EXHIBIT 10.40
October 21, 1999
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c/o JetForm Corporation
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇
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Re: Employment Agreement
We are pleased to confirm the terms and conditions of the employment of ▇▇▇
▇▇▇▇▇ ("you" or the "Executive") with JetForm Corporation (the "Corporation").
The Corporation believes that it is reasonable and fair to the Corporation that
you receive fair treatment in the event of the termination without cause or
adverse modification without cause of your employment. In consideration thereof,
and by your execution of this Agreement below, you wish to abide by various
non-competition and confidentiality restrictions contained herein, your
violation of which would be highly detrimental to the Corporation, and both you
and the Corporation wish formally to agree as to the terms and conditions
contained herein that will govern the termination or modification of your
employment.
Article I - Preamble and Interpretation
1.0 The parties agree that the Executive's original date of employment with the
corporation for the purposes of this agreement is January 1, 1999.
1.1 The parties agree, and represent and warrant to each other, that the above
preamble is true and accurate and is incorporated into the terms of this
Agreement.
1.2 The headings of the Articles, sections, subsections and clauses herein are
inserted for convenience of reference only and shall not affect the meaning or
construction hereof.
1.3 For the purposes of this Agreement, the following terms shall have the
following meanings, respectively:
(a) "Annual Salary" means the sum of:
(i) the annual salary of the Executive, payable to the Executive by the
Corporation at the Date of Termination or as at the end of the
month immediately preceding the month in which termination occurs
(the "Prior Month"), whichever is greater, and if an annual salary
has not been established, it shall be calculated by multiplying the
monthly salary of the Executive in effect for the Prior Month by
12; and
(ii) the aggregate amount of all remuneration, salaries, bonuses and
benefits (including, without limitation, health, dental and
disability coverage) not included in clause (i) above that the
board of directors of the Corporation acting reasonably estimates
would be payable to the Executive during the 12 month period
following the termination of the Executive's employment by the
Corporation assuming: (1) the employment of the Executive was not
terminated during such period; and (2) the Executive benefited from
and participated in such remuneration, salaries, bonuses and
benefits on a basis consistent with practices in effect for senior
executives of the Corporation immediately prior to the Date of
Termination;
(b) "Change of Control" shall mean: the acquisition by a person or persons
acting jointly of the Corporation's voting shares, such that the
acquiror(s) would beneficially own shares equal to greater than 50% of the
votes attaching to the Corporation's voting shares.
(c) "Date of Termination" shall mean the date of termination of the Executive's
employment, whether by the Executive or by the Corporation or by death of
the Executive;
(d) "Disability" shall mean the Executive's failure to substantially perform
his duties on a full-time basis for a period of six months out of any
18-month period, where such failure is a result of physical or mental
illness;
(e) "Good Reason" shall include, without limitation, the occurrence of any of
the following without the Executive's written consent (except in connection
with the termination of the employment of the Executive for Just Cause or
Disability):
(i) a material reduction by the Corporation of the Executive's salary,
benefits or any other form of remuneration or any change in the
basis upon which the Executive's salary, benefits or any other form
of remuneration payable by the Corporation is determined other than
a reduction or change in a manner which is consistent with industry
practices generally in effect prior to such reduction or change; or
(ii) any failure by the Corporation to continue in effect any
substantive benefit, bonus, profit sharing, incentive, remuneration
or compensation plan, pension plan or retirement plan in which the
Executive was participating or entitled to participate immediately
prior to such failure other than a failure to continue such
benefits, bonuses or plans on a basis consistent with industry
practices generally in effect prior to such failure, or the
Corporation taking any action or failing to take any action, the
failure of which would adversely affect the Executive's
participation in or reduce his rights or benefits under or pursuant
to any such plan other than an action or failure to take an action
on a basis consistent with industry practices generally in effect
prior to such action or failure, or the Corporation failing to
increase or improve such rights or benefits on a basis consistent
with industry practices generally in effect prior to such failure;
or
(iii) any material breach by the Corporation of any provision of this
Agreement; or
(iv) the failure by the Corporation to obtain, in a form satisfactory to
the Executive acting reasonably, an effective assumption of its
obligations hereunder by any successor to the Corporation,
including a successor to a material portion of its business; or
(v) the Corporation requiring the Executive to relocate to a place of
work located greater than 100 kilometres from Executive's current
place of work; and
(f) "Just Cause" shall mean:
(i) gross insubordination;
(ii) the continued failure or refusal by the Executive to substantially
perform his duties according to the terms of his employment, after
the Corporation has given the Executive notice of such failure or
refusal and a reasonable opportunity to correct it, except where
such acts or omissions by the Executive:
(A) follow an event defined herein as "Good Reason"; or
(B) result from the Executive's Disability.
