EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS AGREEMENT made to have effect the 1st day of December, 1998.
BETWEEN:
MDSI MOBILE DATA SOLUTIONS INC., a body corporate duly
incorporated under the laws of Canada and having its offices
at 00000 Xxxxxxxxxxx Xxx, Xxxxxxxx, X.X.
X0X 0X0
(the "Company")
AND:
XXXXXXX X. XXXXXX, a resident of British Columbia,
having an address at 0000 Xxxxxx Xxxx, Xxxxxxxx, X.X. X0X 0X0
(the "Executive")
WHEREAS the Company wishes to employ the Executive and the Executive is
willing to accept such employment upon the terms and conditions set forth in
this Agreement;
NOW THEREFORE in consideration of the premises and the mutual covenants and
agreements herein set forth the parties hereto mutually covenant and agree as
follows:
1. EMPLOYMENT
1.1 The Company hereby employs the Executive to be the Chief Executive Officer
of the Company and the Executive hereby accepts such employment. The Executive
shall report to the Board of Directors of the Company and shall perform all
duties and have all authority incident to the position of Chief Executive
Officer of the Company and such additional duties as he may from time to time be
reasonably required to perform, and such additional authority as he may from
time to time be given, by the Board of Directors.
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1.2 Without limiting or restricting in any manner the generality of the
foregoing, the work and services to be performed by the Executive will include
the following responsibilities and authority:
(i) Develop the vision, strategies and tactics to achieve the goals
and objectives as determined by the Board of Directors,
(ii) Manage, build and develop the management into a world class
management team capable of achieving the potential of MDSI,
(iii) Assuming responsibility for developing and achieving the
Company's vision, strategies, goals and programs; and
(iv) Assuming responsibility for the operations of the Company
including its operating performance on a quarter by quarter
basis.
(v) Identify opportunities for strategic partnering, mergers,
acquisitions and dispositions and negotiate conditions of such
initiatives on behalf of the Company so as to maximize
profitability and future potential.
1.3 The Executive shall perform his duties out of the Richmond office of the
Company or out of such other office in the lower mainland area of British
Columbia which the Company shall establish and designate as its Vancouver head
office. The Executive's duties will involve extensive domestic and international
travel.
2. EXCLUSIVE SERVICE
Except as expressly provided the Executive shall, during his employment
with the Company, devote his entire attention on a full time basis to the
business of the Company. Provided he obtains the prior written approval of the
Board of Directors the Executive may, during his employment with the Company
undertake work as a director or consultant to any other company, firm or
individual that is
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not in competition with the Company. At this time the Company acknowledges the
Executive has obligations as a Director of Avcan Global Systems Inc.
3. SALARY AND BONUSES
3.1 The Company shall pay the Executive an annual base salary ("Base Salary")
of Canadian $275,000 gross payable bi-monthly which shall be increased as
follows:
(i) On January 1, 2000 by an amount of 10%; and
(ii) On January 1 of each year of employment commencing 2001 by a cost
of living increase corresponding with the rate of inflation for
the immediately preceding year identified in the Consumer Price
Index for Vancouver published by Statistics Canada which shall in
no case be less than 2.5% per year;
(iii) Notwithstanding (i) or (ii) above the Company will undertake a
review of the Executive's compensation every three years or
sooner if deemed necessary by the committee of the Board of
Directors.
3.2 The Company shall pay the Executive the following incentive bonuses:
(i) a primary bonus (the "Target Incentive") of up to 40% of Base
Salary to be paid upon the Company achieving quarterly revenue,
earnings per share and corporate targets established by the Board
of Directors and communicated to the external market. This bonus
shall be earned and paid in accordance with the details of the
Target Incentive Plan attached as Schedule "B" to this Agreement;
and
(ii) a secondary bonus (the "Performance Incentive") of up to 40% of
Base Salary to be paid upon the Company achieving internal
performance targets established by the Board of Directors. This
bonus shall be earned and paid in accordance with the details
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of the Performance Incentive Plan attached as Schedule "C" to
this Agreement.
