CONTINUATION OF EMPLOYMENT AGREEMENT
AGREEMENT made as of this 27th day of May, 1997 by and between
NORD PACIFIC LIMITED, a Bermuda corporation (the "Company"), with an address
at 00 Xxxxxx Xxxxxx, Xxxxxxxx XX00, Xxxxxxx, and XXXXX X. CRUFT , ("Cruft"),
an individual residing at 0000 Xxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000.
WHEREAS, Cruft has been the Chief Executive Officer and
Chairman of the Board of the Company on a full-time basis for many years;
WHEREAS, Cruft desires to reduce his responsibilities to, and
compensation from, the Company and the Company desires to retain the
services of Cruft pursuant hereto;
In consideration of the mutual covenants and agreements herein
contained, the parties hereby agree as follows:
1. EMPLOYMENT. The Company (or a subsidiary of the Company)
agrees to continue to employ Cruft, and Cruft hereby agrees to continue such
employment for the Term (as defined below), with the reduced duties and
compensation and upon the terms and conditions hereinafter set forth in this
Agreement.
2. TERM. The term ("Term") of Cruft's employment hereunder
shall commence on June 1, 1997 ("Effective Date") and shall continue through
and including May 31, 1998 ("Initial Termination Date"), unless earlier
terminated by Cruft on not less than ninety (90) days' advance written notice
to the Company or as hereinafter provided for in this Agreement. The Term
hereof shall thereafter be automatically extended from year to year unless
and until terminated by either party on written notice given to the other
party not less than ninety (90) days' prior to the Initial Termination Date
or, if previously extended, the then extended termination date hereof.
3. DUTIES AND OFFICES.
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(a) Cruft shall be the Chairman of the Board of the
Company during the Term and shall perform the services as set forth in the
Company's bylaws, which services shall be commensurate with Cruft's status as
Chairman. Cruft shall perform his services subject only to the direction and
control of the Board and will report only to the Board.
(b) During the Term, Cruft shall be obligated to devote
no more than 12.5% of his full working time and energies to the business and
affairs of the Company. The Company understands that Cruft may
contemporaneously serve in a similar capacity with Nord Resources Corporation
("NRC").
(c) The office for the performance of his services shall
be located in or around Santa Ynez, California or at such other location to
which Cruft determines to relocate. The Company shall pay for Cruft's office
and such secretarial assistance as is reasonably necessary, which shall be
reduced to part-time as soon as reasonably possible.
4. COMPENSATION. During the Term, the Company shall pay
Cruft an annual salary ("Salary") of $50,000 in equal semi-monthly
installments, less required withholding and other applicable taxes. In the
event the Company and Cruft mutually agree in advance for Cruft to devote
additional time to the Company, Cruft will be compensated for such additional
time on a pro rata basis determined on an annual basis.
5. EXPENSES, BENEFITS AND PERQUISITES.
(a) The Company will pay or reimburse Cruft for all
travel and other expenses reasonably incurred by Cruft during the Term hereof
in connection with the performance of his duties hereunder upon presentment
of written expense receipts reflecting such expenses.
(b) The Company shall reimburse Cruft for his costs of
participation in the Company's health insurance plan so long as he is covered
under the NRC plan or, if NRC's plan is no longer available to Cruft, the
cost of a comparable plan separately maintained by Cruft.
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(c) The Company shall provide to Cruft, at no cost to
Cruft, professional services related to tax, retirement and estate planning.
(d) Title to the 1989 BMW which Cruft is currently using
shall be transferred to him at no cost.
The cost of Cruft's office, insurance and certain
expenses and other items may be shared by the Company with NRC under separate
agreement, and it is not intended that the cost of items hereunder be
duplicative of items provided by NRC.
6. DISABILITY. If Cruft is unable to perform his services
by reason of illness or incapacity for a period of 180 consecutive days, the
Company shall have the right to terminate this Agreement and all benefits
hereunder at any time after the 180th day, provided that on the effective
date of termination, Cruft is still disabled. Such termination shall not
effect any rights which Cruft may have at the time of termination pursuant to
any insurance, retirement, pension, stock or option award or other benefit
plan or arrangement with the Company. During the period of disability prior
to termination, the Company shall pay Cruft his Salary provided for in this
Agreement and shall comply with all other terms and conditions of this
Agreement.
7. DEATH OF EXECUTIVE. In the event that Cruft should die
during the Term, this Agreement and all benefits hereunder shall terminate.
Such termination shall not affect any rights which Cruft, his spouse or
estate may have at the time of his death pursuant to any insurance or other
death benefit, retirement, pension, stock or option award or any other
benefit plan or arrangement with the Company.
8. DISCHARGE FOR CAUSE. The Board of Directors of the
Company may discharge Cruft "For Cause" at any time. Such discharge shall be
effected by written notice to Cruft which shall specify the reasons for
Cruft's discharge and the effective date thereof. As used herein, the term
"For Cause" shall mean only chronic alcoholism, drug addiction, criminal
dishonesty or willful violation of direct written instructions from the Board
of Directors
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of the Company relating to material matters, which directions are consistent
with all applicable laws, rules and regulations and orders to which Cruft or
the Company are subject and the provisions of this Agreement, unless cured
within 10 days after notice. Upon termination pursuant to this Section 8,
this Agreement and all benefits hereunder shall terminate, except that such
termination shall not affect any right that Cruft may have at the time of
termination pursuant to any insurance, retirement, pension, stock or option
award or any other benefit plan or arrangement with the Company.