(iii) dishonesty by the Executive affecting the Corporation;
(iv) use by the Executive of drugs or of alcohol in a manner which
materially affects his ability to perform his employment duties;
(v) any improper act by the Executive that the Executive knows or
should reasonably know is substantially inconsistent with his
duties as an Executive; or
(vi) any criminal act of dishonesty by the Executive resulting or
intended to result directly or indirectly in personal gain of the
Executive at the Corporation's expense.
Article II - Duties and Compensation
2.1 The Executive shall serve the Corporation and any subsidiaries of the
Corporation in such capacity or capacities and shall perform such duties and
exercise such powers pertaining to the management and operation of the
Corporation and any subsidiaries of the Corporation as may be determined from
time to time by the board of directors of the Corporation consistent with the
office of the Executive. The Executive shall:
(a) devote his full time and attention and his reasonable best efforts during
normal business hours to the business and affairs of the Corporation;
(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 Corporation;
(c) faithfully observe and abide by all the rules, regulations and policies of
the Corporation applicable to the Executive, (including without limitation
the Corporation's policies respecting ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇) from time to time in
force which are brought to the attention of the Executive or which he
should reasonably be aware; and
(d) use his reasonable best efforts to promote the interests and goodwill of
the Corporation.
2.2 Subject to Article 3 hereof, the Annual Salary payable to the Executive
shall be determined during the annual review process by the direct line
reporting executive and approved where applicable by the Chief Operating
Officer, the President, or the Compensation Committee of the Board of Directors.
2.3 The Executive shall also be entitled to receive the vacation and benefits
set forth on a basis consistent with the company practice generally in effect
for other executives of the corporation which benefits may be amended from time
to time by the Corporation but subject always to the provisions of Article 3
hereof.
Article III - Obligations of the Corporation upon Termination
3.1 The Corporation shall have the following obligations in the event that the
Executive's employment is terminated:
(a) Death, Disability or Retirement. If the Executive's employment is
terminated by reason of the Executive's death, Disability or retirement,
the Executive or the Executive's family, as the case may be, shall be
entitled to receive benefits in a manner consistent with and at least equal
in amount to those made available by the Corporation to senior executives
or surviving families of the senior executives of the Corporation under
such plans, programs and policies relating to (i) family death benefits, if
any, as are in effect at the date of the Executive's death; or (ii)
Disability or retirement, if any, as are in effect at the Date of
Termination, as the case may be.
(b) Termination by the Corporation for Just Cause and Termination by the
Executive Other Than for Good Reason. If the Executive's employment is
terminated by the Corporation for Just Cause, or is terminated by the
Executive other than for Good Reason, the Corporation shall pay to the
Executive, if not theretofore paid, the fraction of the Annual Salary and
vacation pay, if any, earned by or payable to the Executive by the
Corporation during the then current fiscal year of the Corporation for the
period to and including the Date of Termination, and the Corporation shall
not have any further obligations to the Executive under this Agreement or
otherwise.
