EMPLOYMENT AGREEMENT
Exhibit 10.1
THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated as of November 8, 2004, by and between Xxxxxx.xxx Co., a Nova Scotia corporation (the “Corporation”), and Xxxxxx X. Xxx (the “Executive”).
WHEREAS, the Executive is employed by the Corporation as Vice President Engineering; and
WHEREAS, the Corporation and the Executive have agreed upon terms and conditions for the Employee’s employment with the Corporation, which terms and conditions are set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein and for other good and valuable consideration, 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 Vice President Engineering. He will report to the Chief Executive Officer of the Corporation, as appointed by the Board of Directors, and shall perform such duties and exercise such powers of the position of Vice President Engineering.
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 and Tucows Inc., a Pennsylvania corporation and the ultimate parent corporation of the Corporation (“Tucows”) and Tucows’ subsidiaries (collectively with Tucows and the Corporation, the “Tucows Companies”);
(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 Tucows Companies; and
(c) use his best efforts to promote the interests and goodwill of the Tucows Companies.
3. REMUNERATION
The intent of this Agreement is to entitle the Executive to an annual compensation package for his services considering the role and performance of the Executive. Such compensation is to be comprised of a base salary, annual bonuses, 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 initially be at a rate of Cdn$180,000 commencing on November 8th, 2004 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 of Tucows.
(c) Bonus Structure
The Executive will be eligible for an annual bonus of Cdn$75,000, based on the achievement of mutually agreed upon objectives.
(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 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 Cdn$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 annually. 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 40,000 common shares of Tucows. The options will be granted per the Corporation’s option plan. The options shall vest in accordance with the Corporation’s option plan.
4. 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.
5. 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 nine 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. In the event that the Corporation wishes to terminate the Executive’s employment for Cause, the Corporation will provide the Executive with written notice of the circumstances that entitle the Corporation to so terminate the Executive.
(c) Without Cause
The Corporation may terminate the employment of the Executive without Cause at any time upon 30 days’ prior written notice to the Executive. In the event of such termination, the Executive shall be entitled to payment of: (i) all compensation due through the Date of Termination (including a pro rata payment of bonuses earned) and (ii) a termination sum in the amount of six months compensation plus one month’s compensation for each year of service. For this purpose, compensation is defined as including, but not limited to, base salary, vacation pay and car allowance, and options that 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 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 six months. 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.
(d) By Executive
The Executive may terminate this Agreement upon providing the Corporation with three months notice in writing of his intention to do so.
6. 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.
7. NON-COMPETITION
During the term of this Agreement and for a period of 6 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 with a direct competitor engaged in a material business carried on by the Tucows Companies as of the date of termination (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 will not (without the prior written consent of the Corporation), (i) divulge to any person the name of any customer or client of the Tucows Companies; (ii) knowingly solicit, interfere with or endeavor to entice away from the Tucows Companies any customer, client or any person in the habit of dealing with the Tucows Companies;
and (iii) interfere with or knowingly entice away or otherwise attempt to obtain the withdrawal of any employee of the Tucows Companies.
The Corporation may apply for or have an injunction restraining breach or threatened breach of the covenants herein contained.
The Corporation acknowledges that its belief today is that no company contemplated as being covered by this section has its principal operation in Canada.
8. 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 will have access to, 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 Tucows Companies, including, without limitation, information relating to addresses, preferences, needs and requirements of past, present and prospective clients, customers, suppliers (collectively, “Confidential Information”), the disclosure of any of which to competitors of the Tucows Companies or to the general public, or the use of same by the Executive or any competitor of the Tucows Companies would be highly detrimental to the Tucows Companies’ interests;
(b) in the course of performing his duties and responsibilities for the Corporation, the Executive will be a representative of the Corporation to its customers, clients, and suppliers, and as such, will 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, its right to (i) maintain the confidentiality of its Confidential Information, (ii) preserve the goodwill of the Corporation, and (iii) the benefit of any relationships that have been 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.
9. 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.
10. 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.
11. GOVERNING LAW
This Agreement shall be governed in accordance with the laws of the Province of Ontario.
12. SUCCESSORS
This Agreement shall be binding on and inure to be benefit of the successors and assigns of the Corporation and the heirs, executors, personal legal representatives and permitted assigns of the Executive.
13. 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 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 business days after the resumption of postal service. Notices shall be addressed as follows:
If to the Corporation:
Xxxxxx.xxx Co.
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
If to the Executive:
Xx. Xxxxxx X. Xxx
0000 Xxxxx Xxxx, X.X. #0
Xxxxx, Xxxxxxx, X0X 0X0
14. 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.
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XXXXXX.XXX CO. |
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Per: |
s/ Xxxxxx Xxxx |
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Xxxxxx Xxxx - Chief Executive Officer |
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s/ Xxxxxx X. Xxx |
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Xxxxxx X. Xxx |
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