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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.           )

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Filed by a Party other than the Registrant o

Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material Pursuant to §240.14a-12

TUCOWS INC.
(Name of Registrant as Specified In Its Charter)

 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
         
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Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

LOGO

April 29, 2004

Dear Fellow Shareholder:

        You are cordially invited to attend the 2004 annual meeting of Tucows Inc. to be held at the TSX Broadcast and Conference Centre, The Exchange Tower, 130 King Street West, Toronto, Ontario, Canada, on Tuesday, June 1, 2004, at 4:30 p.m. (local time).

        We will begin the annual meeting with a report on our operations, progress and plans and then will discuss and vote on the matters described in the accompanying notice of annual meeting and proxy statement. You will also have an opportunity to ask questions.

        Please read the accompanying notice of annual meeting and proxy statement carefully. It is important that your shares be represented at the meeting, whether or not you attend the meeting and regardless of the number of shares you own. Whether or not you plan to attend, you can ensure that your shares are represented and voted at the annual meeting by promptly completing, signing, dating and returning the enclosed proxy card in the envelope provided. If you decide to attend the annual meeting and wish to change your proxy vote, you may do so by voting in person at the meeting.

        We look forward to seeing you on June 1, 2004.

  Sincerely,

 
SIGNATURE
  Elliot Noss
 President and Chief Executive Officer

TUCOWS INC.
96 Mowat Avenue
Toronto, Ontario M6K 3M1
Canada

Notice of Annual Meeting of Shareholders—June 1, 2004

        The 2004 annual meeting of shareholders of Tucows Inc. will be held at 4:30 p.m. (local time) on June 1, 2004 at the TSX Broadcast and Conference Centre, The Exchange Tower, 130 King Street West, Toronto, Ontario, Canada, to:

        The record date for determining shareholders entitled to notice of, and to vote at, the annual meeting and any adjournment or postponement of the annual meeting was April 19, 2004. Our board of directors is soliciting the enclosed proxy. Please carefully read the accompanying proxy statement for more information regarding the business to be transacted at the annual meeting. You will also find enclosed our 2003 annual report on Form 10-K.

        We will make available at the annual meeting a complete list of the shareholders entitled to vote at the annual meeting, and you may examine the list for any purpose related to the annual meeting.

        Regardless of whether you plan to attend the annual meeting, please complete, sign, date and return the enclosed proxy card promptly. You are cordially invited to attend the annual meeting in person. Returning the enclosed proxy card will not affect your right to revoke your proxy or to vote in person if you do attend the annual meeting.


 
SIGNATURE
  Brenda Lazare
 General Counsel and Secretary
Toronto, Ontario
April 29, 2004		  

        Your vote is important. Please vote by using the Internet, vote by telephone or sign and return the enclosed proxy card as soon as possible to ensure your representation at the annual meeting. Your proxy card contains instructions for each of these voting options.


TABLE OF CONTENTS

 
   Page
VOTING INFORMATION   1
  Record date   1
  How to vote   1
  Revoking your proxy   2
  Returning your proxy without indicating your vote   2
  Withholding your vote or voting to "abstain"   2
  Street name shares   2
  Votes required to hold the annual meeting   2
  Votes required to elect directors   2
  Votes required to ratify the appointment of KPMG LLP   2
  Postponement or adjournment of annual meeting   2
BENEFICIAL OWNERSHIP OF COMMON STOCK AND RELATED SHAREHOLDER MATTERS   3
  Stock ownership of management   3
  Principal shareholders   4
  Related shareholder matters   5
PROPOSAL NO. 1 ELECTION OF DIRECTORS   5
INFORMATION CONCERNING OUR BOARD OF DIRECTORS   6
  Meetings   6
  Policy regarding attendance   6
  Committees   7
  Director nomination process   7
  Ethics policy for senior officers   8
  Communications with the board of directors   8
  Director compensation   8
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION   9
AUDIT COMMITTEE REPORT   9
AUDIT FEES AND ALL OTHER FEES   10
  Audit fees   10
  Audit-related fees   10
  Tax fees   10
  All other fees   10
  Audit committee pre-approval of audit and permissible non-audit services of independent auditors   11
EXECUTIVE COMPENSATION   11
  Compensation committee report on executive compensation   11
  Employment and change-in-control arrangements   13
  Summary compensation table   15
  Option grants in last fiscal year   16
  Aggregated option exercises in last fiscal year and fiscal year-end option values   16
  10-year option repricings   17
STOCK PERFORMANCE GRAPH   18
PROPOSAL NO. 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS   19
  Ratification of appointment   19
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE   19
OTHER MATTERS TO BE DECIDED AT THE ANNUAL MEETING   19
ADDITIONAL INFORMATION   19
  Shareholder proposals for the 2005 annual meeting   19
  Cost of proxy solicitation   19

TUCOWS INC.
96 Mowat Avenue
Toronto, Ontario M6K 3M1
Canada

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS
June 1, 2004

        We are sending this proxy statement to shareholders of Tucows Inc., a Pennsylvania corporation, in connection with our board of directors' solicitation of proxies for use at our annual meeting of shareholders on June 1, 2004. We invite you to attend in person. We have also enclosed our 2003 annual report on Form 10-K (which does not form a part of the proxy solicitation material).

        Before August 28, 2001, we were known as Infonautics, Inc. On August 28, 2001, we completed a merger with a Delaware corporation, which we refer to as Tucows Delaware. We refer to such merger as the Merger in this proxy statement. Upon completion of the Merger, we changed our name to Tucows Inc.


VOTING INFORMATION

Record date.

        The record date for the annual meeting was April 19, 2004. You may vote all shares of our common stock that you owned as of the close of business on that date. On April 19, 2004, we had 65,239,717 shares of common stock outstanding. Each share of common stock is entitled to one vote on each matter to be voted at the annual meeting. We will begin mailing this proxy statement and the proxy card on or about April 29, 2004 to shareholders of record as of the close of business on the record date.

How to vote.

        By mail.    If you hold your shares through a securities broker (that is, in street name), you may complete and mail the voting instruction card forwarded to you by your broker. If you hold your shares in your name as a holder of record, you can vote your shares by proxy by completing, signing and dating the proxy card and returning it in the enclosed postage-paid envelope. A properly completed and returned proxy card will be voted as you instruct, unless you subsequently revoke your instructions.

        By telephone.    If you hold your shares through a securities broker, you may vote by telephone by following the instructions included with the voting instruction card forwarded to you by your broker.

        By Internet.    If you hold your shares through a securities broker, you may vote your shares via the Internet by following the instructions included with the voting instruction card forwarded to you by your broker. If you vote your shares via the Internet, you may incur costs such as telephone and Internet access charges.

        At the annual meeting.    Submitting your vote by mail or via the Internet does not limit your right to vote in person at the annual meeting if you later decide to do so. If you hold your shares in street name and want to vote in person at the annual meeting, you must obtain a proxy from your broker and bring it to the annual meeting.