(c) Termination by the Corporation Other Than for Just Cause, Disability or
Death and Termination by the Executive for Good Reason. Either party must
give 60 days written notice of such termination. If the Executive's
employment is terminated by the Corporation other than for Just Cause,
Disability, retirement or death or is terminated by the Executive for Good
Reason:
(i) the Corporation shall pay to or to the order of the Executive the
aggregate of the following amounts (less any deductions required by
law):
(A) if not theretofore paid, the Executive's Annual Salary for the
then current fiscal year of the Corporation for the period to
and including the Date of Termination; and
(B) an amount equal to the Annual Salary;
(ii) subject to the provisions of Section 9 of the 1995 Stock Option
Plan and Section 16 of the 1993 Stock Option Plan, the Corporation
shall ensure that all options to acquire common shares of the
Corporation held by the Executive on the Date of Termination shall
continue to vest and be exercisable for the full period during
which Executive is compensated by the Corporation as set forth in
Section 3.2. As of the last day of such period, the executive shall
have 30 days to exercise all vested options. On the 31st day, all
unexercised options vested or unvested are cancelled.
(iii) the Corporation shall not seek in any way to amend the terms of any
loans from the Corporation or its subsidiaries to the Executive;
(iv) the Corporation shall provide the Executive with the job relocation
counselling services of the firm acceptable to the Corporation for
an amount not to exceed $15,000;
(v) if, at the Date of Termination, there were any memberships in any
clubs, social or athletic organizations paid for by the Corporation
that were for the regular use of the executive at the Date of
Termination, the Corporation will not take any action to terminate
such memberships but need not renew any such membership that
expires; and
(vi) the Corporation shall pay to the Executive all outstanding and
accrued vacation pay to the Date of Termination.
Upon compliance with clauses (c)(i) through (vi) above, the Corporation shall
have no further obligations to the Executive under this Agreement or otherwise
and the Executive agrees that notwithstanding any other provision contained
herein, the Executive shall not have any right to commence any action for
wrongful dismissal or termination.
(d) Change of Control. The parties agree that this Agreement will not
automatically terminate upon any Change of Control of the Corporation. However,
the Corporation and the Executive acknowledge and agree that both the
Corporation (or its successor) and the Executive shall have the right to
terminate this Agreement within 90 days of the closing of a Change of Control,
on 30 days prior notice to the other party (prior to the expiry of the 90 day
period). If the Executive's employment is so terminated:
(i) the Corporation shall pay to or to the order of the Executive the
aggregate of the following amounts (less any deductions required by
law):
(A) if not theretofore paid, the Executive's Annual Salary for the
then current fiscal year of the Corporation for the period to
and including the Date of Termination; and
(B) an amount equal to the Annual Salary (to the extent the
termination is by the Corporation the portion of the Annual
Salary referred to in Section 1.3 (a)(ii) shall be deemed to
be the targeted incentive compensation);
(ii) all options held by the Executive, whether then vested or not,
shall immediately become exercisable (and shall remain exercisable
as set forth in clause 3.1(c)(ii)) in the event that the
Executive's employment is terminated by the Corporation (other than
for Just Cause, Disability or Death) within one year following the
completion of the transaction effecting the change of control of
the Corporation as contemplated by this Section 3.1(d);
(iii) the Corporation shall not seek in any way to amend the terms of any
loans from the Corporation or its subsidiaries to the Executive;
(iv) the Corporation shall provide the Executive with the job relocation
counselling services of the firm acceptable to the Corporation for
an amount not to exceed $15,000;
(v) if, at the Date of Termination, there were any memberships in any
clubs, social or athletic organizations paid for by the Corporation
that were for the regular use of the Executive at the Date of
Termination, the Corporation will not take any action to terminate
such memberships but need not renew any such membership that
expires; and
(vi) the Corporation shall pay to the Executive all outstanding and
accrued vacation pay to the Date of Termination.
Upon compliance with clauses (d)(i) through (vi) above, the Corporation shall
have no further obligations to the Executive under this Agreement or otherwise
and the Executive agrees that notwithstanding any other provision contained
herein, the Executive shall not have any right to commence any action for
wrongful dismissal or termination.
