EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the 3rd day of February, 2000.
BETWEEN:
▇▇▇▇▇ CAPPADOCIA (hereinafter referred to as the Employee)
OF THE FIRST PART
-and-
THINWEB SOFTWARE INCORPORATED, a company incorporated under the laws
of the Province of Nova Scotia (hereinafter referred to as the
Company)
OF THE SECOND PART
-and-
thinWEB TECHNOLOGIES CORPORATION, a company incorporated under the
laws of the State of Delaware
OF THE THIRD PART
WHEREAS:
(a) The Company is presently engaged in the business of computer software
concentrating on the development of Internet and electronic commerce
applications;
(b) The Company and the Employee have agreed to enter into this Employment
Agreement upon the terms and conditions hereafter set out.
NOW THEREFOR IN CONSIDERATION OF the foregoing and the mutual covenants and
agreements set forth below, and for other good and valuable consideration, the
parties covenant and agree as follows:
ARTICLE 1 - EMPLOYMENT
1.1 Term of Agreement
The term of this Agreement shall commence effective on the date of this
Agreement and shall continue for an indefinite period or until and if terminated
by the Company or the Employee as contemplated herein; provided, however, that
the provisions hereof shall survive the termination of this Agreement with
respect to the rights and entitlements of the parties hereto which have accrued
prior to, or as a consequence of, such termination.
1.2 Survival of Covenants
Notwithstanding Section 1.1, the provisions of Articles 5, 6 and 7 of this
Agreement shall survive the termination of this Agreement and shall continue in
effect in accordance with the terms thereof.
1.3 Employment and Duties
Subject to the terms of this Agreement, the Employee shall perform the duties as
set forth on Schedule A hereto and shall serve the Company and any affiliates of
the Company in such capacity or capacities and shall perform such further duties
and exercise such powers as may be determined from time to time by the Board of
Directors of the Company; provided however such duties shall be reasonably
consistent with the scope and stature of the duties and responsibilities with
which the Employee is empowered. The Employee shall:
(a) devote his/her full time and attention to the business and affairs of
the Company;
(b) perform those duties assigned to them faithfully and diligently and to
the best of his/her ability;
(c) use his/her best efforts to promote the interests and goodwill of the
Company and its affiliates; and
(d) comply with the Company's policies as they are established from time
to time.
1.4 Reporting Procedures
The Employee shall be based in Toronto or Ottawa, as the employee sees fit
having regard to his responsibilities, and will report to or at the direction of
the Board of Directors of the Company. The Employee shall report fully on the
management, operations and business affairs of the Company advising to the best
of his ability and in accordance with reasonable standards on matters that may
arise from time to time during the terms of this Agreement. Within 30 days of
the date hereof at a meeting with the Board of Directors the Employee's clear
mandate, responsibilities and reporting relationship will be mutually agreed
upon as between the Employee and the Company.
ARTICLE 2 - COMPENSATION AND BENEFITS
2.1 Remuneration and Benefits
(i) The Employee remuneration shall be a base salary of CDN. $200,000 per year
(Base Salary), which shall not be reduced, and the benefits contemplated
herein. Subject to no reduction, the Base Salary shall be reviewed
annually, or more frequently if the Board of Directors of the Company so
determines in its absolute discretion. Notwithstanding anything contained
herein, the Company shall be under no obligation to increase the Base
Salary at the time of any such review. All payments of Base Salary shall
be made twice monthly, and all payments made by the Company on account of
Base Salary and other remuneration (if any) shall be subject to all
required deductions for income tax and other statutory withholdings.
(ii) The Employee shall receive 950,000 common shares of thinWEB Technologies
Corporation. 315,000 of such shares will vest immediately and the
remainder will vest in eight equal quarterly instalments, commencing three
months from this date. Of the shares vesting immediately, the Employee
will be permitted to sell a sufficient number of shares to realize net pre-
tax proceeds of $1,600,000 CDN, following thinWEB Technologies Corporation
shares becoming publicly traded, up to a maximum of 200,000 shares sold,
this being the number which will be registered for sale in the SEC
registration statement. The remaining vested shares shall be subject to
the trading restrictions imposed by the SEC on shares held by insiders.
2.2 Benefits
The Employee shall also be entitled to such benefits as are set out in Schedule
B hereto. In addition, the Employee shall be entitled to participate in such
other benefits as are provided by the Company generally to other employees of
the Company. The Employee acknowledges and agrees that the Company has the
right to unilaterally revise the terms of any insurance of health benefits
package.