Revoking your proxy.

        You can revoke your proxy at any time before your shares are voted at the annual meeting by:

Returning your proxy without indicating your vote.

        If you return a signed proxy card without indicating your vote and do not revoke your proxy, your shares will be voted according to the board of directors' recommendations.

Withholding your vote or voting to "abstain."

        In the election of directors, you can withhold your vote for any of the nominees. Withheld votes will be excluded entirely from the vote and will have no effect on the outcome. On the other proposal, you can vote to "abstain." If you vote to "abstain", your shares will be excluded entirely from the vote and will have no effect on the outcome.

Street name shares.

        If your shares are held in street name through a broker or other nominee, you have the right to direct your broker on how to vote your shares. If you do not direct your broker or nominee to vote your shares and if your broker or nominee does not have discretionary authority to vote your shares or has discretionary authority to vote your shares but fails to exercise that authority, your shares will have no effect on the outcome of any matter voted on at the annual meeting.

Votes required to hold the annual meeting.

        We need a majority of shares of common stock outstanding on April 19, 2004 present, in person or by proxy, to have a quorum to be able to hold the annual meeting. Accordingly, the presence of 32,619,859 shares will constitute a quorum. Shares represented by a properly signed and returned proxy are considered present at the annual meeting for purposes of determining a quorum, regardless of whether the holder of such shares or proxy withholds his, her or its vote or abstains.

Votes required to elect directors.

        A plurality of the votes cast is required for the election of directors. Accordingly, the five nominees for election as directors who receive the highest number of votes actually cast will be elected.

Votes required to ratify the appointment of KPMG LLP.

        The affirmative vote of a majority of the votes cast by all holders of shares of common stock represented at the annual meeting and entitled to vote is required to ratify the appointment of KPMG LLP as our independent public accountants for the year ended December 31, 2004.

Postponement or adjournment of annual meeting.

        If the annual meeting is postponed or adjourned, your proxy will still be valid and may be voted at the rescheduled meeting. You will still be able to revoke your proxy until it is voted.

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BENEFICIAL OWNERSHIP OF COMMON STOCK AND RELATED SHAREHOLDER MATTERS

Stock ownership of management.

        We encourage stock ownership by our directors, officers and employees to align their interests with your interests as shareholders. Under the rules of the Securities and Exchange Commission, which we refer to in this proxy statement as the SEC, a person who directly or indirectly has or shares voting power and/or investment power with respect to a security is considered a beneficial owner of the security. Voting power includes the power to vote or direct the voting of shares, and investment power includes the power to dispose of or direct the disposition of shares. Shares as to which voting power and/or investment power may be acquired within 60 days are also considered beneficially owned under the SEC's rules.

        The following table sets forth the beneficial ownership of our common stock, as of April 1, 2004, by each of our executive officers named in the summary compensation table on page 15 and each of our directors, as well as by all of our directors and executive officers as a group. The information on beneficial ownership in the table and related footnotes is based upon data furnished to us by, or on behalf of, the persons referred to in the table. Unless otherwise indicated in the footnotes to the table, each person named has sole voting power and sole investment power with respect to the shares included in the table.

 
   Beneficial Ownership of Common Stock
  
Name
   Common Stock
Beneficially Owned
Excluding Options
   Stock Options
Exercisable
within 60 Days of
April 1, 2004
   Total Common
Stock
Beneficially
Owned
   Percent of
Class(1)
  
Elliot Noss   331,197 (2) 1,880,002   2,211,199   3.3 %
Michael Cooperman   90,715 (3) 666,640   757,355   1.2 %
Graham Morris   37,704 (4) 296,425   334,129   *  
Supriyo Sen   —   348,366   348,366   *  
David Woroch   93,050 (5) 52,081   145,131   *  
Stanley Stern   138,850 (6) 208,050   346,900   *  
Erez Gissin   —   25,000   25,000   *  
Alan Lipton   —   25,000   25,000   *  
Lloyd Morrisett   50,000 (7) 60,000   110,000   *  
All directors and executive officers
As a group (8 persons)		   703,812   3,265,139   3,968,951   5.8 %
*
Less than 1%.

(1)
Based on 65,039,717 shares outstanding as of April 1, 2004, adjusted for shares of stock beneficially owned but not yet issued.

(2)
Includes an aggregate of 86,869 shares of common stock owned by two separate family trusts of which Mr. Noss is the trustee. Shortly before completion of the Merger, each Tucows Delaware stockholder, including Mr. Noss, entered into an escrow agreement with two Tucows Delaware stockholders, Yossi Vardi and Redel Inc., which required each Tucows Delaware stockholder to deposit, at the effective time of the Merger, a pro rata portion of the number of shares of our common stock that would be issued if, rather than agreeing to cancellation of certain options, Mr. Vardi and Redel Inc. had exercised those options to purchase shares of common stock of Tucows Delaware before the Merger. We refer to that escrow agreement as the Vardi/Redel escrow agreement in this proxy statement. Of the 244,328 shares of common stock owned directly by Mr. Noss, 24,670 shares are being held in escrow under the terms of the Vardi/Redel escrow agreement.

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(3)
Of the 90,715 shares of our common stock owned directly by Mr. Cooperman, 8,192 shares are currently being held in escrow under the terms of the Vardi/Redel escrow agreement.

(4)
Of the 37,704 shares of our common stock owned directly by Mr. Morris, 3,405 shares are currently being held in escrow under the terms of the Vardi/Redel escrow agreement.

(5)
Of the 93,050 shares of our common stock owned directly by Mr. Woroch, 8,403 shares are currently being held in escrow under the terms of the Vardi/Redel escrow agreement.

(6)
Of the 138,850 shares of our common stock owned directly by Mr. Stern, 1,702 shares are currently being held in escrow under the terms of the Vardi/Redel escrow agreement.

(7)
These shares of common stock are owned jointly by Dr. Morrisett and his wife.

Principal shareholders.

        The following table sets forth information with respect to each shareholder known to us to be the beneficial owner of more than 5% of our outstanding common stock as of April 1, 2004.

 
   Beneficial Ownership
of Common Stock
  
Name and Address of Beneficial Owner
   Number
of Shares
   Percent
of Class(1)
  
STI Ventures N.V. Hullenbergweg 379 New Line
1101 CR, Amsterdam
Zuid-Oost, The Netherlands		   17,545,836 (2) 27.0 %

Parman Holding Corp.
c/o ONYX Financial Advisors SA
25, Voie Des Traz
Chambre 1101
Port Franc, Batiment Aerogare Fret
1211 Geneva 5, Switzerland
 
6,996,916
(3)
10.8
%

Eurocom Communications Ltd.
2 Dov Freidman Street.
Ramot-Gan, Israel
 
5,597,112
(4)
8.6
%

Hapoalim Nechasim (Menayot) Ltd.
50 Rothschild Boulevard
Tel Aviv, Israel
 
3,492,112
(5)
5.4
%
(1)
Based on 65,039,717 shares outstanding as of April 1, 2004.

