EMPLOYMENT AGREEMENT
This
Employment Agreement (the “Agreement”) is entered into as of the 31st day of
July 2006 (the “Effective Date”) by and between X. Xxxxxxx Xxxxxx III
(“Executive”) and Adera Mines Limited (the “Company”).
WHEREAS,
the Company believes that Executive’s service, experience, and knowledge are
valuable to the Company in connection with its business; and
WHEREAS,
the Company desires to employ Executive, and Executive desires to be employed
by
the Company, as the Chief Executive Officer of the Company.
NOW,
THEREFORE, in consideration of the mutual promises and covenants herein
contained, the parties hereto agree as follows:
1. Employment.
The
Company hereby employs Executive and Executive accepts such employment upon
the
terms and conditions hereinafter set forth.
2. Term
of Employment.
Subject
to the provisions of Section 6, the term of Executive’s employment pursuant to
this Agreement shall commence on and as of the Effective Date and shall
terminate thirty-six months from that date (the “Initial Term”). This Agreement
will be automatically renewed for successive one year periods after the
expiration of the Initial Term, unless Executive is otherwise notified in
writing on or before the end of the Initial Term or any of the successive one
year terms. In
this
Agreement the word “Term” shall, depending on the context used, refer to the
Initial Term or to any renewal periods.
3. Duties;
Extent of Service.
During
the Term, Executive (i) shall serve as an employee of the Company with the
title
and position of Chief Executive Officer, reporting to the Board of Directors
of
the Company, and shall have such executive responsibilities as the Board of
Directors of the Company shall from time to time designate, provided
that, in
all
cases Executive shall be subject to the oversight and supervision of the Board
of Directors of the Company in the performance of his duties, and (ii) shall
render all services reasonably incident to the foregoing. Executive hereby
accepts such employment, agrees to serve the Company in the capacities
indicated, and agrees to use Executive’s best efforts in, and shall devote
Executive’s full working time, attention, skill and energies to, the advancement
of the interests of the Company and the performance of Executive’s duties and
responsibilities hereunder.
4. Salary.
During
Executive’s employment under this Agreement, the Company shall pay Executive a
salary at the rate of $215,000 per annum (the “Salary”). Such Salary shall be
subject to withholding under applicable law, shall be prorated for partial
years
and shall be payable in periodic installments not less frequently than monthly
in accordance with the Company’s usual practice for its executive officers as in
effect from time to time.
5. Benefits.
(a) Regular
Benefits.
During
the Term, Executive shall be entitled to participate in any and all medical,
pension, dental and life insurance plans and disability income plans, retirement
arrangements and other employment benefits that are in effect from time to
time
for executive officers of the Company generally. Such participation shall be
subject to (i) the terms of the applicable plan documents (including, as
applicable, provisions granting discretion to the Board of Directors of the
Company or any administrative or other committee provided for therein or
contemplated thereby) and (ii) generally applicable policies of the Company.
In
addition to and notwithstanding the foregoing, the Board of Directors shall
have
the discretion to review Executive’s health insurance needs and determine what
policies or coverage the Company will provide.
(b) Vacation.
During
the Term, Executive shall receive paid vacation annually in accordance with
the
Company’s practices for executive officers, as in effect from time to time, but
in any event not less than four weeks per calendar year.
(c) Expenses.
The
Company shall reimburse Executive for all reasonable business expenses incurred
by Executive during Executive’s employment hereunder to the extent in compliance
with the Company’s business expense reimbursement policies in effect from time
to time and upon presentation by Executive of such documentation and records
as
the Company shall from time to time require. The Board of Directors in its
discretion may reimburse Executive for relocation expenses.
(d) Housing
and Automobile Allowances.
The
Company shall provide to Executive, or for his benefit, living expenses in
the
amount of $3,000 per month during the first six months of the Term. The Company
shall provide to Executive, or for his benefit, an automobile allowance in
the
amount of $1,000 per month during the Term. The living expense and the
automobile allowance shall be a flat monthly amount for the stated
periods.
(e) Taxation
of Payments, Benefits and Allowances.
