THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of March 11, 2003, by and between Tucows.com Co., a Nova Scotia corporation (the "Corporation"), and Graham Morris (the "Executive").
WHEREAS, the Executive is employed by the Corporation as Chief Operating Officer; and
WHEREAS, the terms and conditions of the Executive's employment are currently set forth in that certain Executive Compensation Agreement between the Executive and Tucows International Corporation, a former subsidiary of the Corporation, dated as of September 5th 2000, that was assumed by the Corporation (the "Predecessor Agreement"); and
WHEREAS, the Corporation and the Executive have agreed upon revised terms and conditions for the Employee's continued employment with the Corporation, which revised terms and conditions are set forth in this Agreement and are intended to supersede and replace the Predecessor 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:
The Corporation shall employ the Executive for an indefinite term subject to any termination provisions that form part of this Agreement.
The Executive shall serve the Corporation in the capacity of Chief Operating Officer ("COO"). 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 COO.
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.
The Executive acknowledges that these duties supersede any previous duties or responsibilities of the Executive under any previous contracts, including the Predecessor Agreement.
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 and the size and stage of development of the Tucows Companies, which is equal to the higher of (a) fair market value or (b) to the extent compensation levels for comparable senior executives of the Corporation exceed fair market value, the compensation levels of such comparable senior executives. Such fair market compensation is to be comprised of a base salary, 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$187,500 commencing on January 1, 2003 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 within three months of the Corporation's year-end and any adjustment resulting from such review will be effective from the year end date.
(c) Bonus Structure
The Executive will be entitled to participate as appropriate in any bonus plan for senior executive employees that the Corporation may institute from time to time.
(d) Employee Benefits
The Executive shall be entitled to participate in all of the Corporation's benefit plans made generally available to its senior executive employees from time to time in accordance with the terms thereof at the Corporation's expense. The Corporation 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.
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) Change in Control Benefits
(1) As used herein the following words and phrases shall have the following respective meanings unless the context indicates otherwise:
Act of 1933, as amended), or (ii) STI Ventures N.V. or any entity controlled by, or under common control with, STI Ventures N.V.) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either (i) the then outstanding shares of common stock of Tucows (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of Tucows entitled to vote generally in the election of directors of Tucows (the "Company Voting Securities"); or
The Executive's right to terminate employment for Good Reason shall not be affected by the Executive's (A) incapacity due to physical or mental illness or (B) continued employment for less than 90 days following the occurrence of (or, if later, the Executive's gaining knowledge of) any event constituting Good Reason herein.
(2) In the event a Change in Control occurs and (1) if within 18 months thereafter, the Executive's employment with the Corporation or a Subsidiary or any Successor shall terminate either (a) by action of the Corporation or a Subsidiary or any Successor without Cause or (b) by reason of the Executive's resignation from such employment for Good Reason or (2) the Executive tenders his resignation from such employment with or without Good Reason within the 30-day period immediately following the date that is six months after the effective date of the Change in Control, the Executive shall be entitled to the following benefits (in addition to any benefits that would otherwise be payable under Section 5):
(3) The benefits described in Section 3(g)(2) above shall be provided in addition to, and not in lieu of, all other accrued or vested or earned but deferred compensation, rights, options or other benefits which may be owed to the Executive following termination, including but not limited to accrued vacation or sick pay amounts or benefits payable under any bonus or other compensation plans, stock option plan, stock ownership plan, stock purchase plan, life insurance plan, health plan, disability plan or similar or successor plan.
(4) Upon a Change in Control, the Corporation's obligations to provide the benefits described in Section 3(g)(2) above shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Corporation, Tucows or any of its Subsidiaries may have against the Executive.
(5) The change in control benefits described in this Agreement shall bind any Successor (whether direct or indirect, by purchase, merger, consolidation or otherwise), in the same manner and to the same extent that the Corporation would be obligated under the Agreement if no succession had taken place. In the case of any transaction in which a Successor would not by the foregoing provision or by operation of law be bound by the Agreement, the Corporation or Tucows shall require such Successor expressly and unconditionally to assume and agree to perform the Corporation's obligations under this Agreement, in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.
(h) D&O insurance and Indemnity
The Executive will be an "officer" of the Corporation who will be covered under the Corporation's or Tucows' D&O insurance policy. To the extent that the corporation lacks sufficient insurance to fully indemnify the Executive (e.g., does not have D&O insurance), the Corporation agrees that it shall indemnify the Executive with regard to legal defense costs and liability costs. For greater certainty, the Corporation will pay the legal fees when presented with an invoice rather than requiring Executive to pay same and claim reimbursement. The Corporation shall have the right to choose whether or not to defend or settle and to appoint counsel of its choice.
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.
(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 which vest during the severance in lieu of notice period. The Corporation shall not be entitled to provide notice in lieu of the termination compensation. Furthermore, the termination compensation sum is payable forthwith after termination, whether or not the Executive seeks or finds alternative employment within any set time period after termination. Termination compensation will be payable in equal installments over six months if Executive is satisfied, in his discretion, acting reasonably, that there is adequate security to ensure that the compensation will in fact be paid in full. 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.
During the term of this Agreement and for a period of 12 months from the Date of Termination of this Agreement, the Executive hereby covenants and agrees that:
The Corporation may apply for or have an injunction restraining breach or threatened breach of the covenants herein contained.
The Executive acknowledges and agrees that:
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.
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.
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.
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:|
96 Mowat Avenue
Toronto, Ontario M6K 3M1
If to the Executive:
Mr. Graham Morris
9 Tudor Gate
Toronto, Ontario, M2L 1N3
14. LEGAL FEES FOR DRAFTING
All legal fees, including any of the Executive's legal fees pertaining to the drafting or interpretation, while the Executive is employed by the Corporation, of this agreement will be at the Corporation's cost.
15. LEGAL ADVICE
The Executive hereby represents and warrants to the Corporation and acknowledges and agrees that he had the opportunity to seek, and was not prevented nor discouraged by the Corporation from seeking independent legal advice, prior to the execution and delivery of this Agreement and that, in the event that he did not avail himself of that opportunity prior to signing this Agreement, he did so voluntarily without any undue pressure agrees that his failure to obtain independent legal advice shall not be used by him as a defense to the enforcement of his obligations under this Agreement.
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IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of the date first above written.
/s/ Elliot Noss
Elliot Noss Chief Executive Officer
/s/ Graham Morris
| ||Market Capitalization
Source: OneCLE Business Contracts.