3.3 All payment of salary or bonus shall be subject to deduction of all
applicable Federal and Provincial income tax, unemployment insurance, Canada
Pension deductions and other deductions required at law or made pursuant to this
Agreement.
4. PERQUISITES AND EXPENSES
4.1 The Company shall provide the Executive with an annual flexible pre-tax
perquisite of Canadian $5,000. Any tax which may be applicable to this payment
shall be paid by the Executive.
4.2 The Company shall provide to the Executive the following expenses,
equipment and allowances:
(i) reimbursement for all reasonable and necessary expenses incurred
by the Executive in the conduct of the business of the Company in
accordance with travel and expense policies established by the
Company from time to time;
(ii) appropriate hardware/software, including cell phone, pager, and a
portable computer selected by the Company to permit the Executive
to operate effectively while away from the office or at home and
associated costs; and
(iii) an allowance of Canadian $15,000 per year to cover the leasing
and operating costs of an automobile. This allowance will be
indexed to the rate of inflation indicated in the Consumer Price
Index for Canada as published by Statistics Canada and adjusted
accordingly on the first day of January in each year of
employment commencing on January 1, 2000.
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5. STOCK OPTIONS
5.1 The Executive shall be entitled to participate in the Employee Stock
Purchase Plan as established by the Company and amended from time to time. A
copy of that Plan has been supplied to the Executive who acknowledges its
receipt.
5.2 In addition, the Executive shall be entitled to the following Stock
Options:
(i) effective October 28, 1998 an option to purchase 75,000 Company
shares at a price of Canadian $20 per share. These shares shall
vest cumulatively in equal monthly amounts on the first day of
each of the subsequent 36 months; and
(ii) in addition commencing January 1, 2000 the Executive shall
receive an annual grant of options based on the MDSI executive
stock policy. The Executive acknowledges receipt of a copy of
this policy.
5.3 Stock options which have vested may be exercised at any time up to five
years from the date of grant. Subject to the provisions of Sections 12, 13 and
14 below, those stock options which have not vested by the date of termination
of the Executive's employment with the Company shall expire automatically as of
that date. Upon termination of his employment by resignation (except a
resignation under section 13 or 14), the Executive shall have a period of thirty
(30) days in which to exercise vested share purchase options, failing which
those options shall expire automatically.
5.4 The stock options granted to the Executive in Section 5.2 are made in
accordance with the Company's Stock Option Plan as amended from time to time by
the Company. A copy of this plan has been supplied to the Executive who
acknowledges its receipt.
6. VACATION
6.1 The Executive shall be entitled to vacation as follows:
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1999 - five weeks vacation
each year thereafter - six weeks vacation.
7. BENEFITS
7.1 The Executive shall receive those benefits (including medical, dental,
extended health insurance, short and long term disability, life insurance and
family assistance) which are provided to Canadian based employees in the Company
Employee Benefit Program in effect upon the Executive's employment date as that
Program may be modified from time to time. A copy of the Program has been
supplied to the Executive who acknowledges its receipt. In addition to this plan
the Company will provide the Executive with supplemental life insurance to bring
the Executive's total life insurance coverage to $1,000,000. Life insurance
beyond CDN$350,000 (basic and supplemental) shall be subject to evidence of
insurability. The Executive shall be entitled to participate in any separate
benefit package which the Company may subsequently develop for senior
management.
8. SICK LEAVE
8.1 If the Executive shall, at any time, by reason of illness or mental or
physical disability, be incapacitated from carrying out the terms of this
Agreement, he shall furnish the Directors of the Company with medical evidence
to prove such incapacity and the cause thereof, and shall receive his full
salary for a period of 180 days or until long term disability begins whichever
period is shorter.
