Tucows 2012 Annual Report Download - page 71

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66
Employment Agreements—Change in Control
Under their employment agreements, both Mr. Noss and Mr. Cooperman are also entitled to the change in
control benefits described in the following paragraph if:
• the executive resigns 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;” or
• within 18 months after a “change in control” and executive’s employment is terminated either:
• without “cause;” or
• by resignation for “good reason.”
If an executive’s employment is terminated following a change in control under the circumstances described in
the preceding paragraph, the executive is entitled to receive a lump sum payment based upon the fair market value of the
Company on the effective date of the “change in control” as determined by our Board of Directors in the exercise of
good faith and reasonable judgment taking into account, among other things, the nature of the “change in control” and
the amount and type of consideration, if any, paid in connection with the “change in control.” Depending on the fair
market value of the company, the lump sum payments range from $375,000 to $2 million in the case of Mr. Noss, and
from $187,500 to $1 million in the case of Mr. Cooperman. In addition to the lump sum payments, all stock options held
by the executive officers will be immediately and fully vested and exercisable as of the date of termination.
A “change in control” is generally defined as:
• the acquisition of 50% or more of our common stock;
• a change in the majority of our Board of Directors unless approved by the incumbent directors (other than as
a
result of a contested election); and
• certain reorganizations, mergers, consolidations, liquidations or dissolutions, unless certain requirements are
met regarding continuing ownership of our outstanding common stock.
“Good reason” is defined to include the occurrence of one or more of the following:
• the executive’s position, management responsibilities or working conditions are diminished from those in
effect immediately prior to the change in control, or he is assigned duties inconsistent with his position;
• the executive is required to be based at a location in excess of 30 miles from his principal job location o
r
office immediately prior to the change in control;
• the executive’s base compensation is reduced, or the executive’s compensation and benefits taken as a whole
are materially reduced, from those in effect immediately prior to the change in control; or
• we fail to obtain a satisfactory agreement from any successor to assume and agree to perform our obligations
to the executive under his employment agreement.