EXHIBIT 10.34
KEY MAN CONTRACT
This Key Man Contract ("Agreement"), made this 30th day of
November, 2001, but effective as of October 1, 2001, ("Effective Date") by and
between Daleco Resources Corporation, a Delaware corporation together with any
and all of its wholly owned subsidiaries with its principal place of business at
000 Xxxxx Xxxxxx Xxxxxx, Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000 ("Company") and Xxxxxx
X. Xxxxxx ("Xxxxxx").
WITNESSETH:
WHEREAS, the Company desires to employ Xxxxxx as the President of
its wholly owned subsidiary, Strategic Minerals, Inc., and as a Director of the
Company, and Xxxxxx desires to be employed by the Company as the President of
its wholly owned subsidiary, Strategic Minerals, Inc., and as a Director of the
Company, upon the terms and conditions set forth herein; and
WHEREAS, Xxxxxx is presently serving as the President of
Strategic Minerals, Inc. without the benefit of a written contract; and
WHEREAS, Xxxxxx and Company desire to reduce the terms of
Xxxxxx'x employment with Strategic Minerals, Inc. into a written contract.
NOW THEREFORE, in consideration of the premises and mutual
covenants contained herein and intending to be legally bound hereby, the parties
hereto agree as follows:
1. INCORPORATION BY REFERENCE. The parties hereto incorporate by
reference the Witnesseth section as though same were set forth at length herein.
2. EMPLOYMENT.
(a) The Company hereby employs Xxxxxx as President and Chief
Executive Officer of its wholly owned subsidiary, Strategic Minerals, Inc., and
as a member of the Board of Directors ("Board") of the Company and Strategic
Minerals, Inc. Xxxxxx shall report directly to the President of the Company and
the Board and shall perform such duties as are customarily performed by a person
holding the position of President and Chief Executive Officer in business is
similar to those engaged by the Strategic Minerals, Inc. and shall, in addition,
render such other reasonable services as may be assigned to him from time to
time by either the President of the Company or the Board within his scope of
experience, training and expertise.
(b) Xxxxxx hereby agrees to be employed as President and Chief
Executive Officer of Strategic Minerals, Inc. for the term hereof as defined
below and to serve as a member of the Boards of Directors of Strategic Minerals,
Inc. and the Company for so long as he shall be elected and qualified. Xxxxxx
agrees that he shall at all times faithfully and to the best of his ability,
perform all of the duties that may reasonably be requested of him within his
scope of experience, training and expertise pursuant to the terms of this
Agreement.
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(c) While the principal offices of the Company are located at
000 Xxxxx Xxxxxx Xxxxxx, Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000, the Company shall
maintain corporate offices for Xxxxxx in Albuquerque, New Mexico, with
appropriate secretarial support, at the Company's expense.
(d) The Company represents and warrants to Xxxxxx that this
Agreement has been duly and validly authorized and executed by and on behalf of
the Company and Strategic Minerals, Inc. in accordance with their Certificates
of Incorporation and Bylaws and that it constitutes the lawful, valid and
binding obligation of the Company and Strategic Minerals, Inc.
(e) Xxxxxx represents and warrants to the Company and
Strategic Minerals, Inc. that he is free to accept employment hereunder and that
he has no prior or existing obligations, commitments or restraints of any kind
that would in anyway hinder or interfere with his acceptance of, or the full
performance of, his employment by the Company and Strategic Minerals, Inc. When
executed, this Agreement will constitute the lawful, valid and biding obligation
of Xxxxxx.
3. TERM.
(a) Unless earlier terminated in accordance with Paragraph 5
below, this Agreement shall continue for an initial period commencing as of the
Effective Date and ending September 30, 2004 ("Initial Term"). After the
expiration of the Initial Term and subject to the termination provisions set
forth herein, this Agreement will automatically be extended for successive two
(2) year terms, provided that neither party has given written notice to the
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other of his/its intent not to renew not less than 180 days prior to the
respective renewal date.
4. COMPENSATION.
(a) BASE SALARY. During the Xxxxxx'x employment hereunder,
Xxxxxx shall receive a base salary for second half of Fiscal Year 2002 of not
less than Fifty Thousand Dollars ($50,000) commencing April 1, 2002.
