3
|
in
carrying out his duties hereunder, the Employee; (i) has been grossly
negligent, or (ii) has committed willful gross
misconduct;
|
|||
10.1.4.4
|
personal
conduct on the Employee’s part which is of such a serious and substantial
nature that, as reasonably determined in good faith in the sole discretion
of the Employer, it would materially injure the reputation of the
Employer
if the Employee is retained as an Employee; or
|
|||
10.1.4.5
|
any
and all omissions, commissions or other conduct, which would constitute
cause under applicable law.
|
|||
10.2
|
The
Parties understand and agree that the giving of notice or the payment
of
termination pay, and severance pay, as required by the Employer to
the
Employee on termination shall not prevent the Employer from alleging
cause
for the termination.
|
|||
10.3
|
The
Employee authorizes the Employer to deduct from any payment, any
amounts
properly owed to the Employer by the Employee by reason of advances,
loans
or in recommence for damages to or loss of the Employer's property
and
equipment, save only that this provision shall be applied so as not
to
conflict with any applicable law or legislation.
|
|||
11.
|
RESULTS
OF TERMINATION
|
|||
11.1
|
If
this Agreement is terminated for cause, as described in section 10.1.4
hereof, the Employee shall be entitled to receive his remuneration
to the
date of such termination for cause, including any and all vacation
pay and
bonuses earned to date.
|
|||
11.2
|
If
this Agreement is terminated upon written notice as described in
paragraphs 10.1.1, 10.1.2, and 10.1.3 hereof, the Employer shall
pay to
the Employee to the end of the notice period his salary and at the
end of
the date terminating the notice provision, the Employer shall pay
to the
Employee vacation pay equivalent and any other monies due under applicable
United States federal or state law, as well as any and all amounts
to
which he may be entitled pursuant to sections 10.1.2 or 10.1.3.
|
6
12.
|
MEDIATION/ARBITRATION
|
|||
12.1
|
Should
any dispute or disagreement of any kind arise at any time; (i) regarding
the rights and liabilities of the Parties hereof or with respect
to the
interpretation, validity, construction, meaning, performance, effect
or
application of this Agreement, as amended from time to time; or (ii)
between the Employer and the Employee, the Parties agree that good
faith
negotiations shall take place between the Employer and the Employee.
If
such good faith negotiations have not resolved the dispute or disagreement
within a reasonable period of time, either Party may request mediation
between the Parties, or either Party may refer the dispute or disagreement
directly to arbitration without going to mediation.
|
|||
12.2
|
The
mediator shall be agreed upon by the both Parties. In the event that
the
Parties are unable to agree upon the mediator, the dispute or disagreement
shall be referred to arbitration in accordance with this
section.
|
|||
12.3
|
All
discussions before the mediator shall be non-binding, confidential
and
without prejudice to the position of either Party. The Parties agree
that
if the mediation process does not result in a satisfactory solution
of the
dispute or disagreement after the lesser of either; (a) ten (10)
hours of
mediation, or (b) thirty (30) days from the commencement of the mediation,
then either Party may refer the dispute or disagreement to arbitration
pursuant to the provisions of the American
Arbitration Association's National Rules for the Resolution of Employment
Disputes in effect at the time of the arbitration demand,
in
accordance with the following:
|
|||
12.3.1
|
the
reference to arbitration shall be to one (1) arbitrator.
|
|||
12.3.2
|
any
such arbitration shall be held in the city of Orlando, Florida. The
arbitration shall be completely private. The arbitrator shall fix
the
appropriate procedures which may include discovery, an oral hearing(s)
and
any other procedures the arbitrator deems appropriate. The issue
or issues
to be decided by the arbitrator shall be defined in an arbitration
agreement filed on consent by the aggrieved party. In the event the
Parties to the arbitration shall be unable to agree upon the issue
or
issues to be decided by the arbitrator in any arbitration pursuant to this
paragraph, the arbitrator shall have jurisdiction to determine the
issue
or issues to be so decided. The Parties shall do all such acts and
things
as are necessary to enable the arbitrator to make a proper finding
respecting the matters in issue. The arbitrator may order interest
on any
award and the arbitrator may award costs, including attorneys’ fees, to
either Party, provided that such award is permitted by the applicable
law
governing the underlying claim. In the absence of any award of costs,
each
of the Parties shall bear their own costs, including attorneys’ fees, of
any arbitration pursuant to this paragraph and one-half of the cost
of the
arbitrator. The arbitrator shall be strictly bound by applicable
legal
principles and the general nature of this Agreement in rendering
his/her/its decision.
|
|||
12.3.3
|
The
Parties agree that good faith negotiations, mediation and arbitration
shall all be without recourse to the Courts. The award of the arbitrator
shall be final and binding, except that either Party may appeal an
arbitration award to the Courts on a question of law. Judgment upon
the
award rendered by the arbitrator may be entered in any Court having
jurisdiction.
|
7
13.
|
RIGHT
TO INJUNCTIVE RELIEF
|
|||
|
As
a violation by the Employee of the provisions of paragraphs 7 and
9 hereof
could cause irreparable injury to the Employer and there is no adequate
remedy at law for such violation, the Employer shall have the right,
in
addition to any other remedies available to it at law or in equity,
to
enjoin the Employee in a court of equity from violating such provisions.
