TRUE NORTH ENERGY CORP. EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT
10.1
THIS
EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is made between True North
Energy Corp., a Nevada corporation and its affiliated companies (collectively
referred to as the “Company"), and Xxxx Folnovic (“Executive”). Unless otherwise
indicated, all references to Sections are to Sections in this Agreement. This
Agreement is effective as of the “Effective Date” set forth in Section 11 below.
WITNESSETH:
WHEREAS,
the
Company desires to obtain the services of Executive, and Executive desires
to be
employed by the Company upon the terms and conditions hereinafter set
forth;
NOW,
THEREFORE,
in
consideration of the premises, the agreements herein contained and other good
and valuable consideration, receipt of which is hereby acknowledged, the parties
hereto agree as of the date hereof as follows:
1.
Employment. The Company hereby agrees to employ Executive, and Executive hereby
agrees to serve the Company, as its President and Chief Executive Officer
(“Employment”) and as a Director for a period of twelve (12) months beginning on
the Effective Date. This Agreement is renewable for up to four (4) additional
twelve (12) month periods upon the mutual written consent of the parties
within
thirty (30) days of the ending date of the then applicable term.
2.
Scope
of Employment.
(a)
During the Employment, Executive will serve as President and Chief Executive
Officer of the Company. In that connection, Executive will (i) devote his
full-time attention and energies to the business of the Company and will
diligently and to the best of his ability perform all duties incident to his
employment hereunder; (ii) use his best efforts to promote the interests and
goodwill of the Company; and (iii) perform such other duties commensurate with
his office as the Board of Directors of the Company may from time-to-time assign
to him.
(b)
Section 2(a) shall not be construed as preventing Executive from (i) serving
on
corporate, civic or charitable boards or committees, or (ii) making investments
in other businesses or enterprises; provided that in no event shall any such
service, business activity or investment require the provision of substantial
services by Executive to the operations or the affairs of such businesses or
enterprises such that the provision thereof would interfere in any respect
with
the performance of Executive's duties hereunder.
3.
Compensation and Benefits during Employment. During the Employment, the Company
shall provide compensation to Executive as follows.
(a)
The
Company shall pay Executive a base annual salary of $120,000 in equal monthly
installments of $10,000, subject to required withholdings.
(b)
As
additional consideration for signing this Agreement and for agreeing to abide
and be bound by its terms, provisions and restrictions, and in addition to
all
other benefits described in this Agreement, Executive, his nominees and/or
assigns, shall receive up to an aggregate of 5,000,000 restricted shares of
Company common stock (the “Shares”) payable as follows: 1) 1,000,000 Shares
payable at the end of the twelve-month period immediately following the
Effective Date; and 2) assuming that this Agreement is subsequently renewed
pursuant to Section 1, 1,000,000 Shares payable at the end of each twelve-month
renewal, up to a maximum of four renewals.
In
the
event Executive’s employment terminates prior to the end of any twelve month
term of employment contemplated by this Agreement, Executive shall, in lieu
of
the Share compensation provided for above, be entitled to Share compensation
as
follows:
(i) Death
or Disability.
If
Executive dies or is disabled during any twelve-month term of employment within
this Agreement, Executive or Executive’s estate, as the case may be, shall
receive a pro rata portion of 1,000,000 restricted shares with respect to the
existing twelve-month term based on the number of days of the term during which
Executive was employed at the time of his death or disability. For example,
if
Executive dies after having served nine months of a term, his estate shall
receive 750,000 restricted shares. The shares shall be payable within 15 days
of
the date of death or disability. Notwithstanding the foregoing, if Executive
dies during the initial twelve-month period immediately following the Effective
Date, his estate will be entitled to received 1,000,000 shares rather than
a
pro-rata allocation.
(ii) Termination
by Executive “For Good Reason” or by Company “Without Cause”.
If
Executive’s employment is terminated during any twelve-month term of employment
under this Agreement, by Executive “For Good Reason” (as such term is defined in
Section 8(d) hereof) or by the Company “Without Cause”, Executive shall be
entitled to receive 1,000,000 shares of restricted common stock to the same
extent he would have been entitled to such shares at the end of the term except
that such shares shall be payable within 15 days of the date of
termination.
(iii) Termination
by Company “With Cause”.
If
Executive’s employment is terminated during any twelve-month term of employment
under this Agreement by the Company “With Cause” (as such term is defined in
Section 8(c) hereof), Executive shall forfeit all rights to Share compensation
for such twelve-month term and no payment of shares will be due to
Executive.
