EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the 25th day
of June, 1997, by and between Stansbury Holdings Corporation, a Utah corporation
(the "Company"), and Xxxxx X. Xxxxxxx Ph.D. (the "Executive").
PRELIMINARY STATEMENTS:
A. The Executive has been approveed by the Board of Directors (the
"Board") as Vice President of the Company.
B. The Executive is widely regarded as an international expert in the
field of commercial vermiculite and possesses extensive knowledge of the
vermiculite industry and the ability to apply this knowledge to the business and
affairs of the Company, its policies, methods and personnel and industry.
C. The Board recognizes that the Executive will contribute to the
growth and success of the Company and desires to assure the Company of the
Executive's employment and to compensate him therefor.
D. The Board has determined that this Agreement will reinforce and
encourage the Executive's attention and dedication to the Company.
E. The Company acknowledges that the Executive possesses specific
intellectual property and assets which are not to be included within the scope
of this agreement. These include, but are not limited to, (i) proprietary
information, ideas and concepts for new and improved vermiculite products and
applications, conceived and considered as part of the Executive's business known
as Vermiculite Technologies; (ii) proprietary information obtained, distributed,
or documented in the Executive's publication Vermiculite Technology Newsletter;
and (iii) interests and ownership positions in certain developmental companies
including Resource Vermiculite LLC.
F. The Executive is willing to make his services available to the
Company on the terms and conditions hereinafter set forth.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties agree as follows:
1. EMPLOYMENT
1.1 GENERAL. The Company hereby agrees to employ the Executive, and
the Executive hereby agrees to serve the Company, on the terms and subject to
the conditions set forth herein.
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1.2 DUTIES OF EXECUTIVE. During the term of this Agreement, the
Executive shall serve as the Vice President of the Company, shall diligently
perform all services as may be assigned to him by the Board, and shall exercise
such power and authority as may from time to time be delegated to him by the
Board. The Executive shall devote at least twenty (20) hours per week of his
time, energy and attention to the business and affairs of the Company, render
such services to the best of his ability, and use his best efforts to promote
the interests of the Company.
2. TERM
2.1 INITIAL TERM. The initial term of this Agreement and the
employment of the Executive hereunder shall be for theperiod from the date
hereof through December 31, 1997 (the "Initial Term"), unless sooner terminated
in accordance with the terms and conditions hereof.
2.2 RENEWAL TERMS. The Initial Term of this Agreement, and the
employment of the Executive hereunder, may be renewed and extended for such
period or periods as may be mutually agreed to by the Company and the Executive
in a written supplement to this Agreement signed by the Executive and the
Company (the "Written Supplement). If this Agreement is not so renewed and
extended the employment of the Executive, hereunder, shall automatically
terminate uon the expiration of the Initial Term.
3. COMPENSATION
3.1 BASE SALARY. The Executive shall receive a base salary at the
following annual rates (the "Base Salary") during the Initial Term of this
Agreement.
Period Base Salary
6/1/97-12/31/97 $36,000
The Base Salary shall be payable in equal installments consistent with the
Company's normal monthly payroll schedule, subject to applicable withholding and
other taxes. If the term of this Agreement shall be renewed and extended as
provided in Section 2.2 hereof, then during such renewal term of this employment
hereunder the Executive shall be paid a base salary as set forth in the Written
Supplement.
3.2 INCENTIVE COMPENSATION--STOCK PARTICIPATION PROGRAM
(a) In addition to the Base Salary, the Executive shall be entitled
to receive as additional compensation (the "Incentive Compensation - Stock
Participation Program") for the attainment of specific goals, as specific goals,
as set forth in Exhibit "A" attached hereto, during the term of the Executive's
employment hereunder, a total of 500,000 shares of the Company's common stock
(the "Shares") to be issued in increments of 100,000 each upon the completion of
each of the following criteria: (i) the execution of the employment agreement;
(ii) entering into an agreement directly with the claim owners or through
Resource Vermiculite LLC which will allow Xxxxxxxxx immediate access to the mine
and mill for the production of vermiculite concentrates; (iii) commencement of
production from the Elk Gulch mine and mill by Xxxxxxxxx Holdings, with
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"production" being defined as the mining and milling of vermiculite ore to
produce sufficient concentrated and sized vermiculite to be marketed in truck
load and rail car load quantities; (iv) entering into an agreement with the HPS
claim owners which will allow for the long term access to the Elk Gulch mine and
mill; and (v) the successful modification of mill circuitry to allow for a
potential mill production capacity of 25,000 tons per year based on a full year
production schedule.
