10.11 Employment Agreement Xxxxxxx Xxxxxxxx
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of October, 2004 by and between,
Atlas Mining Company, an Idaho corporation with its principal offices
at 000 X. Xxxxxx Xxx., Xxxxxx, Xxxxx 00000, (the "Company"), and
Xxxxxxx X. Xxxxxxxx, whose address is 0000 Xxxxx Xxxxx, Xxxxxxxx,
Xxxxxxx 00000, (the "Executive").
W I T N E S E T H:
WHEREAS, the Company desires to obtain the benefit of the services of
Executive, and Executive desires to render such services, on the terms and
conditions hereinafter set forth:
NOW, THEREFORE, the parties hereto, in consideration of the premises
and mutual covenants herein contained, hereby agree as follows:
1. Upon the execution of this Agreement, all prior employment
agreements, whether written or oral, between Executive and the
Company are terminated and have no further force or effect.
2. Subject to the terms and conditions hereinafter set forth, the
Company hereby employs the Executive, and the Executive hereby
agrees to and enters into the employ of the Company, or of any
parent, subsidiary, or affiliate of the Company as the Company
shall from time to time select, for an employment term commencing
as of the 1st day of October, 2004, and continuing for a period
of five (5) years from such date (the "Term of Employment"). At
the end of the initial Term of Employment, this Agreement shall
automatically be renewed for an additional one-year periods,
unless either party provides at least 120 days written notice of
its decision not to renew this agreement.
3. During the Term of Employment, the Executive shall devote such
time, effort and attention to the business and affairs of the
Company as President and Chief Executive Officer, as the
Executive and the Board of Directors shall mutually agree. The
Executive will continue as Chairman the Board and Director of the
Company's Board of Directors, and will continue as prescribed by
the Shareholders. He shall receive no additional compensation
for serving as a Director so long as he is employed by the
Company on a full-time basis in an executive position.
4. For all services to be rendered by the Executive in any capacity
during the Term of Employment, including, without limitation,
services as an executive, officer, director or member of a
committee of the Company or its subsidiaries, divisions, and
affiliates, the Executive shall be paid compensation as follows:
(A) (i) for the first year of the Term of Employment, a salary at
the annual rate of $120,000;
(ii) for the second year of the Term of Employment, a salary at
the annual rate of $150,000;
(iii)for the third year of the Term of Employment, a salary at
the annual rate of $200,000;
(iv) for the fourth year of the Term of Employment, a salary at
the annual rate of $225,000;
(v) for the fifth year of the Term of Employment, a salary at
the annual rate of $250,000.
(B) Such salary will be paid in regular installments in accordance
with the Company's usual paying practices, but not less
frequently than semi-monthly. Such payments will be subject to
such deductions by the Company as the Company is from time to
time required to make pursuant to law, government regulations, or
order, or by agreement with or consent of Executive.
(C) Executive shall be entitled to participate in all group life
insurance, medical and hospitalization plans and pension and
profit sharing plans as are presently offered by the Company or
which may hereafter during the Term of Employment be offered by
the Company generally to its operating executives.
(D) Executive shall be entitled to use of an automobile to be leased
by the Company with monthly lease payments not to exceed $1,000.
(E) Executive is entitled to a bonus program based on hallmarks
achieved.
(F) Obtain adequate funding package for Company.
(a) Achieve profitability through the Company's activities.
(b) Increase market cap of Company stock to the benefit of
shareholders.
(c) Bonus payments will be no more than 40% of Executive
base salary (as noted in 4.,A. above) for each
hallmark. Payments may be in the form of cash or
common stock as mutually agreed by the Executive and
the Company.