9. CONFIDENTIAL INFORMATION
9.1 The Executive acknowledges that as Chief Executive Officer of the Company,
he holds a fiduciary position and owes to the Company a duty of utmost loyalty
and good faith. The Executive agrees to serve the Company well and faithfully
and to the best of his ability, and to use his best efforts to promote its
interests.
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9.2 The Executive acknowledges that in the exercise of his duties with the
Company he will develop and receive information which is proprietary or
confidential to the Company, which information may include but shall not be
limited to: intellectual property; know-how; trade secrets and processes;
product specifications; methods of doing business; information with respect to
the Company's organization; information with respect to the Company's financial
affairs and business plans; information with respect to the Company's pricing
policies; sales and marketing plans; information with respect to the identity
and special needs of the Company's customers (the "Confidential Information").
9.3 The Executive agrees that he shall not disclose the Confidential
Information (either during the continuance of his employment hereunder or any
time thereafter) to any persons other than the Directors of the Company, or as
required in the normal course of business and shall not use the Confidential
Information (either during the continuance of his employment hereunder or any
time thereafter) for his own purposes, or any purposes other than those of the
Company. The Executive further agrees in consideration for his continued
employment by the Company to execute such further and other agreements
concerning the secrecy of the affairs of the Company or any companies with which
the Company is affiliated or associated as the Directors of the Company shall
reasonably request.
9.4 Information shall not be considered as confidential if at the time of
disclosure by the Executive it is generally known to the public or after
disclosure by the Executive it becomes known to the public through no violation
of this Agreement or is disclosed to the Executive by a third party that it is
not under an obligation to maintain the confidentiality of the information.
10. NON COMPETITION
10.1 The Executive agrees that the Company has a legitimate interest in ensuring
that Confidential Information will neither be used by the Company's competition
nor by the Executive for a purpose other than the execution of his functions as
an employee of the Company. Therefore, the Company and the Executive
specifically agree:
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(i) that during the term of his employment, under no circumstances
will the Executive compete with the Company either on his own
behalf or on behalf of or as an employee of a third party;
(ii) for a period of twelve (12) months following the termination of
his employment with the Company the Executive shall not compete
with the Company either on his own account or on behalf of or as
an employee of any third party; and
(iii) for a period of twelve (12) months following the date of
termination of his employment with the Company the Executive
shall not approach any other employee of the Company for the
purpose of recruiting that employee to his own service or
offering or causing to be offered to such other employee a new
position or employment with any other person or company
10.2 The Executive acknowledges and agrees that there can be no geographic limit
to his covenant not to compete due to the nature and extent of the business of
the Company, the market for the Company products and the technologies with which
the Company is involved.
10.3 The parties to this agreement recognize that a breach by the Executive of
any of the covenants contained in Sections 9 and 10 of this Agreement would
cause irreparable harm to the Company which could not be adequately compensated
for by monetary damages. Accordingly the Executive agrees that in the event of a
breach by him of any of the covenants contained in Sections 9 and 10 of this
Agreement, he shall and hereby does consent to an injunction being issued
against him restraining him from any further breach of the said covenants. The
provisions of this section shall not be construed so as to affect or impair any
other remedies which the Company may have in the event of such breach, including
but not limited to an action for damages.
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11. OWNERSHIP AND USE OF WORK PRODUCTS
11.1 The Executive agrees that any work products produced by the Executive in
the course of his employment with the Company whether developed solely by the
Executive or jointly with any other party (the "Work Product") shall be the sole
and exclusive property of the Company.
11.2 The Company acknowledges that general knowledge and experience including
general techniques, algorithms, methods and formulae not developed for the
Company's specific application or work gained by the Executive prior to or in
the course of his association with the Company, may be used by the Executive at
any time prior to, during or subsequent to his association with the Company,
unless a specific agreement to the contrary is entered into by the Executive and
the Company, as long as the Executive is not in breach of his covenants of
non-competition contained herein.
