Exhibit 10.4
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EMPLOYMENT AGREEMENT
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This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
this first (1st) day of April, 2003, ("Effective Date") by and between MR3
Systems, Inc., a Delaware corporation, ("EMPLOYER") located at 000 Xxxxxxx
Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, and Xxxxxxx X. Xxxxxx
("EMPLOYEE") whose address is 000 Xxxxxxx Xxxxxx, Xxxxx 000 X, Xxx Xxxxxxxxx, XX
00000.
RECITALS
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WHEREAS, EMPLOYER requires the services of a President, Chief Operating
Officer and member of its Board of Directors ("Director") who will have
responsibility for providing leadership and direction in the overall execution
of EMPLOYER's business plan; and
WHEREAS, EMPLOYEE warrants that he has the special skills, knowledge,
abilities and experience required for the position of President, Chief Operating
Officer and Director; and
WHEREAS, EMPLOYER desires to employ EMPLOYEE as its President, Chief
Operating Officer and Director subject to the terms and conditions of this
Agreement; and
WHEREAS, EMPLOYEE wishes to be employed by EMPLOYER to serve as its
President, Chief Operating Officer and Director.
NOW, THEREFORE, in consideration of the recitals, covenants, conditions
and promises contained herein, the parties hereto agree as follows:
ARTICLE I
EMPLOYMENT AND DUTIES
---------------------
1.1 Employment. EMPLOYER hereby engages EMPLOYEE to serve in the capacity
of President, Chief Operating Officer and member of the Board of
Directors, of EMPLOYER and EMPLOYEE hereby accepts said employment on
the terms and conditions set forth in this Agreement.
1.2 Duties. Those duties typically undertaken by a President and COO of a
public company similar to the Corporation in (i) size, (ii) current
stage of its development, and (iii) need to expand its operations,
resources and manpower. Executive management responsibility for all
areas of the Corporation's business, working directly with the Chief
Executive Officer. Duties also to specifically include: (i) providing
and/or arranging for 100% of the financing necessary to fund all of the
operating expense, cash flow and capital requirements needed to manage
and operate the Corporation within the budgets established by the
Corporation's Board of Directors, and (ii) management and supervision
of all domestic and foreign licensing activities.
1.3 Hours. EMPLOYEE shall devote his full time, attention and energies to
the business of EMPLOYER and shall not, during the term of this
Agreement, be engaged in any other full or part-time employment or
other affiliation, which will keep him from fulfilling his duties to
EMPLOYER hereunder (allowing for reasonable amounts of time to oversee
personal interests and currently existing business relationships).
Notwithstanding anything to the contrary contained herein, nothing in
this Agreement shall be construed to prevent EMPLOYEE from
participation in professional association activities approved by
EMPLOYER.
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1.4 Representation and Warranty of EMPLOYEE. EMPLOYEE represents and
warrants to EMPLOYER that performance of his duties will not violate
any agreements with, or trade secrets of, any other person or entity.
ARTICLE II
COMPENSATION
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2.1 Base Salaries.
2.1.1 An annual salary equal to 100% of the salary paid by the
Corporation to its highest-paid employees, Xxxxxxx X. Xxxx and
Xxxxxx X. XxXxx. That salary is currently listed at $120,000
per year but has never been paid in full. Salary may be
accrued and can also be convertible, in whole or in part, into
shares of the Corporation's Common Stock at the per share
market price in effect at the end of each applicable pay
period. EMPLOYEE must notify the Corporation of such
conversion, in writing, within 30 days of the end of the
applicable pay period.
2.1.2 Said Base Salaries shall be paid to EMPLOYEE monthly in
accordance with EMPLOYER's payroll practices. All Salaries
shall be subject to all appropriate and required payroll
deductions.
2.2 Stock Options. EMPLOYER grants to EMPLOYEE 5-year Warrants, commencing
as of the Effective Date, to purchase the Common Stock of EMPLOYER
("Options") at an exercise price of $0.10 per share, vesting as
follows:
2.2.1 Warrants equal to 3,000,000 Shares upon the execution of this
Agreement, with an additional 3,000,000 Warrants to vest at
the rate of 83,334 warrants per month during the 3-year term.
Monthly vesting of the 3,000,000 warrants to accelerate to
166,667 warrants per month for each month following the month
in which the Corporation either (1) sells its first bar of
gold produced in a commercial MR3 gold extraction facility, or
(2) enters into its first technology license agreement,
whichever shall first occur.
2.3 Benefits. EMPLOYEE shall be entitled to the following fringe benefits:
(a) Vacation and Sick Days. EMPLOYEE shall be entitled to the
vacation and sick day benefits accorded employees as
established by the EMPLOYER personnel policies.
