Exhibit
10.11
SEPARATION , WAIVER AND RELEASE
AGREEMENT
This
Separation, Waiver and Release Agreement (“ Agreement
”) dated as of November __, 2008 (the “Effective
Date”) is by and among Ronald Price, 114 Monopanson Drive,
Stevensville, MD 21666 (“ Price ”) and Atlas
Mining Company, 1221 Yellowstone, Osburn, ID 83849 (“
Atlas ”).
RECITALS
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Atlas was the
owner of 100% of the equity interests in its wholly owned
subsidiary, Nano Clay & Technologies, Inc. (“ NCT
”). NCT has been administratively dissolved by the
Secretary of State of Idaho and no longer exists. Atlas
is a party to this Agreement in its own right and as successor to
whatever rights it may have with respect to NCT.
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Price executed
an Employment Agreement dated March 9, 2006 (“ Employment
Agreement ”) (a copy of which is attached hereto as
Exhibit A ), which provided that he would serve as
President, Chief Executive Officer, and a director of NCT and would
continue as a director of Atlas.
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Given (i) the
dissolution of NCT and the responsibility of Price as director,
president and CEO of NCT for the dissolution and (ii) Price’s
execution and delivery in 2007 of his resignation as a director of
Atlas and an agreement terminating his positions with NCT, Atlas
believes that the Employment Agreement may have already been
terminated, but is nevertheless willing to enter into the
Agreement; in the event of Price’s breach of this Agreement,
Atlas maintains all rights to assert that the Employment Agreement
had been terminated prior to execution of this
Agreement.
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The parties
have agreed that it is in the best interest of Price and Atlas to
expressly terminate the Employment Agreement and Price’s
relationships with NCT and Atlas as set forth above and to enter
into this Agreement
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AGREEMENT
NOW THEREFORE,
it is agreed as follows:
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Termination
of Employment Agreement. The parties agree that the Employment Agreement
attached as Exhibit A is a true and correct copy of Employment
Agreement and is the only employment or similar agreement (written
or oral) involving Price and Atlas or NCT. The parties
agree that to the extent the Employment Agreement was not
previously terminated by virtue of the matters set forth in the
recitals hereto, it is terminated upon the execution of this
Agreement. The parties recognize that given the
dissolution of NCT, there could be ambiguity as to Price’s
status as an officer and director of NCT. For purposes
of clarity and to resolve any doubt, Price resigns as an
officer and director of NCT effective upon the execution of this
Agreement. Also on the date of this Agreement, Price
resigns as a director of Atlas and from any other position he may
hold with Atlas or any of its subsidiaries. All such
termination and resignations are voluntary and made without
coercion. To the extent that Atlas needs to accept such
resignation(s), it hereby does so . Price represents that he does
not and did not hold any other position with Atlas other than
director or NCT other than president, CEO, and director and does
not hold any positions with any subsidiary of Atlas other than NCT.
Price agrees that upon the termination of the Employment Agreement,
he has no right to employment by Atlas or NCT.
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2.
