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EXHIBIT 10.(xi)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of January 1, 1995 ("Effective
Date"), by and between NEVADA MANHATTAN MINING INCORPORATED, a Nevada
corporation doing business in California (the "Company"), and XXXXXXXXXXX X.
XXXXXXXX, an individual residing in California (the "Employee").
1. EMPLOYMENT
The Company hereby employs Employee to render services subject to the
terms, conditions and provisions of this Agreement. Employee shall serve in
the position of and have the title "President". Employee shall render such
services principally at such places in Calabasas, California and other
applicable locations in the State of California deemed appropriate by the Board
of Directors of the Company (the "Board"); Employee shall not be required to
perform substantial services outside of the State of California without his
consent.
2. ACCEPTANCE OF EMPLOYMENT
Employee hereby accepts employment by the Company and agrees to render
services as President of the Company subject to the terms, conditions and
provisions of this Agreement.
3. TERM
Notwithstanding the date on which this Agreement is actually executed
by the Company and Employee or the date on which Employee is actually appointed
President, the term of this Agreement shall begin as of the Effective Date, and
shall continue until December 31, 1997 (the "End Date"), unless further
extended or sooner terminated as herein provided.
4. DUTIES
4.1 DUTIES AND AUTHORITY. Employee shall perform such duties and
have such authority as President of the Company as provided by the Articles of
Incorporation and Bylaws of the Company and as may be determined from time to
time by the Board consistent therewith and with such position and title.
Employee shall report to the Board.
4.2 EMPLOYMENT. Employee shall devote substantially all of his
business time and effort during normal business hours to the Company. For
purposes of this Agreement, "business time" shall mean, on the average, forty
(40) hours per week.
4.3 INSURANCE. Employee hereby grants the Company permission to
buy "key man" life insurance on Employee's life.
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5. COMPENSATION
5.1 SALARY; STOCK OPTION; EXPENSE REIMBURSEMENT; BENEFITS. In
consideration for the services to be rendered by Employee and in complete
discharge of the Company's salary obligations hereunder, the Company shall pay
or grant to Employee, as the case may be, and Employee shall accept from the
Company the following (subject to all withholding requirements which may be
imposed by applicable federal, state or local authorities):
5.1.1 an annual salary equal to the existing annual
salary now payable by the Company to Employee, payable in accordance with the
Company's regular payroll schedule. On each anniversary of the Effective Date,
the Board will review Employee's annual salary and decide on a potential salary
increase, or, in the event of a significant decrease in cash flow of the
Company, salary decrease, for the year following such anniversary; provided
that in no event shall Employee's annual salary under this Section 5.1.1 be
reduced for any year by an amount equal to more than twenty percent (20%) of
such salary for the immediately preceding year;
5.1.2 the right to purchase Nine Hundred Thousand
(900,000) shares of common stock in the Company (the "Shares") exercisable, in
whole or in part, at any time during the term of this Agreement, as same may be
modified or extended. The purchase price for the Shares shall be as follows:
the first Three Hundred Thousand (300,000) Shares may be purchased at the price
of One Dollar ($1.00) per Share; the next Three Hundred Thousand (300,000)
Shares may be purchased at the price of One and 50/100 Dollars ($1.50) per
Share; and the remaining Three Hundred Thousand (300,000) Shares may be
purchased at the price of Two Dollars ($2.00) per Share. The options granted
pursuant to this Section 5.1.2 shall be exercised, if at all, by written notice
(the "Notice") given by Employee to the Company in the manner provided herein.