(2)
As disclosed on Schedule 13D filed with the SEC on September 7, 2001. Of the 17,545,836 shares of common stock, 1,584,433 are being held in escrow under the terms of the Vardi/Redel escrow agreement, and STI Ventures N.V. may only dispose or direct the disposition of such shares under the terms of the Vardi/Redel escrow agreement.

(3)
As disclosed on Schedule 13G filed with the SEC on February 14, 2002. Of the 6,996,916 shares of common stock, 631,839 are being held in escrow under the terms of the Vardi/Redel escrow agreement, and Parman Holding Corp. may only dispose or direct the disposition of such shares under the terms of the Vardi/Redel escrow agreement.

(4)
As disclosed on Schedule 13G filed with the SEC on February 14, 2002. Of the 5,597,112 shares of common stock, 505,433 are being held in escrow under the terms of the Vardi/Redel escrow

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(5)
As disclosed on Schedule 13G filed with the SEC on February 19, 2004. Of the 3,492,112 shares of common stock, 505,433 are being held in escrow under the terms of the Vardi/Redel escrow agreement, and Hapoalim Nechasim (Menayot) Ltd. may only dispose or direct the disposition of such shares under the terms of the Vardi/Redel escrow agreement.

Related shareholder matters

        The following table depicts information regarding our use of shareholder-approved and non-shareholder approved stock plans as of December 31, 2003.

Equity compensation plan information

Plan Category
   Number of Securities to
be Issued Upon Exercise
of Outstanding Options
   Weighted-Average
Exercise Price of
Outstanding Options
   Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected in
Column (a)
 
   (a)

   (b)

   (c)
Equity Compensation plans approved by security holders   8,665,755   $ 0.69   1,309,041
Equity Compensation plans not approved by security holders   0   $ 0.00   0
  Total   8,665,755     0.69   1,309,041


PROPOSAL NO. 1
ELECTION OF DIRECTORS

        The current term of office of all of our directors expires at the 2004 annual meeting. The board of directors proposes that the following five nominees, all of whom are currently serving as directors, be re-elected for a new term of one year and until their successors are duly selected and qualified. The number of directors fixed pursuant our governing instruments and a resolution adopted by our board of directors is six. Our board of directors has named only five nominees because Robert F. Young resigned as a director in February 2004 and our board of directors has not yet elected a director to replace him. Our board of directors is currently actively considering various potential candidates for nomination to the board of directors to fill the vacancy created by Mr. Young's resignation. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proxy statement.

        Each of the nominees has consented to serve if elected. If any of them becomes unavailable to serve as a director, the board of directors may designate a substitute nominee. In that case, the persons named as proxies will vote for the substitute nominee designated by the board of directors. Unless you withhold authority to vote for these persons, your proxy will be voted FOR the election of the five nominees.

  Stanley Stern   Chairman of the board of directors since August 2001

        Mr. Stern, age 47, has been a managing director and head of investment banking with Oppenheimer & Co. Inc., an investment banking firm, since April 2004. From February 2002 to March 2004, Mr. Stern served as a managing director and head of investment with C.E. Unterberg,

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Towbin, an investment banking firm. From January 2000 to February 2002, Mr. Stern served as managing director of STI Ventures Advisory USA Inc. and as a member of the board of directors and the investment committee of STI Ventures, a venture capital company focusing on the high technology market. From 1990 until he joined STI Ventures, Mr. Stern served as a managing director of CIBC Oppenheimer, a financial services company.

  Erez Gissin   Director since August 2001

        Mr. Gissin, age 45, has been the chief executive officer of IP Planet Network Ltd., an Israeli satellite communication operator providing Internet backbone connectivity and solutions to ISPs since July 2000. Before that, from July 1995 to July 2000, Mr. Gissin was vice president, business development of Eurocom Communications Ltd., a holding company that owns stock in several telecommunications services, equipment and Internet companies in Israel and elsewhere. Mr. Gissin is also a director of Partner Communications Ltd.

  Alan Lipton   Director since August 2001

        Mr. Lipton, age 53, has served as president and chief executive officer of Diamond.com, a leading source for certified diamonds, fine jewelry and brand-name watches on the Internet, since November 1999. Before that, from 1995 until November 1999, Mr. Lipton operated the Lipton Foundation, a private foundation that contributes to various charitable organizations.

  Lloyd Morrisett   Director since February 1994

        Dr. Morrisett, age 74, served as a director of Infonautics beginning in February 1994 and served as chairman of the board of directors of Infonautics beginning in March 1998 until the Merger in August 2001. He is the co-founder of the Children's Television Workshop—now Sesame Workshop—and served from 1969 to 1998 as president of The Markle Foundation, a charitable organization.

  Elliot Noss   Director since August 2001

        Mr. Noss, age 41, is our president and chief executive officer and has served in such capacity since the completion of the Merger with Tucows Delaware in August 2001. From May 1999 until completion of the Merger in August 2001, Mr. Noss served as president and chief executive officer of Tucows Delaware. Before that, from April 1997 to May 1999, Mr. Noss served as vice president of corporate services of Tucows Interactive Ltd., which was acquired by Tucows Delaware in May 1999.

The Board of Directors unanimously recommends a vote FOR the nominees listed above.


INFORMATION CONCERNING OUR BOARD OF DIRECTORS

Meetings.

        Our board of directors met seven times during the 2003 fiscal year. Our board of directors also took action by unanimous written consent on two occasions during the 2003 fiscal year. Each incumbent director attended at least 75% of the total number of meetings of the board of directors and the committees on which he served during the 2003 fiscal year.

Policy regarding attendance.

        Directors are expected, but are not required, to attend board meetings, meetings on committees on which they serve, and shareholder meetings, and to spend the time needed and meet as frequently as necessary to discharge their responsibilities properly. Elliot Noss and Llyod Morrissett attended our 2003 annual meeting of shareholders in person while the remainder of the board of directors were available by teleconference.

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Committees.

        Our board of directors has two committees, an audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended, and a compensation committee.

        The audit committee, whose members in the 2003 fiscal year were Messrs. Stern and Young and Dr. Morrisett and whose members currently are Mr. Stern and Dr. Morrisett, held five meetings during the 2003 fiscal year. The audit committee's purposes are:

        All of the members of our audit committee are independent, as independence is currently defined in Rule 4350(d)(2)(A)(i) and (ii) of the Marketplace Rules of the National Association of Securities Dealers, or the NASD. In addition, our board of directors has determined that Stanley Stern is an "audit committee financial expert," as defined by the rules of the SEC. Our board of directors adopted a new audit committee charter on March 16, 2004, a copy of which is attached to this proxy statement as appendix A. For further information concerning the audit committee, please see the Audit Committee Report on page 9.

