Exhibit 10.8
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of May 01, 2004 (the "Effective Date").
BETWEEN:
Bay Resources Ltd, a company incorporated under the laws of Delaware,
having its principal office at 000 Xx. Xxxxx Xx. Xxxxx 0, Xxxxxxxxx,
Xxxxxxxx 0000 Xxxxxxxxx (the "Company")
AND:
Xxxxxxx X. Xxxxxxx, having a residence at 000 Xxxxxx Xxxx. 0X
Xxxxxxxx, XX 00000 X.X.X. (the "Executive")
WHEREAS:
The Company wishes to retain the services of the Executive to provide the
services hereinafter described during the term hereinafter set out. NOW
THEREFORE in consideration of the mutual covenants and agreements herein
contained and for other good and valuable consideration, the Company and
Executive undertake and agree as follows:
Term
1. The Company shall employ the Executive for a period commencing as of the
Effective Date and continuing until and including December 31, 2006.
Title
2. The Executive will have the title of Chief Operating Officer.
Duties
3. The Executive shall serve the Company and any subsidiaries of the Company
in such capacity or capacities and shall perform such duties and exercise
such powers pertaining to the management and operation of the Company as
may be determined from time to time by the board of directors of the
Company consistent with his position as Chief Operating Officer. The
Executive shall:
(a) devote his endeavours and best efforts during normal business hours to
the business and affairs of the Company;
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(b) perform those duties that may reasonably be assigned to the Executive
diligently and faithfully to the best of the Executive's abilities and
in the best interests of the Company;
(c) use his best efforts to promote the interests and goodwill of the
Company;
(d) comply with all laws applicable to the Company in carrying out the
Company's business;
(e) ensure that the policies and procedures of the Company as advised or
communicated are followed and complied with; (f) faithfully serve the
Company; and (g) comply with and observe all lawful requests,
directions and restrictions made or imposed by a Director.
4. From time to time the Company will review and update the duties so that it
accurately outlines the current scope of the position. This procedure is
jointly conducted by the Company in consultation with the Executive. It is
the Company's aim to reach agreement to reasonable changes. If an agreement
is not possible the Company reserves the right to insist on changes to the
Executive's duties after consultation with the Executive.
5. The Executive shall be permitted to perform outside business endeavours
provided that such activities do not materially conflict with the
Executive's duties hereunder.
Hours of Work
6. The Executive shall work such hours appropriate to a position of this
seniority
Reporting Procedures
7. The Executive shall report to the person holding the office of Chief
Executive Officer. The Executive shall give a written report on the
operations and business affairs of the Company on a monthly basis to the
Secretary by the third business day and advise to the best of his ability
and in accordance with reasonable business standards on business matters
that may arise from time to time during the term of this Agreement.
Remuneration
8. The annual base salary payable to the Executive for his services hereunder
shall be US$110,000, exclusive of bonuses, benefits and other compensation.
This salary is an all inclusive salary and is provided in lieu of all
payments and obligations specified in any applicable awards including the
weekly wage rate of ordinary hours; industry, district and roster
allowances; leisure days; public holidays; overtime; shift and weekend
penalties; leave loading payments and any other payments.
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9. The Company shall provide the Executive with a statement of earnings and
deductions in respect of each salary instalment paid.The annual base salary
payable to the Executive for his services hereunder for each successive
year of the term of this Agreement, exclusive of bonuses, benefits and
other compensation, shall increase by a percentage of the annual base
salary for the immediately preceding year at a rate determined by the
Remuneration Committee of the Company. The annual base salary payable to
the Executive, shall be payable in monthly instalments in arrears on the
1st day of each month or in such other manner as may be mutually agreed
upon, less, in any case, any deductions or withholdings required by
applicable law. Payment of the salary will be by electronic funds transfer
to a bank account in the USA nominated by the Executive.
10. The Company shall provide the Executive with Executive benefits comparable
to those provided by the Company to other senior executives of the Company
generally and shall permit the Executive to participate in any bonus plan,
share purchase plan, retirement plan or similar plan offered by the Company
to its senior executives generally in the manner and to the extent
authorized by the Remuneration Committee of the Company. In addition the
Executive will be able to participate in such extended health, medical,
disability and insurance or other benefit plans established by the Company
and made available to other executives of the Company.
Stock Options
11. The Company shall grant the Executive options to purchase 750,000 shares of
common stock of the Company (the "Options") at a per share exercise price
of US$1.00, with the Options vesting over the period of the contract as
follows: 250,000 of the Options will vest as of the Effective Date, a
further 250,000 will vest at the mid-term date of the contact, and the
remaining 250,000 will vest on December 31st 2006. The Options will be
issued subject to applicable securities laws, the availability of Options
within the Company's stock option plan (the "Plan") and may be subject to
hold periods. In addition, the Options shall be subject to the provisions
of the Plan and the Company's standard form of stock option agreement (as
executed, the "Stock Option Agreement").