(b) For purposes of this Agreement, the Shares (Incentive
Compensation) shall be deemed earned by the Executive as of the completion dates
of tasks (i) through (v) in Section 3.2(a), all of such being Shares duly
authorized, validly issued, fully paid and non-assessable. The Company agrees to
register the Shares within a period of 90 days subsequent to the date the Shares
are so issued. The Company further agrees to remain in good standing pursuant to
Section 12(g) of the Securities Exchange Act of 1934, and to keep all reports
and filings required to be made with the Securities and Exchange Commission
current. Any termination of this Agreement by the Company prior to the
expiration of its stated term as provided in paragraph 2 hereof shall not affect
or in any way impair the Executive's right (or those of his transferees to sell
or otherwise dispose of such Shares.
(c) The Company shall permit the Executive or his designated
representative, on reasonable advance notice, form time to time to review the
Company's books and records relevant to the calculation of the Incentive
Compensation. The Executive shall bear the entire cost of such review.
4. EXPENSE REIMBURSEMENT AND OTHER BENEFITS
4.1 EXPENSE REIMBURSEMENT. The Executive shall be entitled to
reimbursement by the Company for all reasonable business expenses incurred by
him in connection with the performance of his duties hereunder, provided,
however, that such entitlement is conditioned upon the Executive providing the
Company with appropriate documentation of such expenses in accordance with
Company policy.
4.2 OTHER BENEFITS. The Executive shall be entitled to participate
in all medical, hospitalization, disability and group life insurance plans, and
any and all other employee benefit plans, as are presently and hereafter
provided by the Company to its executives. The Executive shall be entitled to
four weeks paid vacation per year in accordance with the Company's prevailing
policy for its executives; provided, however, that in no event may a vacation be
taken when to do so could reasonably be expected to materially and adversely
affect the Company's business and unused vacation time shall not be carried over
to any subsequent year. Notwithstanding the foregoing, the Executive shall be
entitled to employee benefits which are no less favorable than those currently
provided to him by the Company.
4.3 WORKING FACILITIES. The Company shall utilize the Executive's
existing office, secretarial help and other facilities and services currently
available to him; the Company shall not be required to provide rent, additional
staff wages or utilities at this time. It is contemplated that as the Company
moves from the developmental stage to an operation phase (defined as the
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commencement of vermiculite mining and milling to produce saleable product),
existing facilities will change and the Company will assume the expense thereof.
5. TERMINATION
5.l TERMINATION FOR CAUSE. The Company shall at all times have the
right, upon written notice to the Executive, to terminate the Executive's
employment hereunder for Cause (as hereinafter defined). For purposes of this
Agreement, the term "Cause" shall mean (a) a willful breach by the Executive of
any of the material terms or provisions of this Agreement, (b) the conviction of
the Executive of a felony, (c) commission by the Executive of an act or acts
involving fraud, embezzlement, misappropriation, theft, breach of fiduciary duty
or dishonesty against the property or personnel of the Company, or (d) willful
or reckless conduct by the Executive which the Board in good faith determines
could reasonably be expected to have a material adverse effect on the business,
assets, properties, results of operations, financial condition or prospects of
the Company. Upon any termination pursuant to this Section 5.1, the Executive
shall be entitled to be paid any unpaid amounts of his Base Salary or $72,000
per year, whichever is greater, which accrued through the date of termination
and the Company shall have no further liability under this Agreement (other than
for reimbursement for reasonable business expenses incurred prior to the date of
termination, subject, however to the provisions of Section 4.1).
5.2 DISABILITY. The Company shall at all times have the right, upon
written notice to the Executive, to terminate the Executive's employment
hereunder, if the Executive shall, as the result of mental or physical
incapacity, illness or disability, become unable to perform his duties hereunder
for in excess of 60 consecutive calendar days or 90 calendar days in any
12-month period. Upon any termination pursuant to this Section 5.2, (a) the
Company shall pay to the Executive (i) immediately any unpaid amounts of his
Base Salary or $72,000 per year, whichever is greater, accrued through the
effective date of termination, plus (ii) in accordance with Section 3.2 (b), an
amount earned through the date of termination but unpaid pursuant to the
Incentive Compensation - Stock Participation Program, and (b) the Company shall
have no further liability under this Agreement (other than for reimbursement for
reasonable business expenses incurred prior to the date of termination, subject,
however, to the provisions of Section 4.1).
