EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the 1st day of August, 2000,
BETWEEN:
XXXXXXXXXX.XXX CORP.
("LG")
- and -
XXXXXX XXXXX
("Xxxxx")
WHEREAS LG has agreed to appoint and employ Xxxxx, and Xxxxx, has agreed to act,
as the President and Chief Executive Officer of LG;
AND WHEREAS the parties wish to set out the terms of their Relationship in
written form,
NOW THEREFORE in consideration of the mutual covenants and promises set forth
below, LG and Xxxxx hereby agree that their relationship shall be governed by
the following:
1. JOB DESCRIPTION -- Xxxxx shall provide services to LG as described in
the job description, attached to this Agreement as SCHEDULE "A". The
job description may be amended from time to time by the Board of
Directors of LG (hereafter "the LG Board"), after full consultation
with Xxxxx.
2. TERM -- This Agreement shall be deemed to have commenced on the 1st day
of August, 2000, and shall continue until terminated by Xxxxx or by LG
in accordance with this Agreement.
3. COMPENSATION
3.1 Effective February 1, 2000, LG shall pay a salary to Xxxxx for
his services under this Agreement at a starting base salary of
$40,000.00 (Cdn.) per annum, to be paid in equal installments
over the course of the year.
3.2 LG further agrees to increase this base salary payable to
Xxxxx to $60,000 per annum, effective August 12, 2000. The
increased salary shall accrue until such time as LG raises U.S
$800,000 in equity financing, at which time the accrued amount
shall be paid forthwith.
3.3 The LG Board may review and re-calculate Xxxxx'x salary on the
anniversary date of Xxxxx'x employment, taking into
consideration, among other factors, cost of living, length of
service, performance and overall financial position of LG.
EMPLOYMENT AGREEMENT
3.4 Salary due to Xxxxx shall be paid in arrears on every second
Friday, or the last working day before these dates, or such
other regular pay day as may be agreed upon between LG and
Xxxxx.
3.5 Deductions and Contributions
(a) LG shall withhold from each salary payment the
statutory deductions for Employment Insurance ("EI")
and Canada Pension Plan ("CPP") premiums, and federal
and provincial income tax and such other deductions
as may be required by law from time to time.
(b) LG shall make the required employer contributions to
EI and CPP premiums and such other payments required
to be made by employers by law, on behalf of Xxxxx
and shall remit these together with Xxxxx deductions
to the Receiver General for Canada, as required.
3.6 Additional Compensation
In addition to the above enumerated compensation, LG will
issue to Xxxxx 500,000 non-transferable options pursuant to
the Stock Option Plan of XxxxXxxxxx.xxx, Inc, LG's parent
company, each entailing the right to purchase one common share
of XxxxXxxxxx.xxx, Inc. and bearing an exercise price of $0.10
US (one tenth of one dollar US Funds) per share, with 20
vesting dates (for 25,000 shares each) over 20 successive
fiscal year quarters. The first vesting date shall be October
31, 2000.
4. BENEFITS
Other than the remuneration stipulated herein, no other benefits will
be paid or offered to Xxxxx by LG, although should LG commence to offer
employee benefits, Xxxxx will be entitled to such benefits as any other
officer is entitled to such benefits.
5. PERFORMANCE AND SUPERVISION
5.1 Xxxxx shall exercise the reasonable care, skill, and diligence
in performing the services set out in this Agreement
consistent with a senior executive of a similar company at a
similar stage in its development as LG.
5.2 Xxxxx shall perform the duties required of him by the LG Board
and shall act in accordance with all reasonable, lawful
directives given to him by the LG Board and shall report from
time to time, as may be required, to the LG Board concerning
his assigned tasks and activities, but no less often than
every second regularly scheduled meeting of the LG Board.
5.3 Xxxxx shall use his best efforts to promote the interests of
LG, shall not disclose the business of LG, and shall not use
for his own purposes or for the purposes of any other
organization or individual any information he may acquire
concerning the operation of LG.
5.4 Xxxxx shall be provided with all necessary information
regarding the policies and procedures of LG or as required by
the LG Board and its operations required in the performance of
the duties set out in this Agreement, as they are amended from
time to time.
