CONSULTING AND ADVISORY AGREEMENT
EXHIBIT
10.11
To
effect an orderly transition in
connection with the termination of their employment relationship, and to
transition such employment to a consulting agreement, IDAHO GENERAL MINES,
INC.
(the “Company”), and XXXXXX X. XXXXXXX (the “Consultant”) agree as
follows:
RECITALS
1. Consultant
has been an employee
of the Company.
2. Consultant
has submitted his
resignation and the Company has accepted that resignation, effective October
1,
2007. In recognition of Consultant’s service to the Company, his expertise in
the mining industry, his knowledge of the assets and properties of the Company
and his knowledge and expertise in constructing and operating major mines,
xxxxx
and related facilities the Company and Consultant desire to transition to a
consulting and advisory relationship.
NOW
THEREFORE in consideration of the
foregoing and the respective covenants and promises of the parties contained
herein, the Company and Consultant enter into this Consulting and Advisory
Agreement (the “Agreement”) and agree as follows:
AGREEMENT
1. EFFECTIVE
DATE. This Agreement
shall be effective on the date that it is executed by the parties herein.
2. TERM.
This Agreement shall have
a term of thirty six (36) months form the Effective Date, subject to the
termination provisions set forth herein.
3. DESCRIPTION
OF SERVICES AND
DUTIES. Consultant shall, to the best of his ability, industriously and
faithfully perform the responsibilities set forth herein and provide
consulting/advisory services (“Services”) to the Company on an ongoing basis for
the term set forth above for the projects as assigned to the Consultant by
the
Chief Executive Officer (“CEO”) of the Company. Consultant shall provide written
reports as directed by the CEO which are consistent with the Services being
performed. The reports are to be provided on a monthly/quarterly basis as
directed by the CEO and as is necessary in connection with the Services assigned
to the Consultant.
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3.1 In
performing the Services, Consultant shall, to the best of his ability,
industriously and faithfully perform the responsibilities and devote adequate
and sufficient business time, attention, skill and efforts to the tasks assigned
to him by the CEO and to do so on a priority basis to the Company. Consultant
shall be available to the Company to perform the Services required herein,
not
engage in other consulting services which would cause him to be unavailable
to
the Company and be unable to perform the Services required herein. It is the
intent of the parties that the Company be Consultant’s primary consulting
obligation.
3.2 Consultant
agrees that he shall not engage in any outside consulting services on any
project anywhere in the world to any person, entity or organization involving,
directly or indirectly, the exploration, development, extraction or processing
of molybdenum. If Consultant contemplates providing outside consultant services
to any person, entity or organization which also is engaged, as a part of its
business, in the exploration, development, extraction or processing of
molybdenum, prior to doing so he shall certify and provide assurances to the
Company that he will not provide any advice, review, consultation or any
services whatsoever to said business’ molybdenum project(s). In other words,
Consultant shall not provide any consulting services on any molybdenum projects
other than for the Company. Consultant agrees that molybdenum is a mineral
of
primary concern to the Company and that a breach of this provision would cause
substantial harm and damages to the Company for which there would be no adequate
remedy. If the Consultant violates this provision it is agreed that there would
be no adequate remedy at law and the Company may obtain injunctive relief.
If
this provision is violated by Consultant the Company may terminate this
Agreement, for cause, in addition to seeking injunctive relief and other
appropriate relief.
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3.3 Without
limitation, Consultant’s primary duties and Services under this Agreement shall
be to assist the Company in all areas involving the development, construction
and operation of the Mount Hope Project, the Liberty Project and other Company
mining facilities, assets and projects as may be directed by the CEO which
may
include studies, reports and/or the evaluation of the Company’s non-core assets
for disposition. Consultant’s Services shall also include serving as a technical
consultant to the Company in any area of professional expertise and experience
he holds and shall, as directed by the CEO, perform the Services as assigned
to
him.
3.4 Upon
request by the CEO, the Consultant shall attend the Company’s Board of Directors
Meetings and make reports to the Board.