The base salary shall be paid commencing in equal periodic
installments in accordance with the Company's salary practices. The base salary
payment shall not in any way limit or reduce any other obligation of the Company
hereunder, and no other compensation, benefit or payment hereunder shall in any
way limit or reduce the obligation of the Company to pay Xxxxxx'x base salary
hereunder. Commencing in Fiscal 2003 (October 1, 2002) Xxxxxx'x base salary
should increase to One Hundred Thousand Dollars ($100,000.00) and shall be paid
in equal monthly installments.
It is understood and agreed that Xxxxxx'x base salary may, at the
sole and exclusive discretion of the Company and the Board, be increased from
time to time.
(b) PERFORMANCE BONUS. Xxxxxx shall receive from the Company,
on or before December 31, 2001 ("Date") a bonus for the Xxxxxx'x dedication and
devotion to Strategic Minerals, Inc. and its predecessor, Clean Age Minerals,
Incorporated in the amount of Fifty Thousand Dollars ($50,000) ("Accrued
Performance Bonus"). The Accrued Performance Bonus shall be payable in common
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stock of the Company ("Common Stock"), the number of shares of which to be
determined based upon the average closing price for the Common Stock at the
close of business for the five (5) trading days immediately preceding the
Effective Date ("Accrued Performance Stock Purchase Price"). The Common Stock
payable to the Xxxxxx pursuant to this paragraph shall be fully vested shares
without any restrictions on transferability except as otherwise required by law,
and provided further that Xxxxxx shall not be allowed to transfer the shares
received pursuant to this paragraph for a period of one year beginning on the
date of his receipt of such shares.
(c) STOCK OPTIONS. At the time of execution of this Agreement,
the Xxxxxx shall be granted options to purchase One Million shares (1,000,000)
of Common Stock at a price equal to ninety percent (90%) of the average closing
price for Common Stock at the close of business for the five (5) trading days
immediately preceding the Effective Date hereof ("Options").
The options shall vest in equal installments over the initial
term; however, vesting shall be accelerated in the event of Xxxxxx'x death,
disability, involuntary termination without cause (as defined below), or upon a
change in control, as defined as the acquisition of forty-one percent (41%) of
the issued and outstanding common stock of the Company by any party, without
giving effect to future dilution through the exercise of any outstanding
options, warrants or the conversion of preferred stock into Common Stock. The
Options granted hereunder shall not be exercisable after the earlier of: (i) the
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expiration of three (3) years from the date the options become vested, or (ii)
two (2) years from the date Xxxxxx ceases to be employed by the Company.
(d) EXPENSES. During the term of Xxxxxx'x employment
hereunder, Xxxxxx shall receive reimbursement from the Company for all
reasonable expenses incurred by Xxxxxx in the performance of his duties
hereunder, including, by way of example and not limitation, travel and living
expenses while away from home on business at the request of or in the service of
the Company, provided that such expenses are incurred and accounted for in
accordance with the standard policies and procedures established, from time to
time, by the Company for reimbursement of expenses.
(e) VACATION. Xxxxxx shall be entitled to four (4) weeks of
vacation for each twelve (12) months of employment by the Company. It being
understood that as of the date hereof, Xxxxxx is presently entitled to the full
amount of vacation authorized hereunder pursuant to this paragraph. Any such
vacation shall be taken at such times and in such periods as shall not
substantially interfere with Xxxxxx'x duties required to be rendered by Xxxxxx
hereunder.
(f) OTHER BENEFITS. Xxxxxx shall be entitled to participate in
the same manner as other officers and directors of the Company in such life
insurance, medical, dental, disability, pension, retirement plans and other
programs as may be established by the Company and/or the Board, from time to
time, for the benefit of its officers and directors, except as provided
elsewhere herein, nothing herein shall affect the Company's or Board's right to
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amend, modify or terminate any retirement or other benefit plan at anytime for
any reason.
5. TERMINATION OF EMPLOYMENT. This Agreement and the Xxxxxx'x
employment hereunder may be terminated only under the following circumstances
during the term of this Agreement.
(a) TERMINATION BY XXXXXX. Xxxxxx may terminate his employment
with Strategic Minerals, Inc. for any reason after September 30, 2003 by giving
the Company not less than 180 days notice of his intent to terminate his
employment. In the event of the termination of this Agreement by Xxxxxx, the
Company shall be required to pay Xxxxxx only the amounts due and owing to him
pursuant to this Agreement prorated to the date of Xxxxxx'x voluntary
termination and Xxxxxx shall not be entitled to the payments set forth in
Paragraph 6(c) below. Notwithstanding the foregoing to the contrary, should the
Xxxxxx'x notice of voluntary termination result from the imposition of
additional duties and/or requirements outside the normal course of Xxxxxx'x
duties, expertise or training experience, of a person holding Xxxxxx'x position
or the Company's or Board's refusal to allow Xxxxxx to take reasonable vacation
time, then Xxxxxx shall be entitled to those benefits to which he would be
entitled had his termination been an involuntary termination without cause
("Forced Resignation").
