EMPLOYMENT AGREEMENT
Exhibit 10.3
This
Employment Agreement (the “Agreement”), entered into
and effective as of July 3, 2018 (the “Effective Date”), is by
and between ACCESSWIRE Canada Ltd, a Canadian limited entity (the
“Company”), and Xxxx
Xxxxxxxx, an individual (the “Employee”). The Company
and the Employee shall sometimes be referred to herein as the
“Parties”.
BACKGROUND
A. This
Agreement is being entered into in connection with that certain
Stock Purchase Agreement, dated as July 3, 2018, by and between the
Company and Employee.
B. The
Company is a wholly-owned subsidiary of Issuer Direct Corporation,
a Delaware corporation (“Issuer
Direct”).
C. The
Company and the Employee desire to set forth in writing the terms
and conditions of their agreement and understanding with respect to
the employment of the Employee as its Director of Corporate
Development from the
Effective Date forward.
AGREEMENT
The
Parties, intending to be legally bound, hereby agree as
follows:
1. Employment. The Company hereby agrees to employ
Employee as its Director of Corporate Development and Employee
hereby accepts such employment upon the terms and conditions set
forth herein and agrees to perform duties as assigned by the
Company. The Employee’s employment, as provided herein, shall
commence on the Effective Date and shall continue for a period of
two years unless earlier terminated pursuant to Section 8
(“Term”). It is understood and agreed by the
Company and Employee that this Agreement does not contain any
promise or representation concerning the duration of
Employee’s employment with the Company. Employee specifically
acknowledges that his employment with the Company is at-will and
may be altered or terminated by either Employee or the Company at
any time, with or without cause and/or with or without notice. For
the purposes of this Agreement, the term “Company
Group” shall include Issuer Direct any and all subsidiaries
of the Company or Issuer Direct in which the Company or Issuer
Direct owns at least a 20% equity interest.
2. Duties.
Employee shall render exclusive, full-time services to the Company
as its Director of Corporate Development. The Employee shall report
to the Company’s Chief Executive Officer and Board of
Directors (the “Board”) of the Company
and/or Issuer Direct. Employee’s responsibilities, title,
working conditions, location, duties and/or any other aspect of
Employee’s employment may be changed, added to or eliminated
during his employment at the sole discretion of the Company. During
the Term of this Agreement, the Employee shall devote his best
efforts and his full business time, skill and attention to the
performance of his duties on behalf of the Company and the Company
Group.
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3. Policies and Procedures.
Employee agrees that he is subject to and will comply with the
policies and procedures of the Company, as such policies and
procedures may be modified, added to or eliminated from time to
time at the sole discretion of the Company, except to the extent
any such policy or procedure specifically conflicts with the
express terms of this Agreement. Employee further agrees and
acknowledges that any written or oral policies and procedures of
the Company do not constitute contracts between the Company and
Employee.
4. Salary. For all services rendered and to
be rendered hereunder, the Company agrees to pay to the Employee,
and the Employee agrees to accept a salary of $130,000 CDN per
annum (“Base
Salary”). Any such salary shall be payable in
accordance with the Company’s normal payroll practice and
shall be subject to such deductions or withholdings as the Company
is required to make pursuant to law, or by further agreement with
the Employee.
5. Incentive Compensation. During
the Term, the Employee shall be eligible to receive annual bonus
compensation in an initial amount equal to fifteen percent (15%) of
the Base Salary upon the achievement of various quarterly
milestones to be mutually agreed to by Employee and the
Company’s Chief Executive Officer.
6. Equity Grants. During the Term and pursuant to
Issuer Direct’s 2014 Equity Incentive Plan (the
“Plan”) or any successor
equity incentive plan, the Employee may receive additional equity
grants, solely at the discretion of the Board or the Compensation
Committee of the Board of Issuer Direct, which grants will be
subject to a separate award agreement between the Company, Issuer
Direct and the Employee under the Plan.
7. Other Benefits. While employed by the Company as
provided herein:
(a) Employee and Employee Benefits.
The Employee shall be entitled to all benefits to which other
executive officers of Issuer Direct are entitled, on terms
comparable thereto, including, without limitation, participation in
pension and profit sharing plans, 401(k) plan (or any similar plans
typically offered to residents of Canada), group insurance policies
and plans, medical, health, vision, and disability insurance
policies and plans, and the like, which may be maintained by Issuer
Direct for the benefit of its executives. Issuer Direct reserves
the right to alter and amend the benefits received by Employee from
time to time at Issuer Direct’s discretion.