12. In the case of a Change of Control (defined below), all Options then
outstanding will immediately vest for the purpose of such transaction.
Furthermore, in the event of a Qualifying Transaction (defined below), the
acquirer, whether a so-called "Capital Pool Company" ("CPC") or otherwise,
shall issue to the Executive the same number of options to purchase common
shares of such acquirer (or if no such shares exist a class of securities
having rights similar to those generally held by holders of common stock)
under the same terms and conditions as the Options at the per share market
price of such acquirer on the date that such transaction is consummated.
Furthermore, in the event of a Reverse Takeover (as such term is defined
under Policy 5.2 Changes of Business and Reverse Takeovers of the TSX
Venture Exchange) where all or substantially all of the assets of the
Company are transferred to a third party, the Executive shall receive the
same number of options to purchase common shares of such third party (or if
no such shares exist a class of securities having rights similar to those
generally held by holders of common stock) under the same terms and
conditions as the Options at the per share market price of such third party
on the date that such transaction is consummated
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13. The term "Change of Control" shall mean any one of the following
transactions: (i) the acquisition in a transaction or a series of
transactions (including a merger) by any person or organization, other than
the Company or any of its subsidiaries or any Executive benefit plan or
related trust of the Company or any of its subsidiaries, of beneficial
ownership of fifty percent (50%) or more (on a fully diluted basis) of the
combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors or persons
holding similar positions with the Company (including, without limitation,
a Qualifying Transaction (as defined below); (ii) individuals who, as of
the date of this Agreement, constitute the Board of Directors of the
Company (or similar body elected to manage the affairs of the Company)
cease for any reason to constitute at least a majority of the Board of
Directors (or similar body) as constituted from time to time; or (iii) the
sale or other disposition of all or substantially all of the assets of the
Company in one transaction or series of related transactions, including,
without limitation, a Qualifying Transaction. The term "Qualifying
Transaction" shall mean a transaction involving the acquisition of stock or
assets by a CPC where following such a transaction the CPC gains full
listing privileges on the Toronto Stock Exchange.
Holidays
14. The Executive shall be entitled to three weeks' paid holidays per fiscal
year of the Company, excluding Company holidays and religious holidays, and
at a time approved in advance by the Chief Executive Officer, which
approval shall not be unreasonably withheld, delayed or conditioned but
shall take into account the staffing requirements of the Company and the
need for the timely performance of the Executive's responsibilities. In the
event that the Executive decides not to take all the vacation to which he
is entitled in any fiscal year, the Executive shall be entitled to take up
to one week of such vacation in the next following fiscal year at a time
approved in advance by the Chief Executive Officer.
Expenses
15. The Executive shall be reimbursed for all reasonable travel and other
out-of-pocket expenses reasonably incurred by the Executive in connection
with carrying out his duties hereunder. For all such expenses the Executive
shall supply the Company with copies and records of all invoices or
statements in respect of which the Executive seeks reimbursement. The
Company may at its sole discretion provide reasonable expense advances upon
request and will promptly reimburse out-of-pocket expenses upon
presentation of such vouchers and invoices. Any expenses to be incurred by
the Executive in excess of US$1,000 shall require the prior written consent
of the Company.
Policies, Procedures and Instructions
16. Policies, procedures and instructions exist for the effective and safe
operation of the Company's business and the welfare and interests of
Executives. The Executive is expected to comply with all policies,
procedures and instructions that are applicable to their work area and
responsibilities. When required during the term of this Agreement, the
Company shall exercise its right to replace or modify existing rules,
policies, procedures or instructions or introduce new ones with which the
Executive will be required to comply. A transgression of a policy,
procedure or instruction may render the Executive liable to disciplinary
action or termination. Information about new policies or changes to
existing policies will also normally be provided in circulars, e-mails, on
notice boards and otherwise brought to the attention of Executives required
to observe them.
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Occupational Health and Safety
17. The Executive acknowledges that the Company has a legal obligation to
provide a safe workplace for the Executive. The Executive has a
responsibility to the Company, and to his or her fellow Executives and
employees to assist the Company in providing a safe workplace by observing
all relevant workplace Occupational Health and Safety, First Aid and
workplace accident policies and procedures. A transgression of an
Occupational Health and Safety, First Aid or Workplace Accident work rule,
policy, procedure or instruction may render the Executive liable to
disciplinary action or termination. Information about Occupational Health
and Safety rules will normally be provided in circulars, on notice boards
and otherwise brought to the attention of all Executives.
