EMPLOYMENT AGREEMENT
EXHIBT
10.1
This
Employment Agreement,
by and
between Wits Basin Precious Minerals Inc., a Minnesota corporation (the
“Company”),
and
Xxxxxxx X. Xxxxx (the “Executive”)
is
entered into as of the 19th day of February, 2007 (the “Effective
Date”).
INTRODUCTION
A. The
Company desires to employ Executive, and Executive desires to be employed by
the
Company, to serve as the Company’s President of Asia Operations pursuant to the
terms and conditions of this Agreement.
AGREEMENT
Now,
Therefore,
in
consideration of the foregoing, and for other good and valuable consideration
the receipt and sufficiency of which is hereby acknowledged, the Company and
Executive, each intending to be legally bound, hereby agree as
follows:
1. Employment.
Subject
to all of the terms and conditions of this Agreement, the Company hereby agrees
to employ Executive, and Executive hereby accepts such employment and agrees
to
serve the Company with undivided loyalty and to the best of his ability.
Executive shall report to and take direction from the Company’s Board of
Directors and Chief Executive Officer.
2. Term.
Unless
terminated earlier by either party with one year written notice of termination
to the other party, Executive’s employment shall commence on the Effective Date
and shall continue for a period of three years from the Effective Date (the
“Term”).
3. Duties.
The
Executive shall serve as the Company’s President of Asia Operations and shall
perform, subject to the direction of the Company’s Chief Executive Officer (the
“CEO”)
and
Board of Directors (the “Board”),
duties as may be from time to time directed by the CEO and Board. The Executive
shall devote substantially all of his business time, attention and energies
to
the business and affairs of the Company and shall use his best efforts to
advance the best interests of the Company and shall not during the Term be
actively engaged in any other business activity, whether or not such business
activity is pursued for gain, profit or other pecuniary advantage, that will
interfere with the performance by the Executive of his duties hereunder or
the
Executive’s availability to perform such duties or that will adversely affect,
or negatively reflect upon, the Company.
4. Compensation.
(a) Base
Salary.
In
consideration for Executive’s services under this Agreement, the Company hereby
agrees to pay Executive a base salary of $10,000 per month during the Term
(the
“Base
Salary”).
(b) Benefits.
During
the Term, Executive shall be entitled to the employee benefits as provided
by
the Company to its management team. The Company reserves the right, in its
sole
discretion, to alter the terms of such benefits at any time and from time to
time.
(c) Reimbursement.
The
Company shall provide Executive a $10,000 advance to be used toward reasonable
out-of-pocket business expenses incurred by Executive (“Expenses”)
on the
Company’s behalf, and further agrees to reimburse Executive for such additional
Expenses incurred during the Term that are in excess of such advance, including,
without limitation Expenses relating to:
(i) Executive’s
lap-top computer, phone, office and office equipment;
(ii) Leasing
expenses (or equivalent reimbursement of reasonably monthly costs or payments
incurred by Executive) relating to a vehicle;
(iii) Leasing
expenses relating to housing, and housing related expenses, each as reasonably
agreed by Executive and the Company,
including,
if applicable, Executive’s annual leasehold expenses relating to such housing;
notwithstanding the foregoing, in the event the Company terminates Executive’s
employment during the term of any annual leasehold, it hereby agrees to
reimburse Executive for the remainder of such annual leasehold;
(iv) Reasonable
expenses related to Executive’s relocation to and from Hong Kong, and within
Asia as necessary in the determination of the Company, including reasonable
expenses to establish residency in Hong Kong;
(v) Travel
expenses between the United States and Asia, as necessary in the determination
of the Company;
(vi) In
addition to health insurance coverage as provided in Section 2(b) above, if
reasonably available, equivalent international coverage; and
(vii) Cost
of
tax advice and preparation resulting from Executive’s compensation abroad
pursuant to the terms of this Agreement, including costs of such advice
resulting from residing in multiple overseas jurisdictions.
Notwithstanding
the foregoing, Executive must properly account to the Company all such expenses
in accordance with the rules and regulations of the Internal Revenue Service
under the Internal Revenue Code of 1986, as amended, and in accordance with
any
standard policies of the Company relating to reimbursement of business expenses
as such policies exist or may be implemented in the future.
(d) Stock
Options.