(b) Expense Reimbursement. The
Employee shall receive, against presentation of proper receipts and
vouchers, reimbursement for direct and reasonable out-of-pocket
expenses incurred by him in connection with the performance of his
duties hereunder according to the policies of the Company and
subject to the approval of the Chief Financial Officer of the
Company or Issuer Direct.
(c) Vacation. The Employee shall be
entitled to five weeks (200 hours) paid personal time off per
12-month period (including vacation) according to Issuer
Direct’s personal time off policy. In addition to the five
week (200 hours) flexible personal time off set forth above,
Employee shall be entitled to Alberta statutory holidays plus
additional paid personal time off during December 24th through January
1st each
calendar year during the Term. Sick time shall not be limited by
this Section 7(c) and shall be governed by Issuer Direct’s
policies for sick leave.
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8. Termination. Employee and the
Company each acknowledge that either party has the right to
terminate Employee’s employment with the Company at any time
for any reason whatsoever, with or with cause or advance notice
pursuant to the following:
(a) Voluntary Resignation by Employee,
Termination for Cause or Death. In the event the Employee
(i) voluntary terminates his employment with the Company (other
than for Good Reason as defined below), (ii) is terminated by the
Company for Cause (as defined below), or (iii) shall die during the
period of his employment hereunder, the Company’s obligation
to make payments hereunder shall cease upon the date of such
termination and the Company’s obligation to make payments
hereunder shall cease upon such termination, except the Company
shall pay Employee (a) any salary earned but unpaid prior to
termination and all accrued but unused personal time, and
(b) any business expenses that were incurred but not
reimbursed as of the date of termination.
(b) Termination by Disability. In
the event Employee shall become permanently disabled, as evidenced
by notice to the Company of Employee’s inability to carry out
his job responsibilities for a continuous period of more than three
months, Employee’s employment shall cease on such day but the
Company shall continue (i) to make payment to Employee based on the
then Base Salary for a period of three months (in accordance with
the Company’s general payroll policy) commencing on the first
payroll period following the fifteenth day after termination of
employment and (ii) to provide substantially similar coverage under
the Company’s then current medical, health, and vision
insurance plans to the Employee and his eligible dependents for a
period of three months provided that Employee continues to make any
required employee contribution ((i) and (ii), above, collectively
the “Severance
Benefits”), in addition to any accrued but unpaid
salary and unreimbursed expenses prior to the date of termination.
Vesting of any option grants shall continue to vest pursuant to the
schedule and terms previously established during the three month
severance period. Subsequent to the three month severance period
the vesting of any option grants shall immediately
cease.
(c) Termination by the Company without
Cause. The Company
will have the right to terminate Employee’s employment with
the Company at any time without Cause. In the event Employee is
terminated without Cause or resigns for Good Reason (as defined
below), and upon the execution of a full general release by
Employee (“Release”), releasing all
claims known or unknown that Employee may have against Company as
of the date Employee signs such Release, and upon the written
acknowledgment of his continuing obligations under this Agreement,
Company shall continue to make the Severance Benefits, in addition
to any accrued but unpaid salary and unreimbursed expenses prior to
the date of termination.
i. “Cause” means termination
of the Employee’s employment because of the Employee’s:
(i) commission of fraud, misappropriation or embezzlement related
to the business or property of the Company; (ii) conviction for, or
guilty plea to, or plea of nolo contendere to, a felony in the
jurisdiction in which such conviction or guilty plea occurs; (iii)
material breach by the Employee of this Agreement, and the duties
described therein, or any other agreement to which the Employee and
the Company or a member of the Company Group are parties that has
not been cured within 30 days following receipt of written notice
thereof (except as set forth in the following (iv)); (iv) material
breach by the Employee of Sections 9 and 10 of this Agreement; (v)
commission by the Employee of acts that are demonstrably injurious
to a member of the Company Group, monetarily or otherwise; and (vi)
any violation by the Employee of any fiduciary duties owed by him
to the Company or a member of the Company Group that causes injury
to the Company, other than breaches of fiduciary duty also
committed by other officers and members of the Board based on
actions taken after consultation with, and the advice of, legal
counsel.
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ii. “Good Reason” means the
occurrence of any of the following without the written consent of
the Employee: (i) any duties, functions or responsibilities are
assigned to the Employee that are materially inconsistent with the
Employee’s duties, functions or responsibilities with the
Company as contemplated or permitted by this Agreement; (ii)
material diminution in Employee’s duties; or (iii) the Base
Salary or the annual incentive plan opportunity expressed as a
percentage of Base Salary of the Employee is materially reduced,
unless a reduction is as part of an overall cost reduction program
that affects all senior executives of the Company and does not
disproportionately affect the Employee.
iii. “Corporate
Transaction” shall have the meaning set forth
in the Plan of the Company.