(b) DEATH. Xxxxxx'x employment hereunder shall terminate upon
his death.
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(c) DISABILITY. If (i) as a result of Xxxxxx'x incapacity due
to physical or mental illness, the employee shall have been unable to perform
his duties hereunder for a period of three (3) consecutive months during the
term hereof, and (ii) within 90 days after written notice of termination is
given by the Company to Xxxxxx (which may occur at or after the end of such
three (3) month period) Xxxxxx shall not have returned to the performance of his
duties hereunder on a full time basis; then the Company may terminate Xxxxxx'x
employment hereunder.
(d) CAUSE. The Company may, at any time during the term
hereof, terminate Xxxxxx'x employment for cause. For the purpose of this
Agreement, "Cause" shall be defined to mean: (i) any material failure by Xxxxxx
to observe or perform any of his agreements contained herein; (ii) his
conviction or pleas of guilty or nolo contendere to a filing or other crime of
moral turpitude or misappropriation of funds; or (iii) Xxxxxx'x substance abuse.
(e) EFFECT OF TERMINATION. Any termination of this Agreement
pursuant to paragraphs 5(b), (c) or (d) will automatically act as Xxxxxx'x
resignation from the Board of Directors of the Company and the Board of
Directors of Strategic Minerals, Inc., effective as of the date of Xxxxxx'x
termination.
6. COMPENSATION UPON TERMINATION OF EMPLOYMENT.
(a) During any period that Xxxxxx fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness
("disability period"), Xxxxxx shall continue to receive his full base salary
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together with all benefits, then in effect and which have been granted to
Xxxxxx; provided, however, that any payments made to Xxxxxx during the
disability period shall be reduced by the sum of the amount; if any, payable to
Xxxxxx under any disability benefit plans of the Company.
(b) If Xxxxxx'x employment is terminated for cause under
paragraph 5(d) above, the Company shall pay Xxxxxx his full base salary through
the termination date plus all accrued and unpaid benefits (including all expense
reimbursements outstanding, if any) and the Company shall have no further
obligations whatsoever to Xxxxxx under this Agreement, except as may be
expressly provided elsewhere herein.
(c) If Xxxxxx'x employment is terminated by the Company prior
to the scheduled expiration of the Initial Term or any extension thereof, or if
by Forced Resignation, other than for cause, then Xxxxxx shall be entitled to
receive payments of his base salary and a performance bonus for the balance of
the Initial Term under the terms set forth in this Agreement, plus all accrued
and unpaid benefits (including all health and welfare benefits to which Xxxxxx
was a participant in accordance with their terms). Additionally, all Options
shall become fully vested in Xxxxxx and Xxxxxx shall have a period of three (3)
years of the date of his involuntary termination in which to exercise said
Options. Finally, Xxxxxx shall be paid a severance payment equal to three (3)
times Xxxxxx'x base salary then in effect.
7. CORPORATE BOARDS AND OTHER MEMBERSHIPS. Xxxxxx shall continue
to serve on the boards of the Company's subsidiary corporations and shall have
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the right to become a member of boards of directors of other corporations to the
extent that such entities are not in competition with the Company and such other
board memberships do not directly or indirectly interfere with Xxxxxx'x duties
to the Company.
8. RESTRICTIONS ON COMPETITION AND NON-DISCLOSURE
(a) NON-DISCLOSURE OF INFORMATION.
(1) Xxxxxx shall not, directly or indirectly, disclose to
any person or entity for any reason, or use for his own personal benefit, any
Confidential Information (as defined below) either during his employment with
the Company or following termination of that employment for Cause for a period
of three years after termination of this Agreement;
(2) Xxxxxx shall, at all times take all precautions
necessary to protect from loss or disclosure by him of any and all documents or
other information containing, referring to or relating to such Confidential
Information. Upon termination of his employment with the Company for Cause or if
Xxxxxx terminates the Agreement prior to expiration of the Initial Term, Xxxxxx
shall promptly return to the Company any and all documents or other tangible
property containing, referring to or relating to such Confidential Information,
whether prepared by him or others.