On the
Effective Date, the Company shall grant Executive a stock option (the
“Option”)
to
purchase 2,500,000 shares of the Company’s common stock, par value $0.01 per
share (the “Common
Stock”),
at an
exercise price equal to $0.43 per share, the Fair Market Value (as defined
below) of the Common Stock on the date of grant, such option to vest as follows,
provided Executive remains an employee of the Company at the time of such
vesting:
(i) The
Option shall vest with respect to 1,000,000 shares at such time Executive
relocatesto Hong Kong and establishes a home office in Hong Kong on behalf
of
the Company;
(ii) The
Option shall vest with respect to 500,000 shares on the earlier of (i) the first
anniversary of the Effective Date, (ii) the achievement of a
milestone, as determined by the Board of Directors, or (iii) the termination
of
Executive's employment with the company; and
(iii) The
Option shall vest with respect to the remaining 1,000,000 shares at the earlier
of (i) such time the Company achieves certain performance criteria established
by the Board of Directors, the achievement of which shall be determined by
the
Board of Directors, and (ii) the third anniversary of the Effective
Date.
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Upon
termination of Executive’s employment with the Company, for any reason or no
reason, Executive’s rights to any portion of the Option that has not yet vested
as of the date of such termination shall not vest and all of Executive’s rights
to such unvested portion of the Option shall terminate. The Option shall have
a
term of 10 years from date of grant and the vested Options shall remain
exercisable for 90 days from the date that the Executive is no longer an
employee of the Company. In connection with such grant, the Executive shall
enter into a stock option agreement which will memorialize the foregoing vesting
schedule and other terms described in this Section 4(d) and provide additional
standard option provisions. For purposes of this Agreement, “Fair
Market Value”
shall
mean (a) if the Common Stock is traded on an exchange or is quoted on The Nasdaq
Global Market, Nasdaq Capital Market or the OTC Bulletin Board, then the closing
or last sale prices, respectively, reported for the date of grant; (b) if the
Common Stock is traded in the over-the-counter market, then the average of
the
closing bid and asked prices reported on the date of grant; or (c) if the Common
Stock is not publicly traded, the fair market value of such stock will be
determined by the Board, acting in good faith utilizing customary business
valuation criteria and methodologies (without discount for lack of marketability
or minority interest).
5. Confidentiality.
Except
as specifically permitted by an authorized officer of the Company or by written
Company policies, Executive will not, either during or after his employment
by
the Company, use Confidential Information (as defined below) for any purpose
other than the business of the Company or disclose it to any person who is
not
also an executive of the Company unless authorized by the Board. When
Executive’s employment with the Company ends, Executive will promptly deliver to
the Company all records and any compositions, articles, devices, apparatuses
and
other items that disclose, describe, or embody Confidential Information,
including all copies, reproductions, and specimens of the Confidential
Information in Executive’s possession, regardless of who prepared them and will
promptly deliver any other property of the Company in Executive’s possession,
whether or not Confidential Information. As used in this Section 5,
“Confidential Information” means information that is not generally known and
that is proprietary to the Company or that the Company is obligated to treat
as
proprietary, including information known by Executive prior to the Effective
Date. Any information that Executive reasonably considers Confidential
Information, or that the Company treats as Confidential Information, will be
presumed to be Confidential Information (whether the Executive or others
originated it and regardless of how the Executive obtained it).
6. Non-Solicitation
and Non-Competition.
Executive agrees that, during the Term and for a
period
of one (1) year beyond the Term, Executive will not, without the prior written
consent of the Company, directly or indirectly, do or commit any of the
following acts:
(a) Induce,
entice, hire or attempt to hire, employ or otherwise contract with any employee
or independent contractor of the Company; provided, that Executive may contract
with independent contractors for matters that are not related to the business
activities of the Company.
(b) Induce,
or attempt to induce any employee or independent contractor of the Company
to
leave the employ or cease doing business with the Company.
(c) Induce,
or attempt to induce, any customer, supplier, vendor or any other person to
cease doing business with the Company.
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(d) Induce
or
attempt to induce any individual to violate any agreement with the Company.
Executive
further agrees that, during the Term of this Agreement and for a period of
one
(1) year beyond the Term, he will not, without the prior written consent of
the
Company, directly or indirectly, render services, advice or assistance to any
corporation, person, organization or other entity which engages in the mining
business, or engage in any such activities in any capacity whatsoever,
including, without limitation, as an employee, independent contractor, officer,
director, manager, beneficial owner, partner, member or shareholder (other
than
being a shareholder of a corporation required to file periodic reports with
the
Securities and Exchange Commission under Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, where the shareholder’s total holdings are
less than three percent (3%)).