9. Proprietary and Other
Obligations.
(a) Confidential Information.
During the period of the Employee’s employment with the
Company and at all times thereafter, the Employee shall hold in
secrecy for the Company Group all Confidential Information (as
defined below) that may come to his knowledge, may have come to his
attention or may have come into his possession or control while
employed by the Company. Notwithstanding the preceding sentence,
the Employee shall not be required to maintain the confidentiality
of any Confidential Information which (a) is or becomes available
to the public or others in the industry generally (other than as a
result of inappropriate disclosure or use by the Employee in
violation of this Section 9(a)) or (b) the Employee is compelled to
disclose under any applicable laws, regulations or directives of
any government agency, tribunal or authority having jurisdiction in
the matter or under subpoena. Except as expressly required in the
performance of his duties to the Company under this Agreement, the
Employee shall not use for his own benefit or disclose (or permit
or cause the disclosure of) to any Person, directly or indirectly,
any Confidential Information unless such use or disclosure has been
specifically authorized in writing by the Company in advance.
During the Employee’s employment and as necessary to perform
his duties under this Agreement, the Company Group will provide and
grant the Employee access to the Confidential Information. The
Employee recognizes that any Confidential Information is of a
highly competitive value, may include Confidential Information not
previously provided the Employee and that the Confidential
Information could be used to the competitive and financial
detriment of the Company Group if misused or disclosed by the
Employee. The Company Group promises to provide access to the
Confidential Information only in exchange for the Employee’s
promises contained herein, expressly including the covenants in
this Agreement.
For the
purposes of this Agreement, “Confidential Information”
means any trade secrets and confidential and proprietary
information acquired by the Employee in the course and scope of his
activities under this Agreement, including information acquired
from third parties, that (i) is not generally known or disseminated
outside the Company Group (such as non-public information), (ii) is
designated or marked by the Company Group as
“confidential” or reasonably should be considered
confidential or proprietary, or (iii) the Company Group indicates
through its policies, procedures, or other instructions should not
be disclosed to anyone outside the Company Group. Without limiting
the foregoing definitions, some examples of Confidential
Information under this Agreement include (a) matters of a technical
nature, such as scientific, trade or engineering secrets,
”know-how”, formulae, secret processes, inventions, and
research and development plans or projects regarding existing and
prospective customers and products or services, (b) information
about costs, profits, markets, sales, customer lists, customer
needs, customer preferences and customer purchasing histories,
supplier lists, internal financial data, personnel evaluations,
non-public information about products or services of the Company
Group (including future plans about them), information and material
provided by third parties in confidence and/or with nondisclosure
restrictions, computer access passwords, and internal market
studies or surveys and (c) and any other information or matters of
a similar nature.
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(b) Inventions. The Employee agrees
that all right, title and interest in and to any information, trade
secrets, inventions, discoveries, developments, derivative works,
improvements, research materials and products made or conceived by
the Employee alone or with others during the course of the
Employee’s employment and relating to the financial industry,
newswire distribution and process, regulatory compliance, or
investor relations shall belong exclusively to the Company Group.
The Employee hereby irrevocably waives in favor of the Company
Group any and all copyright and moral rights, and irrevocably
assigns to the Company and/or Company Group any and all legal
rights, that the Employee may have in respect of any such
materials. The Employee agrees to execute any assignments and/or
acknowledgements as may be requested by the Company Group from time
to time, at the expense of the Company, without any further
remuneration.
(c) Return of Documents and
Property. Upon termination of the Employee’s
employment for any reason, the Employee (or his heirs or personal
representatives) shall immediately deliver to the Company (a) all
documents and materials containing Confidential Information
(including without limitation any “soft” copies or
computerized or electronic versions thereof) or otherwise
containing information relating to the business and affairs of the
Company Group (whether or not confidential), and (b) all other
documents, materials and other property belonging to the Company
Group that are in the possession or under the control of the
Employee.
(d) Non-disparagement. The Employee
agrees during and after the Term, he shall not to knowingly
disparage the Company Group, its officers, directors, employees or
agents in any manner that could be harmful to it or them or its or
their business, business reputation or personal reputation. The
Company Group agrees during and after the Term, it shall instruct
its officers, directors, employees and agent not to knowingly
disparage the Employee in any manner that could be harmful to you
or your business or personal reputation. This paragraph will not be
violated by statements from either party that are truthful,
complete and made in good faith in required response to legal
process or governmental inquiry.