The Notice shall state the number of Shares with respect to which the option is
being exercised. The Notice shall specify a date which is not less than five
(5) nor more than fifteen (15) days after the date of the Notice, on which date
payment shall be made for the Shares being purchased. Employee shall pay the
purchase price for the Shares either in cash or by the issuance of one or more
promissory notes executed by Employee in favor of the Company payable over a
period not to exceed five (5) years from the date of the Notice, with interest
payable on the principal balance at the "applicable federal rate" (i.e., the
lowest rate necessary to avoid the imputation of interest under applicable
provisions of the Internal Revenue Code of 1986, as amended). Upon receipt of
full payment for the Shares or Employee's promissory note(s), the Company shall
deliver to Employee a certificate representing the number of Shares so
purchased. The Company shall pay a cash bonus to Employee in an amount
sufficient to pay or reimburse Employee for the amount of any income tax
payable with respect to the issuance of the foregoing stock option or any
exercise thereof; provided, however, that nothing in this Agreement shall
obligate the Company to pay or reimburse Employee for all or any portion of any
tax liability arising from Employee's sale, exchange or other disposition of
any of the Shares. The options granted pursuant to this Section 5.1.2 are
non-qualified options and are not intended to qualify as incentive stock
options within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended. Upon the termination of Employee's employment with the Company,
whether or not such employment is pursuant to this Agreement or an extension or
modification of this Agreement, all unexercised options shall
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be immediately forfeited; provided, however, if Employee's employment is
terminated by the Company other than for cause, Employee or his legal
representative may exercise the option to purchase the Shares as provided
herein for a period of ninety (90) days following the date of such termination.
5.1.2.1 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION;
STOCK SPLITS AND SIMILAR EVENTS. Subject to any required action by the Board
and the Company's shareholders and Section 26 hereof, the number of Shares
covered by the option granted under Section 5.1.2 and the exercise price of
such option shall be proportionately adjusted for any increase or decrease in
the number of shares of common stock of the Company issued and outstanding
between the effective date hereof and on the date of exercise of the option.
5.1.2.2 MERGERS AND ACQUISITIONS. Subject to any
required action by the Board and the Company's shareholders, in the event of a
merger or consolidation, the option granted under Section 5.1.2 shall pertain
and apply to the securities to which a holder of the number of Shares subject
to the unexercised portion of such option would have been entitled.
5.1.3 reimbursement on a monthly basis for all reasonable
expenses incurred by Employee in connection with the performance of his duties
under this Agreement, provided that such expenses are documented and approved
by the Company in each instance, which approval shall not be unreasonably
withheld;
5.1.4 such fringe benefits (including but not limited to
paid vacations and participation in medical insurance plans and employee
benefit plans) as now are, or hereafter may become, generally available to all
executive officers of the Company; and
5.1.5 such other benefits (if any) as may be authorized
from time to time by the Board.
5.2 BONUSES. Subject to the provisions and limitations of this
Section 5.2, Employee shall be entitled to receive, in addition to the
compensation and benefits set forth in Section 5.1 hereof, a merit bonus
("Merit Bonus") in the amount calculated under the formula and subject to the
conditions and restrictions set forth in this Section. The amount of the Merit
Bonus, if any, payable to Employee shall be calculated within fifteen (15) days
after the preparation of the Company's financial statements for each fiscal
year ending during the term of this Agreement and shall be paid to Employee
within ten (10) days after the date of calculation of the amount of the Merit
Bonus.
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5.2.1 AMOUNT OF BONUS. The amount of the Merit Bonus shall be
determined on the basis of the Company's operating cash flow for each fiscal
year ending during the term of this Agreement. The amount of the Merit Bonus
shall be determined as follows:
Amount of Cash Flow Amount of Merit Bonus
$1,000,000, or more, and less than $2,000,000 25% of base salary
$2,000,000, or more, and less than $3,000,000 50% of base salary
$3,000,000 or more 75% of base salary
For purposes of calculating the amount of the Merit Bonus, the term "base
salary" shall be the annual salary under Section 5.1.1 hereof for the fiscal
year with respect to which the Merit Bonus is payable.
5.2.2 PRORATION. In the event of the termination of this Agreement
other than by the Company for cause or by Employee without cause, the Company
shall pay to Employee a Merit Bonus with respect to the portion of the fiscal
year in which such termination occurs during which this Agreement was in
effect. The amount of the Merit Bonus so payable shall be determined as
follows:
A. At the end of the fiscal year during which this
Agreement is terminated, the Company shall calculate (i) its cash flow for such
fiscal year and (ii) the amount of the Merit Bonus that would have been payable
under Section 5.2.1 had the Agreement continued in effect during the entire
fiscal year. For purposes of calculating such Merit Bonus, the base salary
shall be deemed to be the base salary that would have been paid had the
Agreement continued in effect during the entire fiscal year.
