Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") entered into effective as of
February 1, 2001, by and between Xxxxxx X. Xxxxxxxx (the "Executive"), and
Touchstone Resources USA, Inc., a Texas corporation having its principal place
of business at 0000 Xxxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 (the "Company").
WHEREAS, the Company wishes to employ the Executive as the Senior Vice
President- Exploration, and to perform services incident to such position for
the Company, and the Executive wishes to be so employed by the Company, all upon
the terms and conditions hereinafter set forth:
NOW, THEREFORE, in consideration of the premises and mutual covenants
and obligations herein set forth, and for other good and valuable consideration,
the receipt, sufficiency and accuracy of which is hereby acknowledged, accepted
and agreed to, the parties hereto, intending to be legally bound, hereby agree
as follows:
1. Employment and Term. The Company hereby employs the Executive to serve
as the Senior Vice President - Exploration. The Term of this Agreement
shall be effective as of the date first written above, and shall
terminate twelve (12) months from the date hereof (the "Termination
Date"), unless earlier terminated by either party hereto in accordance
with the provisions of Section 5 hereof; provided, however, that upon
the occurrence of a Change of Control (as such term is defined in
Section 5(g) hereof), the Termination Date shall automatically
accelerate without any further action by the Company or the Executive.
During the Term of this Agreement, the terms of the employment shall be
as set forth herein unless modified by the Executive and the Company in
accordance with the provisions of Section 1(1) hereof. The Executive
hereby agrees to accept such employment and to perform the services
specified herein, all upon the terms and conditions hereinafter set
forth.
2. Position and Responsibilities. The Executive shall serve as the Senior
Vice President - Exploration of the Company, and shall report to, and
be subject to the general direction and control of, the President
and/or Chairman of the Board of the Company. The Executive shall have
the obligations, duties, authority and power to do all acts and things
as are customarily done by a person holding the same or equivalent
position or performing duties similar to those to be performed by
executives in corporations of similar size to the Company and shall
perform such managerial duties and responsibilities of the Company as
may be reasonably assigned to him by the President and/or Chairman of
the Board of the Company. Unless otherwise agreed by the Executive, the
Executive shall be based at the Company's principal executive offices
located in the Greater Houston, Texas metropolitan area.
Notwithstanding the foregoing, it is understood and agreed that the
Executive will continue to maintain his primary residence in the State
of Washington and will commute between Houston and Washington on a
schedule that is mutually agreeable with the President and/or Chairman
of the Board of the Company.
3. Extent of Service. The Executive shall devote no less
than fifty percent (50%) of his business time and attention to the
business of the Company.
4. Compensation.
(4)1 Consideration of the services to be rendered by the Executive
to the Company, the Company will pay the Executive a salary
("Salary") of Xxx Xxxxxxx Xxxxx Xxxx Xxxxxxxx Xxxxxx Xxxxxx
Dollars ($144,000.000 USD) per year for the term of this
Agreement. Said salary will be payable in conformity with the
Company's prevailing practices for executive compensation as
such practice shall be established or modified from time to
time. Salary payment shall be subject to all applicable
federal and state withholding, payroll, and other taxes. From
time to time during the Term of this Agreement, the amount of
Executive's salary may be increased by and/or at the sole
discretion of the Compensation Committee of the Company's
Board of Directors, which shall review the Executive's Salary
no less regularly than annually.
(4)2 As additional consideration, upon execution of this Agreement,
the Executive shall be assigned and transferred by Xxxx X.
Xxxx, an option to purchase common shares of the parent
corporation of the Company, being Touchstone Resources, Ltd.,
which is currently traded on the Canadian Venture Exchange
("CDNX") under symbol ("TUT"). The Executive shall have the
option to purchase up to and including Fifty Thousand (50,000)
free trading shares of stock at the price of $2.10 Canadian
Dollars per share. This option shall continue to be in force
and effect for a period of five (5) years beginning from the
Effective Date of this Agreement, and notwithstanding anything
to the contrary contained herein, shall not terminate upon the
Termination of the employment of the Executive.
(4)3 The Executive will be entitled to participate i any incentive
programs of the Company or of Touchstone Resources Ltd,
including, without limiting the generality of the foregoing,
share option plans, share purchase plans, share bonus plans or
financial assistance plans in accordance with and on the same
terms and conditions as at the effective date of this
Agreement which are in place or as which may from time to time
be determined by the Directors in their sole discretion.