6. CONFIDENTIALITY AND COPYRIGHT
6.1 Xxxxx shall keep confidential any information obtained about
any employee of LG obtained in the course of his employment,
except with the express consent of the employee or in the case
that the information is required for the functioning of LG, in
which case, Xxxxx shall give the information only to the party
that requires the information.
6.2 Xxxxx shall use the discretion expected of a reasonable senior
executive and director when releasing information about the
business and affairs of LG in any matter where LG's interest
may be harmed by the release of such information.
6.3 Upon termination of employment, Xxxxx shall deliver to LG all
documents, correspondence, plans, or other written material
and any copies thereof, and other physical property which
belongs to LG or is obtained during the performance of his
duties under this Agreement.
6.4 All written materials, plans, models, software, coding or
other materials (the "Works") in which copyright or property
rights can exist which are prepared by Xxxxx in the course of
the performance of his duties under this Agreement shall be
the sole property and copyright of LG, and Xxxxx hereby waives
moral rights in said Works.
7. EMPLOYEE'S RIGHTS
7.1 There shall be no discrimination with respect to Xxxxx by
reason of age, marital status, family status, membership in
political parties, sex, sexual orientation, race, ancestry,
place of origin, colour, ethnic origin, citizenship, creed,
handicap (where the handicap does not prevent Xxxxx from
performing the major duties of the position with reasonable
accommodation on the part of LG), or educational background,
or on any further ground as might be enumerated in the Ontario
Human Rights Code.
7.2 LG shall abide by all requirements placed on employers under
the Occupational Health and Safety Act.
8. DISCIPLINE
The LG Board shall monitor the performance of Xxxxx under the terms of
this agreement on a continuous and ongoing basis. The LG Board has the
right to discipline Xxxxx for cause. Discipline shall be "progressive";
that is, normally discipline shall increase in severity if a form of
unsatisfactory behavior is repeated or if a pattern of unsatisfactory
behavior develops. Discipline shall be administered by the Chairman of
the LG Board, upon the direction of the LG Board; such discipline may
include suspension or discharge.
9. NON COMPETITION AGREEMENT
Xxxxx acknowledges and agrees that it is a condition of this Employment
Contract that he enter in to a non-competition agreement in the form
attached hereto as SCHEDULE "B".
10. TERMINATION AND JOB SECURITY
10.1 Subject to Section 8, LG, through proper action by the LG
Board, may terminate the services of Xxxxx under this
Agreement, as follows:
a. for cause, without notice or pay in lieu of notice;
b. because LG no longer wishes to maintain a position
with substantially similar duties, or substantially
alters the job description so that Xxxxx is not
competent to perform the position as newly defined;
c. without cause.
10.2 If the discharge is for either of the reasons given in
subparagraphs 10.1 b or 10.1 c above, LG shall pay Xxxxx 4
weeks' salary for every full year Xxxxx has been in the employ
of LG thereafter, up to a maximum of 6 months' salary. The
amount of compensation paid shall be reduced by the amount of
notice given.
10.3 Xxxxx may terminate this Agreement upon no less than 120 days'
written notice to LG.
10.4 In the event that Xxxxx terminates this agreement and does not
thereafter remain as a director, officer, employee or
consultant of LG, he shall forfeit any options not at the time
of the termination vested under the terms of Section 3.6 and
the option agreement referenced in that section.
10.5 Should Xxxxx terminate this agreement and not thereafter
remain as a director, officer, employee or consultant of LG,
(a) on a date which is less than 2 years after
the date of this Agreement, Xxxxx shall be
subject to all restrictions imposed on the
continuing directors of LG under applicable
securities law for 3 years beyond the
effective date of his termination of this
Agreement,
(b) on a date which is less than 3 years after
the date of this Agreement, Xxxxx shall be
subject to all restrictions imposed on the
continuing directors of LG under applicable
securities law for 2 years beyond the
effective date of his termination of this
Agreement and
(c) on a date which is less than 4 years after
the date of this Agreement, Xxxxx shall be
subject to all restrictions imposed on the
continuing directors of LG under applicable
securities law for 1 year beyond the
effective date of his termination of this
Agreement.
11. HOURS OF WORK
Xxxxx and LG acknowledge and agree that due to the nature of the duties
and functions contemplated by this Agreement, Xxxxx shall not be
required to perform a minimum and maximum number of hours of work.