(3) Notwithstanding any provision to the contrary in this
Paragraph 8, this paragraph shall not apply to information which Xxxxxx is
legally required to disclose or to information which has become part of the
public domain or is otherwise publicly disclosed through no fault or action of
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Xxxxxx. If Xxxxxx has reason to believe that he may be legally required to
disclose Confidential Information, he shall give the Company reasonable notice
prior to disclosure so that it may seek to protect the confidentiality of such
information.
(4) For purposes of this Agreement "Confidential
Information" means any information relating in any way to the business of the
Company disclosed to or known to Xxxxxx as a consequence of, result of, or
through Xxxxxx'x employment by the Company which consists of technical and
non-technical information about the Company's products, processes, programs,
concepts, forms, business methods, data, any and all financial and accounting
data, marketing, customers, customer lists, and services and information
corresponding thereto acquired by Xxxxxx during the term of Xxxxxx'x employment
by the Company. Confidential Information shall not include any of such items
which are published or are otherwise part of the public domain, or freely
available from trade sources or otherwise.
(b) DISCLOSURE OF WORKS AND INVENTIONS/ASSIGNMENT OF PATENTS.
(1) Xxxxxx shall maintain such records of his work as the
Company may direct from time to time. Xxxxxx shall promptly disclose to the
Company, in writing, any and all copyrightable works, including software, and
any and all discoveries, inventions, technological innovations and improvements,
whether patentable or not (whether it be a machine, process, apparatus, article,
composition, design, software, writing or other thing) conceived or made by
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Xxxxxx, solely or jointly, during the period of his employment with the Company,
whether or not authorized, conceived or made during working hours or with the
Company's equipment or facilities, which relates in any manner to the existing
or contemplated business of the Company. Unless otherwise waived in writing by
the Company, all such copyrightable works (including software), discoveries,
inventions, technological innovations and improvements shall be the exclusive
property of the Company with respect to any and all countries in the world and
Xxxxxx shall assign and hereby does assign all right, title and interest thereto
the Company or its nominee.
(2) Xxxxxx, both during his employment and thereafter,
shall cooperate fully with the Company in taking all actions and measures
necessary for the Company to acquire and perfect its ownership of all such
property. Whenever required to do so by the Company, Xxxxxx shall execute any
and all applications, assignments or other instruments which the Company shall
deem necessary to apply for and obtain Letters Patent or copyrights of the
United States or any foreign country or to otherwise protect the Company's
interest therein. Such obligations shall continue beyond the termination of
employment with respect to works, inventions, discoveries and improvements
authorized, conceived, made or reduced to practice by Xxxxxx during the period
of employment, and shall be binding upon Xxxxxx'x assigns, executors,
administrators and other legal representatives. In conformance with Company
policy from time to time, Xxxxxx shall be reimbursed by the Company for
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reasonable expenses incurred by him in connection with his obligations under
this Section 8(b), subject to Xxxxxx furnishing adequate documentary evidence to
substantiate such expenses.
(3) Xxxxxx agrees that in the event of publication by him
of written or graphic materials, the Company will retain and own all rights in
said materials, including right of copyright.
(c) Restrictions on Competition.
(1) Xxxxxx covenants and agrees that during the period of
his employment hereunder and for a period of two (2) years following the
termination of his employment, Xxxxxx shall not, directly or indirectly engage
in, participate in or assist, as principal or agent, officers, director,
employee, franchisee, consultant, shareholder, or otherwise, alone or in
association with any other person, corporation or other entity, any business
whose activities, services or products are directly or indirectly competitive
with the subsidiaries or affiliates anywhere in the United States; provided,
however, that the foregoing restriction shall not apply in the case of a company
the stock of which is traded either on a national or a regional stock exchange
or over-the-counter, where Xxxxxx owns less than 5% of the stock of such
company.
(2) Xxxxxx agrees that during his employment with the
Company he shall not, directly or indirectly, solicit the trade of or trade
with, or otherwise do business with, any customer or prospective customer of the
Company for any direct or indirect competitor of the Company. Xxxxxx further
agrees that for two (2) years following the termination of his employment with
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the Company, Xxxxxx shall not, directly or indirectly, solicit the trade of or
trade with, any customer or prospective customer of the Company on behalf or for
the benefit of any direct or indirect competitor of the Company.