Waiver and Release of Claims
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Price, on behalf of himself
and his marital community, heirs, executors, administrators and
assigns, except as discussed below, expressly releases and waives
against NCT and Atlas and their respective current and former
officers, directors, stockholders, managers, employees, agents,
trustees, representatives, general and limited partners, members
and attorneys (all of which are collectively referred to as
“Released Parties”) any and all claims, damages, causes
of action or disputes, whether known or unknown, based upon acts or
omissions relating to Price’s employment or the end of his
employment with NCT and Atlas, occurring or that could be alleged
to have occurred on or prior to the execution of this Agreement;
and further releases, discharges and acquits Released Parties,
individually and in their representative capacities, from such
claims, damages,
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causes of
action or disputes. Except as discussed below, this
waiver and release includes, but is not limited to, any and all
claims for wages, employment benefits, and damages of any kind
whatsoever arising out of any contracts, expressed or implied; any
covenant of good faith and fair dealing; estoppel or
misrepresentation; discrimination or retaliation on any unlawful
basis; harassment; unjust enrichment; wrongful termination or
constructive discharge; any federal, state, local or other
governmental statute or ordinance, including, without limitation,
Title VII of the Civil Rights Act of 1964, as amended; the
Americans with Disabilities Act; the Fair Labor Standards Act; the
Employee Retirement Income Security Act, as amended; the Civil
Rights Act of 1866; the Age Discrimination in Employment Act and
the Older Workers Protection Act subject to the rights Price
retains, even if Price signs this Agreement, that are discussed
below; any state or federal wage payment statute; or any other
legal limitation on the employment relationship (“Released
Claims”). Unless otherwise provided in this
Agreement, Price acknowledges that Released Parties are in no way
liable for any claims described in this Section. Price agrees to
defend and indemnify Released Parties (including payment of fees as
incurred) against any Released claims whether made by Price or on
behalf of Price to the full extent permitted by
law. Excluded from this Release and from the Released
Claims are claims arising after the date of this Agreement, claims
that Price may have with regard to vested benefits under ERISA,
claims which may arise after the date that this Agreement is
signed, or any other claim that may not be released in accordance
with law (“Unreleased Claims”); additionally, despite
Price’s acceptance of this Agreement, nothing in this
Agreement will prevent him from (i) initiating or causing to be
initiated on his behalf any complaint, charge, claim or proceeding
against NCT and Atlas before any local, state or federal agency,
court or other body challenging the validity of the waiver of
claims under the Age Discrimination in Employment Act or the Older
Workers Protection Act contained in this Agreement (but no other
portion of this waiver) or (ii) initiating or participating in any
investigation or proceeding conducted by the Equal Employment
Opportunity Commission (“EEOC”);
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Price
represents and acknowledges that he has not filed any complaint,
charge, claim or proceeding, except with respect to Unreleased
Claims, if any, against any of the Released Parties before any
local, state or federal agency, court or other body (each
individually a “Proceeding”). Price also
represents that he is not aware of any basis on which such a
Proceeding could reasonably be instituted. Price
understands and acknowledges that he is waiving any right he may
have to benefit in any manner from any relief (whether monetary or
otherwise) arising out of any Proceeding, including any Proceeding
conducted by the EEOC Price understands that, by executing this
Agreement, he is limiting the availability of certain remedies he
might have against the Released Parties. If Price is
ever awarded or recover in any forum any amount as to a claim Price
has waives in this Agreement, such amounts shall be payable to
Atlas and Price hereby assigns the right to any such amounts to
Atlas; and
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Price
acknowledges and agrees that except as required by this Agreement,
(i) NCT and Atlas have no obligation to provide any of the
consideration in Section 7, (ii) the consideration set
forth in paragraph 7 is consideration for Price’s
representations, covenants and release herein, and (iii) the
consideration in Section 7 constitute adequate consideration for
Price’s representations, covenants and release set forth in
this Agreement.
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Price
acknowledges that, other than as discussed herein, he is knowingly
and voluntarily waiving and releasing any rights he may have under
the Age Discrimination in Employment Act and the Older Workers
Benefit Protection Act of 1990 and further acknowledges that he
been advised by this writing, as required by the Age Discrimination
in Employment Act and the Older Workers Benefit Protection Act of
1990, that (a) his waiver and release do not apply to any rights or
claims that may arise after he executes this Agreement; (b) he has
a right to, and has been advised to, consult with an attorney
regarding this Agreement and its effects prior to executing this
Agreement; (c) he has at least twenty-one (21) days from the date
this Agreement is received to consider this Agreement (although he
may voluntarily choose to execute this Agreement earlier); and (d)
he has seven (7) days after accepting this Agreement to revoke his
acceptance, and his acceptance will not be effective until that
revocation period has expired. To revoke this Agreement, Price
understands that he must deliver a written and
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signed
statement of revocation to William Gleeson, by no later than 5:00
p.m. on the seventh day after he signs this
Agreement. Price understands that he may hand-deliver
the revocation to William Gleeson, Suite 2900, 925 4
th Avenue, Seattle, WA 98104 or may fax the
revocation to William Gleeson at (206)370-6071. Price
understands that if he effectively revokes this Agreement, all of
the promises made by Price and Atlas or NCT through or related to
this Agreement will not be effective, other than Price’s
obligations under the Employment Agreement which is attached hereto
and incorporated herein by reference.