3.5 Consultant
acknowledges that he has no speaking or binding authority on behalf of the
Company, and shall not enter into any obligations on its behalf without the
express authority of the Company. Consultant shall not hold himself out as
having authority that is inconsistent with this provision.
3.6.
Consultant shall not disparage the Company, its officers, directors, employees
and/or agents.
4. COMPENSATION
FOR SERVICES. For
the Services to be performed by the Consultant the Company shall pay the
Consultant the following sums:
4.1 Annual
payment of Two Hundred Fifty Thousand Dollars ($250,000), payable quarterly
($62,500) (in arrears), for each twelve (12) months of the term of this
Agreement.
4.2 Consultant
shall be paid a bonus of Two Hundred Fifty Thousand Dollars ($250,000) payable
within forty five (45) days (the “Payment Date”) of the start of construction of
the Mount Hope Project (the “Trigger Date”). If the Trigger Date does not occur
during the term of this Agreement, Consultant shall nevertheless be paid the
bonus on or prior to the Payment Date if the delay in the start of construction
is not related to or arising out of, in the good faith determination by the
Company, any acts of Consultant or the failure of Consultant to provide the
Services set forth herein. Notwithstanding the foregoing, the bonus shall not
be
paid if the Trigger Date does not occur on or prior to June 30,
2012.
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4.3 This
is a Professional Service agreement, in which Consultant agrees to provide
Company with the consulting and advisory services contemplated herein.
Consultant is an independent contractor providing services to Company. This
Agreement is not an employment agreement between Company and Consultant. Company
will not withhold, report or pay so-called payroll taxes from the compensation
payable to Consultant, including, without limit, Federal and State income taxes
(if any), Federal social security tax and (if any) State unemployment insurance
tax. Consultant shall be responsible for the payment of all applicable federal,
state and local taxes and withholdings as required by applicable law, and for
compliance with all other obligations, such as with regard to industrial
insurance. Consultant agrees to and shall indemnify, defend and hold Company
harmless from any claims by any government entity regarding the payment of
such
taxes or withholdings.
5. BUSINESS
EXPENSES/REIMBURSEMENT. The Company shall reimburse Consultant for his
reasonable and necessary business expenses incurred in connection with the
performance by Consultant of his Services hereunder, subject to compliance
with
such policies regarding expenses and expense reimbursements as may be provided
from time to time by the Company.
6.
NO OTHER BENEFITS. Consultant shall
not be entitled to any benefits or other compensation that are otherwise
available to employees of the Company and no payments due herein whether
accelerated by Change Of Control or otherwise shall be increased for an excised
tax gross-up payment in any manner.
7. ASSIGNMENT.
Except as provided
herein, this Agreement may not be assigned by either party without the express
written consent of the other party, in such party’s sole and absolute
discretion. Notwithstanding the foregoing, the Company may assign its rights
and
obligations under this Agreement (by operation of law or otherwise) without
the
consent of Consultant in connection with the sale of assets or merger of the
Company. Notwithstanding the foregoing, Consultant may assign this Agreement
to
a different entity which he establishes as a consulting business, provided
that
such assignment is subject to the express written consent of Company, and
provided further that Consultant, and no one else, must personally perform
the
services contemplated herein. Any purported assignment by any party in violation
hereof shall be null and void in the making thereof. This Agreement shall be
binding upon and moved to the benefit of the parties hereto their respective
successors, permitted assigns, executors, administrators and heirs at
law
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8. CHANGE
OF CONTROL. Upon Change
Of Control Consultant shall be paid any sums which are earned through the date
of Change Of Control but not yet paid plus a sum equal to the number of months
left on the term. For purposes of this Agreement Change Of Control shall
mean:
8.1 The
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either (A)
the
then-outstanding shares of common stock of the Company (the "Outstanding Company
Common Stock") or (B) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however,
that, for purposes of this Section 8, the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company, or (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
Affiliated Company;
8.2 consummation
of a reorganization, merger, statutory share exchange or consolidation or
similar corporate transaction involving the Company or the acquisition of assets
or stock of another entity by the Company (each, a "Business Combination"),
in
each case unless, following such Business Combination, (A) all or substantially
all of the individuals and entities that were the beneficial owners of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than fifty percent (50%) of the then-outstanding shares of
common stock and the combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of directors, as the
case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation that, as a result of such transaction, owns
the Company or all or substantially all of the Company's assets either directly
or through one or more subsidiaries) in substantially the same proportions
as
their ownership immediately prior to such Business Combination of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities,
as the case may be, and (B) no Person (excluding any corporation resulting
from
such Business Combination or any employee benefit plan (or related trust) of
the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, fifty percent (50%) or more of,
respectively, the then-outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then-outstanding voting securities of such corporation, except to the extent
that such ownership existed prior to the Business Combination;
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8.3 a
sale or disposition of all or substantially all of the operating assets of
the
Company to an unrelated party; or
8.4 approval
by the shareholders of the Company of a complete liquidation or dissolution
of
the Company.