11.3 This Agreement does not apply to any general techniques, formulae,
algorithm or method for which no equipment, supplies, facility or other
resources or trade secret information of the Company was used and which was
developed entirely on the Executive's own time unless such techniques, formulae,
algorithms, or method related directly to the business of the Company or the
Company's actual demonstrated anticipated research or development.
11.4 At any and all times, either during or after termination of the Executive's
employment with the Company, the Executive will promptly, on the request of the
Company, perform all such acts and execute and deliver all such documents that
may be necessary to vest in the Company the entire right, title and interest in
and to any such Work Product. Should any services be rendered after termination
of his association with the Company a reasonable compensation will be paid to
the Executive upon a per diem basis in addition to reasonable travelling and
accommodation expenses incurred as a result of rendering such services.
11.5 The Employee hereby assigns to the Company any rights the Employee may have
or acquire in the Work Product and waives all claims whatsoever with respect to
the Work Product including any
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moral rights which he/she may have or acquire in the Work Product or to its use,
including the right to restrain or claim damages for any distortion, mutilation
or other modification of the Work Product or any part thereof whatsoever, or to
restrain use or reproduction of the Work Product in any context, or in
connection with any product or service.
12. TERMINATION OF EMPLOYMENT
12.1 The Executive's employment may be terminated at any time by the Company
without previous notice and without payment in lieu of notice for cause which,
for the purposes of this agreement shall include but not be limited to:
(i) dishonesty in the course of the discharge of his duties as an
employee;
(ii) gross negligence or repetitive negligence committed without
regard to corrective direction in the course of the discharge of
his duties as an employee;
(iii) conviction of any criminal offence other than an offence which,
in the reasonable opinion of the Company does not affect the
reputation of the Company or the Executive's position as a
representative of the Company;
(iv) becoming bankrupt or insolvent;
(v) any incapacity, other than an illness or disability, which
renders the Executive incapable of continuing his employment for
a period of 3 months or longer.
12.2 The Executive shall be entitled to terminate his employment with the
Company, at will, at any time by giving notice in writing to the Company of not
less than eight weeks unless otherwise agreed to in writing by the parties.
12.3 The Company may terminate the employment of the Executive at will and
without cause at any
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time upon payment to the Executive of all salary and bonuses owing up to the
date of termination and a severance package consisting of an amount equal to the
sum of two (2) times the current base salary plus two (2) times the current year
target incentive amount.
12.4 In the event that the Company terminates the employment of the Executive
under Section 12.3 above, all stock options to which the Executive is entitled
and which would have vested during the period of twenty-four (24) months
following the date of termination shall vest immediately as of the date of
termination and the Executive shall have a period equal to the earlier of
twenty-four (24) months from that date of termination or the original expiry
date of the five (5) year vesting period from the date of the grant, to exercise
those options.
12.5 The Executive will not be required to mitigate the amount of any payment or
benefit provided for under this Section 12 or any damages resulting from a
failure of the Company to make any such payment or to provide such benefit, by
seeking other employment, or otherwise, nor shall the amount of any payment or
benefit provided for under this Section 12 be reduced by any compensation earned
by the Executive from employment or self employment.
13. CHANGE OF CONTROL OF THE COMPANY
13.1 In this section the term "Change of Control" shall mean:
(a) the sale of greater than 50% of the issued and outstanding common
shares in the capital of the Company pursuant to a "takeover bid" (as
defined in the British Columbia Securities Act);
(b) the disclosure that any person (a "Control Person") directly or
indirectly, beneficially or legally owns, or exercises control or
direction over, greater than 50% of the issued and outstanding shares
in the capital of the Company, in any xxxxxxx xxxxxxx report,
information circular, prospectus, offering memorandum, material change
report or
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other disclosure document of the Company or any such Control Person,
filed or required to be filed with the British Columbia Securities
Commission, the TSE or any other securities regulatory authority or
stock exchange;
(c) the sale or disposition of all or substantially all of the assets of
the Company to a non-affiliated party;
(d) the merger, amalgamation or consolidation of the Company with or into
any other non-affiliated corporation; or
(e) the appointment of a liquidator, receiver, receiver-manager, or
trustee in bankruptcy of the Company, or the making of any assignment
or proposal to or for the benefit of the creditors of the Company.
