LA TEKO RESOURCES LTD.
000 XXXX 0000 XXXXX
XXXX XXXX XXXX, XXXX
00000
December 2nd, 0000
Xxxxxx X. Xxxxxxx
x/x Xxxxx 000 - 000 Xxxx Xxxxxx
Xxxxxxxxx, X.X., X0X 0X0
Dear Xx. Xxxxxxx:
Re: La Teko Resources Ltd., (the "Company")
The purpose of this letter agreement is to document the terms upon which the
Company has agreed to hire you as its President and Chief Executive Officer.
1) Employment
1.1 Upon execution of this agreement (the "Agreement"), you will be appointed
to the board of directors of the Company (the "Board") and hired as the
Company's President and Chief Executive Officer. You will be responsible to the
Board for the management of all affairs and business of the Company and you will
take such action as may be required to fulfill your duties as President and
Chief Executive Officer of the Company.
1.2 You are authorized to sit on the board of directors of Dentonia Resources
Ltd. provided that such directorship does not result in a conflict of interest
with your position with the Company and provided that such directorship does not
impair your ability to fulfill your responsibilities under this Agreement. Any
directorships with other companies will require the prior approval of the Board.
1.3 Your employment under this Agreement, subject to the provisions of Section
4 of this Agreement' shall be for an initial term of three years (the "Initial
Term") and thereafter for a period to be determined between you and the Board.
2) Compensation
2.1 As compensation for services to be rendered pursuant to this Agreement, the
Company agrees to pay you a salary of Cdn$12,000 per month.
2.2 In addition to the salary referred to in paragraph 2.1 above, the Company
shall, subject to regulatory approval, grant you stock options entitling you to
purchase up to 500,000 shares of the Company which, subject to paragraph 4.4,
will vest incrementally as follows:
a) 200,000 upon execution of this Agreement;
b) a further 100,000 upon the first anniversary of this Agreement;
c) a further 100,000 upon the second anniversary of this Agreement; and
d) the final l00,000 upon the third anniversary of this Agreement.
2.3 The Company will, upon execution of this Agreement, take such steps as are
required to set the exercise price for the entire 500,000 stock options at the
lowest price allowable by the policies of the Vancouver Stock Exchange.
2.4 The Company shall pay or reimburse you for all reasonable expenses incurred
or paid by you during the period of your employment hereunder in the performance
of your services under this Agreement.
2.5 The Company will either include you under its existing medical/dental/life
insurance coverage or the Company will provide you with a comparable Canadian
policy.
2.6 You will be entitled to four weeks (20 work days), not including holidays
or sick leave, of paid vacation each year during your employment.
2.7 The Company will pay the leasing costs for a vehicle to be used by you
provided that such costs are reasonable and recognizing that it is your
intention to lease a 4-wheel drive vehicle.
3) Annual Objectives
3 1 Each year the Board will, in consultation with you, establish corporate
objectives for the forthcoming year which the Board will expect you to work
towards having the Company achieve. The Board will act reasonably in
establishing such corporate objectives and it is recognized that circumstances
may change from time to time which result in such corporate objectives being
modified prior to being achieved.
4) Termination of Employment Relationship
4.1 You may terminate this Agreement upon thirty (30) days written notice to
the Company.
4.2 The Company may terminate your employment under this Agreement as follows:
a) subject to paragraph 4.3, immediately for cause;
b) on three months notice if you have become disabled (physically or
mentally) to the extent that you have been unable to perform the essential
functions of your employment hereunder for a continuous period of six months,
and
c)on six months notice prior to the end of the Initial Term
4.3 In the event that the cause referred to in sub-paragraph 4.2 (a) is that
the Board is not satisfied with your efforts to accomplish the corporate
objectives established by the Board in accordance with paragraph 3.1, the
Company will provide you with six months notice. For the purposes of this
paragraph, the Board must act reasonably and in good faith in determining
whether it is satisfied with your efforts to accomplish the corporate objectives
in question.
4.4 In the event that the Company is purchased or undergoes a merger or other
similar corporate transaction (referred to in this paragraph as a "Transaction",
which results in you no longer retaining the position of President and Chief
Executive Officer of the Company in accordance with the terms of this Agreement,
you will receive a severance package equal to one year's salary (ie
Cdn$144,000), payable in a lump sum and the following shall apply to your
incentive stock options:
a) fifty percent of the unvested stock options will automatically vest if the
Transaction occurs in the first year of this Agreement, or
b) one-hundred percent of the unvested stock options mil automatically vest if
the Transaction occurs after the first anniversary of this Agreement.
5) General
5.1 This Agreement shall be construed in accordance with the laws of the
Province of British Columbia and shall enure to the benefit of and be binding
upon the parties hereto and their respective personal representative, successors
and assigns.
Assuming the above accurately sets out the terms agreed to, please evidence your
agreement by signing this letter below and returning a copy to us.
Yours truly,
LA TEKO RESOURCES LTD. AGREED TO AND ACKNOWLEDGED:
Per: /s/ Xxxxxx Xxxxxxxx /s/ Xxxxxx X. Xxxxxxx
