EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of January
25, 2007 (this “ Agreement ”), is entered into
by and between Zone Mining Limited, a Nevada corporation (the
“ Company ”), and James G. Clark (the “
Executive ”).
WHEREAS, the Company and the Executive desire to
enter into an agreement to provide for the terms and conditions of
the Executive’s employment with the Company; and
WHEREAS, the success of the business of the
Company is dependent on the goodwill established by the Executive
with the Company’s customers and the public
generally.
NOW, THEREFORE, in consideration of the premises
and mutual covenants contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby mutually acknowledged, the Company and the Executive hereby
agree as follows:
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Position and Duties; Term of
Employment.
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(a) The Company hereby employs the Executive, and
the Executive hereby accepts employment with the Company, upon the
terms and conditions set forth in this Agreement.
(b) During the Employment Term (as defined below),
the Executive shall serve as the Chief Executive Officer, Chief
Financial Officer, Treasurer, and Secretary of the Company and
shall have the usual and customary duties, responsibilities and
authority of a Chief Executive Officer, Chief Financial Officer,
Treasurer, and Secretary, subject to the power and authority of the
Company’s board of directors (the “ Board
”). During the Employment Term, the Executive shall render
such administrative, financial and other executive and managerial
services to the Company and its subsidiaries consistent with the
Executive’s position and as may be directed by the
Board.
(c) During the Employment Term, the Executive shall
report to the Board and shall devote his full business time,
attention, skill and best efforts to the performance of his duties
under this Agreement (except for permitted vacation periods and
reasonable periods of illness or other incapacity) and shall not
engage in any other business or occupation while employed by the
Company. The Executive shall perform his duties, responsibilities
and functions to the Company to the best of his abilities in a
diligent, trustworthy, professional and efficient manner and shall
comply with the policies and procedures of the Company in all
material respects. Notwithstanding the foregoing, nothing herein
shall preclude the Executive from: (i) serving, with the prior
written consent of the Board, as a member of the board of directors
or advisory boards (or their equivalents in the case of a
non-corporate entity) of non-competing businesses and charitable
organizations; (ii) engaging in charitable activities and community
affairs; and (iii) managing his personal investments and affairs;
provided , however , that the activities set out in
clauses (i), (ii) and (iii) shall be limited by the Executive so as
not to materially interfere, individually or in the aggregate, with
the performance of his duties and responsibilities
hereunder.
(d) During the Employment Term, and at all times
during the Executive’s employment with the Company, the
Executive will be employed by the Company on an at-will basis,
which means that either the Executive or the Company can terminate
the employment relationship at any time, with or without notice,
and for any reason, with or without good cause, or for no
reason.
(e) Unless sooner terminated as provided in
Section 4 hereof, the Executive’s employment under
this Agreement shall commence as of the Effective Date (as defined
below) and will end twelve (12) months from the Effective Date (the
“ Employment Term ”); provided ,
however , that the Employment Term may be extended for
additional twelve (12) month periods upon the mutual written
agreement of the Company and the Executive within thirty (30) days
of the expiration of the then effective Employment Term.
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Compensation and Benefits.
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(a) Base Salary . During the Employment Term, the Company shall
pay to the Executive a base salary of $200,000 per annum (the
“ Base Salary ”), subject to applicable
withholding, which shall be payable by the Company in regular
installments in accordance with the Company’s normal payroll
practices in effect from time to time.
(b) Bonus . In addition to the Base Salary, the Executive
may be eligible to earn a bonus at the discretion of the Board
(excluding the Executive if he shall be a member of the Board at
such time), based upon meeting certain performance objectives
determined by the Board (the “ Bonus ”), subject
to applicable withholding. The Bonus, if any, payable pursuant to
this Section 2(b) shall be paid by the Company to the
Executive within thirty (30) business days following the
determination by the Board of the Executive’s entitlement to
any Bonus hereunder.