2.3 Bonus and Profit Sharing
Bonuses, if any, to be paid to the Employee and the criteria for determining the
same shall be as determined by Board of Directors of the Company. Participation
in any profit-sharing plan approved by the Board of Directors at a level not
less than that of any other senior officer or employee.
2.4 Employee Stock Option Plan
The Employee shall be entitled to participate in any employee stock option plan
(ESOP) established by the Company's parent thinWEB Technologies Corporation from
time to time for the general benefit of employees of the Company at a level that
is commensurate with his/her position, provided that the Employee is and remains
eligible for such participation in accordance with the terms and conditions of
the ESOP. The Employee shall be entitled to an option on 300,000 common shares
of thinWEB Technologies Corporation, to be issued at such time as the shares
become publicly traded, at a strike price equal to the opening price on the
first day of trading, or such other strike price adopted by thinWEB Technologies
Corporation that the Employee may agree to. Future options to be at a level not
less than that of any other senior officer or employee of the Company, thinWEB
Technologies Corporation or ▇▇▇▇▇▇▇.▇▇▇ Inc.
2.5 Vacation
The Employee shall be entitled to four (4) weeks paid vacation per calendar year
at his discretion having regard to his responsibilities.
2.6 Business Expenses
The Company shall pay or reimburse the Employee for all reasonable and approved
out-of-pocket expenses, which approval shall not be unreasonable, actually and
properly incurred from time to time in connection with carrying out his/her
duties hereunder in accordance with the Company's general policies as they may
be established or amended from time to time. The Employee shall furnish to the
Company an expense statement and invoices or receipts (or such other supporting
information as the Company may require) for expenses for which the Employee
seeks reimbursement or payment. Additionally the Employee shall be entitled to
a monthly car allowance of up to $750 per month.
ARTICLE 3 - TERMINATION
3.1 Termination
Notwithstanding anything contained in this Agreement, the Company may not
terminate the employment of the Employee without payment as set out in
subsection 3.4 herein.
3.2 Termination for Disability/Death
The Company may terminate the employment of the Employee immediately upon notice
to the Employee if the employee becomes permanently disabled, with payment as
set out in subsection 3.4; provided however, if such termination would
jeopardize the Employee's right to receive long-term disability payments, which
he would otherwise receive from the Company's insurers, the Company shall (if so
directed by the Employee or his lawful attorney) terminate the employment of the
Employee immediately upon cessation of the Employee's entitlement thereto.
"Permanently disabled" means 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 Employee, the Employee has been continuously unable or
unwilling or has failed to perform his/her duties for one hundred and eighty
(180) consecutive days, or if, during any year of the employment period, the
Employee has been unable or unwilling or has failed to perform his duties for a
total of one hundred eighty (180) days, consecutive or not. The term any year
of the employment period means any period of twelve (12) consecutive months
during the employment period. This Agreement shall, subject to the provisions
of Section 1.1, terminate without notice upon the death of the Employee.
3.3 Termination by Employee
The Employee may terminate his employment with the Company by providing no less
than sixty (60) days notice in writing prior to the effective date of the
termination of his/her employment. Such notice may be reduced to a shorter term
at the option of the Company. Upon giving such notice, the Employee shall
forthwith execute and deliver to the Company his written resignation from any
and all offices of the Company and its affiliates, without claim for
compensation for loss of office.
3.4 Payments Due on Termination
Upon termination of the Employee's employment:
(a) as a result of termination by the Employer as set forth in Section
3.1, the Employee shall be entitled to receive, in such manner as he
may direct, within thirty (30) days of the date of termination, an
amount equal to one year's worth of targeted income (which shall
include Base Salary, car allowance, bonuses, profit sharing, and
benefits);
(b) as a result of the permanent disability or death of the Employee as
set forth in Section 3.2, the Employee or his/her estate, as
applicable, shall be entitled to receive, within thirty (30) days of
the date of such termination, an amount equal to the then applicable
Base Salary which would have been earned by the Employee during the
succeeding ninety (90) day period following the date of termination of
employment;
(c) shares and options vested to the Employee at the time of the
Employee's termination or resignation belong to the Employee but any
unvested shares and options will be forfeited; and
(d) Employee's profit participation under the terms of a profit-sharing
plan will be paid out pro-rata as per the terms of such agreement.