All
Shares issuable pursuant to this Section 3(b) will be fully vested and shall
be
transferable by Executive as of the date of receipt. During the term of
employment, in the event of a consolidation or merger or sale of all or
substantially all of the assets of the Company in which outstanding shares
of
the Company’s common stock are exchanged for securities, cash or other property
of any other corporation, firm, partnership, joint venture, association, or
business entity, the Company is otherwise acquired or there is a change of
control of the Company (receipt of more than 50% of the outstanding shares
of
the Company, the Company otherwise being acquired, or a change in control of
the
Company are collectively referred to as an “Acquisition”), or in the event of
liquidation of the Company, so much of the 5,000,000 Shares issuable under
this
Agreement that have not been issued to Executive shall immediately and fully
vest and shall also be transferable by Executive immediately prior to such
Acquisition or liquidation. The numbers of Shares are subject to adjustment
from
time to time as set forth in this Section 3(b). In the event that the Company
shall at any time after the Effective Date (i) declare a dividend on the Common
Stock in shares of its capital stock, (ii) subdivide the outstanding Common
Stock, (iii) combine the outstanding Common Stock into a smaller number of
Common Stock, or (iv) issue any shares of its capital stock by reclassification
of the Common Stock (including any such reclassification in connection with
a
consolidation or merger in which the Company is the continuing corporation),
then in each case, with respect to so much of the 5,000,000 Shares that have
not
been issued to Executive, Executive shall be entitled to new, additional, or
different shares of Common Stock in proportion to such dividend, subdivision,
combination or issuance. This Section 3(b) shall otherwise apply to such new,
additional, or different shares of Common Stock to the extent applicable to
the
Shares with respect to which they were distributed. For example, if the Company
declares a 2:1 stock dividend within thirty-six (36) months after the Effective
Date when Executive has received 2,000,000 Shares, Executive would thereafter
be
entitled to receive 2,000,000 Shares at the end of the thirty-six (36),
forty-eight (48), and sixty (60) month periods (or an aggregate of 6,000,000
Shares) immediately after the Effective Date provided that Executive is employed
by the Company at the end of each of such periods. Such adjustment shall be
made
successively whenever any event listed above shall occur. Any successor of
the
Company shall be bound by this Section 3(b) as provided by Section 6(b) hereof.
(c)
The
Company shall reimburse Executive for business expenses incurred by Executive
in
connection with the Employment in accordance with the Company’s then-current
policies.
(d)
Executive will be entitled to participate in any health insurance or other
employee benefit plan which the Company may adopt in the future.
(e)
Executive will be entitled to five (5) weeks of paid vacation per
year.
(f)
Executive will be entitled to participate in any incentive program or
discretionary bonus program of the Company which may be implemented in the
future by the Board of Directors.
(g)
Executive will be entitled to participate in any stock option plan of the
Company which may be approved in the future by the Board of
Directors.
Any
act,
or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by Executive in
good
faith and in the best interests of the Company and thus shall not be deemed
grounds for Termination for Cause.
4.
Confidential Information.
(a)
Executive acknowledges that the law provides the Company with protection for
its
trade secrets and confidential information. Executive will not use any of the
Company’s confidential business information or confidential technical
information in any way, either during or after the Employment with the Company,
except as required in the course of the Employment.
(b)
Executive will strictly adhere to any obligations that may be owed to former
employers insofar as Executive’s use or disclosure of their confidential
information is concerned.
(c)
Information will not be deemed part of the confidential information restricted
by this Section 4 if Executive can show that: (i) the information was in
Executive’s possession or within Executive’s knowledge before the Company
disclosed it to Executive; (ii) the information was or became generally known
to
those who could take economic advantage of it; (iii) Executive obtained the
information from a party having the right to disclose it to Executive without
violation of any obligation to the Company, or (iv) Executive is required to
disclose the information pursuant to legal process (e.g., a subpoena), provided
that Executive notifies the Company immediately upon receiving or becoming
aware
of the legal process in question. No combination of information will be deemed
to be within any of the four exceptions in the previous sentence, however,
whether or not the component parts of the combination are within one or more
exceptions, unless the combination itself and its economic value and principles
of operation are themselves within such an exception or exceptions.
(d)
All
originals and all copies of any drawings, blueprints, manuals, reports, computer
programs or data, notebooks, notes, photographs, and all other recorded,
written, or printed matter relating to research, manufacturing operations,
or
business of the Company made or received by Executive during the Employment
are
the property of the Company. Upon Termination of the Employment, whether or
not
for Cause, Executive will immediately deliver to the Company all property of
the
Company which may still be in Executive’s possession. Executive will not remove
or assist in removing such property from the Company’s premises under any
circumstances, either during the Employment or after Termination thereof, except
as authorized by the Company’s management.