It
is
specifically agreed, however, the Company’s contemplated Delaware
reincorporation and merger to facilitate said reincorporation shall not
constitute a Change of Control.
9. TERM
OF AGREEMENT AND
TERMINATION BY CONSULTANT. The term of this Agreement shall be for thirty six
(36) months and shall commence as of the Effective Date and shall terminate
automatically thirty six (36) months thereafter. Despite the term of this
Agreement (i) Consultant shall have the right to terminate this Agreement upon
sixty (60) days prior written notice to the Company for any reason provided
the
Company may waive the notice period and (ii) the Company shall have the right
to
terminate this Agreement in accordance with the provisions of Section 13 hereof.
In any such event, the Company shall pay Consultant the amounts due through
the
date of termination but no other sums shall be due, including the bonus if
not
otherwise payable. Provided, however, the provisions set forth in Sections
10,
11 and 12 shall survive any such termination.
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10. DISCLOSURE
OF INFORMATION.
10.1 Consultant
acknowledges that he will receive access to the Company’s Confidential
Information. For purposes of this Agreement, "Confidential Information" means
nonpublic information that Company discloses to Consultant and designates as
being confidential or proprietary or which under the circumstances surrounding
disclosure, ought to be treated as confidential. "Confidential Information"
includes, without limitation, information relating to Company’s current and/or
proposed business plans, financial statements, budgets, customer or potential
customer lists, product development plans, inventions, research, testing
results, released or unreleased products or services, marketing or promotion
of
any product or service, employees, customers, contracts, policies and practices,
and information received from others that Company is obligated to treat as
confidential. Consultant and Company agree that any proprietary or confidential
information which has been disclosed to Consultant prior to the date of this
Agreement in connection with his prior employment by the Company shall also
be
subject to terms and conditions hereof. Notwithstanding the foregoing,
Confidential Information shall not include any information that is or
subsequently becomes publicly available without Consultant's breach of any
confidentiality obligation owed to Company. Consultant agrees that he will
not
at anytime during the term of this Agreement or following termination of the
Agreement for any reason, disclose, use or make otherwise available to any
third
party, any Confidential Information, except for disclosure necessary in the
course of Consultant’s duties under this Agreement or as otherwise required by
law. In the latter event, Consultant shall disclose to the Company the event
and
authority requiring disclosure “required by law” at the first opportunity upon
learning of the disclosure request and provide the Company with a reasonable
opportunity to oppose or narrow such disclosure requirement or request or
otherwise seek appropriate confidentiality protections relating to such
information.
10.2 Upon
termination of this Agreement, Consultant shall deliver to a designated Company
representative all records, documents, hardware, software and all other Company
property in whatever form and all copies thereof in Consultant’s possession.
Consultant acknowledges that all such materials are the sole property of the
Company and that Consultant will certify in writing to the Company at the time
of termination that Consultant has complied with this obligation.
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11. DISCLOSURE
AND ASSIGNMENT OF
INVENTIONS.
