ALLIANCE RECOVERY CORPORATION
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT between Xxxxx Xxxxxxx, an individual residing at
0000 Xx. Xxxxxxx Xxxx, Xxxxxx, Xxxxxxx, Xxxxxx, X0X 0X0 (hereinafter referred to
as "Employee") and Alliance Recovery Corporation, a Delaware corporation, having
an office at Xxxxxxxx Park Drive, P.O. Box 1538, Monroe, Michigan, (the
"Employer") to be effective as of the date on which the SB-2 Registration
Statement of the Employer is declared effective by the U.S. Securities and
Exchange Commission (the "Effective Date").
W I T N E S S E T H:
WHEREAS, Employer desires to employ Employee as the Chief Executive
Officer and President; and
WHEREAS, Employee is willing to be employed as the Chief Executive
Officer and President in the manner provided for herein, and to perform the
duties of the Chief Executive Officer and President upon the terms and
conditions herein set forth; and
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein set forth it is agreed as follows:
1. Employment of the Chief Executive Officer and President. Employer
-------------------------------------------------------
hereby employs Employee as Chief Executive Officer and President.
2. Term.
----
(a) Subject to Section 9 below and further to Section 2(b) below,
the term of this Agreement shall commence upon the execution
hereof (the "Commencement Date") and expire five years from
such date ("Initial Term"). Each 12 month period after the end
of the initial term forward during the term hereof shall be
referred to as an "Annual Period." During the term hereof,
Employee shall devote substantially all of his business time
and efforts to Employer and its subsidiaries and affiliates.
(b) Subject to Section 10 below, unless the Board of Directors of
the Company (the "Board") of Employer shall determine to the
contrary and shall so notify Employee in writing on or before
the end of the Initial Term or any Annual Period or unless the
Employee notifies Employer in writing thirty (30) days before
the end of the Initial Term or any Annual Period of his desire
not to renew this Agreement, then at the end of either the
Initial Term or the Annual Period, as the case maybe, the term
of this Agreement shall be automatically extended for five (5)
years to be added at the end of the then current term of this
Agreement.
3. Duties. The Employee shall perform those functions generally performed
------
by persons of such title and position, shall attend all meetings of the
stockholders and the Board and shall perform any and all related duties and
shall have any and all powers as may be prescribed by resolution of the Board,
and shall be available to confer and consult with and advise the officers and
directors of Employer at such times that may be required by Employer. Employee
shall report directly and solely to the Board.
4. Compensation & Benefits.
-----------------------
(i) Employee shall be paid compensation of a minimum of $250,000
per year during the Initial Term of this Agreement.
(ii) Employee is eligible for an annual bonus, if any, which will
be determined and paid in accordance with policies set from
time to time by the Board, in its sole discretion.
(iii) Employee shall receive an automobile allowance as determined
by the Employer's Board of Directors.
(iv) The Employer shall use its best efforts maintain Director's
and Officer's Liability Insurance in an amount that is
standard and customary for a business of its nature.
(v) The Employer shall provide contributions to any self-directed
employee benefit plan (whether or not based in the United
States) up to the maximum amount allowable by law.
(vi) Employee has provided certain technology and know-how to
Employer that is owned by Employee. Provided Employee is
employed by Employer under the terms of this Agreement,
Employer shall be able to use such technology at no charge. If
Employee is no longer employed by Employer for any reason
whatsoever, Employer can use such technology only in
accordance with a license agreement to be entered into by
Employee and Employer, on terms acceptable to both parties,
which shall include, but not be limited to, a license fee
payable by Employer to Employee based on the replacement cost
of technology as set out in the engineer's opinion attached
hereto as Exhibit A.
5. Expenses. Employee shall submit to Employer reasonably detailed
--------
receipts with respect thereto which substantiate the Employee's expenses.
6. Vacation. Employee shall be entitled to receive six (6) weeks paid
--------
vacation time during each year of employment upon dates agreed upon by Employer.
Upon separation of employment, for any reason, vacation time accrued and not
used shall be paid at the salary rate of Employee in effect at the time of
employment separation.