13.2 In the event that the Company undergoes a Change of Control the Executive
shall have the right at any time within 30 days from the date on which the
Change of Control occurred to resign from his employment with the Company in
accordance with Section 12.2 above, in which case he shall be entitled to
receive the severance package described in Section 12.3 above.
13.3 In the event the Executive resigns his employment pursuant to 13.2 above,
all stock options to which the Executive is entitled and which would have vested
during the period of twelve (12) months following the date of resignation shall
vest immediately as of the date of the resignation and the Executive shall have
a period equal to the earlier of twelve (12) months from that date of
resignation or the original expiry date of the five (5) year vesting period from
the date of the grant, to exercise those options.
13.4 The Executive will not be required to mitigate the amount of any payment or
benefit provided for under this Section 14 or any damages resulting from a
failure of the Company to make any such payment or to provide such benefit, by
seeking other employment, or otherwise, nor shall the amount
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of any payment or benefit provided for under this Section 14 be reduced by any
compensation earned by the Executive from employment or self employment.
14. RESIGNATION AND INDEMNITY
14.1 Upon termination of this Agreement, the Executive will tender to the
Company, and their associated companies, his resignation as an officer and if
applicable, his resignation as a director.
14.2 Subject to the Canada Business Corporations Act, as amended from time to
time (the "Act"), the Company hereby indemnifies the Executive, his heirs,
executors administrators and personal representatives (collectively, the
"Indemnitees") and save the Indemnitees harmless against all costs, charges and
expenses actually and reasonably incurred by the Indemnities in law, in equity
or under any statute or regulation, in connection with any civil, criminal, or
administrative claim, action, proceeding or investigation to which the
Indemnitees are made a party or in which they are otherwise involved as a
witness or other participant by reason of the Executive being or having been a
Director or officer of the Company or its affiliated or associated companies,
including any action brought by the Company or companies, if:
(i) the Executive acted honestly and in good faith with a view to the
best interests of the Company or companies; and
(ii) in the case of a criminal or administrative claim, action,
proceeding or investigation, the Executive had reasonable grounds
for believing that his conduct was lawful.
14.3 Without limiting the generality of the foregoing of Section 14.2 the costs,
charges and expenses against which the Company will indemnify the Indemnitees
include:
(i) any and all fees, costs and expenses actually and reasonably
incurred by the Indemnitees in investigating, preparing for,
defending against, providing evidence in, producing documents or
taking any other action in connection with any commenced or
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threatened action, proceeding or investigation, including
reasonable legal fees and disbursements, travel, and lodging
costs;
(ii) any amounts reasonably paid in settlement of any action,
proceeding or investigation;
(iii) any amounts paid to satisfy a judgement or penalty, including
interest and costs; and
(iv) all costs charges and expenses reasonably incurred by the
Indemnitees in establishing their right to be indemnified
pursuant to this Agreement.
14.4 If the Indemnitees or any one of them are required to include in their
income, or in the income of the estate of the Executive, any payment made under
this Section 14 for the purpose of determining income tax payable by the
Indemnitees or any of them or the estate, the Company shall pay an amount by way
of indemnity that will fully indemnify the Indemnitees or estate for the amount
of all liabilities described in Section 14.2 and Section 14.3 and all income
taxes payable as a result of the receipt of the indemnity payment.
14.5 Upon receipt of a written request by the Indemnitees for indemnification
under this Agreement (an "Indemnification Notice"), the Company will forthwith
apply to the Supreme Court of British Columbia for approval of the requested
indemnification, will diligently proceed to obtain such approval and will take
all other steps necessary to provide the requested indemnification as soon as
practicable following receipt of the Indemnification Notice.