11.1 Consultant
agrees to promptly disclose to the Company inventions, ideas, processes,
writings, designs, development and improvements, whether or not protectable
under the applicable patent, trademark or copyright statues, which Consultant
makes, conceives, reduces to practice or learns as direct or indirect result
of
his performance of the Services and duties for which he was engaged by the
Company in connection with this Agreement, either alone or jointly with others
relating to any business which the Company, during the period of this Agreement
is or may be concerned (“Inventions”). Consultant agrees that any such
Inventions are “works for hire”. Such disclosure shall be made by Consultant to
the Company in a written report, setting forth in detail the structures,
procedures and methodology employed and the results achieved.
11.2 Consistent
with and to the extent permitted by applicable law, Consultant hereby assigns
and agrees to assign to the Company all rights in and to the Inventions and
proprietary rights therein, as provided in Section 11.1, based thereon or
related thereto, including, but not limited to, applications for United States
and foreign patents and resulting patents.
11.3 Consultant
further agrees, without charge to the Company but at its expense, to assist
the
Company in every proper way and execute, acknowledge and deliver to the Company,
during and after termination of this Agreement, all such documents necessary
and
perform such other legal acts as may be necessary, in the opinion of the
Company, to obtain or maintain United States or foreign patents or other
proprietary protection, for any and all Inventions made during his performance
of the duties and Services for the Company in any and all countries, and to
vest
title therein to the Company.
11.4 Consultant
acknowledges notice from the Company that this foregoing obligation to assign
rights in and to any Inventions does not apply to an Invention for which no
equipment, supplies, facility or Confidential Information of Company was used
and which was developed entirely on Consultant's own time and (1) which does
not
relate (A) directly to the business of the Company, or (B) to the Company's
actual or demonstrably anticipated research or development; or (2) which does
not result from any work performed by Consultant for the Company.
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11.5 Consultant
further agrees that prior to termination of the Agreement with the Company
for
any reason, Consultant shall disclose to the Company, in a written report,
all
Inventions, the rights to which Consultant has agreed to assign to the Company
under Sections 11.1 and 11.2 above, and which Consultant has not previously
disclosed.
12. RESTRICTIVE
COVENANTS.
12.1 Non-Solicitation.
(a)
Consultant specifically acknowledges that the Confidential Information described
in Section 10.1 includes confidential data pertaining to current and prospective
customers of the Company, that such data is a valuable and unique asset of
the
Company's business and that the success or failure of the Company's specialized
business is dependent in large part upon the Company's ability to establish
and
maintain close and continuing personal contacts and working relationships with
such customers and to develop proposals which are specifically designed to
meet
the requirements of such customers. Therefore, during term of this Agreement
and
for the twelve (12) months following termination of this Agreement for any
reason, except on behalf of the Company or with the Company's prior written
consent, Consultant is prohibited from soliciting, either directly or
indirectly, on his own behalf or on behalf of any other person or entity, all
such customers with whom Consultant had contact during the twenty-four (24)
months preceding termination of this Agreement.
(b) Consultant
specifically acknowledges that the Confidential Information described in Section
10.1 also includes confidential data pertaining to current and prospective
employees and agents of the Company, and Consultant further agrees that during
the term of this Agreement and for the twelve (12) months following termination
of this Agreement for any reason, Consultant will not directly or indirectly
solicit, on his own behalf or on behalf of any other person or entity, the
services of any person who is an employee or agent of the Company or solicit
any
of the Company's employees or agents to terminate their employment or agency
with the Company.
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(c) Consultant
specifically acknowledges that the Confidential Information described in Section
10.1 also includes confidential data pertaining to current and prospective
vendors and suppliers of the Company, Consultant agrees that during the term
of
this Agreement and for the twelve (12) months following termination of this
Agreement for any reason, Consultant will not directly or indirectly solicit,
on
his own behalf or on behalf of any other person or entity, any Company vendor
or
supplier for the purpose of either providing products or services to competitors
of the Company, as described in Section 12.2(b), or terminating such
vendor's or supplier's relationship or agency with the Company.