Executive acknowledges that his participation in these plans
or programs will be to such extent and in such amounts as the
Directors in their sole discretion may decided from time to
time. Any amounts which Executive may be entitled to under any
such plan or program shall not, for the purposes of this
Agreement, be treated as Salary. Executive agrees that the
Company may substitute, reduce, modify, or if necessary,
eliminate such plans or programs for good and valid reason.
All such plans or programs shall be governed by the policies
of the various regulatory bodies which have jurisdiction over
the affairs of the Company.
(4)4 During the term of this Agreement, the Company shall pay or
reimburse the Executive for all reasonable out-of-pocket
expenses for travel, meal, hotel, accommodations,
entertainment, cellular telephone, and the like incurred by
him in
connection with the business of the Company upon submission by
him with an approved statement documenting such expenses as
required by the Internal Revenue Code, as may be amended (the
"Code").
(4)5 The Executive shall be entitled to reasonable paid vacation
during each calendar year during the term of this Agreement,
and at such time or times convenient to him and the Company.
(4)6 During the term of this Agreement, the Executiv shall be
entitled to participate in and to receive all rights and
benefits under any life, disability, medical and dental health
and accident profit sharing or deferred compensation plan, or
such other plan or plans as may be implemented by the Company
during the term of this Agreement. The Executive shall be
entitled to participate in and receive all rights and benefits
under any plan or program adopted by the Company for any other
group or any other executive employees of the Company,
including without limitation, rights and benefits under
directors and/or officer's liability insurance currently in
place under the Company's insurance program for the directors
and officers of the Company.
5. Termination.
(5)1 Termination by Company; Discharge for Cause. The Company shall
be entitled to terminate this Agreement and the Executive's
employment with the Company at any time for whatever reason;
or any time for "cause" by written notice to the Executive.
The termination of the Executive's employment by the Company
shall constitute a termination for "cause" if such termination
is for one or more of the following reasons: (i) the willful
failure or refusal of the Executive to render services to the
Company in accordance with his obligations under this
Agreement, including without limitation, the failure or
refusal of the Executive to comply with the work rules,
policies, procedures and directives as established by the
Board of Directors and consistent with this Agreement. Such
failure or refusal to be uncured and continuing for a period
of not less than fifteen (15) days after notice outlining the
situation is given by the Company to the Executive; (ii) the
commission by the Executive of an act of fraud or
embezzlement; (iii) the commission by the Executive of any
other action with the intent to injure the Company; (iv) the
Executive having being convicted of a felony or crime
involving moral turpitude; (v) the Executive having
misappropriating the property of the Company; (vi) the
Executive having engaged in personal misconduct which
materially injures the Company; or (vii) the Executive having
willfully violated any law or regulation relating to the
business of the Company which results in a material injury to
the Company. In the event of the Executive's Termination by
the Company for cause hereunder, the Executive shall be
entitled to no severance or other termination benefits except
for any unpaid Salary accrued through the date of Termination.
The termination of this Agreement without cause pursuant
to this Section 5(a), shall entitle Executive to severance
payment when other benefits specified in Section 5 (f) hereof.
(5)2 Death. If the Executive dies during the term of this Agreement
or while in the employ of the Company, this Agreement shall
automatically terminate and the Company shall have no further
obligation to the Executive or his estate, except that the
Company shall pay to the Executive's estate that portion of
his Salary and benefits accrued through the date of the death.
All such payments to the Executive's estate shall be made in
the same manner and at the same time as the Executive's
salary.
(5)3 Disability. If, through the Term of the Agreement, the
Executive shall be prevented from performing his duties
hereunder for a period of sixty (60) days by reason of
disability, the Company on thirty (30) day's prior notice to
the Executive, may terminate this Agreement. For the purposes
of this Agreement, the Executive shall be deemed to have
become disabled when the Board of Directors of the Company, on
verification by a physician designated by the Company, shall
have determined that the Executive has become physically or
mentally unable (excluding infrequent temporary absences due
to ordinary illness) to perform the essential functions of his
duties under this Agreement with reasonable accommodation. In
the event of a termination pursuant to this Paragraph (c), the
Company shall be relieved of all of its obligations under this
Agreement, except the Company shall pay to the Executive or
his estate, in the event of the subsequent death, that portion
of the Executive's salary and benefits accrued through the
date of this such Termination. All such payments to the
Executive or his estate shall be made in the same manner and
at the same time as his salary would have been paid to him had
he not become disabled.