The
Company shall undertake to make deductions, withholdings and tax reports with
respect to payments, benefits and allowances under this Agreement to the extent
that it reasonably and in good faith believes that it is required to make such
deductions, withholdings and tax reports. Payments, benefits and allowances
made
under this Agreement shall be in amounts net of any such deductions or
withholdings. Nothing in this Agreement shall be construed to require the
Company to make any payments to compensate the Executive for any adverse tax
effect associated with any payments, benefits or allowances or for any deduction
or withholding from any payment, benefit or allowance.
(f) Grant
of Stock Option.
Upon
execution of this Agreement, the Company shall grant to Executive an option
to
purchase 1,000,000 shares of the Company’s common stock at an exercise price of
$0.30 per share. The options shall vest on an equal thirty six month basis,
at
the rate of 27,778 per month, until 1,000,000 options shall be vested. The
options shall have a five year term. Following Board approval of our 2006 Equity
Incentive Plan (the “Plan”) (which is anticipated by August 30, 2006), your
option grant shall be from the Plan and shall be subject to the terms
thereof.
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(g) Exclusivity
of Salary and Benefits.
The
Executive shall not be entitled to any payments or benefits other than those
provided under this Agreement. Compliance with the provisions of this Section
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shall in no way create or be deemed to create any obligation, express or
implied, on the part of the Company or any of its affiliates with respect to
the
continuation of any particular benefit or other plan or arrangement maintained
by them or their subsidiaries as of or prior to the date hereof or the creation
and maintenance of any particular benefit or other plan or arrangement at any
time after the date hereof.
6.
Termination
and Termination Benefits.
Notwithstanding the provisions of Section 2, Executive’s employment under this
Agreement shall terminate under the following circumstances set forth in this
Section 6.
(a)
Termination
by the Company for Cause.
Executive’s employment under this Agreement may be terminated for Cause without
further liability on the part of the Company other than for accrued but unpaid
Salary through the date of termination effective immediately upon written notice
to Executive. “Cause” shall mean the following:
(i) the
commission by Executive of any act of embezzlement, fraud, larceny or theft
on
or from the Company or an affiliate of the Company;
(ii) the
commission by Executive of, or indictment of Executive for a felony or any
misdemeanor, which misdemeanor involves moral turpitude, deceit, dishonesty
or
fraud;
(iii) failure
to perform, or materially poor performance of, Executive’s duties and
responsibilities assigned or delegated under this Agreement, or any material
misconduct or violation of the Company’s policies, in either case, which
continues for a period of 30 days after written notice given to Executive;
or
(iv) a
material breach by Executive of any of the covenants, terms or provisions of
this Agreement or any agreement between the Company and Executive regarding
confidentiality and proprietary rights, as set forth in Section 7
below.
(b) Termination
by Executive.
Executive’s employment under this Agreement may be terminated by Executive by
written notice to the Board of Directors at least 60 days prior to such
termination. Upon termination of Executive’s employment pursuant to this Section
6(b), all obligations of the Company under this Agreement shall immediately
terminate other than any obligation of the Company with respect to earned but
unpaid Salary and earned benefits contemplated hereby to the extent accrued
or
vested through the date of termination.
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(c) Termination
by the Company Without Cause.
Subject
to the payment of the Termination Benefits pursuant to Section 6(d), Executive’s
employment under this Agreement may be terminated without Cause by the Company
upon written notice to Executive.
(d) (i)
Certain
Termination Benefits.
Unless
otherwise specifically provided in this Agreement or otherwise required by
law,
all compensation and benefits payable to Executive under this Agreement shall
terminate on the date of termination of Executive’s employment under this
Agreement. Notwithstanding the foregoing, in the event of termination of
Executive’s employment with the Company pursuant to Section 6(c) above, (i) the
Company shall pay to Executive the greater of (i) the sum of $60,000 or (ii)
the
salary due for the balance of the Term, and
any
unvested options owned by Executive (including, but not limited to, the option
described in Section 5(f) above) shall vest. Collectively, these benefits shall
be described herein as the “Severance Benefits”.
(ii)
The
parties hereto agree that the Severance Benefits are to be in full satisfaction,
compromise and release of any claims arising out of any termination of the
Executive’s employment pursuant to Section 6(c), and such amounts shall be
contingent upon the Executive’s delivery of a general release of such claims
upon termination of employment in a form reasonably satisfactory to the Company,
it being understood that no Severance Benefits shall be provided unless and
until the Executive executes and delivers such release.