        The compensation committee, whose members in the 2003 fiscal year were Messrs. Stern and Young and Dr. Morrisett and whose members currently are Mr. Stern and Dr. Morrisett, held five meetings during the 2003 fiscal year. This committee evaluates our compensation policies and provides a general review of our compensation plans to ensure that they meet corporate objectives. The responsibilities of the compensation committee also include administering our stock incentive plan. For further information, please see the compensation committee report on executive compensation on page 11.

Director nomination process.

        We do not have a standing nominating committee or a charter with respect to the nominating process. Our board of directors believes that it is not necessary to have such a committee because its size and composition allow it to adequately identify and evaluate qualified candidates for directors. By resolution, our board of directors has adopted a policy regarding director nominations. Under this policy, a majority of our independent directors, as defined in Rule 4200(a)(15) of the Marketplace Rules of the NASD, consider and recommend to the whole board the potential director nominees. Our independent directors are Stanley Stern, Erez Gissin, Alan Lipton and Lloyd Morrisett.

        Our board of directors will consider any candidate proposed in good faith by a shareholder. To do so, our board of directors has adopted a resolution that requires a shareholder to timely submit to our secretary at the address set forth on the first page of this proxy statement the following:

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        To be timely, a shareholder's nomination must be delivered to our secretary at least 120 days before the date on which we first mailed our proxy materials for our prior year's annual meeting of shareholders.

        In considering candidates for nomination, our board of directors shall seek individuals who evidence strength of character, mature judgment and the ability to work collegially with others. Furthermore, it is the policy of our board of directors that it endeavor to have directors who collectively possess a broad range of skills, expertise, industry and other knowledge and business and other experience useful to the effective oversight of the company's business; therefore, in considering whether to nominate a person for election as a director, the independent directors and our board of directors will consider, among other factors, the contribution such person can make to the collective competencies of the board based on such person's background. In determining whether to nominate a current director for re-election, the board will take into account these same criteria as well as the director's past performance, including his or her participation in and contributions to the activities of the board. Because we do not have a standing nominating committee, this year's nominees (all of whom are currently serving as directors) were selected for re-election by our whole board.

Ethics policy for senior officers.

        Our board of directors has adopted an ethics policy for senior officers applicable to Tucows' chief executive officer, chief financial officer and vice president, finance. A copy of the ethics policy for senior officers can be obtained from our Internet web site at http://www.tucowsinc.com, without charge.

Communications with the board of directors.

        We provide an informal process for shareholders to send communications to our board of directors. If you wish to communicate with our board of directors, you may send correspondence to the attention of our general counsel at our address set forth on the first page of this proxy statement. The general counsel will submit your correspondence to the chairman of the board of directors, the chairman of the appropriate committee, or the appropriate individual director, as applicable. Our board of directors is considering new or additional procedures to implement to send communications to our board of directors.

Director compensation.

        Directors who are employees receive no additional or special compensation for serving as directors. Under the terms of our amended and restated 1996 equity compensation plan, we make formula grants of nonqualified stock options to our non-employee directors and members of committees of our board of directors as described below. All options granted under the formula grants are immediately exercisable, have an exercise price equal to the fair market value on the date of grant and have a five-year term.

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        Effective as of January 1, 2004, non-employee directors who serve as members of our audit committee receive an annual fee of $12,000 and non-employee directors who serve on our compensation committee receive an annual fee of $6,000. In addition, non-employee directors who physically attend board meetings receive a fee of $3,000 for each meeting attended. We also reimburse our directors for their reasonable out-of-pocket expenses incurred in attending meetings of our board of directors or its committees. During the 2003 fiscal year, members of both of the committees of our board of directors received an annual fee of $6,000 with respect to each committee on which they sat.


COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

        The members of the compensation committee of our board of directors during the 2003 fiscal year were Messrs. Stern and Young and Dr. Morrisett. None of the members of our compensation committee or audit committee has ever been an officer or employee of Tucows or its subsidiaries. None of our executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers on our board of directors or compensation committee.


AUDIT COMMITTEE REPORT

        The audit committee operates pursuant to a formal written charter that was most recently approved and adopted by the board of directors on March 16, 2004 and complies with the applicable provisions of the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the SEC and the NASD. A copy of the charter is attached as appendix A to this proxy statement.

        In accordance with that charter and the independence criteria prescribed by applicable law and the rules and regulations of the SEC for audit committee membership, all of the members of the audit committee are independent directors as defined in NASD Marketplace Rule 4200(a)(15). Each audit committee member meets the NASD's financial knowledge requirements, and Mr. Stern, who has been designated by our board of directors as an "audit committee financial expert" pursuant to the rules of the SEC, meets the NASD's professional experience requirements as well.

        The purposes of the audit committee are described on page 7 of this proxy statement under the caption "Information Concerning Our Board of Directors-Committees—Audit Committee" and in the charter of the audit committee. In particular, it is the audit committee's duty to review the accounting and financial reporting processes of Tucows on behalf of the board. In fulfilling our responsibilities, the audit committee has reviewed and discussed the audited consolidated financial statements to be contained in Tucows' annual report on Form 10-K for the fiscal year ended December 31, 2003 with Tucows' management and also with KPMG LLP, Tucows' independent auditors. Management is responsible for the financial statements and the reporting process, including the system of internal controls, and has represented to the audit committee that such financial statements were prepared in accordance with generally accepted accounting principles. The independent auditors are responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States.

        The audit committee has also discussed with KPMG LLP the matters that are required to be discussed by the auditors with the audit committee under Statement on Auditing Standards No. 61, as amended. Furthermore, the audit committee has received and discussed with the auditors their annual written report on their independence from the company and its management, which is made under Rule 3600T of the Public Company Accounting Oversight Board, which adopts on an interim basis

9


Independence Standards Board Standard No. 1 (independence discussions with audit committees), and has considered with KPMG LLP whether the provision of non-audit services to Tucows would be compatible with the auditors' independence (no such non-audit services were provided in the 2003 fiscal year).

        In performing all of these functions, the audit committee acts in an oversight capacity. The audit committee reviews Tucows' earnings releases before issuance and the annual report on Form 10-K prior to filing with the SEC. In its oversight role, the audit committee relies on the work and assurances of Tucows' management, which has the primary responsibility for financial statements and reports, and of the independent auditors, who, in their report, express an opinion on the conformity of Tucows annual financial statements to accounting principles generally accepted in the United States.

    Audit Committee Members
Stanley Stern, Chair
Lloyd Morrisett


AUDIT FEES AND ALL OTHER FEES

Audit fees.

        KPMG LLP has served as our independent auditors since the Merger in August 2001. Fees billed for audit services by KPMG LLP totaled approximately $100,149 for the 2003 fiscal year, including fees associated with the annual audit and the review of our quarterly reports on Form 10-Q for the 2003 fiscal year. Fees billed for audit services from KPMG LLP totaled approximately $92,546 for the 2002 fiscal year, including fees associated with the annual audit, the review of the Company's quarterly reports on Form 10-Q and statutory audits required internationally.