(5)4 Termination for Good Reason. The Executive shall be entitled
to terminate this Agreement and his employment with the
Company at any time upon thirty (30) days written notice to
the Company for "good reason" (as defined below). The
Executive's Termination of Employment shall be for "good
reason" if such termination is the result of any of the
following events: (i) the Executive is assigned any
responsibilities or duties materially inconsistent with his
position, duties, responsibilities, and status of the Company
as in effect as of the date of this Agreement, or as may be
assigned to the Executive pursuant to Section 2 hereof; or his
title or offices in effect at the date of the Agreement or as
Executive may be appointed or elected in accordance with
Section 2 are changed; or the Executive is required to report
to or direct to any other person other than the President
and/or Chairman of the Board of the Company; (ii) there is a
reduction in the salary (as such salary shall have been
increased from time to time) payable to the Executive pursuant
to Section 4(a) hereof; (iii) failure by the Company or any
successor of the Company, or its assets, to continue to
provide the Executive with any material benefit, bonus, profit
sharing, incentive, remuneration or compensation plan, stock
ownership or purchase plan, stock option plan, life insurance,
disability plan, pension plan or retirement plan which the
executive was entitled to participate in as of the date of
this Agreement under or pursuant to any such plan, or the
failure by the Company to increase or approve such rights or
benefits on a basis consistent with the practices in effect at
the date of the
Agreement or with practices implemented subsequent to the date
of this Agreement with respect to the executive employees of
the Company's generally, whichever is more favorable to the
Executive, but excluding such action that is required by law;
(iv) without Executive's consent, the Company requires the
Executive to relocate to a city or community other than one
within fifty (50) mile radius of the Greater Houston, Texas
metropolitan area, except for required travel on the Company's
business to an extent substantially consistent with the
Executive's business obligations under this Agreement; or (v)
there is a materially breach by the Company of any provision
of this Agreement.
On the Executive's termination of this Agreement for good
reason, the Executive shall be entitled to severance payment
and other benefits specified in Section 5(f) hereof.
(5)5 Voluntary Termination. Notwithstanding anything to the
contrary contained herein, the Executive shall be entitled to
voluntarily terminate this Agreement and his employment with
the Company at his pleasure upon thirty (30) days written
notice to such effect. In such event, the Executive shall not
be entitled to any further compensation other than any unpaid
salary and benefits accrued through the date of Termination.
At the Company's option, the Company may pay to the Executive
the salary and benefits that Executive would have received
during such thirty (30) days, in lieu of requiring the
Executive to remain in the employment of the Company for such
thirty (30) day period.
(5)6 Termination Benefits Upon Involuntary Termination or
Termination for Good Reason. In the event that (i) the Company
terminates this Agreement and the Executive's employment with
the Company for any reason other than for cause (as defined in
Section 5(a) hereof) or the death or disability (as defined in
Section 5(c) hereof) of the Executive, or (ii) Executive
terminates this Agreement and his employment with the Company
for good reason (as set forth in Section 5(d) hereof), then
the Company shall pay the Executive within thirty (30) days
after the date of termination, an amount (the "Severance
Payment") equal to two (2) times the Executive's highest
annual salary in existence at any time during the last two (2)
years of employment immediately preceding the Date of
Termination, and two(2) times the highest annual bonus paid to
the Executive during any such two (2) year period, minus
applicable withholding and authorized salary deductions (the
"Severance Payment"). In addition, following other such
termination, the Executive shall be entitled to the following
benefits (collectively the "Additional Benefits"); (i)
immediately vesting of any of Executive's outstanding options
to purchase securities in the Company which are now not vested
by their own terms on the date of the Termination and
existence of the Executive's right to exercise all the
Executive's options to purchase securities of the Company for
a period equal to the lesser of (a) one (1) year following the
Date of Termination, or (b) the remaining term of the
applicable options; (ii) continue coverage, at Executive's
cost, of the Company's group health plan for the applicable
coverage period and under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"), but only if
Executive elects such COBRA continuation in accordance with
the time limits in the applicable COBRA regulation; and (iii)
an amount, in cash, equal to the sum of (a) any unreimbursed
expenses incurred by the Executive that performs his duties
hereunder through the Date of Termination, plus (b) any
accrued and unused vacation time or other unpaid benefits as
of the Date of Termination. The parties agree that, because
there could be no exact measure of the damages which would
occur to the Executive as a result of Termination of
employment, such payments contemplated in Section 5(f) shall
be deemed to constitute liquidated damages and not a penalty,
and the Company agrees that the Executive shall not be
required to mitigate his damages. The Termination compensation
in this Section 5(f) shall be paid only if the Executive
executes a Termination Agreement releasing all legal waivable
claims arising from the Executive's employment.