(e)
For a
period of one (1) year after the date of Termination of the Employment,
Executive will not, either directly or indirectly, hire or employ or offer
or
participate in offering employment to any person who at the time of such
Termination or at any time during such one (1) year period following the date
of
Termination is or was an employee of the Company without the prior written
consent of the Company.
5.
Ownership of Intellectual Property.
(a)
The
Company will be the sole owner of any and all of Executive’s Inventions that are
related to the Company’s business, as defined in more detail below.
(b)
For
purposes of this Agreement, “Inventions” means all inventions, discoveries, and
improvements (including, without limitation, any information relating to
manufacturing techniques, processes, formulas, developments or experimental
work, work in progress, or business trade secrets), along with any and all
other
work product relating thereto.
(c)
An
Invention is “related to the Company’s business” (“Company-Related Invention”)
if it is made, conceived, or reduced to practice by Executive (in whole or
in
part, either alone or jointly with others, whether or not during regular working
hours), whether or not potentially patentable or copyrightable in the U.S.
or
elsewhere, and it either: (i) involves equipment, supplies, facilities, or
trade
secret information of the Company; (ii) involves the time for which Executive
was or is to be compensated by the Company; (iii) relates to the business of
the
Company or to its actual or demonstrably anticipated research and development;
or (iv) results, in whole or in part, from work performed by Executive for
the
Company.
(d)
Executive will promptly disclose to the Company, or its nominee(s), without
additional compensation, all Company-Related Inventions.
(e)
Executive will assist the Company, at the Company’s expense, in protecting any
intellectual property rights that may be available anywhere in the world for
such Company-Related Inventions, including signing U.S. or foreign patent
applications, oaths or declarations relating to such patent applications, and
similar documents.
(f)
To
the extent that any Company-Related Invention is eligible under applicable
law
to be deemed a “work made for hire,” or otherwise to be owned automatically by
the Company, it will be deemed as such, without additional compensation to
Executive. In some jurisdictions, Executive may have a right, title, or interest
(“Right,” including without limitation all right, title, and interest arising
under patent law, copyright law, trade-secret law, semiconductor chip protection
law, or otherwise, anywhere in the world, including the right to xxx for present
or past infringement) in certain Company-Related Inventions that cannot be
automatically owned by the Company. In that case, if applicable law permits
Executive to assign Executive’s Right(s) in future Company-Related Inventions at
this time, then Executive hereby assigns any and all such Right(s) to the
Company, without additional compensation to Executive; if not, then Executive
agrees to assign any and all such Right(s) in any such future Company-Related
Inventions to the Company or its nominee(s) upon request, without additional
compensation to Executive.
6.
Successors.
(a)
This
Agreement shall inure to the benefit of and be binding upon (i) the Company
and
its successors and assigns and (ii) Executive and Executive’s heirs and legal
representatives, except that Executive’s duties and responsibilities under this
Agreement are of a personal nature and will not be assignable or delegable
in
whole or in part.
(b)
The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would
be
required to perform it if no such succession had taken place. As used in this
Agreement, "the Company" shall mean the Company as hereinbefore defined and
any
successor to its business and/or assets as aforesaid which assumes and agrees
to
perform this Agreement by operation of law, or otherwise.
7.
Indemnification. The Company shall to the fullest extent permitted by law or
as
set forth in the Articles of Incorporation, and any future amendments, and
the
Bylaws of the Company, indemnify, defend and hold harmless Executive from and
against any and all claims, demands, proceedings, liabilities, damages, losses
and expenses (including attorney's fees, court costs and disbursements) arising
out of the fact that he is or was a director or officer of the Company, or
the
performance of his duties hereunder except in the case of Executive’s gross
negligence, willful misconduct, criminal conduct or violations of law. As soon
as practicable following the execution of this Agreement, the Company will
use
its best efforts to purchase and maintain a Directors and Officers Liability
Insurance policy with a minimum liability limit of $1 million.
8.
Termination.
This
Agreement and the employment relationship created hereby will terminate (i)
upon
the death or disability of Executive under Section 8 (a) or 8 (b); (ii) with
cause under Section 8 (c); (iii) for good reason under Section 8 (d); or (iv)
without cause under Section 8 (e).
|
(a)
|
Disability.
Company
shall have the right to terminate the employment of Executive under
this
Agreement for disability in the event Executive suffers an injury,
illness, or incapacity of such character as to substantially disable
him
from performing his duties without reasonable accommodation by Executive
hereunder for a period of more than thirty (30) consecutive days
upon
Company giving at least thirty (30) days written notice of termination.
|
|
(b)
|
Death.
This
agreement will terminate on the Death of the
Executive.
|
|
(c)
|
With
Cause.