7. Dispute
Resolution.
Any
dispute arising out of or related to Executive’s employment with the Company or
this Agreement or any breach or alleged breach hereof shall be exclusively
decided by binding arbitration before a single arbitrator in a mutually
convenient location pursuant to and in accordance with the rules of the American
Arbitration Association. The arbitrator shall have the power and authority
to
issue temporary and permanent awards of injunctive and equitable relief.
Attorneys fees in each case shall be paid to the prevailing party by the
non-prevailing party. Executive irrevocably waives Executive’s right, if any, to
have any disputes between Executive and the Company arising out of or related
to
Executive’s employment with the Company or this Agreement decided in any
jurisdiction or venue other than by binding arbitration pursuant to the terms
hereof. The promises by the Company and Executive to arbitrate, which the
parties agree can be a less expensive and quicker way to resolve disputes than
litigating them in court or before other agencies or tribunals, constitutes
adequate, reasonable and sufficient mutual consideration for the enforcement
of
this Agreement.
8. General
Provisions.
(a) Successors
and Assigns.
This
Agreement is binding on and inures to the benefit of the Company’s successors
and assigns, all of which are included in the term the “Company” as it is used
in this Agreement; provided,
however,
that
the Company may assign this Agreement only in connection with a merger,
consolidation, assignment, sale or other disposition of substantially all of
its
assets or business.
(b) Amendment.
This
Agreement may be modified or amended only by a written agreement signed by
both
the Company and Executive.
(c) Governing
Law.
The laws
of Minnesota will govern the validity, construction, and performance of this
Agreement, without regard to any choice of law or conflict of law rules and
regardless of the location of any arbitration under this Agreement.
(d) Construction.
Wherever possible, each provision of this Agreement will be interpreted so
that
it is valid under the applicable law. If any provision of this Agreement is
to
any extent invalid under the applicable law, that provision will still be
effective to the extent it remains valid. The remainder of this Agreement also
will continue to be valid, and the entire Agreement will continue to be valid
in
other jurisdictions.
(e) No
Waiver.
No
failure or delay by either the Company or Executive in exercising or enforcing
any right or remedy under this Agreement will waive any provision of the
Agreement. Nor will any single or partial exercise by either the Company or
Executive of any right or remedy under this Agreement preclude either of them
from otherwise or further exercising these rights or remedies, or any other
rights or remedies granted by any law or any related document.
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(f) Captions.
The
headings in this Agreement are for convenience only and shall not affect this
Agreement’s interpretation.
(g) References.
Except
as otherwise required or indicated by the context, all references to Sections
in
this Agreement refer to Sections of this Agreement.
(h) Entire
Agreement.
This
Agreement supersedes all previous and contemporaneous oral negotiations,
commitments, writings, and understandings between the parties concerning the
matters in this Agreement. In the case of any conflict between the terms of
this
Agreement and any other agreement, writing or understanding, this Agreement
will
control.
(i) Notices.
All
notices and other communications required or permitted under this Agreement
shall be in writing and shall be hand delivered or sent by registered or
certified first class mail, postage prepaid, and shall be effective upon
delivery if hand delivered, or three days after mailing if mailed to the
addresses stated below. These addresses may be changed at any time by like
notice:
If
to the Company:
|
900
IDS Center, 00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx,
XX 00000-0000
|
If
to Executive:
|
Xxxxxxx
X. Xxxxx
0000
Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx,
XX 00000
With
a copy to Xx. Xxxxx at the office of the Company in Hong Kong, as
applicable.
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(j) Counterparts.
This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one agreement binding on all parties. Each party
shall
become bound by this Agreement immediately upon signing any counterpart,
independently of the signature of any other party. In making proof of this
Agreement, however, it will be necessary to produce only one copy signed by
the
party to be charged.
Signature
Page Follows
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IN
WITNESS WHEREOF, the undersigned Executive and the Company have executed this
Agreement effective as of the Effective Date.
a
Minnesota corporation
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By | /s/ Xxxxxxx X Xxxx | |
Its: CEO |
/s/
Xxxxxxx X Xxxxx
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Xxxxxxx
X. Xxxxx
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Signature
Page of Employment Agreement between
Wits
Basin Precious Minerals Inc. and Xxxxxxx Xxxxx