B. The amount of the Merit Bonus payable under this
Section shall be equal to the product obtained by multiplying the amount
determined under Section 5.2.2.A by a fraction, the numerator of which is the
whole number of weeks during such fiscal year prior to the termination of this
Agreement, and the denominator of which is fifty-two (52).
5.2.3 PROCEDURE. The Company shall calculate its cash flow in
accordance with generally accepted accounting principles consistently applied.
The Company shall not take any action which would adversely affect the
calculation or amount of the Merit Bonus.
6. COVENANT
Employee shall not, at any time during the term of this Agreement
engage, directly or indirectly, as a principal, partner, director or officer
of, in any business competitive with the Company's Business (as that term is
hereinafter defined); provided, however, notwithstanding the foregoing,
Employee may hold up to five percent (5%) equity interest in an entity engaged
in a business competitive with the Company's Business without violating the
restrictions of this
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Section merely by reason of such ownership. For purposes of this Agreement,
the term "Company's Business" shall mean gold and other mineral mining,
exploration and development as carried on by the Company during the term of
this Agreement.
7. TERMINATION OF EMPLOYMENT
7.1 TERMINATION. Employee's employment under this Agreement may be
terminated as follows:
7.1.1 PERMANENT DISABILITY OF EMPLOYEE. In the event of
Employee's Permanent Disability, the Company may terminate Employee's
employment under this Agreement by giving Employee written notice of the
Board's resolution to do so. For purposes of this Agreement, "Permanent
Disability" shall mean Employee's inability to substantially perform his usual
and customary duties for the Company as a result of any physical or mental
impairment, as medically determined by Employee's personal physician, which
inability lasts for a continuous period of not less than four (4) consecutive
months. Notwithstanding the Company's termination of Employee's employment
pursuant to this Section 7.1.1, after such termination: (a) the Company shall
be obligated to pay to Employee through and including the End Date (determined
without regard to the Company's termination of Employee's employment pursuant
to this Section 7.1.1), the salary otherwise payable to Employee pursuant to
Section 5.1.1 hereof, except that the Company shall not reduce such salary
for any reason, (b) through and including the End Date (determined without
regard to the Company's termination of Employee's employment pursuant to this
Section 7.1.1), the Company and Employee shall be subject to and bound by all
of the terms and provisions of this Agreement excepting only Sections 4, 5.1.4,
5.1.5, 5.2, and 8, the parties' obligations and rights under which shall
terminate simultaneously with such termination of employment.
7.1.2 TERMINATION FOR CAUSE. In the event "Cause" exists,
the Company may terminate Employee's employment under this Agreement by giving
Employee written notice of the Board's resolution to do so. For purposes of
this Agreement, the Company shall be deemed to have "Cause" in the event that
Employee (i) is convicted of or admits in writing to committing theft, fraud,
or embezzlement against the Company, or (ii) substantially fails to reasonably
perform his material duties required to be performed under Section 4.1 of this
Agreement for a reason or reasons other than Employee's death or disability;
provided, however, that prior to the Company's termination of Employee's
employment pursuant to this subparagraph 7.1.2(ii), the Company shall have
first given Employee written notice of such failure, describing in detail the
nature thereof and all material related facts, and Employee shall have not
substantially cured such failure within sixty (60) days following Employee's
receipt of such written notice, and if not cured within such sixty-day period,
the Company shall have given Employee a second written notice of such material
breach and Employee shall have failed to substantially cure such failure within
thirty (30) days following Employee's receipt of such second written notice;
provided, however, that if it is not practicable to cure such failure, or if
such failure is not reasonably susceptible of being cured, within such
sixty-day or thirty-day period, as the case may be, then such time period shall
be extended to the extent required. If Employee shall have cured such failure
prior to the expiration of such sixty-day period, thirty-day period or extended
period, as the case may be, then the Company shall not be entitled to
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terminate Employee's employment hereunder on the basis thereof. Termination of
Employee's employment pursuant to this Section 7.1.2 shall constitute a
termination of this Agreement.