5. In addition to the foregoing salary, the Company hereby grants
the Executive an option to purchase up to 3,500,000 shares of the
Company's common stock at an option exercise price of $.18 per
share during the Term of Employment as follows:
(a) 1,500,000 shares shall vest and become exercisable
commencing January 1, 2005;
(b) 500,000 shares shall vest and become exercisable commencing
on January 1, 2006;
(c) 500,000 shares shall vest and become exercisable commencing
on January 1, 2007;
(d) 500,000 shares shall vest and become exercisable commencing
on January 1, 2008;
(e) 500,000 shares shall vest and become exercisable commencing
on January 1, 2009. Any options, which are not exercised
during the Term of Employment, shall terminate and be of no
further force and effect at the end of the Term of
Employment.
6. The Executive shall be entitled to reimbursement by the Company
for reasonable expenses actually incurred by him on its behalf in
the course of his employment by the Company, upon the
presentation by the Executive, from time to time, of an itemized
account of such expenditures, together with said vouchers and
other receipts as the Company may require.
7. The Executive shall be entitled to vacations in accordance with
the Company's prevailing policy for its operating executives.
8. The Company will maintain a key man life insurance policy on the
Executive of which the beneficiary rights will be divided equally
between the Company and the Executive's estate.
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9. The rights of the Executive or any other person to the payment of
compensation or other benefits under this Agreement shall not be
assigned, transferred, anticipated, conveyed, pledged, or
encumbered except by will or the laws of descent and
distribution; nor shall any such right or interest be in any
manner subject to levy, attachment, execution, garnishment or any
other seizure under legal, equitable, or other process for
payment of debts, judgments, alimony, or separate maintenance, or
reached or transferred by operation of law in the event of
bankruptcy, insolvency, or otherwise.
9. In the event of the Executive's involuntary termination of
employment for any reason, other than for just cause due to theft or
fraud, the Executive shall be entitled to severance compensation or
benefits as provided in this paragraph 9. Nothing contained herein,
however, shall be construed so as to include absence or failure to
perform due to illness as a basis for termination.
(a) Subject to the provisions of paragraph 9(b) below, the Executive
shall be entitled (upon such involuntary termination of employment) to
immediate severance compensation equal to an amount equal to the
Executive's base salary for the remaining period of the Term of
Employment.
(b) The Executive shall be entitled (upon such involuntary
termination of employment), in addition to the severance compensation
described in paragraph 9(a) above, to the benefits described in
paragraph 9(c) below, as follows:
(c) The Executive will be eligible to continue to participate in the
following employee benefit plans (to the extent permissible therein)
for a period of one and one half years from the date of such
involuntary termination of employment. Cost of such participation for
the Executive and eligible dependents shall be born by the Company.
This relates to but does not necessarily to Medical and Dental
insurance coverage.
The Executive will have the option to continue this coverage for an
additional six months (beyond the twelve months paid by the Company)
by paying the full monthly premium.
(d) The Executive shall have the right to exercise any stock warrants
or options granted prior to involuntary termination.
10. Nothing contained herein shall in any way affect or interfere
with the Executive's rights or privileges under any qualified
deferred compensation, retirement, pension, profit sharing,
bonus, insurance, hospitalization, or other employee benefit
plan, program or arrangement, now in effect or hereafter adopted,
in which the Executive is entitled to share or participate as an
employee of the Company.
11. During the Term of Employment, if Executive shall, for a period
of more than three (3) consecutive months or for periods
aggregating more than twelve (12) weeks in any fifty-two
consecutive weeks, be unable to perform the services provided for
herein, as a result of illness or incapacity or a physical,
mental, or other disability of any nature, the Company may, upon
not less than thirty (30) days notice, terminate the Executive's
employment hereunder. The Executive shall be considered unable
to perform the services provided for herein if he is unable to
attend to the normal duties required of him. In such event, the
Company shall pay to the Executive, or to his legal
representatives, base compensation as specified in paragraph 5,
hereof, for a period of twelve (12) months from the date of
termination. Upon completion of the termination payments
provided for in this paragraph, all of the Company's obligations
to pay compensation under this Agreement shall cease.