5.3 DEATH. In the event of the death of the Executive during the
term of this employment hereunder, (a) the Company shall pay to the deceased
Executive's designated beneficiary, or, if no beneficiary has been designated,
the deceased Executive's estate (i) immediately any unpaid amounts of his Base
Salary accrued through the effective date of termination, plus (ii) in
accordance with Section 3.2 (b), an amount earned through the date of
termination but unpaid pursuant to the Incentive Compensation - Stock
Participation Program, and (b) the Company shall have no further liability under
this Agreement (other than for reimbursement for reasonable business expenses
incurred prior to the date of termination, subject, however, to the provisions
of Section 4.1).
5.4 TERMINATION WITHOUT CAUSE. Effective at any time at least one
year after the commencement of the Executive's employment hereunder, the Company
shall have the right to terminate the Executive's employment hereunder without
cause upon at least 90 days' prior
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written notice to the Executive; provided, however, that the Company shall pay
to the Executive (i) on the effective date of termination specified in the
notice any unpaid Base Salary accrued through the effective date of termination,
(ii) if the Company has selected a Non-competition Period (as defined in Section
6.1) in its notice of termination, his then-effective Base Salary or $72,000 per
year, whichever is greater, in equal installments consistent with the Company's
normal payroll practices, from such termination date until the end of the
Non-competition Period, and (iii) in accordance with Section 3.2 (b), an amount
earned through the date of termination but unpaid pursuant to the incentive
Compensation - Stock Participation Program, and (b) the Company shall have no
further liability under this Agreement (other than for reimbursement for
reasonable business expenses incurred prior to the date of termination, subject,
however, to the provisions of Section 4.1).
5.5 TERMINATION BY THE EXECUTIVE. Effective at any time at least one
year after the commencement of the Executive's employment hereunder, the
Executive shall have the right to terminate his employment hereunder upon at
least 90 days' prior written notice to the Company. In the event of such
termination, the Company shall pay to the Executive (i) on the effective date of
termination specified in the notice any unpaid Base Salary accrued through the
effective date of termination, plus (ii) in accordance with Section 3.2 (b), an
amount earned through the date of termination but unpaid pursuant to the
Incentive Compensation - Stock Participation Program, and (b) the Companny shall
have no further liability under this Agreement (other than for reimbursement for
reasonable business expenses incurred prior to the date of termination, subject,
however, to the provisions of Section 4.1).
5.6 EXPIRATION OF INITIAL TERM AND NON-COMPETITION PERIOD. In the
event that the Executive's employment hereunder is terminated by reason of the
expiration of the initial Term, the Company may, pursuant to written notice to
the Executive given at least 90 days prior to the expiration of the Initial
Term, require the Executive to submit to a Non-competition Period of up to one
year, in which case the Company shall continue to pay to the Executive his
then-effective Base Salary or $72,000 per year, whichever is greater, fiom the
expiration of the Initial Term until the end of the Non-competition Period, in
equal installments consistent with the Company's normal payroll practices. Upon
such expiration and receipt of such payments described in the preceding
sentence, together with the payment of any unpaid amounts pursuant to the
Incentive Compensation - Stock Participation Program through the expiration of
the Initial Term, the Company shall have no further liability under this
Agreement (other than for reimbursement for reasonable business expenses
incurred prior to the date of expiration, subject, however, to the provisions of
Section 4.1).
6. RESTRICTIVE COVENANTS
6.1 NON-COMPETITION. While employed by the Company and during the
Non-competition Period (as hereinafter defined) and with the exception(s)
specified in Section E of the Preliminary Statements, the Executive shall not,
directly or indirectly, engage in or have any interest in any sole
proprietorship, partnership, corporation or business or any other person or
entity other than the Company, its subsidiaries or affiliates (whether as an
employee, officer, director, partner, agent, security holder, creditor,
consultant or otherwise) unless the Executive
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receives appropriate written authorization from the Company allowing such
interest or employment, and that directly or indirectly engages in the
manufacture, import, design, merchandising and/or marketing of products
competitive with the products then offered for sale by the Company anywhere the
Company's products are then offered for sale (as may reasonably be determined by
the Company to be the appropriate geographical market(s) for such products);
provided, however, that nothing contained herein shall be deemed to prevent or
restrict the Executive from owning up to 4.9% of the shares of any class of
capital stock of any corporation whose shares are listed on a national
securities exchange or are regularly traded in the over-the-counter market;
provided further that the Executive does not actively participate or engage in
the conduct of the business of any such other corporation. For purposes of this
Section 6.1, the term "Non-competition Period" shall mean (a) in the event the
Executive's employment is terminated pursuant to Section 5.2, 5.4 or 5.6, the
non-competition period, if any, selected by the Company in its notice to the
Executive, which period may not exceed one year following the effective date of
such termination, (b) in the event the Executive's employment is terminated
pursuant to Section 5.5, the period beginning on the effective date of such
termination and ending one year thereafter, or (c) in the event the Executive's
employment hereunder is terminated pursuant to Section 5.1 a period of two years
following the date his employment is terminated. The Company specifically
acknowledges exceptions of those interests disclosed by employee in Section E of
the Preliminary Statements.