14.6 Any failure by the Executive in his capacity as a director or officer of
the Company to comply with the provisions of the Act or the Memorandum, Articles
or Bylaws of the Company will not invalidate any indemnity to which he is
entitled under this Agreement.
15. RETURN OF PROPERTY
15.1 In the event of termination of this Agreement, the Company agrees to pay
the Executive all
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arrears of compensation, and all out of pocket expenses owing, up to and
including the effective date of termination, upon receipt from the Executive of
(and the Executive agrees to deliver to the Company);
(i) any property of the Company which may be in the possession or
control of the Executive; and
(ii) the repayment of any sums owed by the Executive to the Company.
16. SURVIVAL
16.1 Notwithstanding the termination of this Agreement for any reason whatsoever
the provisions of Sections 9, 10, 11 and 14 hereof and any other provisions of
this Agreement necessary to give efficacy thereto shall continue in full force
and effect following such termination.
17. NOTICE
17.1 Any notice or other communication (each a "Communication") to be given in
connection with this Agreement shall be given in writing and may be given by
personal delivery, by registered mail or by telecopier, addressed as follows:
TO: MDSI Mobile Data Solutions Inc.
00000 Xxxxxxxxxxx Xxx
Xxxxxxxx, X.X. X0X 0X0
Attn: Board of Directors
Phone: 000-000-0000
Fax: 000-000-0000
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AND TO: Xxxxxxx X. Xxxxxx
0000 Xxxxxx Xxxx
Xxxxxxxx, X.X.
X0X 0X0
Phone: 000-000-0000
or at such other address or telecopier number as shall have been designated by
Communication by either party to the other. Any Communication shall be
conclusively deemed to be received, if given by personal delivery, on the date
and at the time of actual delivery thereof and, if given by registered mail, on
the fifth day following the date of mailing, if given by telecopier, on the
business day following the transmittal thereof. If the party giving any
Communication knows or ought reasonably to know of any actual or threatened
interruptions of the mails, such Communication shall not be sent by mail but
shall be given by personal delivery or telecopier.
18. ENTIRE AGREEMENT
18.1 Any other previous agreements, written or oral, between the parties hereto
relating to the employment of the Executive by the Company are hereby terminated
and cancelled and each of the parties hereto hereby releases and forever
discharges the other party hereto of and from all manner of actions, causes and
demands whatsoever under or in respect of any such agreement. This Agreement,
together with the Plans and Programmes which are by reference expressly
incorporated into it, constitutes and expresses the whole agreement of the
parties hereto with reference to the employment of the Executive by the Company,
and with reference to any of the matters or things herein provided for, or
herein before discussed or mentioned with reference to such employment; all
promises, representations, and understandings relative thereto being merged
herein.
19. AMENDMENTS AND WAIVERS
19.1 No amendment to this Agreement shall be valid or binding unless set forth
in writing and duly executed by both of the parties hereto. No waiver or any
breach of any by the party purporting to
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give the same and, unless otherwise provided in the written and signed waiver,
shall be limited to the specific breach waived.
20. BENEFITS OF AGREEMENT
20.1 The provisions of this Agreement shall enure to the benefit of and be
binding upon the legal representatives of the Executive and the successors and
assigns of the Company respectively.
21. SEVERABILITY
21.1 If any provision of this Agreement is deemed to be void or unenforceable,
in whole or in part, it shall not be deemed to affect or impair the validity or
any other provision hereby declared and agreed to be severable from each and
every other section, subsection or provision hereof and to constitute separate
and distinct covenants. The Executive hereby agrees that all restrictions herein
are reasonable and valid and all defences to the strict enforcement thereof by
the Company are hereby waived by the Executive.
22. GOVERNING LAW
22.1 This Agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia. The Company and the Executive hereby
irrevocably attorn to the jurisdiction of the courts of the Province of British
Columbia, exclusively.