7.2 TERMINATION BY EMPLOYEE. Employee may terminate his
employment hereunder and this Agreement at any time, with or without cause, by
giving the Company ninety (90) days' prior written notice of Employee's intent
to do so. At the end of such 90-day period the Company's obligations to
Employee and Employee's obligations to the Company under this Agreement shall
cease, except (i) as otherwise expressly provided elsewhere herein and (ii)
with respect to amounts owed by the Company to Employee as of such ninetieth
(90th) day.
7.3 TERMINATION UPON EMPLOYEE'S DEATH. This Agreement shall
automatically terminate upon Employee's death and as of the date of such death
the Company's obligations to Employee and Employee's obligations to the Company
under this Agreement shall cease, except (i) as otherwise expressly provided
elsewhere herein and (ii) with respect to amounts owed by the Company to
Employee as of date.
8. SEVERANCE COMPENSATION
8.1 CASH COMPENSATION. In the event that, during the term of this
Agreement, there is a Change in Control, as that term is defined in Section 9
hereof, and upon or within the twelve (12) months immediately subsequent to
such Change in Control, (i) Employee's employment is terminated by the Company
other than for Cause as that term is defined in Section 7.1.2 hereof, or (ii)
Employee's compensation, duties, status, title, and/or reporting
responsibilities are substantially modified and Employee terminates his
employment pursuant to Section 7.2 hereof, then, the Company shall pay to
Employee in cash within ten (10) days of such termination of employment, as
severance compensation, an amount equal to the product determined by
multiplying Employee's highest monthly salary, as established pursuant to
Section 5.1.1 hereof during the term of this Agreement, by thirty-six (36).
8.2 OPTIONS. Employee is hereby granted an option to acquire, at
any time on or within sixty (60) days after the occurrence of a Change in
Control, as that term is defined in Section 9 hereof, up to that number of
shares as equals, immediately prior to giving effect to the exercise of such
option, twenty-five percent (25%) of the number of then outstanding shares of
stock of the Company at a purchase price of five cents ($0.05) per share. The
Company shall pay a cash bonus to Employee in an amount sufficient to pay or
reimburse Employee for the amount of any income tax payable with respect to the
issuance of the foregoing stock option or any exercise thereof; provided,
however, that nothing in this Agreement shall obligate the Company to pay or
reimburse Employee for all or any portion of any tax liability arising from
Employee's sale, exchange or other disposition of any of the shares purchased
upon exercise of said option.
9. CHANGE IN CONTROL
A change in control of the Company shall be deemed to occur upon the
happening of any of the following:
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9.1 The Company sells substantially all of its assets to a single
purchaser or to a group of associated purchasers in a single transaction or
series of related transactions;
9.2 Shares of the Company's outstanding capital stock constituting
more than twenty percent (20%) of the voting power of the Company's outstanding
capital stock are sold, exchanged, or otherwise disposed of in one transaction
or in a series of related transactions; or
9.3 The Company is a party to a merger or consolidation in which
the Company is not the surviving entity or the Company's shareholders receive
shares of capital stock of the new or continuing corporation constituting less
than eighty percent (80%) of the voting power of the new or continuing
corporation.
The Change in Control shall be deemed to occur as of the date of the closing of
the applicable transaction described above.
10. EFFECT OF TERMINATION
Unless otherwise specifically provided in this Agreement, in the event
of the termination of this Agreement, the Company and the Employee shall be
released and discharged of any from all obligations under this Agreement except
for the obligations of the Company (i) to pay to Employee monies due and owing
to Employee (a) with respect to services performed prior to the date of
termination of this Agreement and (b) pursuant to Sections 7 and 8 hereof, and
(ii) to issue Shares to Employee upon the exercise of the options granted in
Sections 5.1.2 and 8.2.
