CONTINUATION OF EMPLOYMENT AGREEMENT
AGREEMENT made as of this 27th day of May, 1997 by and between NORD
RESOURCES CORPORATION, a Delaware corporation (the "Company"), with an
address of 0000 Xxxxxxxxxx Xxxxxxx Xxxxx, Xxxxxx, Xxxx 00000, and XXXXX X.
CRUFT, ("Cruft"), an individual residing at 0000 Xxxxxx Xxxxxx, Xxxxx Xxxx,
Xxxxxxxxxx 00000.
WHEREAS, Cruft has been the President, 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 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.
(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 Pacific Limited ("NPL").
(c) Unless Cruft otherwise agrees in writing, 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.
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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
Company's plan or, if the Company's plan is no longer available to Cruft, the
cost of a comparable plan separately maintained by Cruft.
(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.
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The cost of Cruft's office, insurance and certain expenses and other items
may be shared by the Company with NPL under separate agreement, and it is not
intended that the cost of items hereunder be duplicative of items provided by
NPL.
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 or under Sections 10 and 12 of this
Agreement. 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 CRUFT. 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 or under Sections 10 and 12 of this Agreement.
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
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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 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 or under Section 10 or 12 of this
Agreement.
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. DEFERRED COMPENSATION. The Company recognizes that Cruft and his
spouse are currently entitled to benefits under the Restated Deferred
Compensation Agreement date May 10, 1989 between the Company and Cruft, as
amended by Amendment No. 1 thereto dated July 7, 1995 ("Retirement
Agreement"). As of the Effective Date, the Company will commence to make
payment to Cruft of the $226,653 per year which, it is agreed, is payable
under the Retirement
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Agreement and will continue to make such payments to him or his spouse as
required thereunder. Such payment will be in addition to the Salary and all
benefits and other compensation payable to Cruft pursuant to this Agreement
or otherwise by the Company. The Company agrees to fund the trust (the
"Trust") created under that certain Trust Agreement dated May 10, 1989, as
restated July 7, 1995 and as amended by Amendment No. 1 thereto dated
December 1, 1995 to fund the payments due Cruft thereunder, by depositing
therein (i) on or before July 31, 1997 an additional $650,000, and (ii) on or
before July 31, 1998, sufficient cash to fully fund such trust. The
provisions of this Section will survive termination of the provisions of this
Agreement.
11. OPTIONS. Cruft currently owns those options listed on Exhibit A
hereto ("Existing Options"). Contemporaneously herewith, the Company is
issuing to Cruft 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 $4.00
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.
The New Options will contain the same provisions as the Existing Options as
previously issued, except for the exercise price and the expiration date
thereof and except that they will be non-qualified options. All Existing
Options (qualified and non-qualified) which expire at a time when the "Market
Price" is either (x) below or (y) less than $1.00 above the price at which
such Existing Options are exercisable will be reissued to Cruft by the
Company as non-plan, non-qualified options at the same exercise price, but
not less than the then "Market Price", with an expiration date of two years
after such reissuance, provided that Cruft is then or within ninety (90) days
prior thereto had been an employee or director of or
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consultant to the Company and/or its affiliates. For purposes hereof, "Market
Price" shall mean the closing sale price of the shares for which the options
are exercisable on the New York Stock Exchange or such other exchange on
which such shares are then traded on such date.
12. EXISTING LOANS. Cruft acknowledges that he is currently indebted to
the Company in the principal amount of $150,000, in the aggregate, pursuant
to the terms of those certain Executive Loan Agreements dated August 8, 1988
and October 2, 1989 (collectively "Cruft Loans"). The Company agrees to
forgive the principal of the Cruft Loans in accordance with the following
schedule, provided Cruft has not theretofore voluntarily completely
terminated his involvement with the Company as director and/or consultant.
FORGIVENESS DATE PRINCIPAL OF LOAN FORGIVEN
---------------- --------------------------
June 1, 1997 $ 50,000
June 1, 1998 $ 50,000
June 1, 1999 $ 50,000
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Total $150,000
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13. 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:
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(A) product and business plans, budgets, sales
forecasts, design plans, research and engineering data,
inventions, methods, systems and processes,
(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 hereafter 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.
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(b) In the event of the breach or threatened breach of the terms and
conditions of this Section 13 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
13. 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.
(c) In the event that any of the provisions of this Section 13 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.
14. 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
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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
any claim or arbitration arising from this Agreement shall be paid by the
Company.
15. MISCELLANEOUS.
(a) Cruft's Change of Control Agreement dated May 10, 1989 as
amended by Amendment No. 1 dated December 1, 1994, Amendment No. 2 dated
December 1, 1995 and Amendment No. 3 of even date herewith shall remain in
full force and effect through its termination date of December 31, 1997.
(b) 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.
(c) This Agreement shall be construed and enforced in accordance
with the laws of the State of New York.
(d) 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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(e) 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.
(f) 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.
(g) 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.
(h) Headings in this Agreement are for convenience only and shall
not be used to interpret or construe its provisions.
(i) 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 RESOURCES CORPORATION
By: /s/ X. Xxxxxx Xxxxxx
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XXXXX X. CRUFT
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