(e) Death;
Disability.
Upon
the death of the Executive, or upon the permanent disability (as defined below)
of the Executive continuing for a period in excess of 60 consecutive days,
all
obligations of the Company under this Agreement shall immediately terminate
other than any obligation of the Company with respect to earned but unpaid
Salary and earned benefits contemplated hereby to the extent accrued or vested
through the date of termination. As used herein, the terms “permanent
disability” or “permanently disabled” shall mean the inability of the Executive,
by reason of injury, illness or other similar cause, to perform a major part
of
his duties and responsibilities in connection with the conduct of the business
and affairs of the Company, as determined reasonably and in good faith by the
Company.
(f) Notwithstanding
termination of this Agreement as provided in this Section 6 or any other
termination of Executive’s employment with the Company, Executive’s obligations
under Section 7 hereof shall survive any termination of Executive’s employment
with the Company at any time and for any reason.
7. Confidentiality;
Proprietary Rights.
(a) Confidential
Information.
As used
in this Agreement, the term “Confidential Information” shall mean information
belonging to the Company (for purposes of this Section 7 including all
predecessors of the Company) of value to the Company or with respect to which
Company has rights in the course of conducting its business and the disclosure
of which could result in a competitive or other disadvantage to the Company.
Confidential Information includes information, whether or not patentable or
copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including, by way of example and without
limitation, trade secrets, ideas, concepts, designs, configurations,
specifications, drawings, blueprints, diagrams, models, prototypes, samples,
flow charts processes, techniques, formulas, software, improvements, inventions,
domain names, data, know-how, discoveries, copyrightable materials, marketing
plans and strategies, sales and financial reports and forecasts, customer lists,
studies, reports, records, books, contracts, instruments, surveys, computer
disks, diskettes, tapes, computer programs and business plans, prospects and
opportunities (such as possible acquisitions or dispositions of businesses
or
facilities) which have been discussed or considered by the management of the
Company. Confidential Information includes information developed by Executive
in
the course of Executive’s employment by the Company, as well as other
information to which Executive may have access in connection with Executive’s
employment. Confidential Information also includes the confidential information
of others with which the Company has a business relationship. Notwithstanding
the foregoing, Confidential Information does not include information in the
public domain, unless due to breach of Executive’s duties under Section
7(b).
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(b) Confidentiality.
In the
course of performing services hereunder on behalf of the Company and its
affiliates, Executive has had and from time to time will have access to
Confidential Information. Executive agrees (i) to hold the Confidential
Information in strict confidence, (ii) not to disclose the Confidential
Information to any person (other than in the regular business of the Company
or
its affiliates), and (iii) not to use, directly or indirectly, any of the
Confidential Information for any purpose other than on behalf of the Company
and
its affiliates. All documents, records, data, apparatus, equipment and other
physical property, whether or not pertaining to Confidential Information, that
are furnished to Executive by the Company or are produced by Executive in
connection with Executive’s employment will be and remain the sole property of
the Company. Upon the termination of Executive’s employment with the Company for
any reason and as and when otherwise requested by the Company, all Confidential
Information (including, without limitation, all data, memoranda, customer lists,
notes, programs and other papers and items, and reproductions thereof relating
to the foregoing matters) in Executive’s possession or control, shall be
immediately returned to the Company.
(c) Third
Party Agreements and Rights.
Executive hereby confirms that Executive is not bound by the terms of any
agreement with any previous employer or other party that restricts in any way
Executive’s use or disclosure of information or Executive’s engagement in any
business. Executive represents to the Company that Executive’s execution of this
Agreement, Executive’s employment with the Company and the performance of
Executive’s proposed duties for the Company will not violate any obligations
Executive may have to any such previous employer or other party. In Executive’s
work for the Company, Executive will not disclose or make use of any information
in violation of any agreements with or rights of any such previous employer
or
other party, and Executive will not bring to the premises of the Company any
copies or other tangible embodiments of non-public information belonging to
or
obtained from any such previous employment or other party.
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(d) Litigation
and Regulatory Cooperation.