6.2 NONDISCLOSURE. The Executive shall not divulge, communicate, or
use to the detriment of the Company or for the benefit of any other person or
persons, or misuse in any way, any confidential information pertaining to the
business of the Company. For purposes hereof, "confidential information" means
information, including but not limited to, technical or non-technical data, a
formula, pattern, compilation, program, device, method, technique, drawing,
process, financial data, or list of actual or potential customers or suppliers,
that (i) is sufficiently secret to derive economic value, actual or potential,
from not being generally known to other persons who can obtain economic value
from its disclosure or use; and (ii) is the subject of efforts that re
reasonable under the circumstances to maintain its secrecy or confidentiality.
Any confidential information now known which was provided by the Company or
hereafter acquired by the Executive with respect to the business of the Company
shall be deemed a valuable, special and unique asset of the Company that is
received by the Executive in confidence and as a fiduciary, and the Executive
shall remain a fiduciary to the Company with respect to all of such information.
6.3 NON-SOLICITATION OF EMPLOYEES AND CUSTOMERS. While employed by
the Company and for two years following the termination of his employment for
any reason, the Executive shall not, directly or indirectly, for himself or for
any other person, firm, corporation, partnership, association or other entity,
attempt to employ or enter into any contractual arrangement with any employee or
former employee of the Company, unless such employee or former employee has not
been employed by the Company for a period in excess of one year.
6.4 BOOKS AND RECORDS. All books, records and accounts relating in
any manner to the business, customers, suppliers or clients of the Company and
all other documents, disks, sftware or other items containing confidential
information relating to the Company, whether
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prepared by the Executive or otherwise coming into the Executive's possession,
shall be the exclusive property of the Company and shall be returned
immediately, together with any copies, to the Company on termination of the
Executive's employment hereunder or on the Company's request at any time.
7. INJUNCTION. It is recognized and hereby acknowledged by the parties
hereto that a breach by the Executive of any of the covenants contained in
Section 6 of this Agreement will cause irreparable harm and damage to the
Company, the monetary amount of which may be virtually impossible to ascertain.
As a result, the Executive recognizes and hereby acknowledges that the Company
shall be entitled to an injunction from any court of competent jurisdiction
enjoining and restraining any violation of any or all of the covenants contained
in Section 6 of this Agreement by the Executive or any of his affiliates,
associates, partners or agents, either directly or indirectly, and that such
right to injunction shall be cumulative and in addition to whatever other
remedies the Company may possess.
8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Montana.
9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and, upon
its effectiveness, shall supersede all prior agreements, understandings and
arrangements, both oral and written, between and among the Executive and the
Company (or any of their affiliates) with respect to such subject matter. Except
for the obligation to pay any accrued but unpaid salary and expense
reimbursements in the ordinary course of business due the Executive, all such
prior agreements, understandings and arrangements for the provision of services
by the Executive to the Company and/or any of its affiliates and the
compensation of the Executive in any form shall automatically terminate upon the
execution of this Agreement, and each party shall thereupon and thereby, without
any further action, release and forever discharge the other (and the other's
affiliates) from any and all liabilities and obligations of any nature arising
out of or in connection with any and all such prior agreements, understandings
or arrangements. This Agreement may not be modified in any way unless by a
written instrument signed by both the Company and the Executive.
10. NOTICES. Any notice required or permitted to be given hereunder
shall be deemed given when delivered by hand, by facsimile or three business
days after being deposited in the United States mail, by registered or certified
mail, return receipt requested, postage prepaid (i) if to the Company, to the
address of its principal offices in Virginia Beach, Virginia, and (ii) if to the
Executive, to his address as reflected on the payroll records of the Company, or
to such other address as either party hereto may from time to time give notice
of to the other.