10. Noncompetition and
Non-solicitation.
Employee acknowledges that he will be a member of executive and
management personnel at the Company Group.
(a) Definitions.
i. “Competing Business” means
press and news release distribution and/or dissemination
business.
ii. “Prohibited Area” means
North America and Canada, which Prohibited Area the Parties have
agreed to as a result of the fact that those are the geographic
areas in which the Company Group conducts a preponderance of their
business and in which the Employee provides substantive services to
the Company Group expand during the Term. The Prohibited Area shall
also include geographic areas in which members of the Company Group
expand during the Term.
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(b) Covenant Not to
Compete. Without the
prior written consent of the Board of Issuer Direct (which may be
withheld in the Board’s sole discretion), so long as the
Employee is an employee of the Company or any other member of the
Company Group and for (i) a three year period thereafter in the
event the separation occurs prior to one year from the Effective
Date or (ii) a two year period thereafter in the event the
separation occurs on or after the first anniversary of the
Effective Date (or, in the case of a Corporate Transaction under
Section 8(c), 12-month period) (the “Restricted Period”), the
Employee agrees that he shall not anywhere in the Prohibited Area,
for his own account or the benefit of any other, engage or
participate in or assist or otherwise be connected with a Competing
Business. For the avoidance of doubt, the Employee understands that
this Section 10(b) prohibits the Employee from acting for himself
or as an officer, employee, manager, operator, principal, owner,
partner, shareholder, advisor, consultant of, or lender to, any
individual or other Person that is engaged or participates in or
carries out a Competing Business or is actively planning or
preparing to enter into a Competing Business. The Parties agree
that such prohibition shall not apply to the Employee’s
passive ownership of not more than 5% of a publicly-traded
company
(c) Non-solicitation
Covenant. Employee agrees that he will not,
individually or with others, directly or indirectly (including
without limitation, individually or through any business, venture,
proprietorship, partnership, or corporation in which they control
or own more than a 5% interest, through any agents, through any
contractors, through recruiters, by their successors, by their
employees, or by their assigns) hire, solicit, or induce any
employee of the Company to leave the Company during the period he
is employed by the Company and for a period of two years following
the separation, resignation, or termination of Employee’s
employment with the Company. Employee further agrees that during
the period he is employed by the Company and for two years
thereafter, he will not, either directly or indirectly, solicit or
attempt to solicit any customer, client, supplier, investor,
vendor, consultant or independent contractor of the Company to
terminate, reduce or negatively alter his, her or its relationship
with the Company. The geographic scope of the covenants in Section
10(c) is the Prohibited Area. Nothing in Sections 9 and 10 should
be construed to narrow the obligations of Employee imposed by any
other provision herein, any other agreement, law or other
source.
(d) Reasonable. Employee agrees and acknowledges that
the time limitation and the geographic scope on the restrictions in
Sections 9 and 10 and their subparts are reasonable. Employee also
acknowledges and agrees that the limitation in Sections 9 and 10
and their subparts is reasonably necessary for the protection of
the Company, that through this Agreement he shall receive adequate
consideration for any loss of opportunity associated with the
provisions herein, and that these provisions provide a reasonable
way of protecting the Company’s business value which was
imparted to him. In the event that any term, word, clause, phrase,
provision, restriction, or section of Sections 9 and 10 of this
Agreement is more restrictive than permitted by the law of the
jurisdiction in which the Company seeks enforcement thereof, the
provisions of this Agreement shall be limited only to that extent
that a judicial determination finds the same to be unreasonable or
otherwise unenforceable. Moreover, notwithstanding any judicial
determination that any term, word, clause, phrase, provision,
restriction, or section of this Agreement is not specifically
enforceable, the Parties intend that the Company shall nonetheless
be entitled to recover monetary damages as a result of any breach
hereof.
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(e) Legal and Equitable Remedies.