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12. The Company makes no representations, guaranty, warranty, or
other assurance of any kind to the Executive or any other person
regarding the federal, state or local tax consequences of this
Agreement or any payments hereunder, and the Company does not
agree to indemnify the Executive or any other person for any
federal, state or local taxes of any kind with respect to
payments hereunder.
13. This Agreement shall be binding upon and inure to the benefit of
the Company, its successors and assigns, and the Executive and
his heirs, executors, administrators and legal representatives.
14. The Company will not consolidate or merge into or with another
corporation or entity, or transfer all or substantially all of
its business and/or assets to another entity, directly or
indirectly, unless such other entity (hereinafter referred to as
the "Successor") shall assume this Agreement and the obligations
of the Company hereunder; and upon such assumption, the Executive
and the Successor shall become obligated to perform the terms and
conditions hereof. However, if during the first 180 days
following any such consolidation or merger, the Executive
determines that he does not desire to remain employed by the
Successor or the Successor determines that the services of the
Executive are no longer required, such consolidation or merger
shall be deemed an involuntary termination of the Executive's
employment, and the Executive shall be paid an amount equal to
his annual base salary at the time of the consolidation or
merger. This payment will be made to the Executive in a single
lump sum at the time of the termination.
15. The Executive will not, at any time during the Term of
Employment, or for a period of one year after the voluntary
termination of the Executive's employment, directly or indirectly
disclose or furnish to any other person, firm, or corporation any
information relating to the Company or its parent, subsidiaries,
or affiliates with respect to technology of the Company's
products, methods of obtaining business, advertising products,
customers or suppliers, or any confidential or proprietary
information acquired by the Executive during the course of his
employment by the Company or its parent, subsidiaries, or
affiliates.
16. This Agreement constitutes the entire agreement between the
parties hereto relating to the subject matter set forth herein
and supersedes any prior oral and/or written agreements,
understandings, negotiations, or discussions of the parties.
There are no warranties, representations or agreements between
the parties in connection with the subject matter hereof, except
as set forth or referred to herein. No supplement, modification,
waiver, or termination of this Agreement or any provision hereof
shall be binding unless executed in writing by the parties to be
bound thereby. Waiver of any of the provisions of this Agreement
shall not constitute a waiver of any other provision (whether or
not similar), nor shall such waiver constitute a continuing
waiver unless otherwise specifically provided.
17. The failure of either party at any time to require performance by
the other of any provision hereof shall not affect in any way the
full right to require such performance at any time thereafter,
nor shall the waiver by either party of the breach of any
provision hereof be taken or be held to be a waiver of the
provision itself.
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18. Any notice or other communication required or permitted to be
given under or in connection with this Agreement shall be in
writing, delivered in person or by public telegram, or by mailing
same, certified or registered mail, postage prepaid, in an
envelope addressed to the party to whom notice is to be given, at
the address given at the beginning of this Agreement, and shall
be effective upon receipt thereof. Each party shall be entitled
to specify a different address by giving notice as aforesaid to
the other party.
19. The invalidity or unenforceability of any paragraph, term, or
provision hereof shall in no way affect the validity or
enforceability of the remaining paragraphs, terms, or provisions
hereof. In addition, in any such event, the parties agree that
it is their intention and agreement that any such paragraph, term
or provision which is held or determined to be unenforceable as
written shall nonetheless be in force and binding to the fullest
extent permitted by law as though such paragraph, term or
provision had been written in such a manner and to such an extent
as to be enforceable under the circumstance. Without limiting
the foregoing, with respect to any restrictive covenant contained
herein, if it is determined that any such provision is excessive
as to duration or scope, it is intended that it nevertheless
shall be enforced for such shorter duration, or with such
narrower scope, as will render it enforceable.
20. All of the terms and provisions of this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective heirs, executors, administrators,
transferees, successors, and assigns.
21. This Agreement shall be governed and construed under the laws of
the State of Idaho.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
entered into as of the date and year hereinabove first set forth.
For Atlas Mining Company: _______________________________
Executive: _________________________________