3.5 Deductions
All payments made by the Company as a result of the Employee's termination shall
be subject to all required deductions for income tax and other statutory
withholdings.
3.6 Payments in Full Settlement
The Employee acknowledges and agrees that the payments pursuant to this Article
shall be in full satisfaction of all claims, losses, costs, damages or expenses
in connection with the termination of his/her employment, including termination
pay and severance pay pursuant to the applicable Labour Standards legislation as
amended form time to time. Except as otherwise provided in this Article, the
Employee shall not be entitled to any further termination payments, damages or
compensation whatsoever in connection with the employment of the Employee and
the termination thereof. The Employee agrees to deliver to the Company,
concurent with any such payment, a full and final release from all actions or
claims in connection with the termination of his/her employment or any losses,
costs, damages or expenses resulting therefrom in favour of the Company, its
affiliates, subsidiaries, directors, and officers, in form satisfactory to
the Company. The Employee shall simultaneously receive a reciprocal release
from the Company, its affiliates, subsidiaries, directors, and officers in turn,
which however shall not waive confidentiality and non-competition provisions
contained herein.
3.7 Return of Materials
On termination of the Employee's employment for any reason, the Employee shall
deliver promptly to the Company all property of the Company and its affiliates
in the possession of the Employee or directly or indirectly under his control.
The Employee agrees not to make reproductions or copies of any such property of
the Company and its affiliates for his personal or business use or that of any
other party.
ARTICLE 4 - ACKNOWLEDGEMENTS BY THE EMPLOYEE
4.1 Acknowledgements by Employee
The Employee acknowledges that:
(a) the Company is presently engaged in the development of computer
software and the sale of products and services based upon such
software, primarily aimed at Internet and electronic commerce
applications;
(b) his services to the Company are special and unique and that he has
significant responsibilities in connection with the Company, its
business and affairs;
(c) his work for the Company gives his/her access to trade secrets of and
confidential information concerning the Company and its affiliates
(Confidential Information) which Confidential Information includes,
without limitation: trade secrets; know-how; marketing plans; cost
figures; client lists; names and addresses of suppliers and business
contacts; software and operating systems; and information relating to
employees and other persons in a contractual relationship with the
Company (but shall not include any such information which is generally
available to the public through no fault of the Employee);
(d) the business of the Company is national and international in scope;
(e) a primary purpose of this Agreement is to evidence the agreements
between the Employee and the Company contained in Articles 5, 6 and 7
hereof; and
(f) the agreements contained in Articles 5,6 and 7 hereof are reasonable
and essential to protect the business and goodwill of the Company and
its business.
4.2 Remedies Available to Company
The Employee acknowledges that a breach by the Employee of the covenants
contained in Articles 5, 6 and 7 would result in immediate and irreparable
damages to the Company that could not adequately be compensated for by monetary
award. Accordingly, it is expressly agreed by the Employee that, in addition to
all other remedies available to it, the Company and its affiliates shall be
entitled to the immediate remedy of an interim, interlocutory and permanent
injunction as well as an accounting of all profits arising out of any breach by
the Employee.
ARTICLE 5 - NON-COMPETITION
5.1 Non-Competition
The Employee shall not, while employed by the Company or:
(a) for the two (2) year period following the termination of his
employment if the Employee initiated the termination; or
(b) for the twelve (12) month period following the termination of this
employment if the Company initiated the termination, whether with or
without Cause,
directly or indirectly, either individually or in partnership or in conjunction
in any way with any person or persons, whether as principal, agent, employee,
consultant, advisor, shareholder, director, guarantor, creditor or in any other
manner whatsoever:
(c) solicit, interfere with or endeavour to entice away from the Company
or its affiliates, accept any business from or the patronage of or
render any service to, sell to or contract or attempt to contract with
any person, firm or corporation who was a client, customer or supplier
of the Company, its affiliates or associates or a prospective client
or customer of the Company, its affiliates or associates with whom the
Company, its affiliates or associates have had any dealing, to the
extent that such business, patronage, service, or contract is
competitive with the business of the Company;
(d) offer employment to or endeavour to entice away from the Company or
its affiliates, any person employed by the Company or its affiliates
at the date of the termination of his employment, or who was so
employed at any time during the previous twelve (12) month period or
interfere in any way with the employment relationship between any such
employee and the Company or its affiliates; or
(e) engage in, carry on or otherwise be concerned with or have any
interest in, or advise, lend money to, guarantee the debts or
obligations of, permit his/her name, or any part thereof, to be used
or employed by any person, firm, association, syndicate or corporation
engaged in or concerned with or having any interest in a business
which competes with the Company's business (Competitive Business).