(b) Federal and State Holidays. EMPLOYEE shall be paid for federal
and state holidays in accordance with EMPLOYER'S holiday
policy.
(c) Professional Association Dues, Subscriptions and Attendance at
Professional Association Meetings. EMPLOYER will pay for
professional association dues, subscriptions to professional
periodicals and payment for attendance at professional
association meetings as reasonably approved by the Board of
Directors as part of its annual budgeting process.
(d) Additional Benefits. EMPLOYEE shall be entitled to such
additional benefits, including medical, disability and death,
and retirement benefits, bonuses or stock options in
accordance with any of those types of benefit plans when and
if adopted by EMPLOYER.
(e) Automobile Allowance. EMPLOYEE shall be entitled to an
automobile allowance of $500/month.
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ARTICLE III
TERM AND TERMINATION
--------------------
3.1 Initial Term. The initial term of this Agreement ("Initial Term") shall
commence on the Effective Date of this agreement ("Commencement Date"),
and shall continue in effect until March 31, 2006, unless sooner
terminated pursuant to the terms of this Agreement.
3.2 Automatic Renewal. Upon completion of the Initial Term, the Agreement
shall continue from month to month until terminated or until the
parties negotiate a new term.
3.3 Termination Without Cause. Either party may terminate this Agreement,
without cause, at any time, upon providing the other party with sixty
(60) calendar days prior written notice of said termination.
Termination shall automatically become effective sixty (60) calendar
days following the giving of said notice ("Effective Date of
Termination").
3.4 Termination For Cause. Notwithstanding any provision in this Agreement
to the contrary, EMPLOYER shall have the right to terminate this
Agreement and EMPLOYEE's employment hereunder for "cause". In the event
EMPLOYEE is terminated for "cause", termination shall be effective upon
sixty (60) days prior written notice by EMPLOYER. For purposes of this
Agreement, "cause" shall be defined as:
(a) Conviction of EMPLOYEE of a felony.
(b) Conviction of EMPLOYEE of a misdemeanor of moral turpitude,
which affects EMPLOYEE's ability to perform his duties under
this Agreement.
(c) EMPLOYEE's refusal to physically report to work for a period
of two (2) weeks for any reason other than authorized vacation
days, sick days, holidays, attendance at
conventions/conferences, or the death or disability of
EMPLOYEE.
(d) Willful malfeasance or gross negligence of EMPLOYEE.
(e) Material refusal by EMPLOYEE to perform his duties, or his
substantial neglect of the duties assigned to him.
(f) Disloyal, dishonest or illegal conduct by EMPLOYEE.
(g) Breach by EMPLOYEE of any other terms of this Agreement and
his failure to cure said breach within ten (10) calendar days.
Notwithstanding any provision of this Agreement to the contrary,
termination of EMPLOYEE's employment pursuant to this Section 3.5 shall
result in termination of EMPLOYER's obligation to pay for or provide
any of the following: (i) Base Salary (except to the extent that said
Salary has been earned and not yet paid) or (ii) Stock Options (except
to the extent that said been earned but not yet paid).
3.5 Effect of Termination. Notwithstanding any provision of this Agreement
to the contrary, upon termination of this Agreement for any cause or
reason, EMPLOYER shall pay EMPLOYEE for all vacation time accrued but
not used by EMPLOYEE prior to the Effective Date of Termination as
required by applicable State laws and regulations.
3.6 Payment Upon Termination by EMPLOYER. Notwithstanding any provision in
this Agreement to the contrary, if EMPLOYER terminates EMPLOYEE's
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Employment without cause pursuant to Section 3.3 hereof, EMPLOYEE shall
be entitled to his then base salary for six (6) months at the rate of
the base salary then in effect, which six month period shall begin on
the Effective Date of the Termination (the "Severance Benefits"), plus
the prorated share of vested options due under Section 2.2.1 above. The
obligation to pay Severance Benefits shall not be subject to credit,
set-off or diminution by reason of the fact that EMPLOYEE may be
gainfully employed during the period that such Severance Benefits are
payable.