The provisions of paragraphs 7 and 9 hereof shall survive the termination
of this Agreement.
|
|||
14.
|
ASSIGNMENT
OF RIGHTS
|
|||
.
|
The rights and obligations which accrue to the Employer under this Agreement shall automatically inure to the benefit of and be binding on its successors and assigns, whether by operation of law or otherwise. The rights of the Employee under this Agreement are not assignable or transferable in any manner, except that any accrued salary or bonus, vested options or other benefits shall be provided to the Employee’s heirs, beneficiaries or estate, or trustee under any trust set up by and for Employee | |||
15.
|
CHANGE
OF CONTROL
|
|||
|
The
Employer agrees that should there be a change in control of the Employer
during the Employee’s employment with the Employer, all stock options,
RSU’s and restricted stock held by the Employee shall become immediately
vested and exercisable in full. The Employer further agrees that
should
there be a change in control of the Employer and the Employee’s employment
is terminated for any reason save and except for cause, the Employee
shall
receive, any payments or benefits to which he is entitled pursuant
to
section 10.1.3 hereof or the remaining salary for the Term whichever
amount is greater. For the purposes of this section, “change in control”
shall be defined as such term is defined the Employer’s 2002 Amended and
Restated Stock Option Plan.
|
|||
16.
|
RESIDENCE
|
|||
17.
|
INDEMNIFICATION
|
|||
The
Employer agrees to fully indemnify and defend the Employee against
all
claims, liabilities, costs, attorneys’ fees, settlement payments and
damages relating to or arising from any threatened or actual legal
action
against the Employee by the company with which the Employee was last
employed before the date hereof, in relation in any manner to section
7 of
the Employee’s prior employment agreement with such
company.
|
||||
18.
|
CURRENCY
|
|||
All
dollar amounts referred to in this Agreement are in United States
funds.
|
||||
19.
|
AMENDMENT
OF AGREEMENT
|
|||
This
Agreement may be altered or amended at any time by the mutual consent
in
writing of the parties hereto.
|
||||
20.
|
TIME
OF ESSENCE
|
|||
Time
shall be of the essence hereof.
|
||||
21.
|
GOVERNING
LAW
|
|||
This
Agreement shall be governed by and construed in accordance with the
laws
of the Province of Ontario.
|
8
22.
|
HEADINGS
|
|||
The
headings appearing throughout this Agreement are inserted for convenience
only and form no part of the Agreement.
|
||||
23.
|
SEVERABILITY
|
|||
The
invalidity or unenforceability of any provision of this Agreement
will not
affect the validity or enforceability of any other provision hereof
and
any such invalid or unenforceable provision will be deemed to be
severable.
|
||||
24.
|
ENTIRE
AGREEMENT
|
|||
This
Agreement constitutes the entire agreement between the parties and
supersedes all prior and contemporaneous agreements, understandings
and
discussions, whether oral or written, and there are no other warranties,
agreements or representations between the parties except as expressly
set
forth herein.
|
||||
25.
|
AGREEMENT
BINDING
|
|||
This
Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective personal representatives, executors,
administrators, successors and assigns.
|
||||
26.
|
INDEPENDENT
LEGAL ADVICE
|
|||
The
Employee acknowledges that he has read and understands the Agreement
and
acknowledges that he has had the opportunity to obtain independent
legal
advice regarding the terms of the Agreement and their legal
consequences.
|
||||
27.
|
SURVIVAL
|
|||
In
the event this Agreement terminates for any reason, sections 7, 9,
10.1.2,
10.1.3, 11, 15 and 17 hereof shall survive to the extent necessary
to give
full effect to their terms.
|
IN
WITNESS WHEREOF
this
Agreement has been executed by the parties hereto as of the date first set
forth
above.
SIGNED,
SEALED & DELIVERED
/s/ | /s/ Xxxxxx Xxxxxx |
Witness |
Xxxxxx Xxxxxx |
WORKSTREAM INC. | ||
|
|
|
Date: | Per: | /s/ Xxxxxx Xxxxx |
Xxxxxx Xxxxx |
||
Title: President & Chief Executive Officer |