7. Secrecy. At no time shall Employee disclose to anyone any confidential
-------
or secret information (not already constituting information available to the
public) concerning (a) internal affairs or proprietary business operations of
Employer or its affiliates or (b) any trade secrets, new product developments,
patents, programs or programming, especially unique processes or methods.
8. Covenant Not to Compete. Employee will not, at any time, anywhere in
-----------------------
the areas where Employer does business during the term of this Agreement, and
for two (2) years thereafter, either directly or indirectly, engage in, with or
for any enterprise, institution, whether or not for profit, business, or
company, competitive with the business of Employer as such business may be
conducted on the date thereof, as a creditor, guarantor, or financial backer,
stockholder, director, officer, consultant, advisor, employee, member, inventor,
producer, director, or otherwise of or through any corporation, partnership,
association, sole proprietorship or other entity; provided, that an investment
by Employee, his spouse or his children is permitted if such investment is not
more than five percent (5%) of the total debt or equity capital of any such
competitive enterprise or business and further provided that said competitive
enterprise or business is a publicly held entity whose stock is listed and
traded on an international or national stock exchange.
9. Termination. If the Employee is terminated by the Employer, the
-----------
Employee shall be entitled to a severance package equal to five (5) years salary
based on Employee's salary at the time of such termination. Notwithstanding such
fact, if Employee is terminated for Cause in accordance with section 9(a)(i)(B)
only, then Employee shall not be entitled to said severance package.
(a) Termination by Employer:
(i) Employer may terminate this Agreement immediately for
Cause. For purposes hereof, "Cause" shall mean (A)
engaging by the Employee in conduct that constitutes
activity in competition with Employer; (B) the
conviction of Employee for the commission of a felony
against the Employer; and/or (C) the habitual abuse
of alcohol or controlled substances. In no event
shall alleged incompetence of Employee in the
performance of Employee's duties be deemed grounds
for termination for Cause.
(ii) This agreement automatically shall terminate upon the
death of Employee, except that Employee's estate
shall be entitled to receive any amount accrued under
Section 4 for the period prior to Employee's death
and any other amount to which Employee was entitled
to at the time of his death.
b. Termination by Employee or Employer without Cause
(i) Employee or Employer shall have the right to
terminate Employee's employment under this Agreement
upon thirty (30) days' notice to either party. If
Employer terminates this Agreement, Employee shall be
entitled to the severance amount set forth in this
paragraph.
10. Consequences of Breach by Employer.
----------------------------------
Employment Termination
(a) If this Agreement is terminated pursuant to Section 9(b)(i)
hereof by Employee, or if Employer shall terminate Employee's
employment under this Agreement in any way that is a breach of
this Agreement by Employer, the following shall apply:
(i) Employee shall be entitled to payment of any
previously declared bonus and additional compensation
as provided in Section 4 above.
(b) In the event that Employee's employment is terminated for any
of the following (i) for cause as set forth in Section 9(a)(i)
of this Agreement, (ii) the expiration of the term of this
Agreement, or (iii) resignation by the Employee in accordance
with Section 9(b)(i), then the provisions of Section 8 shall
apply to Employee.
11. Remedies. Employer recognizes that because of Employee's special
--------
talents, stature and opportunities in the mining market, in the event of
termination by Employer hereunder (except under Section 9(a)(i) or (ii), or in
the event of termination by Employee under Section 9(b)(i) before the end of the
agreed term), the Employer acknowledges and agrees that the provisions of this
Agreement regarding further payments of base salary, bonuses and the
exercisability of rights constitute fair and reasonable provisions for the
consequences of such termination, do not constitute a penalty, and such payments
and benefits shall not be limited or reduced by amounts' Employee might earn or
be able to earn from any other employment or ventures during the remainder of
the agreed term of this Agreement.
12. Excise Tax. In the event that any payment or benefit received or to be
----------
received by Employee in connection with a termination of his employment with
Employer would constitute a "parachute payment" within the meaning of Internal
Revenue Code Section 280G or any similar or successor provision to 280G and/or
would be subject to any excise tax imposed by Internal Revenue Code Section 4999
or any similar or successor provision then Employer shall assume all liability
for the payment of any such tax and Employer shall immediately reimburse
Employee on a "grossed-up" basis for any income taxes attributable to Employee
by reason of such Employer payment and reimbursements.