(d) Consultant
further agrees that, during term of this Agreement and for the twelve (12)
months following termination of this Agreement for any reason, Consultant will
do nothing to interfere with any of the Company's business
relationships.
12.2 Non-Competition.
(a) Consultant
represents to the Company that Consultant is not a party to any agreement with
a
prior employer, client or otherwise which would prohibit Consultant from
performing this Agreement. Consultant further represents that he has provided
to
the Company copies of any and all agreements (e.g., non-competition,
non-solicitation, or non-disclosure agreements) that might limit Consultant's
ability, in any way, to perform the Services set forth herein, and Consultant
agrees to act at all times on behalf of the Company in a manner consistent
with
any such agreements. Consultant acknowledges and understands that the Company
will have no obligation to provide legal representation to Consultant in the
event a prior employer, client or other third party brings or threatens to
bring
an action against Consultant for violating any such agreements; and that this
Agreement may be terminated in the event the Company determines that Consultant
may have violated any such agreements. Despite anything to the contrary herein,
termination based upon the Company’s determination that Consultant has violated
this Section 12.2 shall be considered termination for Cause.
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(b) Consultant
covenants and agrees that during the period commencing on the Effective Date
and
ending thirty-six (36) months from the Effective Date (the “Restriction
Period”), he will not, in the United States or Canada or in any other
jurisdiction or country, engage in or carry on, directly or indirectly, as
an
owner, employee, agent, associate, consultant or in any other capacity, a
business competitive with that conducted by the Company. A "business competitive
with that conducted by the Company" shall mean any business or activity involved
in the discovery or mining of (1) molybdenum or, (2) any other ore that produces
molybdenum as a by product. For purposes of this subparagraph (b)(2), a business
is not competitive with the Company if the annual gross revenue derived from
the
sale of molybdenum as a by product during all times during the Restriction
Period comprises less than the lesser of (i) 10% of the annual gross revenue
of
said business or (ii) $50 million (a “Minimal Producer”). If Consultant
contemplates entering into any employment or business arrangement with a Minimal
Producer he shall, prior to the commencement of such employment or affiliation,
certify and provide continued assurances to the Company that said business
is,
in fact, a Minimal Producer. To "engage in or carry on" shall mean to have
ownership in such business or consult, work in, direct or have responsibility
for any area of such business, including but not limited to the following areas:
operations, sales, marketing, manufacturing, procurement or sourcing,
purchasing, customer service, distribution, product planning, research, design
or development.
(c) During
the Restriction Period, Consultant certifies and agrees that he will notify
the
CEO of the Company of his employment or other affiliation with any potentially
competitive business or entity prior to the commencement of such employment
or
affiliation.
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13. TERMINATION
BY COMPANY.
Despite the term of this Agreement as set forth in Section 2 above, the Company
shall have the right to earlier terminate this Agreement:
13.1 at
any time with cause. In such case, Consultant shall receive, as the only
obligation of the Company the compensation earned through the date of
termination but not yet paid to Consultant. For purposes of this Agreement
and
except as set forth elsewhere herein, Cause shall mean the good faith
determination by the Company that:
(a) Consultant
has neglected, failed or refused to perform the duties and Services as set
forth
in this Agreement;
(b) Consultant
has breached any of the provisions set forth in this Agreement;
(c) Consultant
has committed a willful or intentional act that could reasonably be expected
to
injure the reputation, business or business relationships of the Company;
or
(d) Consultant
has been convicted (including conviction on a nolo contendere, no
contest, or similar plea) of a felony or any crime involving fraud, dishonesty,
or moral turpitude.
With
respect to any of the matters set forth in (a) or (b) above, the Company shall
provide Consultant notice of the deficiency and a reasonable opportunity to
correct the deficiency (not to exceed thirty (30) days) prior to termination
of
this Agreement. In the event that the Company has given notice of a deficiency
and makes a determination that the deficiency has not been cured within a
reasonable period of time, this Agreement may be terminated for Cause.
13.2 automatically
upon the death of the Consultant. In such event, the Company shall pay
Consultant's estate the Compensation earned through the date of death but not
yet paid to Consultant.