ARTICLE IV
DISABILITY OR DEATH
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4.1 If EMPLOYEE shall at any time be incapacitated or prevented by illness,
injury, accident or circumstances beyond his control ("incapacity")
from discharging his duties pursuant to this Agreement for a total of
120 days or more in any 24 consecutive calendar months, EMPLOYER may
then by notice in writing to EMPLOYEE given at any time so long as the
incapacity shall continue after said 120 days: (i) discontinue payment
in whole or in part of EMPLOYEE's base salary on and from such date as
may be specified in the notice until the incapacity shall cease; or
(ii) whether or not payment shall have already been discontinued as the
foresaid, terminate this Agreement forthwith on such date as may be
specified in the notice. Subject to the foregoing, EMPLOYEE's base
salary shall, notwithstanding the incapacity, continue to be paid to
EMPLOYEE in accordance with the provisions with this Agreement with
respect to the period of incapacity prior to such discontinuance or
termination.
4.2 If the EMPLOYEE dies prior to the expiration of the term of employment,
the compensation due him from EMPLOYER under this Agreement shall be
the amount (1) which EMPLOYEE would be paid if permanently disabled,
plus (2) the amount of Severance Benefits under Section 3.6, and shall
be paid to his executors, administrators, heirs, personal
representatives, successors, assigns.
ARTICLE V
EXPENSES
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EMPLOYEE shall be entitled to reimbursement for those ordinary and
necessary expenses incurred in performance of his duties hereunder in accordance
with EMPLOYER's standard policy for reimbursement of business expenses for its
executives. Payment for any other expenses shall be subject to the prior written
approval of the Board of Directors of EMPLOYER.
ARTICLE VI
CONFIDENTIALITY
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EMPLOYEE agrees to enter into the form of Confidentiality Agreement
attached hereto as Exhibit A and made a part hereof.
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ARTICLE VII
NON-COMPETITION
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Unless otherwise waived in writing by the EMPLOYER, which waiver shall
not be unreasonably withheld, during the term of this Agreement, EMPLOYEE shall
serve EMPLOYER diligently and to the best of his abilities and shall not compete
with EMPLOYER in any way. Without limiting the generality of the foregoing,
EMPLOYEE shall not, during the term of this Agreement, directly (whether for
compensation or otherwise), alone or as an agent, principal, partner, officer,
employee, trustee, director, shareholder or in any other capacity, own any
interest in, manage, operate, join, control, assist, participate in the
ownership, management, operation or control of, furnish any capital to, be
connected in any manner with or provide any services as a consultant for any
person, corporation, partnership, proprietorship, firm, association, other
entity or business which competes with any business of EMPLOYER and its
affiliates as conducted from time to time.
ARTICLE VIII
SOLICITATION OF EMPLOYEES
-------------------------
EMPLOYEE agrees that during his employment and for a period of two
years thereafter, he will not, directly or indirectly, individually or on behalf
of another, solicit or induce EMPLOYER's, employees, agents or consultants to
terminate their relationship with EMPLOYER in order to accept employment, an
agency or a consultancy with EMPLOYEE or another person or entity.
ARTICLE IX
CONFIDENTIAL INFORMATION OF OTHERS
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EMPLOYEE warrants that he is not covered by any restrictive covenant
with another EMPLOYER that would preclude him from performing his duties
hereunder. EMPLOYEE agrees that in performing such duties for EMPLOYER, he will
not use or otherwise divulge confidential or proprietary information, or trade
secrets obtained from a former employer.
ARTICLE X
NOTICES
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All notices required to be given hereunder shall be in writing and
shall be deemed delivered if personally delivered or dispatched by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
parties as follows:
EMPLOYER: 000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: CEO
EMPLOYEE: 000 Xxxxxxx Xxxxxx, Xxxxx 000 X
Xxx Xxxxxxxxx, XX 00000
Notice shall be deemed given on the date it is delivered if delivered
personally, and on the date of the return receipt if dispatched by certified or
registered mail, return receipt requested. Any party may change the address to
which to send notices by notifying the other party of such change of address in
writing.
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ARTICLE XI
SEVERABILITY
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Any terms or provisions of this Agreement, which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
term or provision herein and such remaining terms and provisions shall remain in
full force and effect.
ARTICLE XII
GOVERNING LAW
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The existence, validity and construction of this Agreement shall be
governed by the laws of the State of California.
ARTICLE XIII
ASSIGNMENT
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Neither party shall assign this Agreement without the prior written
consent of the other. This Agreement shall be binding on the parties and their
respective successors and assigns.
ARTICLE XIV
WAIVER
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The waiver by either party of any one or more defaults, if any, on the
part of the other, shall not be construed to operate as a waiver of any other or
future defaults, under the same or different terms, conditions or covenants
contained in this Agreement.
ARTICLE XV
CAPTION AND HEADINGS
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The captions and headings throughout this Agreement are for convenience
of reference only and shall in no way be held or deemed to be a part of or
affect the interpretation of this Agreement.