3.2 The benefits payable under this Article III shall be paid as follows: (a)
with respect to that portion of the Annual Salary relating to salary and related
benefits of the Executive, at the Corporation's regular pay periods and (b) with
respect to all other amounts, on a basis consistent with practices in effect
immediately prior to the Date of Termination. If the Executive secures
employment after the Date of Termination and prior to receiving all amounts
owing hereunder, the Executive shall immediately inform the Corporation and the
Corporation shall have the right to terminate all health, life and disability
benefits being carried by the Corporation for the Executive.
Article IV - Non-Competition, Confidentiality and Inventions and Patents
4.1 The Executive shall not while an Executive of the Corporation and for a
period of 12 months following the Date of Termination, for any reason
whatsoever, anywhere in North America, directly or indirectly, either
individually or in partnership, or in conjunction with any other persons or
corporations as principal, agent, shareholder, employee, advisor, lender,
guarantor or in any other capacity whatsoever:
(a) carry on or be engaged in or be connected with or interested in or receive
royalties or other compensation from a segment of any business which is
directly or indirectly competitive with the business of the Corporation or
any of its subsidiaries; or
(b) contact or solicit any designated customers of the Corporation or any of
its subsidiaries for the purposes of selling to the designated customers
any products or services which are the same as or are competitive with, the
products or services sold by the Corporation or any of its subsidiaries
during the term of this Agreement. For the purpose of this section, a
designated customer means any person or entity who was a customer of the
Corporation or any of its subsidiaries while the Executive was an Executive
of the Corporation.
Notwithstanding the foregoing, the Executive may hold up to five per cent of the
issued and outstanding securities of any publicly traded company. For the
purposes hereof, if a Change of Control occurs and the Executive's employment is
terminated (whether by the Corporation or the Executive) within six months of
the Change of Control, the business of the Corporation and its subsidiaries
shall be deemed to be the business immediately prior to the Change of Control.
4.2 The Executive shall not while an Executive of the Corporation and for a
period of 12 months thereafter, directly or indirectly, employ or retain as an
independent contractor any employee of the Corporation or any of its
subsidiaries or induce or solicit, or intend to induce, any such person to leave
his/her employment.
4.3 The Executive acknowledges and agrees that:
(a) in the course of performing his duties and responsibilities as an officer
of the Corporation, he has had and will continue in the future to have
access to and has been 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 Corporation and its
subsidiaries, including, without limitation, information relating to past,
present and prospective clients, customers, suppliers and employees of the
Corporation and its subsidiaries (collectively "Trade Secrets"), the
disclosure of any of which to competitors of the Corporation or to the
general public, or the use of same by the Executive or any competitor of
the Corporation or any of its subsidiaries, would be highly detrimental to
the interests of the Corporation;
(b) the Executive, while an officer and/or employee of the Corporation, owes
fiduciary duties to the Corporation, including the duty to act in the best
interests of the Corporation; and
(c) the right to maintain the confidentiality of the Trade Secrets, the right
to preserve the goodwill of the Corporation and the right to the benefit of
any relationships that have developed between the Executive and the
customers, clients and suppliers of the Corporation by virtue of the
Executive's employment with the Corporation constitute proprietary rights
of the Corporation, which the Corporation is entitled to protect.
In acknowledgement of the matters described above, the Executive hereby agrees
that he will not, during the term of this Agreement or any time thereafter
following the termination of employment for any reason, directly or indirectly
disclose to any person or in any way make use of (other than for the benefit of
the Corporation), in any manner, any of the Trade Secrets, provided that such
Trade Secrets shall be deemed not to include information that is or becomes
generally available to the public other than as a result of disclosure by the
Executive.