(5)7 Termination Benefits Upon Change and Control. In the event of
a change of control, as defined in Section 5(g), then, in lieu
of the Severance Payment contained in Section 5(f) hereof, the
Executive is terminated without cause, or the Executive
terminates his employment for good reason within the twelve
(12) month period immediately following a change in control,
the Company shall pay to the Executive a lump sum amount equal
to two (2) times the Executive's highest annual salary paid
during the last two (2) years immediately preceding the Date
of Termination and two (2) times the highest annual bonus paid
to the Executive while employed by the Company, minus
applicable withholding and authorized salary reductions (the
"Payment"). In the event the excise tax relating to the
parachute payments under Section 280g of the Code applies to
the payment, then the Company shall pay the Executive an
additional payment in an amount such that, after payment of
the Federal Income Taxes (not the excise tax) will such
additional payment, the Executive retains an amount equal to
the excise tax originally imposed on the Payment. The
Executive shall also be entitled to receive the additional
benefits. "Change of Control" means or shall be deemed to have
occurred if an when (i) any "person" or "group" (as such terms
are used in Section 13(d) and 14(d) of the Exchange Act) is or
becomes the "beneficial owner" (as defined in Rule 13(d)-3
under the Exchange Act), directly or indirectly, of more of
more than 50% of the total voting power of the outstanding
voting stock of the Company; (ii) the Company is merged with
or into and consolidated with another person and immediately
after giving effect to the merger or consolidation, (a) less
than 50 % of the total voting power of the outstanding voting
stock with the surviving or resulting entity is then
"beneficially owned" within the meaning of Rule 13(d)-3 under
the Exchange Act, in the aggregate by the stockholders of the
Company immediately prior to such merger or consolidation, and
(b) any "person" or "group" as defined in Section 13(d)(3) or
14(d)(2) of the Exchange Act, or has become the direct or
indirect "beneficial owner" (as defined in Rule 13(d)-3 under
the Exchange Act of more than 50% of the total voting power of
the voting stock of the surviving resulting person/entity;
(iii) the Company sells, assigns, conveys, transfers, leases
or otherwise disposes of all or substantially all of the
Company's assets (either in one transaction or a series of
related transactions); (iv) during any consecutive two (2)
year period individuals who at the beginning of such period
constituted the Board of Directors of the Company (together
with any
new directors whose election by such Board of Directors or
whose nomination for election by the stockholders of the
Company was approved by a vote of the majority of the
Directors then still in office who were either Directors at
the beginning of such period, or whose election or nomination
for election was previously so approved) cease for any reason
to constitute a majority of the Board of Directors of the
Company then in office; or (v) the liquidation or dissolution
of the Company.
(5)8 Survival. Notwithstanding the Termination Agreement of this
Agreement under this Section 5, the provisions of Section 7
and 8 of this Agreement, and all other provisions hereof which
by their terms are to be performed following the Termination
hereof shall survive such Termination and be continuing
obligations.
6. Consent and Waiver by Third Parties. The Executive hereby represents
and warrants that he has obtained all necessary waivers and/or consents
from third parties as to enable him to accept employment with the
Company on the terms and conditions set forth herein, and to execute
and perform this Agreement without being in conflict with any other
agreement, obligation, or understanding of any such third party.
7. Confidential Information. The Executive acknowledges that in the course
of his employment with the Company, he has received and will receive
access to confidential information of a special and unique value
concerning the Company and its business, including, without limitation,
trade secrets, lists of customers, employee records, books and records
relating to the operations, operating costs, correspondence,
compilations, data, studies, reports, memoranda, geologic and
geophysical maps, files, proprietary information, confidential
information, and any other materials (in whatever form maintained,
whether documentary, computer storage or otherwise) and knowledge
concerning the business of the Company and its affiliates (hereafter
collectively referred to as " Confidential Information") which the
Company desires to protect. The Executive acknowledges that such
Confidential Information is confidential and proprietary, and that the
protection of such confidential information against unauthorized use or
disclosure is of critical importance to the Company. Executive agrees
that he will not reveal such information to anyone outside the Company.