Trading in Shares
18. Refer to Attachment 1 and 2.
Confidentiality
19. The Executive is required to covenant and warrant with and to the Company
that during the term of his/her employment and at all times thereafter the
Executive will not divulge either directly or indirectly, knowingly or
inadvertently any knowledge or information concerning the business, affairs
or property of the Company other than as required by law; to the
Executive's legal or financial advisers for the purpose of obtaining
professional advice; or to the extent necessary to perform the Executive's
duties under this Agreement; and the Executive will keep secret and
confidential the secrets of the Company and will treat all information
acquired in the course of the Executive's engagement under this Agreement
regarding the policies, processes, activities, financial affairs of the
Company as secret and confidential.
20. All confidential records, documents and other papers, together with any
copies or extracts thereof, made or acquired by the Executive in the course
of employment shall be the property of the Company and must be returned to
the Company on the termination of the Agreement.
21. This clause shall survive termination of this Agreement for a period of ten
years.
Conflict of Interest
22. Executives are not to engage in private business activities which place
them in a position of conflict of interest with the Company by gaining or
standing to gain, personal profit or position by the use of information
regarding the Company activities or further activities planned by the
Company or by engaging in activities that adversely affect the Executive's
on the job performance.
Inventions
23. Any discovery or invention or secret process made or discovered by the
Executive during the currency of this Agreement in connection with or in
any way affecting or relating to the business of the Company or any of its
subsidiaries or capable of being used or adapted for use therein or in
connection therewith shall forthwith be disclosed to the Company and shall
belong to and be the absolute property of the Company or such one of its
subsidiary companies whichever is the applicable company, as may be
nominated by the Company for that purpose.
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24. The Executive shall, if and when required to do so, (whether during or
after the termination of this Agreement) at the Company's expense apply or
join in applying for letters patent or other similar protection in any part
of the world for any such discovery, invention, process or improvement as
aforesaid and shall execute all instruments and do all things necessary to
vest the said letters patent or other similar protection when obtained and
all right to an interest in the same in the Company or its nominee
absolutely and as sole beneficial owner or in such other person as the
Company may require.
Communication system
25. It is agreed that compliance with reporting and/or communication structures
established by the Company will form part of the terms and conditions of
the Executive.
26. It is understood that it is the Executive's responsibility to show
initiative in ensuring that he or she is facilitating a suitable
information flow.
27. It is agreed that the Executive will actively participate in all and any
communication/reporting programmes that the Company introduces during the
term of this Agreement.
28. It is agreed that during the term of this Agreement the Executive will
supply in full and in a timely manner to the Company all information that
the Company may reasonably require for its personnel/human resources
records.
Termination
For Cause
29. The Company may terminate the employment of the Executive without notice or
any payment in lieu of notice for cause. The term "cause" shall mean
(a) if there is a repeated and demonstrated failure on the part of the
Executive to perform the material duties of the Executive's position
in a competent manner and where the Executive fails to substantially
remedy the failure within a reasonable period of time after receiving
written notice of such failure from the Company, provided that the
Executive shall have no less than thirty (30) days to cure such
breach;
(b) if the Executive is convicted of a criminal offence (other than a
misdemeanour); or
(c) if the Executive disobeys reasonable instructions given in the course
of employment by the Chief Executive Officer or the board of directors
of the Company that are not inconsistent with the Executive's
management position and not remedied by the Executive within a
reasonable period of time after receiving written notice of such
disobedience, provided that the Executive shall have no less than
thirty (30) days to cure such breach.
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For Disability/Death
(d) This Agreement may be terminated by the Company upon thirty (30) days
written notice to the Executive if the Executive becomes permanently
disabled. The Executive shall be deemed to have become permanently
disabled if in any year during the employment period, because of ill
health, physical or mental disability, or for other causes beyond the
control of the Executive, the Executive has been continuously unable
or unwilling or has failed to perform the Executive's duties for one
hundred twenty (120) consecutive days, or if, during any year of the
employment period, the Executive has been unable or unwilling or has
failed to perform his duties for a total of one hundred eighty (180)
days, consecutive or not. The term "any year of the employment period"
means any period of twelve (12) consecutive months during the
employment period.
(e) This Agreement shall terminate without notice upon the death of the
Executive.
Severance Payments
30. Upon termination of the Executive's employment at any time during the Term
(a) for cause; or
(b) by the voluntary termination of employment by the Executive (other
than for good reason);
the Executive shall not be entitled to any severance payment other than
compensation earned by the Executive before the date of termination calculated
pro rata up to and including the date of termination.