During
and after Executive’s employment, Executive shall cooperate fully with the
Company in the defense or prosecution of any claims or actions now in existence
or which may be brought in the future against or on behalf of the Company that
relate to events or occurrences that transpired while Executive was employed
by
the Company. Executive’s full cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf
of
the Company at mutually convenient times. During and after Executive’s
employment, Executive also shall cooperate fully with the Company in connection
with any investigation or review of any federal, state or local regulatory
authority as any such investigation or review relates to events or occurrences
that transpired while Executive was employed by the Company. The Company shall
reimburse Executive for any reasonable out-of-pocket expenses incurred in
connection with Executive’s performance of obligations pursuant to this Section
7(d).
(e) Inventions.
Executive recognizes that the Company and its affiliates possess a proprietary
interest in all of the Confidential Information and have the exclusive right
and
privilege to use, protect by copyright, patent or trademark, or otherwise
exploit the processes, ideas and concepts described therein to the exclusion
of
Executive, except as otherwise agreed between the Company and Executive in
writing. Executive expressly agrees that any products, inventions, discoveries
or improvements made by Executive in the course of Executive’s employment,
including any of the foregoing which is based on or arises out of the
Confidential Information, shall be the property of and inure to the exclusive
benefit of the Company. Executive further agrees that any and all products,
inventions, discoveries or improvements developed by Executive (whether or
not
able to be protected by copyright, patent or trademark) during the course of
his
employment, or involving the use of the time, materials or other resources
of
the Company or any of its affiliates, shall be promptly disclosed to the Company
and shall become the exclusive property of the Company, and Executive shall
execute and deliver any and all documents necessary or appropriate to implement
the foregoing.
(f) Business
Opportunities.
Executive agrees, while he is employed by the Company, to offer or otherwise
make known or available to it, as directed by the Board of Directors of the
Company and without additional compensation or consideration, any business
prospects, contracts or other business opportunities that Executive may
discover, find, develop or otherwise have available to Executive in the
Company’s general industry and further agrees that any such prospects, contacts
or other business opportunities shall be the property of the
Company.
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(g) Acknowledgment.
Executive acknowledges that the provisions of this Section 7 are an integral
part of Executive’s employment arrangements with the Company.
8. Parties
in Interest; Certain Remedies.
It is
specifically understood and agreed that this Agreement is intended to confer
a
benefit, directly or indirectly, on the Company and its direct and indirect
subsidiaries and affiliates, and that any breach of the provisions of this
Agreement by the Executive or any of the Executive’s affiliates will result in
irreparable injury to the Company and its subsidiaries and affiliates, that
the
remedy at law alone will be an inadequate remedy for such breach. Accordingly,
Executive agrees that if Executive breaches, or proposes to breach, any portion
of this Agreement, the Company or its subsidiaries and affiliates shall be
entitled, in addition to any other remedy it may have, to enforce the specific
performance of this Agreement by Executive through both temporary and permanent
injunctive relief without the necessity of posting a bond or proving actual
damages, but without limitation of their right to damages and any and all other
remedies available to them, it being understood that injunctive relief is in
addition to, and not in lieu of, such other remedies.
9. Integration.
This
Agreement constitutes the entire agreement between the parties with respect
to
the subject matter hereof and supersedes all prior agreements between the
parties with respect to any related subject matter.
10. Assignment;
Successors and Assigns, etc.
Neither
the Company nor the Executive may make any assignment of this Agreement or
any
interest herein without the prior written consent of the other party;
provided
that the
Company may assign its rights under this Agreement without the consent of the
Executive in the event that the Company shall effect a reorganization,
consolidate with or merge into any other corporation, partnership, organization
or other entity, or transfer all or substantially all of its properties or
assets to any other corporation, partnership, organization or other entity.
This
Agreement shall inure to the benefit of and be binding upon the Company and
the
Executive, their respective successors, executors, administrators, heirs and
permitted assigns.
11. Enforceability.
If any
portion or provision of this Agreement (including, without limitation, any
portion or provision of any section of this Agreement) shall to any extent
be
declared illegal or unenforceable by a court of competent jurisdiction, then
the
remainder of this Agreement, or the application of such portion or provision
in
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision
of
this Agreement shall be valid and enforceable to the fullest extent permitted
by
law.