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Price Not
Entitled to Benefits of the Employment Agreement.
For purposes of clarity as to the
termination of the Employment Agreement, except as set forth in the
next paragraph, upon the termination of the Employment Agreement
and his resignations, it is agreed as follows:
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Price will not
be entitled, after the Effective Date, to salary under paragraph
4.A of the Employment Agreement;
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Price will not
be entitled to participate in any plans under paragraph
4.C. The only plans he currently participates
immediately before the Effective Date are group life insurance,
which will be cancelled, and a 401(k);
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Price will not
be entitled to benefits under paragraph 4.D, including company
credit card and cell phone;
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Price will not
be entitled to participate in any bonus program under paragraph
4.E. It is agreed that Price is not entitled to any
bonus for periods prior to the Effective Date;
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He is not
entitled to any patent ownership under paragraph
4.F. Price represents that he has not filed any patents
while employed by Atlas or NCT;
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Price is not
entitled to any vacations under paragraph 6 and as of the Effective
Date, he has accrued not vacation time;
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There is no key
man life insurance policy as described in paragraph 7;
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Price will not
be entitled to severance under paragraph 9.
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Amounts Due
Prior to Termination of Employment Agreement; Return of
Property. Salary accrued under the Employment Agreement
through the Effective Date will be paid in accordance with the
usual payroll practices of Atlas. Unreimbursed but
reimbursable expenses on or prior to the Effective Date are set
forth in Exhibit B and will be promptly reimbursed by
Atlas. Price represents that such expenses are all of
his reimbursable expenses and as proper expenses on behalf of the
Atlas. Price will promptly return all property of Atlas
and NCT in his possession or under his control, including the
property listed on Exhibit C and shall certify that he has
done so within 10 days of the Effective Date.
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Stock Option
Agreement. The Non-Qualified Stock Option
Agreement dated July 14, 2006 (“ Stock Option
Agreement ”) attached as Exhibit D is a true and
correct copy of Stock Option Agreement and is the only agreement
(written or oral) relating to securities or options to acquire
securities or profit sharing involving Price and Atlas or
NCT. The parties agree that the Stock Option Agreement
is not terminated and continues in effect, but for purposes of
paragraph 6 of the Stock Option Agreement, Price is deemed have
terminated from Atlas and NCT as of the Effective Date but such
termination will be other than by reason of death or “for
cause.”
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Price’s Contacts and Agreements;
Discoveries. Price represents that Exhibit E is a
true and correct list, of (a) persons and entities that he
solicited as purchasers or potential purchasers of, or joint
venture partners or participants concerning, halloysite or other
minerals from the Dragon Mine, (b) persons or entities to whom any
halloysite clay from the Dragon Mine was delivered for evaluation
or testing and the substance of any reports from such persons or
entities (c) agreements with any persons or entities relating to
halloysite from Dragon Mine and (d) all persons he accompanied to
the Dragon Miner who were not employees or directors of Atlas or
NCT. Price represents that Exhibit F sets forth a true and
correct list of the patentable discoveries or inventions of Price
while in the employ of Atlas or NCT and any research regarding the
processing of halloysite clay or other minerals from the Dragon
Mine and the results of such research.
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Price
represents that Exhibit G is a true and correct
list of all agreements, understandings, and arrangements, whether
financial or otherwise, (other than with Atlas or NCT and other
than patents which he has assigned to the Navy Department) that he
or any entity under his control is, or during his employment at
Atlas or NCT was, party to concerning the extraction, marketing,
exploitation, or sale of, or research and development or
applications concerning, halloysite or kaolin.