Executive further agrees that during the term of this Agreement and
thereafter, he will not use or disclose such information. Upon
termination of his employment hereunder, the Executive shall surrender
to the Company all papers, documents, writings, and other property
produced by him or coming into his possession by or through his
employment hereunder, and relating to the Confidential Information
referred to in this Section 7, and the Executive agrees that all such
materials will at all times remain the property of the Company. The
obligation of confidentially, non-use and non-disclosure of
Confidential Information set forth in this Section 7 shall not extend
to information (i) which was in the public domain prior to disclosure
by the disclosing party, (ii) which comes into the public domain other
than through a breach of this Agreement, (iii) which is disclosed to
the Executive after the Termination of this Agreement by a third party
having legitimate possession thereof and the unrestricted right to make
such disclosure, or (iv) which is necessarily disclosed in the course
of the Executive's performance of his duties
to the Company as contemplated in this Agreement. This Agreement's
Section 7 shall survive the Termination of this Agreement for a period
of one (1) year.
8. Non-Solicitation. To support the agreements contained i Section 7
hereof, from the date hereof and for a period of twelve (12) months
after the Executive's employment with the Company is terminated for any
reason, the Executive shall not, either directly or indirectly, through
any person, firm, association or corporation which the Executive is now
or may hereafter become associated, (i) hire, employ, solicit or engage
any then current employee of the Company or its affiliates, or (ii) use
in any competition, solicitation or marketing effort any information as
to which the Executive has a duty of confidentiality treatment under
Paragraph 7 herein.
9. Notices. All notices, requests, consents and other communications under
this Agreement shall be in writing and shall be deemed to have been
delivered on the date personally delivered or on the date mailed,
postage prepaid, by certified mail, return receipt requested, or
telegraphed and confirmed if addressed to respective parties as
follows:
If to the Executive: Xxxxxx X. Xxxxxxxx
000 Xxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
If to the Company: Touchstone Resources USA, Inc.
0000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Chairman, Compensation Committee
Either party hereto may designate a different address by providing
written notice of such new address to the other party hereto.
10. Specific Performance. The Executive acknowledges that a remedy at law
for any breach or attempted breach of Section 7 or 8 of this Agreement
will be inadequate, agrees that the Company shall be entitled to
specific performance and injunctive and other equitable relief in case
of any such a breach or attempted breach, and further agrees to waive
any requirement of the securing or posting of any bond in connection
with the obtaining of any such injunctive or any other equitable
relief.
11. Waivers and Modifications. This Agreement may be modified, and the
rights and remedies of any provision hereof may be waived, only in
accordance with this Section 11. No modification or waiver by the
Company shall be effective without the consent of at least a majority
of the Compensation Committee of the Board of Directors then in office
at the time of such modification or waiver. No waiver by either party
of any breach by the other or any provision hereof shall be deemed to
be a waiver of any later or other breach thereof or as a waiver of any
other provision of this Agreement. This Agreement sets forth all the
terms of the understandings between the parties with reference to the
subject matter set forth herein and may not be waived, changed,
discharged or terminated orally or by any course of dealing between the
parties, but only by an instrument in writing signed by the party
against whom any waiver, change, discharge or termination is sought.
12. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of Texas.
13. Severability. In case of one or more of the provisions contained in
this Agreement for any reason shall be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this
Agreement, but this Agreement shall be construed as if such invalid,
illegal or unenforceable provisions had never contained herein.
Arbitration. In the event that a dispute or controversy should arise
between the Executive and the Company as to the meaning or application
of any provision, term or condition of this Agreement, such dispute or
controversy shall be settled by binding arbitration in Houston, Texas
and for said purpose each of the parties hereto hereby expressly
consents to such arbitration in such place. Such arbitration shall be
conducted in accordance with the existing rules and regulations of the
American Arbitration Association governing commercial transactions. The
expense of the arbitrator shall be borne by the Company.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement effective as of the date and year first above written.
COMPANY:
TOUCHSTONE RESOURCES USA, INC.
By: /s/ Xxxx X. Xxxx
-------------------------
Xxxx X. Xxxx, President
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxxx
ACCEPTED AND AGREED AS TO
PARAGRAPH 4(2) ONLY.
/s/ Xxxx X. Xxxx
----------------
Xxxx X. Xxxx