5.2 Covenants are Reasonable
The Employee has and will have specific knowledge of the affairs of the Company
and its business, including Confidential Information. Therefore, the Employee
hereby acknowledges and agrees that all covenants, provisions and restrictions
contained in this Article are reasonable, necessary and valid in the
circumstances of this Agreement (including the time and geographic limitations)
and all defences to the strict enforcement thereof by the Company or its
affiliates are hereby waived.
5.3 Revision to Restrictions
If the provisions of this Article 5 are ever adjudicated to exceed the
limitations on time or geographic scope permitted by applicable law, then such
provisions shall be deemed reformed to the maximum time or geographic scope
permitted by applicable law.
5.4 Portfolio Exception
Notwithstanding the foregoing, nothing in this Agreement shall prevent the
Employee from acquiring and holding, directly or indirectly (and including the
holdings of any other person not acting at arm's length with the Employee (as
defined in the Income Tax Act (Canada)) not more than five percent (5%) of the
outstanding share of any corporation engaged in a Competitive Business if such
shares are listed on a stock exchange, provided that the Employee is not a
member of the board of directors or an officer or employee of, or consultant to,
or otherwise involved with, directly or indirectly, such corporation.
ARTICLE 6 - CONFIDENTIALITY
6.1 Confidentiality
The Employee acknowledges and agrees that the Confidential Information as
defined in Article 4 is the exclusive property of the Company and its affiliates
and that such property is being held by the Employee in trust for the Company.
Except as may be required in the course of carrying out his/her duties
hereunder, the Employee covenants and agrees that the Employee will not disclose
(directly or indirectly) any of the Confidential Information to any person,
other than to the directors, officers or employees of the Company, nor will the
Employee disclose, for any purpose other than for the purpose of the Company,
the private affairs of the Company or any other information which the Employee
may acquire during his/her employment with respect to the business and affairs
of the Company.
6.2 Permitted Disclosure
Notwithstanding Section 6.1, the Employee shall be entitled to disclose such
Confidential Information if required pursuant to a subpoena or order issued by a
court, arbitrator or governmental body, agency or official, provided that the
Employee shall first have:
(a) promptly notified the Company of the request to make such disclosure;
(b) consulted with the Company on the advisability of taking steps to
resist such requirements; and
(c) if the disclosure is required or deemed advisable, co-operate with the
Company in an attempt to obtain an order or other assurance that such
information will be accorded confidential treatment.
6.2 Remedies of Company
Nothing in this Article 6 shall be construed as limiting or impair in any way
any of the rights of the Company whether at law, in equity or otherwise against
the Employee with respect to the disclosure, use or exploitation in any manner
whatsoever to any person or for any purpose, as the case may be, of any of the
Confidential Information.
6.3 Obligations Survive in Perpetuity
The obligations of the Employee under this Article 6 shall continue during the
course of his/her employment with the Company and, unless otherwise authorized
in writing by the Company, shall survive the termination of this Agreement,
regardless of which party initiated the termination.
ARTICLE 7 - INTELLECTUAL PROPERTY
7.1 Inventions
The Company shall be the sole owner of all of the products and proceeds of the
Employee's services as an Employee of the Company, whether before or after the
date of this Agreement, including, but not limited to, all materials, ideas,
concepts, formats, suggestions, developments, writings, arrangements, packages,
programs, trade secrets, discoveries, research materials, data bases and other
intellectual property that the Employee may acquire, obtain, develop or create
in connection with and during the term of the Employee's employment by the
Company, whether before or after the date of this Agreement, including any and
all inventions and improvements relating or in any way appertaining to or
connected with the business of the Company free and clear of any claims by the
Employee (or anyone claiming under the Employee) of any kind or character
whatsoever. The Employee shall, during his employment, at the request of the
Company, execute such assignments, certificates or other instruments as the
Company may from time to time deem necessary or desirable to evidence,
establish, maintain, perfect, protect, enforce or defend its right, title and
interest in or to any such properties, including all such applications,
assignments and other instruments with which the Company shall deem necessary in
order to apply for and obtain patents in Canada or foreign countries for such
inventions or improvements and in order to assign and convey to the Company the
sole and exclusive right, title and interest in the inventions or improvements,
all expenses in connection therewith to be borne by the Company.