4.4 Any invention (whether patentable or otherwise), improvement, device,
industrial design, copyright, know-how or other intellectual or industrial
property developed, invented, created or improved by the Executive during the
term of this Agreement or prior to the date hereof while the Executive was
employed by the Corporation in respect of the Corporation's business
(collectively, the "Intellectual Property") shall be the exclusive property of
the Corporation. The Corporation shall have the exclusive right to file patent
applications and to obtain patents, to register industrial designs and copyright
in the name of the Corporation in connection with the Intellectual Property. The
Executive shall execute, from time to time, upon request by the Corporation,
assignments of the Executive's rights in the Intellectual Property to the
Corporation, shall co-operate with the Corporation in documenting the ownership
of the Intellectual Property by the Corporation, and shall provide all necessary
assistance in the filing and prosecution of any applications to register the
Intellectual Property. The Executive hereby waives his moral rights to the
Intellectual Property at common law and under section 14.1 of the Copyright Act
or successor provisions from time to time, which are acknowledged to include the
right to the integrity of the Intellectual Property and the right, where
reasonable in the circumstances, to be associated with the Intellectual Property
or an author by name or under a pseudonym and the right to remain anonymous when
any translation of the Intellectual Property is produced, performed or
published.
4.7 The Executive acknowledges that a breach or threatened breach by the
Executive of the provisions of any of this Article 4 will result in the
Corporation and its shareholders suffering irrevocable harm which is not
capable of being calculated and which cannot be fully or adequately
compensated by the recovery of damages alone. Accordingly, the Executive
agrees that the Corporation shall be entitled to interim and permanent
injunctive relief, specific performance and other equitable remedies, in
addition to any other relief to which the Corporation may be entitled.
4.8 The provisions of this Article 4 comprise all of Executive's obligations
following any termination of Executive's employment with the Corporation.
Article V- General
5.1 The Executive acknowledges that he has had an opportunity to obtain
independent legal advice before signing this Agreement and agrees that either
such advice has been obtained or that he does not wish to seek or obtain such
independent legal advice. The Executive acknowledges that he has read this
Agreement and fully understands the nature and effect of it and the terms
contained herein and that the said terms are fair and reasonable and correctly
set out the Executive's position in the event of termination.
5.2 The Executive agrees that after termination of his employment for whatever
reason, he will tender his resignation from any position he may hold as an
officer of the Corporation or as an officer or director of any of its affiliated
or associated companies, provided that doing so will not reduce the obligations
of the Corporation described herein.
5.3 If any provision of this Agreement is determined to be void or unenforceable
in whole or in part, it shall not be deemed to affect or impair the validity of
any other provision herein and each such provision is deemed to be separate,
distinct and severable.
5.4 Any notice required or permitted to be given under this Agreement shall be
in writing and shall be properly given if delivered by hand or mailed by prepaid
registered mail addressed as follows:
(a) in the case of the Corporation, to:
JetForm Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇
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Attention: Chief Executive Officer
(b) in the case of the Executive, to:
▇▇▇▇ ▇▇▇▇▇
c/o JetForm Corporation
or to such other address as the parties may from time to time specify by notice
given in accordance herewith. Any notice so given shall be conclusively deemed
to have been given or made on the day of delivery, if delivered, or if mailed by
registered mail, upon the date shown on the postal return receipt as the date
upon which the envelope containing such notice was actually received by the
addressee provided in the event of mail disruption, delivery may only be made by
hand.
5.5 This Agreement shall enure to the benefit of and be binding upon the
Executive and his heirs, executors and administrators and upon the Corporation
and its successors and assigns.
5.6 Nothing herein derogates from any rights the Executive may have under
applicable law, and in particular the parties agree that the rights,
entitlements and benefits set out in this Agreement to be paid to the Executive
shall in no event be less than the Executive's entitlement pursuant to the
Employment Standards Act (Ontario) or any successor legislation from time to
time. Any payments made hereunder are agreed to be inclusive of all payments
required of the Corporation under the said legislation.
5.7 This Agreement may be amended only by an instrument in writing signed by
both parties.
5.10 Neither party may waive or shall be deemed to have waived any right it has
under this Agreement (including under this section) except to the extent that
such waiver is in writing.
5.11 This agreement amends, restates and supercedes the employment agreement
between the Executive and the Company dated March 23, 1999.
*********
If you are in agreement with the foregoing terms and conditions, kindly
execute below where indicated and return one fully executed copy of this
Agreement to the attention of Vice President Human Resources, JetForm
Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Yours very truly,
JETFORM CORPORATION
Per:
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Authorized Officer
Accepted and agreed this ____ day of
____________, 1999.
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