In view of the nature of the rights in goodwill, employee
relations, trade secrets, and business reputation and prospects of
the Company Group to be protected under Sections 9 and 10 of this
Agreement, Employee understands and agrees that the Company Group
could not be reasonably or adequately compensated in damages in an
action at law for Employee’s breach of their obligations
(whether individually or together) hereunder. Accordingly, Employee
specifically agrees that the Company Group shall be entitled to
seek temporary and permanent injunctive relief, specific
performance, and other equitable relief to enforce the provisions
of Sections 9 and 10 of this Agreement and that such relief may be
granted without the necessity of proving actual damages, and
without bond. Employee
acknowledges and agrees that the provisions in Sections 9 and 10
and their subparts are essential and material to this Agreement,
and that upon breach of Sections 9 and 10 by him to equitable
relief to prevent continued breach, to recover damages and to seek
any other remedies available to the Company Group. This
provision with respect to injunctive relief shall not, however,
diminish the right of the Company Group to claim and recover
damages or other remedies in addition to equitable
relief.
(f) Extension
of Time. In the event that Employee breaches any covenant,
obligation or duty in Sections 9 and 10 or their subparts, any such
duty, obligation, or covenants to which the Parties agreed by
Sections 9 and 10 and their subparts shall automatically toll from
the date of the first breach, and all subsequent breaches, until
the resolution of the breach through private settlement, judicial
or other action, including all appeals. The duration and length of
Employee’s duties and obligations as agreed by Sections 9 and
10 and their subparts shall continue upon the effective date of any
such settlement, or judicial or other resolution.
11. Miscellaneous.
(a) Taxes. Employee agrees to be responsible
for the payment of any taxes due on any and all compensation, stock
option, or benefit provided by the Company Group pursuant to this
Agreement. Employee agrees to indemnify the Company Group and hold
the Company Group harmless from any and all claims or penalties
asserted against the Company Group for any failure to pay taxes due
on any compensation, stock option, or benefit provided by the
Company Group pursuant to this Agreement. Employee expressly
acknowledges that the Company Group has not made, nor herein makes,
any representation about the tax consequences of any consideration
provided by the Company Group to Employee pursuant to this
Agreement.
(b) Modification/Waiver. This
Agreement may not be amended, modified, superseded, canceled,
renewed or expanded, or any terms or covenants hereof waived,
except by a writing executed by each of the Parties hereto or, in
the case of a waiver, by the party waiving compliance. Failure of
any party at any time or times to require performance of any
provision hereof shall in no manner affect his or its right at a
later time to enforce the same. No waiver by a party of a breach of
any term or covenant contained in this Agreement, whether by
conduct or otherwise, in any one or more instances shall be deemed
to be or construed as a further or continuing waiver of agreement
contained in the Agreement.
(c) Attorneys’
Fees. The prevailing party
shall have the right to collect from the other party its reasonable
costs and necessary disbursements and attorneys' fees incurred in
enforcing this Agreement.
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(d) Successors and Assigns. Neither
party may assign this Agreement without the express written consent
of the other party. For the purposes of the Agreement, an
assignment shall include a merger, consolidation, change of control
or change of control transaction.
(e) Notices. All notices given hereunder shall be
given by certified mail, addressed, or delivered by hand, to the
other party at his or its address contained in the Company’s
records. Employee promptly shall notify Company of any change in
Employee’s address. Each notice shall be dated the date of
its mailing or delivery and shall be deemed given, delivered or
completed on such date.
(f) Governing Law; Personal Jurisdiction
and Venue. This
Agreement and all disputes relating to this Agreement shall be
governed in all respects by the laws of the Province of Alberta and
the laws of Canada applicable thereto. The Parties hereto consent
to the jurisdiction of, and hereby waive any defenses based on lack
of jurisdiction or venue by, any provincial or federal court
located in the Province of Alberta.
(g) Entire Agreement. This Agreement sets forth the
entire agreement and understanding of the Parties hereto with
regard to the employment of the Employee by the Company and
supersede any and all prior agreements, arrangements and
understandings, written or oral, pertaining to the subject matter
hereof. No representation, promise or inducement relating to the
subject matter hereof has been made to a party that is not embodied
in these Agreements, and no party shall be bound by or liable for
any alleged representation, promise or inducement not so set
forth.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties have
each duly executed this Employment Agreement as of the day and year
first above written.
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ACCESSWIRE CANADA LTD
By: /s/ Xxxxx X. Xxxxxxxxx
Xxxxx X.
Xxxxxxxxx
Chief Executive
Officer
|
EMPLOYEE
/s/ Xxxx
Xxxxxxxx
Xxxx
Xxxxxxxx
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ACKNOWLEDGED BY
AND AGREED TO:
ISSUER DIRECT CORPORATION
By:
/s/ Xxxxx X.
Xxxxxxxxx
Xxxxx
X. Xxxxxxxxx
Chief
Executive Officer