11. BENEFITS: BINDING EFFECT. This Agreement shall be for the benefit
of and binding upon the parties hereto and their respective heirs, personal
representative, legal representatives, successors and, any successor to the
Company, whether by merger, consolidation, sale of stock, sale of assets or
otherwise, provided, however, that under no circumstances may the Executive
delegate his employment obligations hereunder or any portion thereof.
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12. SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
effect the enforceability of the remaining portions of this Agreement or any
part thereof, all of which are inserted conditionally on their being valid in
law, and, in the event that any one or more of the words, phrases, sentences,
clause or sections contained in this Agreement shall be declared invalid, this
Agreement, shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted. If such invalidity is caused by length of time or size of
area, or both, the otherwise invalid provision will be considered to be reduced
to a period or area which would cure such invalidity.
13. WAIVER. The waiver by either party hereto of a breach or violation
of any term or provision of this Agreement shall not operate nor be construed as
a waiver of any subsequent breach or violation.
14. DAMAGES: PREVAILING PARTY. Nothing construed herein shall be
construed to prevent the Company or the Executive from seeking and recovering
from the other damages sustained by either or both of them as a result of its or
his breach of any term or provision of this Agreement. If there is any legal
action or proceeding to enforce or interpret any provision of this Agreement or
to enforce or interpret any provision of this Agreement or to protect or
establish any right or remedy of any party, the nonprevailing party to such
action or proceeding shall pay to the prevailing party all costs and expenses,
including reasonable attorneys' fees and costs, incurred by such prevailing
party in such action or proceeding, in enforcing its judgment, and in connection
with any appeal from such judgment. Reasonable attorneys' fees and costs
incurred in enforcing any judgment or in connection with any appeal shall be
recoverable separately from and in addition to any other amount included in such
judgment. The prevailing party's rights under this Section 14 shall not merge
into any judgment and shall survive until all such fees and costs have been
paid. The parties consent and agree to submit to the exclusive jurisdiction of
the courts located in Beaverhead County, Montana, with respect to any litigation
arising hereunder, and each party hereby waives any objection it might have to
venue in any such court.
15. SECTION HEADINGS. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this agreement.
16. NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
other than the Company, the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and assigns, any rights or
remedies under or by reason of this Agreement.
17. SUBSIDIARIES. All references to the "Company" in this Agreement,
including but not limited to those in Section 6, shall be deemed to include any
and all of the Company's direct and indirect subsidiaries to the extent the
context may require.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
(COMPANY)
XXXXXXXXX HOLDINGS CORPORATION
By:
----------------------------------------
Xx. Xxxxxx Xxxxxx
(EXECUTIVE)
-------------------------------------------
Xxxxx X. Xxxxxxx, Ph.D.
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EXHIBIT A
INCENTIVE COMPENSATION - STOCK PARTICIPATION PROGRAM
In addition to the Base Salary, the Executive shall be entitled to
receive additional compensation; a total of 500,000 shares to be issued in
increments of 100,000 each upon the following completion of each of the
following goals, i.e., (i) the execution of the employment agreement; (ii)
entering into an agreement directly with the claim owners or through Resource
Vermiculite LLC which will allow Xxxxxxxxx immediate access tothe mine and mill
for the production of vermiculite concentrates with "production" being defined
as the mining and milling of vermiculite ore to produce sufficient concentrated
and sized vermiculite to be marketed in truck load and rail car load quantities;
(iii) commencement of production from the Elk Gulch mine and mill by Xxxxxxxxx
Holdings; (iv) entering into an agreement with the HPS claim owners for which
will allow for the long term access to the Elk Gulch mine and mill; and (v) the
successful modification of mill circuitry to allow for a potential mill
production capacity of 25,000 tons per year based on a normal yearly production
schedule.
For purposes of this Agreement, the Shares (Incentive Compensation)
shall be deemed earned by the Executive as of the date issued, all of such being
Shares duly athorized, validly issued, fully paid and non-assessable. The
Company agrees to register the Shares within a period of 90 days subsequent to
the date the shares are so issued. The Company further agrees to remain in good
standing pursuant to Section 12(g) of the Securities Exchange Act of 1934, and
to keep all reports and filings required to be made with the Securities and
Exchange Commission current. Any termination of this Agreement by the Company
prior to the expiration of its stated term as provided in paragraph 2 hereof
shall not affect or in any way impair the Executive's right (or those of his
transferees) to sell or otherwise dispose of such Shares.
The Company shall permit the Executive or his designated
representative, on a reasonable advance notice, from time to time to review the
Company's books and records relevant to the calculation of the Incentive
Compensation. The Executive shall bear the entire cost of such a review.
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