Xxxxx shall devote such amounts of time as are reasonably necessary in
order to perform all duties and functions required of him pursuant to
the terms and conditions of this Agreement.
12. HOLIDAYS
12.1 Xxxxx is entitled to a paid holiday at his regular rate of pay
on each of the following public holidays:
o New Year's Day
o Good Friday
o Victoria Day
o Canada Day
o Simcoe Day
o Labour Day
o Thanksgiving Day
o Christmas Day
o Boxing Day
12.2 When a public holiday falls on a non-working day, Xxxxx may
take a holiday on either the last working day before or the
first working day after the holiday, as may be agreed upon
between LG and Xxxxx.
12.3 Where a public holiday falls during Xxxxx'x vacation, the day
shall be considered a paid holiday and shall not count as a
vacation day.
13. VACATION
13.1 Subject to paragraph 13.2, Xxxxx is entitled to 4 weeks' paid
vacation in the first and second year of employment. Vacation
is subsequent years thereafter shall be agreed to by the LG
Board and Xxxxx.
13.2 No vacation benefits shall accrue to Xxxxx during an unpaid
leave of absence, but vacation time shall accrue during an
unpaid leave, in accordance with the Employment Standards Act.
14. SICK LEAVE
14.1 Subject to paragraph 14.2, Xxxxx is entitled to leave with pay
in the event of ill health in the amount of 1 day for each 2
months of employment to a maximum of 6 days per year. Unused
sick leave may accumulate to a maximum of 10 days. Sick leave
may be used in advance at the LG Board's discretion and where
sick leave is exhausted, unpaid sick leave may be granted at
LG's discretion.
14.2 The LG Board shall have the right to require medical evidence
satisfactory to LG for the purpose of verification of absence
due to sickness or disability or for the purpose of
determining fitness or unfitness to work.
15. MISCELLANEOUS LEAVE
15.1 Personal Leave -- Personal leave without remuneration may be
granted by the LG Board.
15.2 Family Illness -- Where no one other than Xxxxx can provide
care during the illness of an immediate family member or
significant other, Xxxxx may use a maximum of 3 days' paid
leave per occasion for this purpose, to a maximum of 6 days
per calendar year.
15.3 Pregnancy, Parental and Adoption Leave -- LG will xxxxx Xxxxx
unpaid leave for the purposes of parental or adoption leave in
accordance with current provisions of the Employment Standards
Act.
15.4 Compassionate/Bereavement Leave -- Xxxxx is allowed up to 5
days paid leave per occasion in the case of death of an
immediate family member or significant other. LG shall grant
such further leave on an unpaid basis as Xxxxx shall require
in the event of such a death.
15.5 Jury Duty -- Xxxxx shall receive paid leave if called to jury
duty or subpoenaed as a witness to a maximum of 3 weeks.
Monies received as a result of jury duties or attendance as a
witness, less actual expenses incurred, shall be paid to LG
during the initial three week period, after which time such
monies shall be retained by Xxxxx.
16. EXPENSES -- It is recognized by the parties that in this position,
Xxxxx will incur significant expenses in the course of fulfilling his
duties under this Agreement. Xxxxx is entitled to reimbursement for
expenses reasonably incurred in the performance of work duties, on
presentation of valid receipts or documentation, including, but not
limited to:
a. automobile travel at the current Ontario Government
rate;
b. actual fares for public transit;
c. actual expenses for parking, taxi cab, train, bus or
air travel; and
d. hotel expenses when Xxxxx is required for purposes of
his employment to remain away from home overnight.
The above shall not include the cost of daily travel to or from work,
or parking while at work. However, LG shall make parking spaces
available to Xxxxx at no cost to Xxxxx as space permits.
17. PERSONNEL RECORDS
17.1 A personnel file for Xxxxx shall be kept in the office of LG.
The file shall contain the following:
(a) copies of all letters of agreement and contracts
between LG or the LG Board and Xxxxx, and the
attached schedules;
(b) payroll information;
(c) termination and other notices; and
(d) any other information respecting employment and
performance.
17.2 Personnel records shall be kept for at least 24 months after
the termination of Xxxxx'x employment with LG.