11. ASSIGNMENT
11.1 BY EMPLOYEE. Employee may assign his rights and delegate his
duties hereunder to a corporation or other business entity in which Employee
owns at least eighty percent (80%) of all voting and equity interests in such
corporation or business entity with the prior consent of the Company, which
consent shall not be unreasonably withheld. It shall be reasonable for the
Company to require, as a condition to its consent, for Employee to guarantee
the assignee corporation's or entity's performance of all of its duties under
this Agreement.
11.2 BY THE COMPANY. The Company may assign this Agreement and
grant its rights hereunder in whole or in part to any affiliate, subsidiary or
parent of the Company, to its successor or successors, or to a corporation with
which it may be merged, consolidated, or combined, or to a corporation which
may acquire all or a major portion of the Company's assets; provided that no
such assignment shall be effective unless and until any such assignee shall
expressly assume all of the Company's obligations hereunder.
12. SUCCESSORS
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors, assigns and legal
representatives.
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13. CONFIDENTIALITY
Employee shall not, either during the term of this Agreement or for a
period of one (1) year thereafter, except in the course of his performance of
services under this Agreement, use or divulge, publish or disclose to any
person, firm or corporation whomsoever any confidential information of the
Company or any of its subsidiaries or affiliates which he has heretofore
received or obtained or hereafter receives or obtains during the term of this
Agreement, in relation to (i) the earnings, profits, costs, expenses or other
financial aspects of the Company or any of its subsidiaries or affiliates, (ii)
the clients, customer lists, or marketing practices of the Company or any of
its subsidiaries or affiliates, or (iii) any other confidential information of
the Company or of any of its subsidiaries or affiliates. The term
"confidential information" shall mean all that information which here or
hereafter is not generally known and which is confidential or proprietary to
the Company, any of its subsidiaries or affiliates. Immediately upon
termination of his employment hereunder Employee shall return to the Company
all records, files, documents and other materials (in whatever form or media)
and all copies thereof, which contain any confidential information of the
Company.
14. INJUNCTIVE RELIEF
Employee hereby acknowledges and agrees that it would be difficult to
fully compensate the Company for damages for a breach or threatened breach of
any of the provisions of Sections 4.2, 6 or 13 hereof. Accordingly, Employee
specifically agrees that the Company shall be entitled to temporary and
permanent injunctive relief to enforce the provisions of Sections 4.2, 6 and 13
hereof and that such relief may be granted without the necessity of proving
actual damages. The foregoing provision with respect to injunctive relief
shall not, however, prohibit the Company from pursuing any other rights or
remedies available to the Company for such breach or threatened breach,
including, but not limited to, the recovery of damages from Employee or any
third parties.
15. NOTICES
Any notice given pursuant to this Agreement may be served personally
on the party to be notified or may be mailed, with postage thereon fully
prepaid, by certified or registered mail with return receipt requested,
addressed as follows:
If to the Company, to: Nevada Manhattan Mining Incorporated
0000 X. Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Senior Vice President
If to the Employee, to: Xxxxxxxxxxx X. Xxxxxxxx
______________________________
______________________________
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or at such other address as such party may from time to time designate in
writing. Any notice shall be deemed delivered when given, if personally
served, and five (5) business days after mailing, if mailed.
16. WAIVERS
All rights and remedies of the parties hereto are separate and
cumulative, and no one of them, whether exercised or not, shall be deemed to
limit or exclude any other rights or remedies which the parties hereto may
have. Neither party hereto shall be deemed to waive any rights or remedies
under this Agreement unless such waiver is in writing and signed by such party.
No delay or omission on the part of either party hereto in exercising any right
or remedy shall operate as a waiver of such right or remedy or any other right
or remedy. A waiver of any right or remedy on any one occasion shall not be
construed as a bar to or waiver of any such right or remedy on any future
occasion.
17. SEVERABILITY
If any provision or portion thereof of this Agreement is held to be
unenforceable or invalid, the remaining provisions and portions thereof shall
nevertheless be given and continue in full force and effect.