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Payments to
Price. In exchange for
the termination of the Employment Agreement, Price’s
resignations and Price’s other agreements set forth herein,
Atlas agrees to compensate Price as follows. For the
period from the Effective Date hereof until February 28, 2009,
Price will be paid at the rate of $200,000 per year for total
payments of $ and thereafter for
the one year period beginning March 1, 2009 and ending February 28,
2010, he will be paid at the rate of $50,000 per year, monthly in
arrears. Except with respect to matters as to which
Atlas’ indemnification bylaws apply, Price shall be entitled
to reimbursement for all properly documented expenses reasonably
incurred and pre-approved by an officer of Atlas in connection with
rendering services pursuant to this Agreement, including, but not
limited to, reimbursement for all reasonable travel, lodging, and
meal expenses. Such amount will be paid in installments
in accordance with Atlas’ usual paying practices. The
foregoing is subject to the proviso that as condition
precedent to being entitled to receive and retain any compensation
set forth in this Paragraph 7, the representations made by Price in
this Agreement and the Exhibits thereto are true and correct when
made and continue to be true and correct through February 28, 2010
and Price does not violate any of the covenants made by him in this
Agreement before February 28, 2010. If any
representations made by Price in this Agreement or the exhibits
thereto cease to be true at any time before February 28, 2010 or if
Price violates before February 28, 2010 any of the covenants made
by Price in this Agreement, Price will promptly notify Atlas in
writing.
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Cooperation
and Services. From and after the Effective Date, Price agrees
and covenants that he shall cooperate fully with and assist in all
respects Atlas and NCT and their directors, executive officers,
senior-level employees, insurers, duly authorized agents,
successors, trustees, assigns, attorneys and experts
acting on behalf of the Company: (i) with the
transfer or transition of any work, projects, assignments, tasks or
duties performed by or assigned to Price on or before the Effective
Date, and (ii) with the conduct of any formal or informal
dispute, claim, litigation, arbitration, grievance, interview,
meeting, action, proceeding, investigation, regulatory
or administrative inquiry, or similar matters or proceedings,
including, without limitation, proceedings involving state or
federal agencies or self-regulated organizations, involving Atlas
or NCT and their directors, executive officers, senior-level
employees, or subsidiaries, including, without limitation, about
which Price may have relevant information or knowledge, or had
access to such information or knowledge. Nothing in this
Agreement shall require Price to identify the information he has
provided to, or disclose his communications with, agencies of
government or self-regulatory organizations. His
cooperation and assistance shall he provided at a time and in a
manner which is mutually and reasonably agreeable to Price and
Atlas, and may include, without limitation, providing information
and documents, submitting to interviews, submitting to depositions,
providing testimony and general cooperation to assist the Company
or NCT and their directors, executive officers, senior-level
employees, or subsidiaries. To the extent he is
entitled, Price will retain the right of indemnification as
provided under Atlas’ bylaws.
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Confidential
Information. Price agrees
and covenants that at all times he will maintain in confidence, and
not disclose to any person or entity or otherwise use, any
Confidential Information. Further, Price agrees that he
will not use any Confidential Information received by Atlas or NCT
from a third party in any manner inconsistent with any agreement
between Atlas or NCT and such third party of which he is made
aware. Price acknowledges that all memoranda, notes, documents,
drawings, specifications, software, media and other materials
containing any Confidential Information are the exclusive property
of Atlas or NCT and agrees to immediately deliver to Atlas or NCT
all such material in his possession or control. “Confidential
Information” means any (i) information
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received by
Atlas or NCT from third parties which Atlas or NCT is obligated to
keep confidential and (ii) any confidential or proprietary
information of Atlas or NCT whether or not marked or otherwise
designated as confidential including, but not limited to,
information that is not generally known or readily ascertainable
outside Atlas or NCT regarding Atlas or NCT’s finances,
employees, plans, marketing, customers, vendors, products,
technology, designs, techniques, research, development, testing,
know-how and other activities. “Confidential
Information” includes information that has not been publicly
disseminated about the halloysite and kaolin (or other minerals) at
the Dragon Mine and does not include the names of, or information
about, persons or entities solicited by Price as purchasers or
potential purchasers of Atlas’ or NCT’s products or
actual or potential joint venturers while an employee of Atlas or
NCT or information relating to the processing of halloysite
clay.