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13.3 automatically
upon the inability of Consultant to satisfactorily perform the Services set
forth in Section 3 or as assigned to him by the CEO from time to time by reason
of mental or physical illness or injury for a period of thirty (30) days. In
such event, the Company shall pay Consultant the Compensation earned but unpaid
to Consultant through the date of termination.
14. ARBITRATION/COSTS. Any
dispute or controversy arising under or in connection with this Agreement that
cannot be informally resolved shall be settled exclusively by arbitration in
Spokane, Washington by a sole neutral arbitrator in accordance with the Rules
of
the American Arbitration Association relating to any disputes then in effect.
Judgment may be entered on the arbitrator’s award in any jurisdiction.
Notwithstanding the foregoing, nothing in this provision restricts in any way
the Company’s right to seek injunctive or other equitable relief in any court to
enforce the Company’s rights pursuant to Sections 10, 11 and 12 of this
Agreement. The prevailing party in any such proceeding shall be entitled to
an
award of its reasonable costs, including attorney fees, in the discretion of
the
arbitrator or court as the case may be.
15. SOLE
AGREEMENT; AMENDMENT.
This Agreement constitutes the sole and entire understanding of the parties
with
respect to the subject matter hereof and all prior written or oral agreements
or
understandings between the parties hereto are incorporated in and are superseded
by this Agreement. No modification or alteration of the terms of this Agreement
shall be binding unless such modification or alteration shall be in writing
and
executed subsequent to the date hereof by all parties. Time is of the essence
of
this Agreement.
16.
NOTICES. Any notice, consent, approval, request, demand or other communication
required or permitted hereunder must be in writing to be effective and shall
be
deemed delivered and received (i) if personally delivered or if delivered by
telex or telecopy with electronic confirmation when actually received by the
party to whom sent, or (ii) if delivered by mail (whether actually received
or
not), at the close of business on the fifth business day next following the
day
when placed in the federal mail, postage prepaid, certified or registered mail,
return receipt requested, addressed as follows:
If
to
Company: Xxxxx X. Xxxxxx,
CEO
Idaho
General Mines, Inc.
0000
Xxxx Xxxx., Xxxxx 000
Xxxxxxxx,
XX 00000
Fax:
(000) 000-0000
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with
a
copy to: Xxxxxxx
X. Xxxxxxxxxxx
Xxxx
& Xxxxxxxxxxx Chartered
X.X.
Xxx
000
Xxxxxxx,
XX 00000
Fax:
(000) 000-0000
(which
shall not constitute notice)
If
to
Consultant: Xxxxxx
X. Xxxxxxx
000
Xxxxx
Xxxxxxxxxx Xxxx., X 000
Xxxxxxx,
XX 00000
Fax:
______________________
with
a
copy to: Xxxxxxx
Xxxxxx
Xxxxxxx
Xxxxxx, P.S.
000
Xxxx
Xxxxx, Xxxxx 000
Xxxxxxx
Xxxxxxxxxx, 00000
Fax:
(000) 000-0000
(which
shall not constitute notice)
17. GOVERNING
LAW. This Agreement shall be governed by and construed under the laws of the
State of Washington, without regard to its conflict of laws principles.
18. SURVIVAL.
Upon the expiration
or termination of this Agreement for any reason, the provisions of Sections
10,
11, 12, 14 and 17 and the other covenants of the parties that by their terms
survive termination of this Agreement herein (the “Surviving Provisions”) shall
survive and remain in full force and effect.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
dates
set forth below, effective as of the date first set forth above.
DATED
this 1st day of October, 2007.
|
For
and on behalf of Idaho General Mines, Inc.
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| |
|
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| /s/ Xxxxx X. Xxxxxx | ||
|
By:
Xxxxx X. Xxxxxx,
Its
Chief Executive Officer
|
||
|
Consultant:
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||
| |
|
|
| /s/ Xxxxxx X. Xxxxxxx | ||
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Xxxxxx
X. Xxxxxxx
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