7.2 Career Opportunities
Any business opportunities related to the business of the Company and its
affiliates which become known to the Employee during his/her employment with the
Company must be fully disclosed and made available to the Company by the
Employee. The Employee agrees not to take or attempt to take any action if the
result will be to divert from the Company any opportunity which is within the
scope of the Company's business or that of its affiliates.
7.3 Disclosure
During the employment period, the Employee shall promptly disclose to the board
of directors of the Company full information, concerning any material interest,
direct or indirect, of the Employee (as owner, shareholder, partner, lender or
other investor, director, officer, employee, consultant or otherwise) or any
member of his family in any business that is reasonably known to the Employee,
to purchase or otherwise obtain a material amount of services or products from,
or to sell or otherwise provide services or products to, the Company and its
affiliates or to any of their suppliers or customers.
ARTICLE 8 - NOTICES
8.1 Notices
Any notice, direction or other communication to be given under this Agreement or
any ancillary agreement shall be in writing and given by delivering it or
sending it by telecopy or other similar form of recorded communication
addressed:
If to the Employee at:
▇▇ ▇▇▇▇▇▇▇▇'▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company at:
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
8.2 Timing
Any communication shall be deemed to have been validly and effectively given (i)
if personally delivered, and the date of such delivery if such date is a
business day and such delivery was made prior to 4:00 p.m. (Ontario time) and
otherwise on the next business day: or (ii) if transmitted by telecopy or
similar means of recorded communication on the business day following the date
of transmission. Any party may change its address for service from time to
timely notice given in accordance with the foregoing and any subsequent notice
shall be sent to such party at its changed address.
ARTICLE 9 - GENERAL
9.1 Amendment and Waiver
This Agreement may not be amended, supplemented or waived except in writing
signed by the party against which such amendment or waiver is to be enforced.
The waiver by any party of a breach of any provision of this Agreement shall not
operate to, or be construed as a waiver of, any other breach of that provision
nor as a waiver of any breach of another provision.
9.2 Governing Law
This Agreement shall be governed by and construed in accordance with the laws of
the Province of Ontario and the laws of Canada applicable therein.
9.3 Severability
If any provision of this Agreement 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, or part thereof, of this Agreement and such
remaining provisions, or part thereof, shall remain enforceable and binding.
9.4 No Restriction on Conduct of Business
Nothing in this Agreement shall restrict the Company in the conduct of its
business and affairs and, without limiting the generality of the foregoing, the
Company shall be free to sell any or all of its assets, to merge, amalgamate
or combine its business with the business of any other person or to discontinue
the business, and no such event shall constitute a breach of the Company's
obligations hereunder.
9.5 Successors
This Agreement shall be binding on and ensure to the benefit of the successors
and assigns of the Company and the heirs and executors of the Employee.
9.6 Entire Agreement
This Agreement constitutes the entire agreement and understanding between the
parties with respect to the employment arrangement addressed herein and
supersedes all prior agreements and understandings, written or oral, between the
parties relating to such subject matter.
9.7 Legal Advice
The Employee hereby represents and warrants to the Company and acknowledges and
agrees that he had the opportunity to seek and was encouraged by the Company to
seek 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 and agrees that his failure to obtain independent legal advice
shall not be used by him as a defence to the enforcement of his obligations
under this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the date first above written.
SIGNED, SEALED and DELIVERED )
)
) ___________________________________
in the presence of: ) ▇▇▇▇▇ CAPPADOCIA
)
) THINWEB SOFTWARE INCORPORATED
)
) per:________________________________
)
)
) per:________________________________
)
)
)
) THINWEB TECHNOLOGIES CORPORATION
)
) per:_______________________________
)
)
) per:_______________________________
SCHEDULE "A"
EMPLOYEE DUTIES
Employee is engaged as President and CEO and shall perform all duties normally
associated with such a position and any duties reasonably ancillary thereto.
Employee shall meet with the Board of Directors within 30 days and a clear
mandate, responsibilities and reporting relationship will be set out and agreed
to.
SCHEDULE "B"
EMPLOYEE BENEFITS
Company group health and insurance benefits plan (currently through Sun Life).
Employee stock option plan.