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Non-Competition;
Non-Solicitation. Price agrees and covenants that until February
28, 2010, he will not:
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a. Directly or indirectly
participate in the marketing or sale of minerals containing
halloysite or kaolin of the same or superior quality as the quality
of the minerals that can be extracted from the Dragon
Mine;
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Directly or
indirectly encourage, solicit, or attempt to induce (or assist
others to encourage, solicit, or attempt to induce) any employee or
consultant of Atlas to terminate his/her relationship with Atlas or
to work elsewhere with Price or any other business, person or
activity.
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Non-Disparagement.
Price agrees and covenants that he
will not, and will not permit his agents or representatives, to
criticize, ridicule or make any comment or statement which
disparages or is derogatory of Atlas or any of its affiliates or
directors, officers, employees or trustees or goods or services in
any communication with the press or other media, any customer or
potential customer or any employee or director or potential
employee or director of Atlas, or its affiliates; provided, however
that nothing herein will prevent Price from giving truthful
testimony if properly subpoenaed to testify under oath. Atlas
agrees that its executive officers and directors will not, and that
Atlas will not authorize, consent, permit or encourage any employee
or agent to, criticize, ridicule or make
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any comment or
statement which disparages or is derogatory of Price in any
communication with the press or other media, any person with whom
Price has a business relationship, or any other person which would
adversely affect in any manner the conduct of any business of Price
or the business or personal reputation of Price; provided, however
that nothing herein will prevent Atlas’s officers and
directors from giving truthful testimony if properly subpoenaed to
testify under oath.
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Inventions,
Copyrights and Patents .
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a. Price
agrees and covenants that, except as provided below, all works of
authorship, inventions, and other materials produced, conceived or
developed, either alone or with others, by Price during the course
of his employment with NCT or Atlas ("Materials"), and all
proprietary rights in such Materials, shall be deemed to be
“works-made-for-hire” and shall be and are the
exclusive property of the Company. Accordingly, Price
hereby irrevocably and perpetually assigns, transfers, and conveys
to Atlas, its successors and assigns, his entire right, title, and
interest in the Materials and any improvements thereon throughout
the world, including without limitation:
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All patents,
copyrights, trade secrets, and other proprietary rights in the
Materials and all rights to prosecute applications, and to secure
registrations, renewals, and extensions of the same;
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All rights to
make use, practice, import, export, and otherwise fully exploit the
Materials and any and all improvements that Atlas may
develop;
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All rights
under any letters patent issued on the Materials or improvements
thereon, and any processes and designs therein, and all rights to
enjoy the same; and
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All documents,
notes, notebooks, drawings, schematics, prototypes, magnetically
encoded media, or other information or materials related to the
Materials.
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b. Price agrees and
covenants to, and shall disclose in writing, all Materials to Atlas
on or before the Effective Date. When requested, and at
Atlas’s expense, Price will assist Atlas or its designee in
efforts to protect such Materials, including without limitation by
taking any of the following actions: making application in the
United States and in foreign countries for a patent on any
Materials specified by Atlas; executing documents of assignment to
Atlas or its designee of all Price's right, title and interest in
and to any Materials, any patent applications relating thereto, and
any patents granted thereon; and from time to time, at the request
of Atlas, executing all instruments and rendering all such
assistance as may reasonably be required in order to protect the
rights of Atlas or its designee and to vest in Atlas or its
designee all rights to any Materials, patent applications and
patents.
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Reasonableness of Covenants and
Assignments. Price acknowledges that he has
carefully read all of the terms of paragraphs 2, 8, 9, 10, 11 and
12 of this Agreement, that he has been advised by Atlas to seek
legal advice to assist him in this and agrees that all of such
terms are necessary for the reasonable and proper protection of
Atlas’s business, that Atlas has been induced to enter into
its relationship with him and provide the consideration described
herein upon his representations that he will abide by and be bound
by each of such terms, and that each term is reasonable in its
scope and duration. If for any reason any portion of paragraphs 2,
8, 9, 10, 11 and 12 of this Agreement shall be held by a court of
competent jurisdiction to be invalid or unenforceable, the parties
agree that the remaining portions of paragraphs 2, 8, 9, 10,
11 and 12 of this Agreement shall remain in full force and effect
and that such court, upon the request of Atlas, may construe and/or
modify such invalid or
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