(c) Benefits . During the Employment Term, the Executive
shall be entitled to (i) participate in all benefits and benefit
plans which are available from time to time to employees of the
Company, subject in each case to the generally applicable terms and
conditions of the applicable plan or program and
(ii) five (5) weeks of paid vacation each calendar year in
accordance with the Company’s policies in effect from time to
time. Vacation must be taken at times that will not be disruptive
to the business of the Company and in accordance with the
Company’s vacation policy in effect from time to
time.
(d) Reimbursement of Expenses
. During the Employment Term, the
Company shall reimburse the Executive for all reasonable business
expenses incurred by him in the course of performing his duties
under this Agreement which are consistent with the Company’s
policies in effect from time to time with respect to travel,
entertainment, and other business expenses, including cell phone
usage related costs, subject to the Company’s requirements
with respect to reporting and documenting of such
expenses.
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Payments Upon Termination.
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(a) This Section 3 provides for certain
payments to the Executive in the event of termination. The
provisions of this Section 3 do not in any way affect the
Executive’s at-will status as provided in Section 1(e)
. The Executive is entitled to no other payments or benefits upon
termination except as expressly stated in this Section 3 .
The Executive acknowledges and agrees that he will have no claim
for any payments, compensation, benefits or damages, with respect
to any additional amounts other than as provided in this Section
3 .
(b) Termination by the Company for Cause
.
(1) If the Company terminates the Executive’s
employment for “ Cause ” as defined below, the
Executive is entitled to, and the Company will pay to Executive,
the following only: (a) the Executive’s Base Salary earned
and accrued through the date of termination; (b) all accrued and
unused vacation time through the date of termination, and any other
form of unused and accrued benefits through the date of termination
which under Company policy and/or applicable law must be paid to
the Executive upon termination, if any; (c) upon submission of
proper proof, any reimbursement for expenses incurred, but not yet
paid to the Executive, if any; and (d) any Bonus described in
Section 2(b) already earned by the Executive for a prior
fiscal year which has closed, to the extent such Bonus has not yet
been paid to the Executive, if any; the Executive will have no
entitlement to any Bonus for the current fiscal year (
i.e., the fiscal year in which the termination occurs) of
the Company. (The foregoing items listed in this Section
3(b)(1)(a)-(d) shall be referred to herein as the “
Accrued Benefits .”)
(2) The term “ Cause ” shall
mean, as determined by the Board: (i) the commission by the
Executive of an act of theft, fraud, embezzlement, falsification of
the Company or customer documents, misappropriation of funds or
other assets of the Company, or other acts of dishonesty or
misconduct involving the property or affairs of the Company or the
carrying out of the Executive’s duties; (ii) the conviction
of the Executive (by trial, upon a plea or otherwise) or the
admission of guilt by the Executive, of any felony or criminal act
of moral turpitude; (iii) the failure by the Executive to
substantially perform his duties or responsibilities under this
Agreement or follow a reasonable instruction of the Board, provided
that if such failure is capable of cure, the Executive is given
written notice of any such failure and fails to remedy the same
within ten (10) days of receipt of such notice; (iv) if the
Executive commits a material breach or material non-observance of
any of the terms or conditions of this Agreement or any Exhibit
hereto, provided that if such breach or non-observance is capable
of cure, the Executive is given written notice of any such breach
or non-observance and fails to remedy the same within ten (10) days
of receipt of such notice; (v) if the Executive breaches any
fiduciary duty to the Company or violates any other contractual,
statutory, common law or other legal duty to the Company, in a
manner that has a material adverse effect on the Company and/or its
subsidiaries or their respective properties or assets; or (vi)
gross negligence or willful misconduct by the Executive in the
performance of his duties.
(3) In the event of termination by the Company for
Cause, which may occur with or without notice, the Company will
inform the Executive in writing that the termination is or was for
Cause.
(c) Termination by the Company Without
Cause . If the Company
terminates the Executive’s employment without Cause, as
defined above, the Executive is entitled to, and the Company will
pay to Executive, the following only:
(1) The Accrued Benefits.