17.3 Xxxxx shall have a right of access to his personnel file at
any time, in the presence of a representative of the LG Board
or his designate. Xxxxx shall have the right to make copies of
any of the contents, to add any documents and/or written
comments to the file at any time and to see any evaluations or
comments on his job performance as they are placed in the
file.
17.4 Access to personnel records shall be limited to the President,
the LG Board (or its designate) and Xxxxx. It is also
understood that those who have access to the file will use the
information gained only in relation to matters relevant to the
running of LG and/or providing letters of reference for Xxxxx.
18. ENTIRE AGREEMENT -- This Agreement and the Schedules referenced herein
shall comprise the entire agreement and understanding between LG and
Xxxxx with respect to the subject matter in this Agreement and
supersedes any prior agreement, representation or understanding with
respect thereto.
19. PERSONNEL POLICIES
The parties acknowledge that LG does not at the present time, have in
place a personnel policy. Xxxxx acknowledges and agrees that should LG
develop a personnel policy during the term of this agreement, it will
form part of this Agreement.
20. AMENDMENT -- Except as expressly provided herein, the terms and
conditions of this Agreement may be amended at any time only by the
mutual written agreement of the parties to this Agreement.
21. GOVERNING LAW -- This Agreement shall be governed by the laws of the
Province of Ontario and the laws ofCanada applicable hereto.
22. EMPLOYEE ACKNOWLEDGEMENT -- Xxxxx acknowledges that he has read and
understands the terms of this Agreement and that LG has advised him
that the foregoing substantially alters, removes, supplants and
supersedes his common law rights. Xxxxx acknowledges that LG has
advised him to seek independent legal advice prior to executing this
Agreement.
IN WITNESS WHEREOF the corporate party has hereunto affixed its corporate seal,
attested by the hands of its respective officers duly authorized in that behalf,
and the individual party has set their hand and seal in the presence of the
witness whose name is set opposite the signature of the party, on the day and
year first written above.
NAME:
TITLE:
c/s
I have the authority to
bind the Corporation.
SCHEDULE "B", EMPLOYMENT AGREEMENT
)
SIGNED, SEALED AND DELIVERED in
the presence of: ) ) )
)
Witness ) XXXXXX XXXXX
SCHEDULE "A"
JOB DESCRIPTION
The responsibilities of the Chief Executive Officer of the Corporation, are,
subject to the control of the board of director, to generally supervise and
control all of the business and affairs of the corporation, and to preside at
all meetings of the shareholders, the board of directors, and all committees of
the board of directors on which the CEO may serve. In addition, the CEO shall
possess, and may exercise, such power and authority, and shall perform such
duties, as may from time to time be assigned by the board of directors, and as
are incident to the offices of president and chief executive officer.
SCHEDULE "B"
NON COMPETITION AGREEMENT
Non-Competition Agreement made the 1st day of August, 2000.
BETWEEN:
XXXXXXXXXX.XXX CORP.
(The "Employer")
and
XXXXXX XXXXX
("Xxxxx")
WHEREAS the Employer or has entered into an Employment Agreement (the
"Agreement") with Xxxxx;
AND WHEREAS the entering into of this Non Competition Agreement is a
condition of the Employment Agreement;
NOW THEREFORE in consideration of the mutual covenants and promises
contained herein and in the Employment Agreement it is agreed by and between the
parties hereto as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions. In this Agreement, the following terms shall have
the meanings set out below unless the context requires otherwise:
SCHEDULE "C", EMPLOYMENT AGREEMENT
(a) "affiliate" means, with respect to any Person, any
other Person who directly or indirectly controls, is
controlled by, or is under direct or indirect common
control with such Person, and includes any Person in
like relation to an affiliate. A Person is deemed to
control another Person if such Person possesses,
directly or indirectly, the power to direct or cause
the direction of the management and policies of such
other Person, whether through the ownership of voting
securities, by contract or otherwise; and the term
"controlled" has a corresponding meaning.
(b) "Agreement" means this Non Competition Agreement,
including any schedules to this Agreements it or they
may be amended from time to time, and the expressions
"hereof", "herein", "hereto", "hereunder", "hereby"
and similar expressions refer to this Agreement and
not to any particular Section or other portion of
this Agreement.