Audit-related fees.

        There were no fees billed in the 2003 fiscal year for professional services rendered by KPMG LLP for assurance and related services that were reasonably related to the performance of the audit or review of the Tucows financial statements and not included in the audit fees for the 2003 fiscal year disclosed above. There were also no fees for such services billed in the 2002 fiscal year.

Tax fees.

        Fees billed in the 2003 fiscal year for professional services rendered by KPMG LLP for tax services, including tax compliance, tax advice and tax planning were approximately $76,098. Fees for tax services billed in the 2002 fiscal year by KPMG LLP totaled approximately $47,900 and related to tax compliance, tax advice and tax planning.

All other fees.

        Fees billed in the 2003 fiscal year and the 2002 fiscal year for products and services provided by KPMG LLP, which are not disclosed above totaled approximately $29,150 and $16,500, respectively, and related to fees for attestation services for matters such as comfort letters and consents related to SEC registration statements and consultation on accounting standards or transactions.

        Based on the reviews and discussions referred to above, the audit committee has recommended to Tucows' board of directors that Tucows' audited consolidated financial statements be included in Tucows' annual report on Form 10-K for the fiscal year ended December 31, 2003 to be filed with the SEC.

10

Audit committee pre-approval of audit and permissible non-audit services of independent auditors.

        The audit committee has adopted a pre-approval policy that provides guidelines for the audit, audit-related, tax and other non-audit services that may be provided to us by our independent auditors. Under this policy, the audit committee pre-approves all audit and certain permissible accounting and non-audit services performed by the independent auditors. These permissible services are set forth on an attachment to the policy that is updated at least annually and may include audit services, audit-related services, tax services and other services. For audit services, the independent auditor provides the audit committee with an audit plan including proposed fees in advance of the annual audit. The audit committee approves the plan and fees for the audit.

        With respect to non-audit and accounting services of our independent auditors that are not pre-approved under the policy, the employee making the request must submit the request to our chief financial officer. The request must include a description of the services, the estimated fee, a statement that the services are not a prohibited services under the policy and the reason why the employee is requesting our independent auditors to perform the services. If the aggregate fees for such services are estimated to be less than or equal to $25,000, our chief financial officer will submit the request to the chairman of the audit committee for consideration and approval, and the engagement may commence upon the approval of the chairman. The chairman is required to inform the full audit committee of the services at its next meeting. If the aggregate fees for such services are estimated to be greater than $25,000, our chief financial officer will submit the request to the full audit committee for consideration and approval, generally at its next meeting or special meeting called for the purpose of approving such services. The engagement may only commence upon the approval of full audit committee.


EXECUTIVE COMPENSATION

Compensation committee report on executive compensation.

        To ensure that our compensation policies are administered in an objective manner, our compensation committee is comprised entirely of independent directors. Further, our compensation committee members have no "interlocking" relationships as defined by the SEC. The compensation committee furnished the following report on executive compensation.

        Compensation governance.    This report describes our executive compensation program and the basis on which we made the 2003 fiscal year compensation determinations for our executive officers, including our chief executive officer and the executive officers named in the summary compensation table on page 15, which are referred to in this proxy statement as the named executive officers. We establish all components of executive pay and recommend or report our decisions to the board of directors for approval.

        Our duties include recommending to the board of directors the base salary levels for all executive officers as well as the design of awards in connection with all other elements of the executive pay program. We also evaluate executive performance and address other matters related to executive compensation.

        Compensation policy and overall objectives.    In developing recommendations regarding the amount and composition of executive compensation, our goal is to provide a compensation package that will enable Tucows to attract and retain talented executives. In addition, our objectives include rewarding outstanding performance and linking the interests of our executives to the interests of our shareholders. In determining actual compensation levels, we consider all elements of the program in total rather than any one element in isolation.

        The key elements of our executive compensation are base salary, annual bonuses and long-term incentives. Each of these is addressed separately below.

11


        Base salaries.    Each of our named executive officers joined us upon completion of the Merger in August 2001. In January 2003 we entered into new employment agreements with Messrs. Noss, Cooperman, Morris and Sen to set forth the initial base salaries of these employees and to provide these key executives with certain benefits in the event of a change in control in order to assure us of their continued employment and dedication to duty, notwithstanding the possibility, threat or occurrence of a change in control. In each instance, we have the discretion to increase annual salaries.

        We intend to regularly review the base salary of each executive officer, including the named executive officers. The base salary ranges of our executives are targeted to be in the range of the median base pay ranges of similarly positioned executives in the group of comparable companies selected for compensation comparison purposes.

        We initially determine base salaries for executives by evaluating executives' levels of responsibility, prior experience, breadth of knowledge, internal equity issues and external pay practices. Increases to base salaries will be driven primarily by performance. We evaluate an executive's performance based upon his or her sustained level of contribution to Tucows.

        Annual bonuses.    Annual bonus opportunities allow us to communicate specific goals that are of primary importance during the coming year and motivate executives to achieve these goals. The bonus program is a discretionary program for certain of Tucows' employees. Each bonus award depends on the terms of each executive's employment agreement, if any, and the extent to which business and/or individual performance objectives are met.

        Long-term incentives.    Stock options are granted to our executives at our discretion to enhance the link between shareholder value creation and executive pay. Stock options are granted at an option price not less than the fair market value of our common stock on the date of grant. Stock options have value only if our stock price appreciates following the date the options are granted. Further, stock options reflected in the summary compensation table on page 15 are subject to a 48-month vesting period. This approach focuses executives on the creation of shareholder value over the long term and encourages equity ownership in Tucows.

        Option Exchange Program.    In January 2003, our board of directors approved a program to give our employees a choice to cancel stock options granted to them which have an exercise price of $0.91 per share or more, in exchange for an equal number of new options in the future. Members of our board of directors who were not employees as of the date of the offer, January 7, 2003, were not eligible for the option exchange program. All other executives and employees as of the date of the offer who had received stock options which have an exercise price of $0.91 per share or more were eligible for the option exchange program. On February 5, 2003, we accepted for cancellation and exchange options to purchase 5,103,385 shares of common stock, which represented approximately 99% of the options eligible for exchange. We granted new options to the employees participating in the option exchange program on August 6, 2003. The exercise price of the new options is $0.37 per share, the closing market price on August 5, 2003.

        Our board of directors approved the option exchange programs because the exercise price of a substantial number of Tucows' outstanding options was significantly higher than the market price of Tucows' common stock, and the board of directors determined that existing options no longer had sufficient value to motivate and retain employees. Therefore, the board of directors believed that it was in Tucows' best interests to enhance and preserve employee morale by offering the option exchange programs.