(2) Payments equal to the Executive’s Base
Salary for the remainder of the Employment Term, paid in accordance
with the Company’s normal payroll practices over the
remainder of the Employment Term.
(3) Through the remainder of the Employment Term or
until the date upon which the Executive accepts new employment with
health care coverage, whichever is earlier, monthly reimbursements
for any payments actually made by the Executive for health
insurance, which reimbursements are not to exceed the amount that
the Executive would be required to pay under Consolidated Omnibus
Budget Reconciliation Act (“ COBRA ”) if he were
to elect to obtain health insurance under COBRA (with the
understanding that, during such period, the Executive is free to
purchase health insurance under COBRA, to the extent available, or
otherwise, or not at all, but that he is entitled only to
reimbursement for amounts actually paid by him for health
insurance, within the limits stated above) (referred to herein as
the “ Health Severance ”).
(4) To the extent permissible under the
Company’s then current benefit plans, as in effect on the
date of such termination, the Company shall provide or arrange to
provide the Executive continuation of the Executive’s
benefits under those benefit plans for the remainder of the
Employment Term.
(5) The pro rata portion (based on the number of
days worked in such year of termination) of any Bonus to which the
Executive would have been entitled had he remained employed by the
Company at the end of the year in which the Executive is
terminated.
The Executive
shall only be entitled to receive the severance payments and
benefits listed in this Section 3(c)(2)- (
5) if the Executive executes, delivers and does not revoke a
general release of claims against the Company in the form and
substance acceptable to the Company, and continues to adhere to and
not breach the provisions of Sections 4 and 5 of this
Agreement.
(d) Termination by the Company upon Death or
Disability .
(1) If the Executive’s employment terminates
due to his death, or the Company terminates the Executive’s
employment due to “Disability” as defined below, the
Executive (or his Estate or personal representative, as applicable)
is entitled to receive only the Accrued Benefits.
(2) The term “ Disability ”
shall mean the Executive, due to physical or mental disability, is
unable to perform the essential functions of his position with the
Company, with or without reasonable accommodation for either (a)
the immediately preceding ninety (90) days or (b) one hundred and
fifty days in any one year period, in accordance with the Americans
with Disabilities Act, the California Fair Employment and Housing
Act, and any other disability laws.
(3) In the event of termination by the Company due
to Disability, which may occur with or without notice, the Company
will inform the Executive in writing that the termination was due
to Disability as defined in this Agreement.
(e) Voluntary Termination by the Executive or
Expiration . If the
Executive terminates his employment for any reason, or if the
Agreement terminates pursuant to Section 1(e) , the
Executive is entitled to receive only the Accrued Benefits.
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Confidentiality; Exclusive
Property.
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(a) Confidentiality . The Executive recognizes that the services to
be performed by him hereunder are special, unique and extraordinary
in that, by reason of his employment hereunder and his past
employment with the Company, he may acquire or has acquired
Confidential Information (as defined below) concerning the
operations of the Company, its subsidiaries or affiliates, the use
or disclosure of which could cause the Company, its subsidiaries or
affiliates substantial loss and damages which could not be readily
calculated and for which no remedy at law would be adequate.
Accordingly, the Executive covenants and agrees with the Company
that he will not at any time, except in performance of his
obligations to the Company hereunder or with the prior written
consent of the Board, directly or indirectly, disclose any secret
or Confidential Information, or any Trade Secret (as defined
below), that he may learn or has learned by reason of his
association with the Company or any of its subsidiaries or any
predecessors to the Business (as defined below), or use any such
information to the detriment of the Company or any of its
subsidiaries or any of its affiliates. The term “
Confidential Information ” includes, without
limitation, information not previously disclosed to the public or
to the trade by the management of the Company or its subsidiaries
with respect to the Company, or its subsidiaries’ or
affiliates’ business plans, prospects and opportunities, the
identi
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