(c) "Employer", for purposes of this agreement, may mean
XxxxXxxxxx.xxx Corp. as a corporate entity, or as
the context requires, the Board of Directors of
XxxxXxxxxx.xxx Corp. or its designate.
(d) "Information" means any information proprietary to
the Employer concerning the Employer's business and
affairs or the business and affairs of an affiliate,
and without limitation includes business plans,
business processes, inventions and documents relating
to business plans, business processes and inventions,
whether in writing, orally communicated or stored in
electronic form.
(e) "Person" is to be broadly interpreted and includes an
individual, a corporation, a partnership, a trust, an
unincorporated organization, the government of a
country or any political subdivision thereof, or any
agency or department of any such government, and the
executors, administrators or other legal
representatives of an individual in such capacity.
(f) "Restriction Period" for purposes of this Agreement,
means the period commencing on the date of this
Agreement and ending three (3) years from the date of
the termination of the Employment Agreement.
1.2 Article and Section Headings. The division of this Agreement
into Articles and Sections and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement. Unless the context requires otherwise, references in this Agreement
to Sections or Schedules are to Sections or Schedules of this Agreement.
1.3 Number and Gender. Unless the context requires otherwise,
words importing the singular include the plural and vice versa and words
importing gender include all xxxxxx.
ARTICLE 2
NON-SOLICITATION
2.1 Non-Solicitation. Xxxxx will not, at any time during the
Restriction Period, without the prior written consent of the Employer,
directly or indirectly, either alone or in conjunction with any individual
or firm, corporation, association or other entity, whether as principal, agent,
covenantor, employee, creditor or in any other capacity whatsoever, engage
or hire or attempt to solicit away from the Employer any employees of the
Employer.
ARTICLE 3
NON COMPETITION
3.1 Non Competition and Restriction Period. For a period of 3
(three) years from the effective date of termination of the Employment
Agreement, Xxxxx shall not:
a. be directly or indirectly engaged in any company or firm which
is a direct competitor to the Employer or its affiliates in
any province in Canada where the Employer is carrying on
business;
b. be employed by any other similar business which may start up
in Canada;
c. intentionally act in any manner that is detrimental to the
relations between the Employer and its customers, employees,
dealers, affiliates or other persons; and
d. solicit any of the customers of the Employer or its affiliates
or be connected with any person, firm or corporation
soliciting or servicing any of the customers of the Employer.
3.2 Xxxxx acknowledges that by reason of employment with the
Employer, he will develop a close working relationship with the Employer's
customers, clients and affiliates, gain a knowledge of the Employer's methods
of operation, and acquire and be exposed to Information or materials
confidential to the Employer generally, all of which would cause irreparable
harm and injury to the Employer if made available to a competitor or if used for
competitive purposes.
3.3 Xxxxx acknowledges and agrees that the foregoing time and
geographic limitations pursuant to this Agreement are reasonable and properly
required for the adequate protection of the exclusive property and business of
the Employer, and in the event that any such time or geographic limitation
is found to be unreasonable by a court, then Xxxxx agrees to be bound to such
reduced time or geographic limitation as said court deems to be reasonable.
3.4 Xxxxx acknowledges and agrees and understands that without
prejudice to any and all remedies available to the Employer, an injunction is
the only effective remedy for any breach of Xxxxx'x covenants under this
Section and that the Employer would suffer irreparable harm and injury in
the event of any such breach and that monetary damages shall be inadequate to
compensate the Employer for the breach. Accordingly, Xxxxx hereby agrees that
the Employer may apply for and have injunctive relief, including an interim or
interlocutory injunction, in any court of competent jurisdiction or threatened
breach thereof. Xxxxx further agrees that the Employer may apply for and is
entitled to said injunctive relief, without having to prove damages, and is
entitled to all costs and expenses including reasonable legal fees. The terms
and conditions regarding injunctive relief are more particularly described in
Article Four herein.