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23. COPY OF AGREEMENT
23.1 The Executive hereby acknowledges receipt of a copy of this Agreement duly
signed by the Company.
IN WITNESS WHEREOF the parties have executed this Agreement as of the day and
year first above written:
SIGNED, SEALED AND DELIVERED by )
XXXXXXX X. XXXXXX )
in the presence of: )
)
---------------------------- )
Witness ) ---------------------------------
) XXXXXXX X. XXXXXX
---------------------------- )
Address )
)
---------------------------- )
Occupation )
MDSI MOBILE DATA SOLUTIONS INC.
Per: ---------------------------------
Authorized Signatory
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Schedule "A" - Job Description
Position : Chief Executive Officer
Purpose of Position
To establish short-term and long-range objectives , plans and policies subject
to approval of the Board of Director, direct financial, organizational, and
operations planning activities, approve budgetary and operations functions and
monitor performance to ensure objectives are met; represent the organization
with its major customers, the financial community,. Responsible for establishing
strategies and tactics associated with mergers, acquisitions, partnering, and
dispositions.
Significant Duties and Responsibilities
Develops broad corporate goals, objectives and strategies in accordance with
established mandate and mission of the organization as agreed to with the Board
of Directors. Directs and coordinates major organizational units so that their
activities are carried out in as an integrated "team".
Establishes accountability and authority limits for subordinate executives and
monitors their performance in execution of business plans, strategic renewal
plans, financial results and organizational objectives, taking corrective action
as required.
Implements on a continuous basis an organizational structure and staffing plan
that meets the on going operational needs of the company and presents key
executive candidates to the Board of Directors for approval.
Present budgets to Board of Directors for approval, reviews financial results,
cash flow requirements, and capital expenditures on a regular basis, assess need
for corrections, reports results to Board; arranges/negotiates external
financing as appropriate.
Represents the organization in important external business relationships with
major clients, strategic partners, financiers, government and the public where
such contacts are critical to achievement of corporate goals.
Identifies opportunities for strategic partnering, mergers, acquisitions and
dispositions and negotiates conditions of such initiatives on behalf of the
company in order to maximize profitability and future potential for
shareholders.
Education and Experience
Broad business experience including 12+ years of progressively more responsible
management experience.
Specialized Skills
Broad general knowledge of the high tech industry and on going awareness of
technology developments. Skills in general and strategic business management,
innovative and visionary planning, analysis and decision making. Effective
leadership communication and customer relations.
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SCHEDULE "B"
40 % of base salary based 80% on achievement of the company's EPS targets in
each quarter and 20% on personal performance determined annually.
The company's EPS targets in each quarter are either achieved or not with
achievement resulting in the payment of the entire (80% of 40%) incentive within
30 days of the company's quarterly results being announced. 50% of any missed
quarters incentive (i.e. 40% of 40%) can be recovered if the year's EPS target
is achieved. This would be paid along with any other incentive achieved for the
year.
Personal performance is actually 20% of the target 40% and 20% of the stretch
40% incentive or 16% of base salary. The performance rating will be based on a
1-10 rating scale where 1 = intolerable, 2 = less than tolerable, 3 = barely
tolerable, 4 = satisfactory -, 5 = satisfactory, 6 = satisfactory +, 7 =
exceeding, 8 = exceeding +, 9 = excelling, 10 = exceptional. A 5 rating would
therefore result in 8% of base salary as an incentive, 7.5 would 12%, and so on.
Personal results are based on a performance plan, which articulates a set of
personal objectives for the year.
SCHEDULE "C"
40% of base salary based 80% on exceeding the target EPS for the year and 20% on
personal performance as described above.
The determination of % achievement of stretch incentive (0-32% of base) will be
in direct relationship to the % achievement of the EPS stretch target for the
year as set by the Board of Directors (e.g. 50% of difference between target and
stretch achieved = 50% of 32% or 16% of base salary).
Payment of annual incentives will be within 30 days of announcing the company's
annual results.