ARTICLE XVI
ATTORNEYS FEES
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In the event that there is any controversy or claim arising out of or
relating to this Agreement, or to the interpretation, breach or enforcement
thereof, and any action or proceeding, is commenced to enforce the provisions of
this Agreement, the prevailing party shall be entitled to an award by the court
of reasonable attorneys' fees, costs and expenses.
ARTICLE XVII
COOPERATION
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Both parties to this Agreement agree to use their best efforts to
cooperate with one another in good faith.
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ARTICLE XVIII
NO THIRD PARTY BENEFICIARIES
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Nothing in this Agreement, expressed or implied, is intended or shall
be construed to confer upon any person, firm or corporation other than the
parties hereto and their respective successors or assigns, any remedy or claim
under or by reason of this Agreement or any term, covenant or condition hereof,
as third party beneficiaries or otherwise, and all of the terms, covenants and
conditions hereof shall be for the sole and exclusive benefit of the parties
hereto and their successors and assigns.
ARTICLE XIX
ENTIRE AGREEMENT
----------------
This Agreement states the entire contract between the parties with
respect to the subject matter of this Agreement and supersedes any oral or
written proposals, statements, discussions, negotiations, or other agreements
before or contemporaneous to this Agreement. The parties acknowledge that they
have not been induced to enter into this Agreement by any oral or written
representations or statements not expressly contained in this Agreement. This
Agreement may be modified only by mutual agreement of the parties provided that,
before any modification shall be operative or valid, it be reduced to writing
and signed by both parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
that day and year, set forth hereinabove.
EMPLOYER
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MR3 SYSTEMS, INC.
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By: /s/ XXXXXXX X. XXXX
-------------------------------------
Xxxxxxx X. Xxxx, Chairman & CEO
EMPLOYEE
--------
/s/ XXXXXXX X. XXXXXX
-----------------------------------------
Xxxxxxx X. Xxxxxx
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EXHIBIT "A"
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CONFIDENTIALITY AGREEMENT
-------------------------
THIS AGREEMENT is made and entered into as of this 1st day of April, 2003, by
and between:
MR3 Systems, Inc. ("EMPLOYER "), a Delaware corporation, whose address is 000
Xxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, and
Xxxxxxx X. Xxxxxx ("EMPLOYEE"), whose address is 000 Xxxxxxx Xxxxxx, Xxxxx 000
X, Xxx Xxxxxxxxx, XX 00000.
EMPLOYER and EMPLOYEE, respectively, may each from time to time be individually
referred to herein as a "Party", or collectively as the "Parties", or, as the
case may be, as the "EMPLOYER" or the "EMPLOYEE".
WHEREAS:
A. EMPLOYER and EMPLOYEE have entered into a Employment Agreement
("Agreement"); and
B. From time to time prior to and during the term of the
Agreement, EMPLOYER may disclose confidential and proprietary
information to the EMPLOYEE.
NOW IT IS HEREBY AGREED as follows:
1. EMPLOYEE hereby agrees to undertake the following with respect
to the confidential information listed below and hereby
defined as "Confidential Information":
(a) all kinds of drawings, sketches, photographs,
layouts, artwork, specifications, including without
limitation design, manufacturing, installing, and
operating drawings (e.g., copies, films,
reproductions, etc.) for the MR3 Technology and/or
the operation of a EMPLOYER System, and other related
products and matters ("Products");
(b) EMPLOYER's financial and pricing information,
business plans, research and development, work in
progress, existing and potential commercial
relationships, services or marketing plans,
information embodied in its technologies, including
equipment, systems, software, codes, products or
chemical formulas, media, operations, manuals,
designs, letters, negotiation documents, product
descriptions, part descriptions, data, reports,
plans, proposals, know-how, methodology, brochures,
descriptions, and other documents and objects of
every description and all related information; and
2. All Confidential Information shall be treated by the EMPLOYEE
as confidential, shall be kept secret by the EMPLOYEE, shall
not be disclosed, directly or indirectly, by the EMPLOYEE to
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any third party without the express written consent of the
EMPLOYER and shall be used by the EMPLOYEE exclusively for the
purposes of performing his obligations under, and otherwise
complying with the terms and conditions of, the Agreement,
including all attachments, exhibits and schedules thereto.
3. The obligations of confidentiality and non-disclosure and the
restrictions of use contained herein shall not apply to
information, which the EMPLOYEE can demonstrate:
(a) is available to the public at the time it is
disclosed or thereafter becomes available to the
public; or
(b) is known to the EMPLOYEE at the time of disclosure;
or
(c) properly comes into the possession of the EMPLOYEE
from an independent source not bound by a
confidentiality obligation.