9. INDEMNIFICATION. The Company shall indemnify Cruft to
the fullest extent permitted by law and the certificate of incorporation and
bylaws of the Company from and against any loss, claim, liability and/or
expense incurred for, or by reason of, or arising out of, acts of Cruft as an
officer and/or director of the Company or any subsidiary at any time prior to
the date hereof or during the Term hereof.
10. OPTIONS. Cruft currently owns those options listed on
Exhibit A hereto ("Existing Options"). Contemporaneously herewith, the
Company is issuing to Cruft non-plan, non-qualified options ("New Options",
New Options and Existing Options being referred to herein collectively as
"Cruft Options") to purchase an additional 50,000 shares of common stock of
the Company for (THE AVERAGE OF THE CLOSING BID AND ASKED PRICE FOR SUCH
STOCK ON NASDAQ ON THE DATE OF SIGNING) per share expiring June 1, 2000,
which New Options shall be exercisable by Cruft in whole or in part at any
time or times prior to such expiration date. For purposes of all the Cruft
Options, Cruft shall continue to be deemed an employee of the Company during
the Term hereof.
11. CONFIDENTIALITY AGREEMENT.
(a) (i) Cruft acknowledges that during his
employment with the Company or any of its subsidiaries, he may have access to
secret and confidential information, including but not limited to some or all
of the following:
(A) product and business plans, budgets, sales
forecasts, design plans, research and engineering data,
inventions, methods, systems and processes,
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(B) exploration activities, including, but not
limited to, prospects, joint ventures, mining and acquisition
opportunities and similar matters,
(C) customers, and
(D) trade secrets
(all such information is hereinafter referred to as "Confidential
Information").
(ii) Cruft agrees that (except as authorized in
writing by the Company or required pursuant to legal or administrative
process) he will not reveal, divulge or make known to any person, firm or
corporation any Confidential Information.
(iii) Cruft agrees that at any time during the
Term upon the request of the Board of Directors and upon the termination of
this Agreement, Cruft will deliver all Confidential Information together with
copies thereof in his possession to the Company. In addition, if after the
Term he shall discover any Confidential Information in his possession, he
shall forthwith deliver the same together with all copies thereof to the
Company.
(b) In the event of the breach or threatened breach of
the terms and conditions of this Section 11 by Cruft, the Company shall be
entitled to a temporary or preliminary restraining order and an injunction or
other equitable relief restraining and enjoining Cruft from violating this
Section 11. In addition to the equitable relief provided above, the Company
shall have the right to pursue all other remedies available at law to the
Company for such breach or threatened breach, including recovery of damages
from Cruft.
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(c) In the event that any of the provisions of this
Section 11 shall be deemed unenforceable, invalid, or overbroad, in whole or
in part for any reason, then any court of competent jurisdiction is hereby
authorized, requested and instructed to reform such provision or provisions
to provide for the maximum confidentiality restraints upon the activities of
Cruft, which may then be legal and valid.
12. DISPUTE RESOLUTION. Any controversy or claim arising out
of or relating to this Agreement and the obligations and responsibilities of
the parties hereto or the breach or alleged breach by any of the parties of
their respective obligations hereunder shall be settled by arbitration in the
City of New York, by one arbitrator in accordance with the then governing
Rules of the American Arbitration Association. The written decision of the
arbitrator shall be final and binding upon the Company and Cruft. Judgment
upon the award rendered may be entered and enforced in any court of competent
jurisdiction. Notwithstanding the above, either party shall be entitled to
seek and obtain injunctive or similar relief from a court of competent
jurisdiction where appropriate pending arbitration. Both parties hereby
submit to the exclusive jurisdiction of the courts of the State of New York
or Federal courts situated in New York County, New York for such purpose and
for purposes of enforcing any arbitration award. All legal fees and expenses
reasonably incurred by Cruft in good faith as a result of claims or
arbitration arising from this Agreement shall be paid by the Company.
13. MISCELLANEOUS.
(a) This Agreement contains the entire understanding
between the parties hereto concerning the subject matter hereof. This
Agreement may only be amended by an instrument in writing executed by the
parties hereto.
(b) This Agreement shall be construed and enforced in
accordance with the laws of the State of New York.
(c) This Agreement and the rights and obligations of the
parties hereto shall bind and inure to the benefit of the successor or
successors of the Company, whether by merger, consolidation or otherwise.
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(d) Any notice to be given pursuant to the terms of this
Agreement shall be in writing and delivered by hand or sent by registered or
certified mail, to such party's address set forth above or to such other
address or to the attention of such other person as either party has
specified by prior written notice to the other party.
(e) The Company's waiver of a breach of any provision of
this Agreement by Cruft shall not operate or be construed as a waiver of any
subsequent breach of this Agreement by Cruft. No waiver shall be valid
unless in writing and signed by an authorized officer of the Company.
(f) Cruft acknowledges that his services are unique and
personal. Accordingly Cruft shall not assign his rights or delegate his
duties or obligations under this Agreement.
(g) Headings in this Agreement are for convenience only
and shall not be used to interpret or construe its provisions.
(h) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the Company has caused this Agreement
to be executed by its officers thereunto duly authorized, and Cruft has
executed this Agreement all as of the date first above set forth.
NORD PACIFIC LIMITED
By:
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XXXXX X. CRUFT
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