3.5 Xxxxx understands and agrees that the restrictions and
covenants imposed pursuant to the terms of this Agreement and the Employment
Agreement constitute a material inducement to the Employer to enter into this
Agreement and the Employment Agreement to employ Xxxxx, and that the Employer
would not enter into the Employment Agreement absent such inducement. Xxxxx
agrees that the restrictions and covenants contained in this Section shall
be construed independently of any other provision of this Agreement, and the
existence of any claim or cause of action by Xxxxx against the Employer, whether
predicated under this Agreement or the Employment Agreement or otherwise, shall
not constitute a defense to the enforcement by the Employer of the restrictions
and covenants contained herein and in the Employment Agreement.
ARTICLE 4
CONFIDENTIALITY
4.1 Confidentiality. The parties acknowledge that Xxxxx has had,
and may have, access to confidential information belonging to the Employer and
its affiliates. In addition to the covenants contained in the Employment
Agreement, Xxxxx therefore undertakes that he shall not neither during the term
of this Agreement not at any time thereafter:
(a) disclose the private affairs or secrets of the
Employer or its affiliates, including any
Information to any third party other than with the
consent of the Employer; and
(b) use for his own purposes or for any purposes other
than those of the Employer or its affiliates any
confidential information that he may have relating
to the businesses of the Employer or its affiliates.
ARTICLE 5
GENERAL
5.1 Severability. Each provision of this Agreement shall
constitute a separate and distinct covenant shall be severable from all
other such separate and distinct covenants contained in this Agreement. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such prohibition or unenforceability and shall be severed from the balance
of this Agreement, all without affecting the remaining provisions of this
Agreement or affecting the validity or enforce ability of such provision in any
other jurisdiction.
5.2 Reasonableness of Restrictions. The Employer and Xxxxx agree
that all restrictions in this Agreement are necessary and fundamental to the
protection of the respective businesses of the parties and are reasonable and
valid. All defenses to the strict enforcement of this Agreement against the
parties or any of their Affiliates are hereby waived.
5.3 Successors and Assigns. This Agreement shall ensure to the
benefit of, and be binding on each of the Employer and Xxxxx and their
respective successors and permitted assigns. Neither party may assign or
transfer, whether absolutely, by way of security of otherwise, all or any
part of its respective rights or obligations under this Agreement without the
prior written consent of the other.
5.4 Amendment. No amendment of this Agreement shall be effective
unless made in writing and signed by both of the parties.
5.5 Waiver. A waiver of any default, breach or non-compliance
under this Agreement shall not be effective unless in writing and signed by the
party to be bound by the waiver. No waiver shall be inferred from or implied but
any failure to act or delay in acting by a party in respect of any default,
breach or non-observance or by anything done or omitted to be done by any other
party. The waiver by a party of any default, breach or non-compliance under this
Agreement shall not operate as a waiver of that party's rights under this
agreement in respect of any continuing or subsequent default, breach or
non-observance (whether of the same or any other nature)
5.6 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 and shall be treated in all respects as an
Ontario contract. Any action, suit or other legal proceeding commenced by any
party hereto based upon, arising out of or otherwise with respect to this
Agreement or the transactions contemplated hereby shall be commenced only
in a court of the Province of Ontario.
5.7 Acknowledgement. Xxxxx acknowledges that he has read and
understands the terms of this Agreement. Xxxxx acknowledges that the Employer
has advised him to seek independent legal advice prior to executing this Non
Competition Agreement.
IN WITNESS WHEREOF the corporate party has hereunto affixed its corporate seal,
attested by the hands of its respective officers duly authorized in that behalf,
and the individual party has set their hand and seal in the presence of the
witness whose name is set opposite the signature of the party, on the day and
year first written above.
NAME:
TITLE:
I have the authority to
bind the Corporation.
SIGNED, SEALED AND DELIVERED in
the presence of: ) ) )
)
Witness )
) XXXXXX XXXXX
XXXXXXXXXX.XXX INC.
OPTION AGREEMENT
Common Shares
THIS AGREEMENT made as of the 1st day of August, 2000.
BETWEEN:
XXXXXXXXXX.XXX INC.,
a corporation incorporated under the laws of the State of Florida
(hereinafter called the "Corporation")
AND:
Xxxxxx Xxxxx,
of the City of Ottawa in the Country of Canada
(hereinafter called the "Grantee"),
WHEREAS:
Pursuant to a resolution dated whereby the Board has granted effective August 1,
2000 (the "Date of the Grant") to the Grantee, the Option to purchase the number
of Shares of the Corporation hereinafter referred to based on the Fair Market
Value thereof on the Date of the Grant.