        Chief executive officer compensation.    Mr. Noss' base salary for the 2003 fiscal year was $142,430. Mr. Noss also received a bonus of $179,945 and was granted options to purchase 76,500 shares of Tucows' common stock during the 2003 fiscal year. Mr. Noss' bonus reflected our recognition of the key role which he played with Tucows since the Merger, particularly in the implementation of cost

12

reduction initiatives and in determining the strategic direction of the company. In determining Mr. Noss' bonus, we also noted the improved operational and financial performance of Tucows for the 2003 fiscal year and the above average increase in Tucows' share price for the year. Mr. Noss' employment agreement provides for periodic increases by our board of directors at its discretion.

        Other named executive officer compensation.    We used the procedures described above in setting the annual salary, bonus and stock options for our named executive officers and other officers for the 2003 fiscal year. During the 2003 fiscal year, Tucows granted bonuses of $127,421 to each of Messrs. Cooperman and Morris and bonuses of $129,646 and $5,008 to Mr. Sen and Mr. Woroch, respectively. In addition during the 2003 fiscal year, Tucows granted options to purchase 76,500 shares of Tucows' common stock to each of Messrs. Cooperman, Morris and Sen and options to purchase 30,000 shares of Tucows' common stock to Mr. Woroch. We believe that the leadership of the named executive officers was critical to Tucows financial and operational success in the 2003 fiscal year. Moreover, we believe that the combination of salary, bonus and option grants made to the named executive officers for the 2003 fiscal year were reasonable in view of their duties and responsibilities and their anticipated contributions to Tucows.

        Conclusion.    We believe that attracting and retaining management and employees of high caliber is essential to maintaining a high-performing organization that creates long-term value for its shareholders. We also believe offering a competitive, performance-based compensation program with a large equity component helps to achieve this objective by aligning the interests of officers and other key employees with those of shareholders. We believe that Tucows' 2003 fiscal year compensation program met these objectives. For the 2004 fiscal year, we have not adopted or made any recommendation to the full board regarding a bonus or other incentive compensation program, but it is anticipated that the same principles that applied to the program in the 2003 fiscal year will likely apply in the 2004 fiscal year. Furthermore, it is contemplated that any stock options or awards that may be granted will be granted on a case-by-case basis, as and when deemed appropriate.

    Compensation Committee Members
Stanley Stern, Chair
Lloyd Morrisett

Employment and change-in-control arrangements.

        Effective January 2003, we entered into new employment agreements with Messrs. Noss, Cooperman, Morris and Sen. Mr. Noss' employment agreement provides for an annual base salary of Cdn$200,000 and the other executives' employment agreements provide for annual base salaries of Cdn$187,500. Under the employment agreements, each of the executive officers are also eligible to receive an annual bonus payable at our board of directors' sole discretion. Each of the new employment agreements provides for an annual review of the executives' compensation by the compensation committee of our board of directors. Each of these agreements is for an indefinite term.

        All of the employment agreements are subject to early termination by us due to:

        If we terminate Mr. Noss without "cause," he is entitled to receive 12 months of compensation plus one month of compensation for each year of service, to a maximum of 18 months of compensation. If we terminate any of the other executives without "cause" they are entitled to receive six months of compensation plus one month of compensation for each year of service. For purposes of the employment agreements, "cause" is defined to mean the executive's conviction (or plea of guilty or

13


nolo contendere) for committing an act of fraud, embezzlement, theft or other act constituting a felony or willful failure or an executive's refusal to perform the duties and responsibilities of his position, which failure or refusal is not cured within 30 days of receiving a written notice thereof from our board of directors.

        Under the employment agreements, each executive is also entitled to the change in control benefits described in the following paragraph if:

        If an executive's employment terminates 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 Tucows 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 Tucows, the lump sum payments range from U.S.$375,000 to U.S.$2 million, in the case of Mr. Noss, and from U.S.$187,500 to U.S.$1 million, in the case of Messrs. Cooperman, Morris and Sen. In addition to the lump sum payments, all stock options held by the executive officers shall be immediately and fully vested and exercisable as of the date of termination.

        A "change in control" is generally defined as:

        "Good reason" is defined to include the occurrence of one or more of the following:

14

Summary compensation table.

        The following table contains information about the annual compensation for our chief executive officer, Elliot Noss, during the 2003 fiscal year and our other most highly compensated executive officers, other than our chief executive officer, earning $100,000 or more. The individuals listed in the following table are referred to as the named executive officers in this proxy statement. All dollar amounts below are shown in U.S. dollars. If necessary, amounts that were paid in Canadian dollars were converted into U.S. dollars based upon the exchange rate of 1.4042 Canadian dollars for each U.S. dollar, which represents the average Bank of Canada exchange rate for the 2003 fiscal year.

 
    
    
    
   Long-Term
Compensation
Awards
    
  
 
    
   Annual Compensation
   Number of
Securities
Underlying
Options
    
  
Name and Principal Position
   Fiscal
Year
   All Other
Compensation(1)
  
  Salary
   Bonus
  
Elliot Noss President and Chief
Executive Officer		   2003
2002
2001		   $
$
$		 142,430
95,481
96,874		   $
$
$		 179,945
154,872
2,691		   1,964,761
60,000
214,575		 (2)

 $
$
$		 6,409
5,729
969		 (3)
(3)
(3)

Michael Cooperman
 Chief Financial Officer
 
2003
2002
2001
 
$
$
$
133,528
95,481
96,874
 
$
$
$
127,421
116,130
1,865
 
720,225
50,000
—
(4)
$
$
$
4,914
4,392
4,456
(3)
(3)
(3)

Graham Morris(5)
 Chief Operating Officer
 
2003
2002
2001
 
$
$
$
133,528
95,481
96,874
 
$
$
$
127,421
116,130
17,491
 
76,500
479,150
—

(6)
$
$
$
4,273
3,819
3,875
(3)
(3)
(3)

Supriyo Sen
 Chief Technology Officer
 
2003
2002
2001
 
$
$
$
133,528
119,351
110,084
 
$
$
$
129,646
116,130
64,127
 
477,040
50,000
400,540
(7)
$
3,917
—
—
(3)

David Woroch
 Vice President, Sales
 
2003
2002
2001
 
$
$
$
128,650
113,049
97,421
(8)
(8)
(8)
$
$
$
5,008
—
20,195
 
30,000
62,915
—

(9)
 
—
—
—
 
(1)
We provide the named executive officers with certain group life, health, medical and other non-cash benefits generally available to all salaried employees and not included in this column pursuant to SEC rules.

(2)
Includes 1,888,261 replacement options granted on August 6, 2003.

(3)
Represents automobile allowances.

(4)
Includes 643,725 replacement options granted on August 6, 2003.

(5)
Mr. Morris resigned from his position with the company effective as of March 5, 2004.

(6)
Includes 429,150 replacement options granted on July 1, 2002.

(7)
Includes 400,540 replacement options granted on August 6, 2003.

(8)
Mr. Woroch's salary included commission amounting to $31,620 for 2003, $31,891 for 2002 and $20,680 for 2001.

(9)
Includes 42,915 replacement options granted on July 1, 2002.

15

Option grants in last fiscal year.