18. SECTION HEADINGS
Section headings contained in this Agreement are for convenience only
and are not a part of this Agreement and do not in any way limit or modify the
provisions of this Agreement.
19. SURVIVAL OF CERTAIN PROVISIONS
Notwithstanding anything to the contrary contained herein, in the
event of any termination of this Agreement, and not in limitation of the rights
of the parties as provided elsewhere herein, it is expressly agreed that the
Company shall retain all of its rights under Sections 6, 13 and 14 hereof, and
Employee shall retain all of his rights under Sections 5.1.2, 5.2.2, 7.1.1, 8
and 10 hereof.
20. AUTHORIZED REPRESENTATIVE OF COMPANY
Although Employee is an officer of the Company, any and all actions
and decisions to be taken or made by the Company under this Agreement or with
respect to the employment relationship described in this Agreement, and any and
all consents, approvals and agreements permitted or required to be given or
made on the part of the Company under this Agreement, shall be made and
accomplished by the Company only through the actions taken, in writing, of its
Senior Vice President or such other person or persons as the Board may from
time to time designate.
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21. ARBITRATION
Any controversy or claim between the Company and Employee involving
the construction or application of any of the terms, provisions or conditions
of this Agreement shall be settled by arbitration conducted in the County of
Los Angeles in accordance with, and by an arbitrator appointed pursuant to, the
Rules of the American Arbitration Association in effect at the time, and
judgment upon the award rendered pursuant thereto may be entered in any court
having jurisdiction hereof, and all rights or remedies of the parties hereto to
the contrary are hereby expressly waived. Prior arbitration pursuant to the
provisions of this Section 21 and an award pursuant thereto shall be a
condition precedent to the bringing of any action, suit or proceeding by any
party subject to this Agreement. The cost of conducting the arbitration
proceeding, including each party's attorneys' fees, shall be borne by the
losing party or in such proportions as the arbitrator decides.
22. ENTIRE AGREEMENT
This Agreement contains the entire understanding between the parties
hereto, and supersedes any prior written or oral agreements between them
respecting the subject matter contained herein. There are no representations,
agreements, arrangements, or understandings, either oral or written, between or
among any of the parties relating to the subject matter of this Agreement which
are not fully expressed herein.
23. AMENDMENT
This Agreement may be amended only in writing duly executed by all of
the parties hereto.
24. GOVERNING LAW
All questions with respect to the construction of this Agreement and
the rights and liabilities of the parties with respect thereto shall be
governed by the laws of the State of California.
25. INTERPRETATION
Each of the parties to this Agreement has been represented by
independent legal counsel. Therefore, the nominal rule of construction that an
agreement shall be interpreted against the drafting party shall not apply. All
pronouns and any variation thereof shall be deemed to refer to the masculine,
feminine, or neuter and to the singular or plural, as the identity of the
person or persons may require for proper interpretation of this Agreement.
26. SHARE REFERENCES
All references in Section 5.1.2 of this Agreement to a number of
shares of common stock of the Company, the price per share at which any shares
of common stock of the Company are to be purchased, or the exercise price of
any options or other rights to acquire any shares of common stock of the
Company assume that the Company has completed the 1-
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for-10 reverse stock split presently contemplated by the Company. In the event
that the Company does not effect such reverse stock split or the reverse stock
split is effected at a ratio other than 1-for-10, all such references to a
number of shares of common stock, the purchase price per share and the exercise
price per share shall be appropriately adjusted.
IN WITNESS WHEREOF, the parties have entered into this Employment
Agreement as of the day and year first above written.
"COMPANY": "EMPLOYEE":
__________ ___________
NEVADA MANHATTAN MINING
INCORPORATED, a Nevada corporation
By: /s/ XXXXXXX XXXXXX /s/ XXXXXXXXXXX X. XXXXXXXX
--------------------------------- ---------------------------------
Xxxxxxx Xxxxxx, Senior Vice President Xxxxxxxxxxx X. Xxxxxxxx
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