NOW THEREFORE in consideration of the premises and other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged by each of the parties hereto) and the covenants contained herein
the parties hereto covenant and agree as follows:
1. Definitions
1.1 Unless the context otherwise specifies or requires, in this
Agreement the following terms shall have the meanings specified in this
paragraph:
(a) "Agreement" "hereto", "herein", "hereof", "hereunder" and similar
expressions refer to this Option Agreement and not any particular
paragraph or any particular portion of this agreement and includes all
schedules attached to this agreement;
(b) "Board" means the board of directors of the Corporation as the same may
be constituted from time to time;
(c) "Date of Grant" means for any Option, the date specified by the Board
at the time it grants the Option;
(d) "Disability" means the permanent and total disability as determined
under procedures established by the Board for the purposes of this
Agreement;
(e) "Exercise Price" means the price per Share as determined herein from
time to time;
(f) "Option" means a non-transferable option to purchase Shares granted
pursuant to this Agreement;
(g) "Shares" means the common shares of the Corporation issued and
outstanding from time to time.
1.2 Capitalized terms not defined herein shall have the meaning
prescribed in the XxxxXxxxxx.xxx, Inc. 2000 Stock Option Plan, the
terms of which are included herein by reference.
2. Grant of Options
The Corporation hereby confirms the grant to the Grantee of an Option, which
shall be treated as an ISO, to purchase from the Corporation up to 500,000
presently unissued Shares, at an Exercise Price of $0.10 per Share being the
Fair Market Value thereof on the Date of the Grant and subject to the terms and
conditions hereinafter set out.
3. Expiry of Option
The term of the vested Options shall be from the date hereof and shall expire on
the earlier of the following:
(a) 5 years following the Date of Grant;
(b) 30 days following the termination of employment without cause of the
Grantee or termination of the Grantee's consulting contract by the
Corporation or an Affiliate for any reason, other than a failure of
the Grantee to fulfill the terms of the consulting contract, as
applicable;
(c) the period specified in a notice given pursuant to paragraph 7 hereof;
(d) 1 day prior to the termination of employment for cause of the Grantee
or to the termination of the Grantee's contract by the Corporation or
an Affiliate for failureof the Grantee to fulfil the terms of the
consulting contract, as applicable; and
(e) 120 days following the Disability, retirement or death of the Grantee.
4. Vesting
The Options will become immediately exercisable and vest in respect of any and
all Shares not yet exercised upon the determination of the Board, in its sole
discretion and on such terms and conditions as it deems appropriate.
5. Exercise of Option
The Option shall be exercisable at any time from time to time during the term
thereof with respect to all or any lesser number of the Shares referred to in
Section 2 that have vested in accordance with Section 4 by written notice given
to the Corporation in the form attached hereto as Schedule "A" to this Agreement
specifying the number of Shares in respect of which such Option is being so
exercised at such time, accompanied by cash, certified cheque, bank draft, money
order or such other means as may be specified by the Board in favour of the
Corporation in payment in full for such Shares at the price per Share specified
in Section 2, whereupon the purchase pursuant to the said Option of the Shares
so specified shall be deemed for all purposes to have been completed and the
said Option exercised to such extent.
The Option shall be exercisable only by the Grantee during her lifetime or by
the legal personal representative or representatives of the Grantee.
The Grantee shall not be entitled to either transfer, assign, gift or transfer
the Shares to any person whatsoever or to pledge, hypothecate or in any way
encumber the Shares without the written consent of the Corporation.
6. Alterations of Capital Stock
If at any time after:
(a) a reconstruction, reorganization or recapitalization of the
Corporation, or its consolidation, amalgamation or merger into or with
another corporation; or
(b) a consolidation, subdivision or other change of the Shares then covered
by the said Option, or the issue of further shares as a stock dividend;
(c) the Board shall determine that, in order to preserve as nearly as may
be possible the original scope and intent of this agreement, the said
Option should thereafter cover a different class and/or number of
Shares and/or should be exercisable at a different Exercise Price per
Share;
the Corporation shall give notice to the Grantee designating such new class,
number and/or price, whereupon this Agreement shall, without further act or
formality, be thereby amended accordingly, and any notice so given by the
Corporation pursuant to a determination so made by its directors shall be final
and binding for all purposes of this Agreement.