        The following table describes stock options granted to the named executive officers during the 2003 fiscal year.

 
    
    
    
    
   Potential Realizable
Value at Assumed
Annual Rates
of Stock Price
Appreciation for
Option Term(3)
 
   Number
of
Securities
Underlying
Options
Granted (#)
   Percentage
of Total
Options
Granted to
Employees in
2003(1)
    
    
 
   Exercise
or Base
Price
($/Sh)(2)
    
Name
   Expiration
Date
  5%
   10%
Elliot Noss   214,575
278,948
1,394,738
76,500		   3.4
4.5
22.3
1.2		 %
%
%
%		 $
$
$
$		 0.37
0.37
0.37
0.36		   01/01/11
01/21/10
05/03/09
08/04/13		   $
$
$
$		 49,930
64,909
324,543
17,320		   $
$
$
$		 126,532
164,491
822,456
43,892

Michael Cooperman
 
643,725
76,500
 
10.3
1.2
%
%
$
$
0.37
0.36
 
10/31/09
08/04/13
 
$
$
149,789
17,320
 
$
$
379,595
43,892

Graham Morris
 
76,500
 
1.2
%
$
0.36
 
08/04/13
 
$
17,320
 
$
43,892

Supriyo Sen
 
400,540
76,500
 
6.4
1.2
%
%
$
$
0.37
0.36
 
02/05/11
08/14/13
 
$
$
93,202
17,320
 
$
$
236,192
43,892

David Woroch
 
30,000
 
0.5
%
$
0.36
 
08/04/13
 
$
6,792
 
$
17,212
(1)
Based on 6,260,235 options granted to all employees during the 2003 fiscal year, including 5,093,735 replacement options granted on August 6, 2003 (see 10-year option repricings note).

(2)
Under our equity compensation plan, all options granted have an exercise price equal to the fair market value of our common stock at the date of grant.

(3)
The 5% and 10% assumed annual rates of compounded stock price appreciation are mandated by rules of the SEC. Our actual stock price appreciation over the option term will likely differ from these assumed annual rates. Unless the market price of our common stock appreciates over the option term, no value will be realized from the option grants made to the named executive officers.

Aggregated option exercises in last fiscal year and fiscal year-end option values.

        None of the named executive officers exercised options in the 2003 fiscal year. The following table sets forth as to the named executive officers information with respect to the total number of shares underlying unexercised options held at the end of the 2003 fiscal year.

 
   Number of Securities
Underlying Unexercised
Options at Year End (#)
   Value of Unexercised
In-The-Money Options
at Year End ($)(1)
Name
  Exercisable
   Unexercisable
   Exercisable
   Unexercisable
Elliot Noss   1,845,595   179,166   $ 201,528   $ 17,761
Michael Cooperman   661,432   108,793   $ 71,518   $ 10,472
Graham Morris   366,521   189,129   $ 708   $ 10,472
Supriyo Sen   301,442   225,598   $ 31,919   $ 23,320
David Woroch   47,320   45,595   $ 283   $ 4,117
(1)
Based on the closing price per share of our common stock on the OTC Bulletin Board maintained by Nasdaq on December 31, 2003 of $0.48, minus the exercise price per share, multiplied by the number of shares of common stock underlying the option.

16

10-year option repricings.

        During the 2003 fiscal year, our board of directors approved a program to give our employees a choice to cancel stock options granted to them which had an exercise price of $0.91 per share or more, in exchange for an equal number of new options in the future. On February 5, 2003, we accepted for cancellation and exchange, options to purchase 5,103,385 shares of our common stock. We granted 5,093,735 replacement options on August 6, 2003. Except for the exercise price and the number of shares vested on the grant date, which equaled the number of shares that would have been vested under the original option had it not been canceled, each replacement option had the same terms and conditions as the canceled option. For more information about the option exchange program see the compensation committee report on executive compensation starting on page 11.

        The following table sets forth information for the named executive officers who participated in the option exchange program in the 2003 fiscal year.

Name
   Date
   Number of
Securities
Underlying
Options
Repriced(#)
   Market
Price of
Stock at
Time of
Repricing
($)
   Exercise
Price at
Time of
Repricing
($)
   New
Exercise
Price
($)
   Length of
Original Term
Remaining at
Date of Repricing
  
Elliot Noss   02/05/03   1,888,260   $ 0.37   $ 0.91   $ 0.37   (1 )
Michael Cooperman   02/05/03   643,725   $ 0.37   $ 0.91   $ 0.37   (2 )
Supriyo Sen   02/05/03   400,540   $ 0.37   $ 0.91   $ 0.37   (3 )
(1)
1,394,738 of the original options were granted on May 4, 1999, and were due to expire on May 3, 2009, 278,947 of the original options were granted on January 22, 2000, and were due to expire on January 21, 2010, and 214,575 of the original options were granted on January 2, 2001, and were due to expire on January 1, 2011.

(2)
The original options were granted on November 1, 1999, and were due to expire on October 31, 2009.

(3)
The original options were granted on February 6, 2001, and were due to expire on February 5, 2011

17


STOCK PERFORMANCE GRAPH

        The following line graph and table compare the cumulative total shareholder return among our common stock, the Nasdaq Composite Index, and the Research Data group (RDG) Internet Composite Index. The graph and table assume a $100 investment in our common stock, the Nasdaq Stock Market (U.S. and Foreign) and the RDG Internet Composite Index on December 31, 1998 and the reinvestment of dividends, if any.

        The comparisons shown in the table and line graph are based on historical data. The information used in the table and line graph was obtained from Research Data General, Inc., a source we believe to be reliable but we are not responsible for any errors or omissions in such information.

December 31
   Tucows
   Nasdaq Composite Index
   RDG Internet Composite Index
1998   100.00   100.00   100.00
1999   155.56   183.72   231.82
2000   15.98   101.37   136.01
2001   6.89   78.48   89.15
2002   6.44   57.79   59.13
2003   10.67   91.54   82.42


COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

AMONG TUCOWS INC., THE NASDAQ STOCK MARKET (U.S. & FOREIGN) INDEX
AND THE RDC INTERNET COMPOSITE INDEX

         CHART

18


PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

Ratification of appointment.

        The audit committee of our board of directors has appointed KPMG LLP as the independent auditors of the company and our subsidiaries for the year ending December 31, 2004. Although shareholder approval is not required, the board of directors desires to obtain shareholder ratification of this appointment. If the appointment is not ratified at the annual meeting, the board of directors will review its future selection of auditors. A representative of KPMG LLP is expected to be present at the annual meeting and will have the opportunity to make a statement, if he or she desires to do so, and to respond to appropriate questions.

        The Board of Directors unanimously recommends a vote FOR ratification of the appointment of KPMG LLP as our independent auditors.


SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers and persons who own more than 10 percent of a registered class of our equity securities to file with the SEC reports of ownership and reports of changes in ownership of our common stock and our other equity securities. These persons are required by SEC regulation to furnish us with copies of all Section 16(a) reports they file. We believe that, under the SEC's rules, all required reports for the 2003 fiscal year have been timely filed.