12. Waiver.
No
waiver of any provision hereof shall be effective unless made in writing and
signed by the waiving party. The failure of any party to require the performance
of any term or obligation of this Agreement, or the waiver by any party of
any
breach of this Agreement, shall not prevent any subsequent enforcement of such
term or obligation or be deemed a waiver of any subsequent breach.
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13. Notices.
Unless
otherwise specifically provided in this Agreement, all notices, demands,
requests, consents, approvals or other communications (collectively and
severally called “Notices”) required or permitted to be given hereunder, or
which are given with respect to this Agreement, shall be in writing, and shall
be given by: (A) personal delivery (which form of Notice shall be deemed to
have
been given upon delivery), (B) by telegraph or by private airborne/overnight
delivery service (which forms of Notice shall be deemed to have been given
upon
confirmed delivery by the delivery agency), (C) by electronic or facsimile
or
telephonic transmission, provided the receiving party has a compatible device
or
confirms receipt thereof (which forms of Notice shall be deemed delivered upon
confirmed transmission or confirmation of receipt), or (D) by mailing in the
United States mail by registered or certified mail, return receipt requested,
postage prepaid (which forms of Notice shall be deemed to have been given upon
the fifth business day following the date mailed). Notices shall be addressed
to
the address set forth on the execution page of this Agreement, or to such other
address as the receiving party shall have specified most recently by like
Notice, with a copy to the other parties hereto.
14. Amendment.
This
Agreement may be amended or modified only by a written instrument signed by
the
Executive and by a duly authorized representative of the Company.
15. Governing
Law.
This
contract shall be construed under and be governed in all respects by the laws
of
the State of California, without giving effect to the conflict of laws
principles thereof.
16. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed and delivered shall be taken to be an original and all of which taken
together shall constitute one and the same document.
17. Arbitration.
Any
controversy, dispute or claim of whatever nature arising out of, in connection
with or relating to this Agreement or the interpretation, meaning, performance,
breach or enforcement thereof, including any controversy, dispute or claim
based
on contract, tort, or statute, and including without limitation claims relating
to the validity of this Agreement or relating to termination of employment,
shall be resolved at the request of either party to this Agreement, by final
and
binding arbitration conducted at a location determined by the arbitrator in
Los
Angeles, California, administered by and in accordance with the then existing
Rules of Practice and Procedure of J*A*M*S/Endispute, Inc.. (J·A·M·S), and
judgment upon any award rendered by the arbitrator(s) may be entered by any
State or Federal Court having jurisdiction thereof. Either party may commence
such proceeding by giving notice to the other party in the manner provided
in
Section 13 of this Agreement. Upon filing a demand for arbitration, all parties
to the Agreement will have right of discovery to the maximum extent provided
by
law for actions tried before a court, and both agree that in the event of an
arbitration, disputes as to discovery shall be determined by the arbitrator(s).
The arbitrator(s) in any such proceeding shall apply California substantive
law
and the California Evidence Code to the proceeding. The arbitrator(s) shall
have
the power to grant all legal and equitable remedies (provisional and final)
and
award damages provided by California law. The arbitrator(s) shall prepare in
writing and provide to the parties an award including findings of fact and
conclusions of law. The arbitrator(s) shall not have the power to commit errors
of law or legal reasoning, and the award may be vacated or corrected pursuant
to
California Code of Civil Procedure §§1286.2 or 1286.6 for any such error. The
Company shall pay all fees of the arbitrator, and each party shall bear its
or
his expenses, costs and attorney fees relating to the arbitration and recovery
under any order and/or judgment rendered therein. In any such proceeding
Xxxxxxxxxx & Xxxxx LLP may represent the Company regardless of whether such
counsel has rendered advice to Executive in the past unless prohibited by law
or
rules of the California State Bar Association. The parties hereto hereby submit
to the exclusive jurisdiction of the courts of the State of California for
the
purpose of enforcement of this agreement to arbitrate and any and all awards
or
orders rendered pursuant thereto.
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
set forth above.
| ADERA MINES LIMITED | ||
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|
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| By: | ||
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Name:
Xxxxxx Xxxxxxxx
Title:
Chairman of Board of Directors
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| EXECUTIVE: | ||
| |
|
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| By: | /s/ | |
|
X.
Xxxxxxx Xxxxxx III
ADDRESS:
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