7. Reorganization
Notwithstanding anything herein contained, in the event of a proposed
reconstruction, reorganization or recapitalization of the Corporation, or its
consolidation, amalgamation or merger into or with another corporation, the
Corporation shall have the right to give written notice to any Grantee requiring
such Grantee within the period specified in such notice (which in no event shall
be shorter than 30 days following the giving of such notice) to exercise such
Option with respect to all Shares covered thereby and not theretofore purchased
by such Grantee. Upon such notice being given, such Grantee shall have the right
to exercise such Option accordingly with such period and such option shall
terminate at the expiry of such period with respect to all Shares covered
thereby which shall not have been theretofore purchased thereunder.
8. Notices
Any notice to be given pursuant to the provisions hereof shall be deemed to have
been validly given if reduced to writing and either mailed by prepaid ordinary
post or delivered to the party to whom the same is to be given at the following
applicable address:
the Corporation XxxxXxxxxx.xxx, Inc.
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX X0X 0X0
the Grantee or ________________________________________
the legal personal ________________________________________
representative or ________________________________________
representatives of ________________________________________
the Grantee ________________________________________
or at such other address as the party to whom the same is given to be given
shall have theretofore designated by notice given in the manner specified in
this section; and any such notice shall be deemed to have been given on the day
of delivery thereof or on the day following the day of mailing thereof in Canada
or the United States, as the case may be.
9. Further Assurances
The parties hereto shall do all further acts and things and execute all further
documents reasonably required in the circumstances to effect the provisions and
intent of this Agreement.
Applicable Law
This Agreement and the provisions hereof shall be governed and construed
according to the laws of the State of New York.
10. Assignment
This Agreement is not assignable by the Grantee or the legal personal
representative or representatives of the Grantee.
11. Entire Agreement
This Agreement together with the Schedule attached hereto constitutes the entire
Agreement between the parties and supersedes all prior and contemporaneous
agreements, understandings and discussions, whether oral or written, and there
are no other warranties, agreements or representations between the parties
except as expressly set forth herein.
12. Agreement Binding
This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective personal representative, executors, administrators,
successors and assigns.
13. Waivers
No amendment, waiver or termination of this Agreement will be binding unless
executed in writing by the parties to be bound hereby. No waiver of any
provision of this agreement will be deemed or will constitute a waiver of any
other provision, nor will any such waiver constitute a continuing waiver unless
expressly provided.
14. Counterparts
This Agreement may be executed in several counterparts, each of which together
shall constitute one and the same instrument. The parties hereto agree that this
Agreement may be transmitted by facsimile or such similar device and that the
reproduction of signatures by facsimile or such similar device will be treated
as binding as if originals and each party hereto undertakes to provide each and
every other party hereto with a copy of the agreement bearing original signature
forthwith upon demand.
IN WITNESS WHEREOF the parties hereto have executed this agreement as
of the date first set forth above.
XXXXXXXXXX.XXX, INC.
Per:
------------------------------------
Title:
-----------------------------------
Witness to Grantee's Signature Grantee
SCHEDULE "A"
OPTION EXERCISE FORM
TO EXECUTE THIS OPTION, COMPLETE AND RETURN THIS FORM
The undersigned Grantee (or the Grantee's legal representative(s)
permitted by the Option Agreement) hereby irrevocably elects to exercise this
Option for the number of Shares of XxxxXxxxxx.xxx, Inc. as set forth below:
(a) Number of shares to be acquired:
--------------------
(b) Option exercise price per share: $
--------------------
(c) Aggregate purchase price [(a) times (b)]: $
--------------------
and hereby tenders a certified cheque for such aggregate purchase price,
directing such Shares to be registered and a certificate therefore to be issued
as directed below.
DATED this day of , 20.
WITNESS TO EXECUTION )
)
)
) [NAME OF GRANTEE]
)
)
-------------------------
) [SIGNATURE OF GRANTEE]
Direction as to Registration:
[Name of Registered Holder]
[Address of Registered Holder]