OTHER MATTERS TO BE DECIDED AT THE ANNUAL MEETING

        All of the matters we knew about as of April 19, 2004 to be brought before the annual meeting are described in this proxy statement. If any matters properly come before the annual meeting that are not specifically set forth on your proxy and in this proxy statement, the persons appointed to vote the proxies will vote on such matters in accordance with their best judgment.


ADDITIONAL INFORMATION

Shareholder proposals for the 2005 annual meeting.

        If you would like to submit a proposal for inclusion in the proxy materials for our annual meeting of shareholders in 2005 you may do so by following the procedures prescribed in SEC Rule 14a-8 under the Securities and Exchange Act of 1934. To be eligible for inclusion, shareholder proposals must be received by the Secretary, Tucows Inc., 96 Mowat Avenue, Toronto, Ontario M6K 3M1, Canada, at any time before December 31, 2004. If you intend to submit a proposal at our annual meeting of shareholders in 2005 but do not intend to include the proposal in our proxy statement for that meeting, you must provide appropriate notice to us on or before March 16, 2005. If we do not receive notice by that date, the persons named as proxies in the proxy materials relating to that meeting will use their discretion in voting the proxies when these matters are raised at the meeting.

Cost of proxy solicitation.

        We will pay the expenses of the preparation of the proxy materials and the solicitation by the board of directors of your proxy. We will make solicitations primarily by mail or by facsimile, but our regular employees may solicit proxies personally or by telephone. We will ask brokerage houses and other nominees, custodians and fiduciaries to forward proxy soliciting material and our annual report on Form 10-K to the beneficial owners of the shares of our common stock held of record by them, and we will reimburse these record holders for their reasonable out-of-pocket expenses incurred in doing

19


so. We may also elect to retain professional solicitors to assist in the solicitation of proxies. Any professional solicitors will be paid by us.


 
By Order of the Board of Directors,

 
SIGNATURE
  Brenda Lazare
 General Counsel and Secretary

20


Appendix A


CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF TUCOWS INC.

I.    Purpose

        The Audit Committee (the "Committee") of the Board of Directors (the "Board") of Tucows Inc. (the "Company") is appointed by, and generally acts on behalf of, the Board. The Committee's purposes are:

        Although the Committee has the powers and responsibilities set forth in this Charter, the role of the Committee is oversight. The members of the Committee are not full-time employees of the Company and may or may not be accountants or auditors by profession or experts in the fields of accounting or auditing and, in any event, do not serve in such capacity. Consequently, it is not the duty of the Committee to conduct audits, to independently verify management's representations, or to determine that the Company's financial statements are complete and accurate, are prepared in accordance with generally accepted accounting principles ("GAAP"), or fairly present the financial condition, results of operations, and cash flows of the Company in accordance with GAAP. These are the responsibilities of management and the independent auditors. The Committee's considerations and discussions with management and the independent auditors do not assure that the Company's financial statements are presented in accordance with GAAP, that the audit of the Company's financial statements has been carried out in accordance with applicable auditing standards, or that the Company's independent auditors are in fact "independent."

II.    Membership

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III.  Meetings, Procedures and Funding

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IV.    Duties and Responsibilities

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PROXY FOR ANNUAL MEETING OF SHAREHOLDERS — JUNE 1, 2004

This Proxy is Solicited by the Board of Directors of Tucows Inc.

        This Proxy is Solicited by the Board of Directors of Tucows Inc. for the Annual Meeting of Shareholders to be held on June 1, 2004, at The TSX Broadcast and Conference Centre, The Exchange Tower, 130 King Street West, Toronto, Ontario, Canada.

        The undersigned having duly received notice of the annual meeting and the proxy statement therefor, and revoking all prior proxies, hereby appoints Elliot Noss and Michael Cooperman, and each of them, proxies, with the powers the undersigned would possess if personally present, and with full power of substitution, to vote all common shares held of record by the undersigned in Tucows Inc., upon all subjects that may properly come before the annual meeting, including the matters described in the proxy statement furnished herewith, subject to any directions indicated on this card. The shares represented by this proxy will be voted as directed by the undersigned. If no directions are given, the proxies will be voted in accord with the Directors' recommendations on the subjects listed on this card and at their discretion on any other matter that may properly come before the annual meeting or any adjournment thereof.

        If you do not sign and return a proxy, or attend the annual meeting and vote by ballot, your shares cannot be voted, nor your instructions followed.

Proposal 1:   Election of the following nominees as Directors: Stanley Stern, Elliot Noss, Erez Gissin, Alan Lipton and Lloyd N. Morrisett
Authority withheld for the following only: (Please strike through name above)

 
 
The Board of Directors unanimously recommends a vote "FOR" each of the nominees.

FOR
 
o
 
 
 
AUTHORITY WITHHELD
FOR ALL NOMINEES
 
o

Proposal 2:
 
Ratification of KPMG LLP as Auditors

 
 
The Board of Directors unanimously recommends a vote "FOR" ratification.

FOR
 
o
 
AGAINST
 
o
 
ABSTAIN
 
o

        In their discretion, the proxy holders are authorized to vote upon such other matters as may properly come before the annual meeting.

        Attendance of the undersigned at the annual meeting or at any adjournment thereof, will not be deemed to revoke this proxy unless the undersigned shall affirmatively indicate at such meeting the intention of the undersigned to revoke said proxy in person. If the undersigned hold(s) any of the shares of Tucows Inc. in a fiduciary, custodial or joint capacity or capacities, this proxy is signed by the undersigned in every such capacity, as well as individually.

        PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD IN THE ENCLOSED ENVELOPE. Please sign exactly as name or names appear on this proxy. If stock is held jointly, each holder should sign. If signing as attorney, trustee, executor, administrator, custodian, guardian or corporate officer, please give full title.

    DATE   , 2004
     
 
    SIGNATURE    
     
 
    SIGNATURE    
     
Votes must be indicated (X) in Black		  



QuickLinks

TABLE OF CONTENTS
VOTING INFORMATION
BENEFICIAL OWNERSHIP OF COMMON STOCK AND RELATED SHAREHOLDER MATTERS
PROPOSAL NO. 1 ELECTION OF DIRECTORS
INFORMATION CONCERNING OUR BOARD OF DIRECTORS
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
AUDIT COMMITTEE REPORT
AUDIT FEES AND ALL OTHER FEES
EXECUTIVE COMPENSATION
STOCK PERFORMANCE GRAPH
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* AMONG TUCOWS INC., THE NASDAQ STOCK MARKET (U.S. & FOREIGN) INDEX AND THE RDC INTERNET COMPOSITE INDEX
PROPOSAL NO. 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
OTHER MATTERS TO BE DECIDED AT THE ANNUAL MEETING
ADDITIONAL INFORMATION
Appendix A
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF TUCOWS INC.