However, specific aspects of the Confidential Information
shall not be deemed to be within the scope of exceptions (a),
(b) and (c) above merely because they are broadly encompassed
by more general information which is in the public domain or
in the EMPLOYEE's possession or is disclosed to the EMPLOYEE
by a third party.
4. EMPLOYEE further agrees that without the express prior written
permission of EMPLOYER:
(a) it will not use the Confidential Information of MR3
to operate (or subcontract others to operate) any
high affinity metals capture technology similar to
the MR3 System or to produce (or subcontract others
to produce) Products or any similar items for anyone
other than MR3 ; and
(b) it will not use or otherwise disclose any such
Confidential Information to any third party.
5. EMPLOYEE confirms that the Confidential Information has been
and shall remain the sole property of the EMPLOYER and upon
receipt of a request from the EMPLOYER, agrees to immediately
return to the EMPLOYER any Confidential Information, including
any drawings, photographs, specifications or other documents
in its possession without retaining any summaries, photocopies
or other reproductions of the above.
6. EMPLOYEE further confirms that any Confidential Information
received has been and shall remain the property of the
EMPLOYER, and the EMPLOYEE shall not claim or apply for any
kind of intellectual property rights pertaining to or relevant
to the Confidential Information.
7. EMPLOYEE acknowledges that the remedies provided by law for a
violation of his obligations would be inadequate and that the
EMPLOYER will be irreparably damaged in the event of a breach
of this Agreement. Consequently, EMPLOYER shall be entitled
to, and the EMPLOYEE shall not in any way object to, an
injunction restraining any violation of this Agreement, or any
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appropriate decree of specific performance, without any bond
or other security, or any proof of irreparable damage, being
required.
8. The obligations of confidentiality and non-disclosure and the
restrictions of use contained herein shall continue for a
period of ninety-nine (99) years from the last date that
Confidential Information is furnished by a EMPLOYER to a
EMPLOYEE.
9. This Agreement may not be modified, amended, rescinded,
canceled or waived in whole or in part, except by written
instrument, signed by both parties, which makes specific
reference to this Agreement and which specifies that this
Agreement is being amended or otherwise altered. None of the
provisions of this Agreement shall be deemed to be waived by
any act or acquiescence on the part of either Party, but only
by a writing executed by both Parties.
10. This Agreement will be binding upon permitted successors and
assignees of the Parties. .
11.
(a) If during the course of any litigation, whether or
not the EMPLOYEE is a party to such litigation, the
EMPLOYEE is requested or required to disclose
Confidential Information obtained under the scope of
this Agreement, the EMPLOYEE shall immediately notify
EMPLOYER of this fact prior to divulging the
Confidential Information and shall give EMPLOYER
adequate notice of the requests or requirement so as
to allow EMPLOYER sufficient time to seek judicial
protection of the Confidential Information.
(b) In the event that any Confidential Information within
the possession of the EMPLOYEE is believed by the
EMPLOYEE to have fallen recently within an exception
set forth in Section 3 above and is, therefore, not
Confidential Information, then the EMPLOYEE shall, at
least sixty (60) days prior to any disclosure or use
of such information for any purpose, notify EMPLOYER
of this fact in writing.
14. This Agreement shall be governed by and construed in
accordance with the laws of the State of California. The
Parties hereby agree that any legal action or proceeding
arising out of or relating to this Agreement may be brought in
the courts of the State of California and the Parties hereby
irrevocably submit to the non-exclusive jurisdiction of, but
not limited to, the courts of the State of California.
15. In the event that there is any controversy or claim arising
out of or relating to this Agreement, or to the
interpretation, breach or enforcement thereof, and any action
or proceeding, is commenced to enforce the provisions of this
Agreement, the prevailing party shall be entitled to an award
by the court of reasonable attorneys' fees, costs and
expenses.
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16. If any one or more of the provisions contained in this
Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other
provisions of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable
provision had never been contained herein. If, moreover, any
one or more of the provisions contained in the Agreement shall
for any reason be held to be excessively broad as to time,
duration, geographical scope, activity or subject, it shall be
construed by limiting and reducing it, so as to be enforceable
to the extent compatible with the applicable law as it shall
then exist.
IN WITNESS WHEREOF, the duly authorized representatives of the Parties
have signed this Agreement as of April 1, 2003.
EMPLOYER
MR3 SYSTEMS, INC.
By: /s/ XXXXXXX X. XXXX
---------------------------------
Xxxxxxx X. Xxxx, Chairman and CEO
EMPLOYEE
/s/ XXXXXXX X. XXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxx
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