13. Arbitration. Any controversies between Employer and Employee involving
-----------
the construction or application of any of the terms, provisions or conditions of
this Agreement, save and except for any breaches arising out of Sections 7 and 8
hereof, shall on the written request of either party served on the other be
submitted to arbitration. Such arbitration shall comply with and be governed by
the rules of the American Arbitration Association and shall be held in the
county where the Employer's principal place of business is at the time of the
arbitration. An arbitration demand must be made within one (1) year of the date
on which the party demanding arbitration first had notice of the existence of
the claim to be arbitrated, or the right to arbitration along with such claim
shall be considered to have been waived. An arbitrator shall be selected
according to the procedures of the American Arbitration Association. The cost of
arbitration shall be borne by the losing party unless the arbitrator shall
determine otherwise. The arbitrator shall have no authority to add to, subtract
from or otherwise modify the provisions of this Agreement, or to award punitive
damages to either party.
14. Attorneys' Fees and Costs. If any action at law or in equity is
-------------------------
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which he may be entitled.
15. Entire Agreement; Survival. This Agreement contains the entire
--------------------------
agreement between the parties with respect to the transactions contemplated
herein and supersedes, effective as of the date hereof any prior agreement or
understanding between Employer and Employee with respect to Employee's
employment by Employer. The unenforceability of any provision of this Agreement
shall not affect the enforceability of any other provision. This Agreement may
not be amended except by an agreement in writing signed by the Employee and the
Employer, or any waiver, change, discharge or modification as sought. Waiver of
or failure to exercise any rights provided by this Agreement and in any respect
shall not be deemed a waiver of any further or future rights. The provisions of
Sections 4, 7, 8, 9(a)(ii), 10, 11, 12, 13, 14, 16, 17, 18 and 19 shall survive
the termination of this Agreement.
16. Assignment. This Agreement shall not be assigned to other parties.
----------
17. Governing Law. This Agreement and all the amendments hereof, and
-------------
waivers and consents with respect thereto shall be governed by the internal laws
of the State of Delaware, without regard to the conflicts of laws principles
thereof.
18. Notices. All notices, responses, demands or other communications under
-------
this Agreement shall be in writing and shall be deemed to have been given when:
(a) delivered by hand;
(b) sent be telex or telefax, (with receipt confirmed), provided
that a copy is mailed by registered or certified mail, return
receipt requested; or
(c) received by the addressee as sent by express delivery service
(receipt requested) in each case to the appropriate addresses,
telex numbers and telefax numbers as the party may designate
to itself by notice to the other parties:
(i) if to the Employer:
Alliance Recovery Corporation
Xxxxxxxx Xxxx Xxxxx, X.X. Xxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
Telefax: (000) 000-0000
Telephone: (000) 000-0000
Copy to: Xxxxxx & Jaclin, LLP
000 Xxxxx 0 Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Xxxxxx, Esq.
Telefax: (000) 000-0000
Telephone: (000) 000-0000
(ii) if to the Employee:
Xxxxx Xxxxxxx
0000 Xx. Xxxxxxx Xxxx
Xxxxxx, Xxxxxxx X0X 0X0
Telefax: (000) 000-0000
Telephone: (000) 000-0000
19. Severability of Agreement. Should any part of this Agreement for any
-------------------------
reason be declared invalid by a court of competent jurisdiction, such decision
shall not affect the validity of any remaining portion, which remaining
provisions shall remain in full force and effect as if this Agreement had been
executed with the invalid portion thereof eliminated, and it is hereby declared
the intention of the parties that they would have executed the remaining
portions of this Agreement without including any such part, parts or portions
which may, for any reason, be hereafter declared invalid.
IN WITNESS WHEREOF, the undersigned have executed this agreement as of
the 6th day of January, 2004.
ATTEST: ALLIANCE RECOVERY CORPORATION
By: By: /s/ Xxxxx Xxxxxxx
--------------------------------- -------------------------
WITNESS:
By: By: /s/ Xxxxx Xxxxxxx
--------------------------------- -------------------------
Xxxxx Xxxxxxx