Good Reason
31. The Executive may terminate his employment with the Company at any time
during the Term without notice to the Company for good reason. The term
"good reason" shall mean the occurrence of any one of the following: (i) a
material reduction or diminution in the Executive's authority, duties or
responsibilities (including, without limitation, with respect to office or
title) hereunder; (ii) any reduction in the then applicable base salary or
the Executive's eligibility to participate in any Executive benefits
program, retirement plan or executive incentive bonus programs as
contemplated by Section 11 hereof; (iii) unless agreed by you in advance,
any relocation of your place of work to a location more than thirty (30)
miles from New York, New York USA; or (iv) any other material failure on
the part of the Company to comply with any other provision of this
Agreement or any stock option agreement executed by the parties as
contemplated herein.
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32. If the Executive's employment is terminated during the Term for good reason
or any other reason other than the reasons set forth in paragraph 29, the
Executive shall be entitled to receive the lesser of:
(f) the total of:
(i) 3 months' salary at the then applicable base salary rate; and
(ii) the present value, as determined by the Chief Executive Officer,
acting reasonably, of the benefits described in paragraph 8 and
10 that would be enjoyed by the Executive during the next 24
months assuming his employment was not terminated and assuming
the then current level of benefits were continued for those 24
months.
The payment described in this paragraph 32 is the only severance payment
the Executive will receive in the event of the termination of this
Agreement for reasons contemplated in paragraph 31.
33. If the Executive's employment is terminated as a result of the permanent
disability or death of the Executive, the Executive or his estate, as
applicable, shall be entitled to receive, within 30 days of the date of
such termination, the balance of the base salary that would otherwise be
paid to the Executive during the remainder of the term of this Agreement.
The Executive agrees to reasonably comply, at the Company's sole expense,
with all requirements necessary for the Company to obtain life insurance
for the Term.
Governing Law
34. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
Severability; Amendment; Integration
35. If any provision of this Agreement, including the breadth or scope of such
provision, shall be held by any court of competent jurisdiction to be
invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remaining provisions, or part thereof, of this Agreement and such remaining
provisions, or part thereof, shall remain enforceable and binding. This
Agreement may not be changed or modified in whole or in part, except by an
instrument executed by both parties hereunder. Other than the Plan and the
Stock Option Agreement, this Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous understandings with respect to the
subject matter hereof, whether written or oral.
Currency
36. In this Agreement, all references to currency mean United States of America
currency.
Notice
37. Any notice or other communication required or permitted to be given
hereunder shall be in writing and either delivered by hand or mailed by
prepaid registered mail. At any time other than during a general
discontinuance of postal service due to strike, lock-out or otherwise, a
notice so mailed shall be deemed to have been received three business days
after the postmarked date thereof or, if delivered by hand, shall be deemed
to have been received at the time it is delivered. If there is a general
discontinuance of postal service due to strike, lock-out or otherwise, a
notice sent by prepaid registered mail shall be deemed to have been
received three business days after the resumption of postal service.
Notices shall be addressed as follows:
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(g) if to the Company at: 000 Xx. Xxxxx Xx. Xxxxx 0, Xxxxxxxxx, Xxxxxxxx
3004 Australia Attention: Xx. Xxxxxx X. Xxxxxxx Facsimile: +61 (3)
8532-2805
(h) if to the Executive at: 000 Xxxxxxxxxx Xx. Xxxxxxxx, X.X. 00000 X.X.X.
Attention: Xxxxxxx X. Xxxxxxx Facsimile: x0 (000) 000-0000
Indemnification.
38. The Company shall indemnify and hold the Executive harmless, to the maximum
extent permitted by law and the Company's By-Laws or similar organizational
document(s), from and against any claim or liability asserted against the
Executive based on, arising out of or otherwise relating to the performance
by the Executive of any of his duties hereunder, except for claims or
liability arising from the Executive's gross negligence, recklessness,
wilful misconduct or breach of this Agreement. The Company shall include
the Executive in its Directors and Officers insurance plan.
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IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of
the day and year first above written.
Signed, Sealed and Delivered by )
Xxxxxxx X Xxxxxxx in the presence of: )
s/s Xxx Xxxxx Xxxxxxx )
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Witness (Signature) )
Xxx Xxxxx Xxxxxxx )s/s Pini Xxxxxxx
)*
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Name (please print) )
)
Xxxxx 0, 000 Xx Xxxxx Xxxx Xxxxxxxxx )
Address )
)
Australia )
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City, Province )
)
)
The Corporate Seal of Bay Resources Ltd was )
affixed in the presence of: )
)
Per: s/s XX Xxxxxxx )
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Authorized Signatory )
)
Per: s/s XX Xxx )
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Authorized Signatory )
)
)