(3) Xxxxxx agrees that during his employment with the
Company and for a period of two (2) years following the termination of his
employment with the Company, he shall not, directly or indirectly, solicit or
induce, or attempt to solicit or induce, any employee of the Company to leave
the Company for any reason whatsoever or hire any employee of the Company.
(4) During his employment with the Company, Xxxxxx shall
not take any action which might divert from the Company any opportunity which
would be within the scope of any present or contemplated future business of the
Company.
(5) In the event of the sale or other disposition of all
or substantially all of the Company's assets or capital stock, Xxxxxx agrees to
use his best efforts, in good faith, to assist the purchaser during the
transition phase for a period of 12 months at his then current compensation
level plus fifty percent. Xxxxxx acknowledges, however, that nothing contained
herein shall be binding upon or otherwise require the purchaser of the Company's
assets or capital stock to continue the employment of Xxxxxx after such purchase
and sale.
(6) The provisions set forth in Section 8 of this
Agreement shall survive the termination of Xxxxxx'x employment with the Company,
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or the expiration of this Agreement, as the case may be, and shall continue to
be binding upon Xxxxxx and Employer in accordance with their respective terms.
(7) Xxxxxx recognizes and acknowledges that the services
to be rendered by him hereunder are of a special and unique character and that
the restrictions on Xxxxxx'x activities contained in this Agreement are required
for the Company's reasonable protection. Xxxxxx agrees that if he shall breach
paragraph 8 of this Agreement, the Company will be entitled, if it so elects, to
institute and prosecute proceedings at law or in equity to obtain damages with
respect to such breach or to enforce the specific performance of this Agreement
by Xxxxxx or to enjoin him from engaging in any activity in violation hereof.
9. MISCELLANEOUS.
(a) NOTICES. Any notice required hereby shall be in writing,
shall be effective upon receipt, may be sent by facsimile transmission, or
original document by hand delivery, overnight courier or certified mail, return
receipt requested, postage prepaid to the address set forth below. The original
of any notice sent by facsimile transmission shall be delivered to the addressee
by the close of the business day next following the date of the facsimile
transmission.
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All notices shall be sent to:
If to the Company:
Daleco Resources Corporation
000 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
FAX NO: 000-000-0000
ATTN: Xxxx X. Xxxxxxxxx
With a copy to:
Xxxxxx, Van Denbergh & Xxxxxxx, P.C.
Xxx Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
FAX NO: 000-000-0000
ATTN: C. Xxxxxx Xxxxxxx
If to Xxxxxx:
Xxxxxx X. Xxxxxx
Clean Age Minerals, Inc.
000 Xxxxxxx X.X.
Xxxxxxxxxxx, XX 00000
Any party may change its address for notice by giving the other party
ten (10) days notice of such change.
(b) VALIDITY. Any term or provisions of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any terms or provisions
thereof.
(c) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute the same Agreement.
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(d) MODIFICATION. This Agreement sets forth the entire
agreement and understanding of the parties concerning the subject matter hereof
and supersedes all prior agreements and understandings between the parties
hereto. This Agreement may not be amended or modified except by written
instrument executed by the parties hereto.
(e) DISPUTE RESOLUTION. Any dispute between Company and Xxxxxx
arising out of or in connection with this Agreement which cannot be amicably
resolved shall be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association in Philadelphia,
Pennsylvania. Each party shall appoint one arbitrator and they shall select a
third arbitrator. The decision of the arbitrators shall be by majority vote and
shall be without appeal therefrom except as allowed by law, and judgment upon
the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. Costs of the arbitration shall be borne by the
non-prevailing party.
(f) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
without giving effect to conflict of laws provisions.
(g) BINDING EFFECT. The terms and provisions of this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto,
their heirs, successors and assigns. Neither party may assign, convey or
transfer the rights or obligations contained herein unless such obligations,
assignment, conveyance or transfer is consented to by the other, which consent
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shall not be unreasonably denied, or such assignment, transfer or conveyance is
pursuant to a testimony transfer or otherwise by operation of law.
(h) HEADINGS. Headings in this Agreement are included herein
for convenience only and shall not constitute a part of this Agreement for any
other purpose or be given any substance effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
Attest: Daleco Resources Corporation
/s/ By:/s/
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Asst. Secretary Xxxx X. Xxxxxxxxx, President
Strategic Minerals, Inc.
By:/s/
---------------------------------
Xxxx X. Xxxxxxxxx
Chairman of the Board of Directors
/s/
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Xxxxxx X. Xxxxxx
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