Company may terminate this Agreement ten (10) days after delivery
of
written notice to Executive for good cause which shall be: (1) Executive’s
willful, material and irreparable breach of this Agreement, (2)
Executive’s willful dishonesty, fraud or material misconduct with respect
to the business or affairs of the Company; (3) Executive’s conviction for
a felony; or (4) Executive’s gross negligence in the performance of his
duties hereunder, Executive’s intentional nonperformance of his duties
hereunder, or Executive’s inattention to his duties hereunder continuing
for ten (10) days after receipt of written notice of need to cure
such
performance, non-performance or inattention.
|
|
(d)
|
Good
Reason.
The Executive may terminate his employment for “Good Reason” by giving
Company ten (10) days written notice
if:
|
(i) he
is
assigned, without his express written consent, any duties materially
inconsistent with his positions, duties, responsibilities, or status with
Company as of the date hereof, or a change in his reporting responsibilities
or
titles as in effect as of the date hereof and such assignment or changes, as
the
case may be, continue for ten (10) days following the receipt of the written
notice;
(ii) his
compensation is reduced; or
(iii) Company
does not pay any material amount of compensation due hereunder and then fails
either to pay such amount within the ten (10) day notice period required for
Termination hereunder or to contest in good faith such notice.
| (e) |
Without
Cause.
Company
may terminate this Agreement without
cause.
|
9.
Obligations of Company upon Termination.
(a) In
the
event of the termination of Executive’s employment pursuant to Section 8 (a),
(b) or (c), in addition to any Share compensation to which Executive may be
entitled as provided in Section 3 hereof, Executive will be entitled to the
salary compensation earned by him hereunder as of the date of such termination
(plus, where applicable, life insurance or disability benefits).
(b) In
the
event of the termination of Executive’s employment pursuant to Section 8 (d) or
(e), in addition to any Share compensation payable pursuant to Section 3 hereof,
Executive will be entitled to receive as severance pay in a lump sum payment
due
on the effective date of termination, the greater, of (1) an amount equal to
the
monthly salary compensation provided for in Section 3(a) multiplied by a factor
of three (3) in addition to all payments of salary earned through the date
of
termination in one lump sum; or (2) an amount equal to the sum of all remaining
monthly salary compensation payments provided for in Section 3(a) that Executive
would have received had he remained employed through the entire twelve-month
term of this Agreement.
10.
Other
Provisions.
(a)
All
notices and statements with respect to this Agreement must be in writing.
Notices to the Company shall be delivered to the Chairman of the Board or any
vice president of the Company. Notices to Executive may be delivered to
Executive in person or sent to Executive’s then-current home address as
indicated in the Company’s records.
(b)
This
Agreement sets forth the entire agreement of the parties concerning the subjects
covered herein; there are no promises, understandings, representations, or
warranties of any kind concerning those subjects except as expressly set forth
in this Agreement.
(c)
Any
modification of this Agreement must be in writing and signed by all parties;
any
attempt to modify this Agreement, orally or in writing, not executed by all
parties will be void.
(d)
If
any provision of this Agreement, or its application to anyone or under any
circumstances, is adjudicated to be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability will not affect any other
provision or application of this Agreement which can be given effect without
the
invalid or unenforceable provision or application and will not invalidate or
render unenforceable such provision or application in any other
jurisdiction.
(e)
This
Agreement will be governed and interpreted under the laws of the United States
of America and the laws of the State of Texas as applied to contracts made
and
carried out in Texas by residents of Texas.
(f)
No
failure on the part of any party to enforce any provisions of this Agreement
will act as a waiver of the right to enforce that provision.
(g)
Section headings are for convenience only and shall not define or limit the
provisions of this Agreement.
(h)
This
Agreement may be executed in several counterparts, each of which is an original.
It shall not be necessary in making proof of this Agreement or any counterpart
hereof to produce or account for any of the other counterparts. A copy of this
Agreement signed by one party and faxed to another party shall be deemed to
have
been executed and delivered by the signing party as though an original. A
photocopy of this Agreement shall be effective as an original for all
purposes.
11.
Summary of Terms of Employment
|
Effective
Date
|
June
1, 2006
|
|
Term
|
One
year, renewable
|
|
Office
/ Position
|
President
and Chief Executive Officer
|
|
Salary
|
$10,000
per month
|
By
signing this Agreement, Executive acknowledges that he (i) has read and
understood the entire Agreement; (ii) has received a copy of it (iii) has had
the opportunity to ask questions and consult counsel or other advisors about
its
terms; and (iv) agrees to be bound by it.
Executed
to be effective as of the Effective Date.
| TRUE NORTH ENERGY CORP. | EXECUTIVE | ||
| By: /s/ Massimiliano Pozzoni | /s/ Xxxx Folnovic | ||
|
Massimiliano Xxxxxxx |
Xxxx Folnovic |
||
| President |
