EMPLOYMENT AGREEMENT BETWEEN MICHAEL LYON AND ATLAS MINING COMPANY EMPLOYMENT AGREEMENT
Exhibit
99.1
BETWEEN
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AND
ATLAS
MINING COMPANY
THIS
AGREEMENT (“Agreement”),
by and between Atlas Mining
Company, an Idaho corporation (the “Company”), and ▇▇▇▇▇▇▇ ▇▇▇▇ (the “Executive”) is made and is
effective as of this 30th day of June, 2008 (the “Employment Date”). In
consideration of the mutual covenants set forth herein, the Company and the
Executive hereby agree as follows:
1. Employment. The Company hereby
agrees to employ the Executive, and the Executive agrees to serve the Company,
in the capacities described herein during the Period of Employment (as defined
in Section 2 of this Agreement), in accordance with the terms and conditions of
this Agreement.
2. Period of Employment. The term
“Period of Employment”
shall mean the period which commences on the Employment Date and, unless earlier
terminated pursuant to Section
6, ends on the same date six months later.
3. Duties During the Period of
Employment.
3.1 Duties. The
Executive shall be employed as the President and Chief Executive Officer of the
Company with overall charge and responsibility for the business and affairs of
the Company. The Executive shall report directly to the Company’s Board of
Directors (the “Board”)
and shall perform such duties as the Executive and the Board reasonably agree
on. The Executive will be permitted to attend meetings of the
Board of Directors but not meetings of the independent directors meeting in
executive session.
3.2
Scope. The
Executive’s duties shall be part time and he shall devote only such of his
business time and attention to the business and affairs of the Company as he and
the Board agree is required. The Executive will not be required to
relocate and he will be required to spend only so much of his business time and
attention at the facilities of the Company as he and the Board agree is
required.
4. Compensation and
Options.
4.1 Salary. The Company shall pay
to Cirrus Advisors, Inc. as compensation to the Executive compensation at the
rate of twelve thousand five hundred dollars per month, payable in advance on
the first business day of the month, except for the period of June, 2008, which
will be payable with the July payment.
4.2 Stock Options. In order to
induce the Executive to enter into this Agreement, the Company shall, as of the
Employment Date, grant to Cirrus Advisors, Inc. a five year stock option grant
with respect fifty thousand shares of the Company’s stock. The
exercise price will be the closing market price on the Employment
Date. 8,333 options shall vest and become exercisable immediately and
are not forfeitable; 8,333 options shall vest and will be nonforfeitable on the
same date on the month as this agreement in July, August and September and 8,334
shall vest and will be nonforfeitable on the same date on the month as this
agreement in October and November. The options will be subject to
standard antidilution provisions. The options and the shares issuable
upon exercise of the options are not subject to registration rights and are not
subject to any put or call or similar arrangements. The Company and
the Executive will enter into a separate option agreement with respect to the
options.
4.3 No Payment of Professional Fees.
The Company will not pay any fees of the Executive’s attorneys, accountants and
other advisors in connection with the negotiation and preparation of this
Agreement.
5. Other Executive
Benefits.
5.1 Regular Reimbursed Business
Expenses. The Company shall promptly reimburse the Executive for all
expenses and disbursements reasonably incurred by the Executive in the
performance of his duties hereunder during the Period of
Employment. Notwithstanding the foregoing, it is understood
that the Executive will live in the Chicago, Illinois area and reasonable
expenses and disbursements include costs of travel, lodging, meals, and similar
expenses for visits to the Company’s facilities and costs of communication,
mailing, and similar expenses in connection with the Company’s
business. Expenses may be incurred by and reimbursed to Cirrus
Advisors, Inc.
5.2 Benefit Plans. The Executive
and his eligible family members shall not be entitled to participate in and of
the Company’s benefit plans.
6.
Termination.
6.1 Death. This Agreement and the
Period of Employment shall terminate automatically upon the Executive’s
death.
6.2 Disability. If the Company
determines in good faith that the physical or mental disability of the Executive
for more than thirty days has occurred, it may give to the Executive written
notice of its intention to terminate the Executive’s employment. In such event,
the Executive’s employment with the Company shall terminate effective on the
thirtieth day after receipt by the Executive of such notice.
6.3 By the Company for Cause.
During the Period of Employment, the Company may terminate the Executive’s
employment immediately for “Cause.” For purposes of this Agreement, “Cause” means (i) the willful
failure by the Executive to perform his duties hereunder, as agreed upon by the
Board and the Executive (after the provision to the Executive of a reasonable
opportunity to cure after written notice is provided by the Company) where the
failure to so perform can reasonably be expected to adversely affect the Company
in a manner that is not insignificant (provided, however, that failure by the
Company to achieve any targeted or anticipated level of performance shall not,
by itself, constitute failure by the Executive to perform his duties), (ii) the
willful failure by the Executive to observe material Company policies and/or
material policies of affiliates of the Company generally applicable to
executives of the Company and/or its affiliates (after the provision to the
Executive of a reasonable opportunity to cure after written notice is provided
by the Company), (iii) gross negligence or willful misconduct by the Executive
in the performance of his duties, and (iv) the commission by the Executive of
any intentional act of fraud, theft or financial dishonesty with respect to the
Company or any of its affiliates, or any felony or criminal act involving moral
turpitude. For purposes of this definition, no act or failure to act
on the part of the Executive shall be considered “willful” unless it is done, or
omitted to be done, by the Executive in bad faith or without reasonable belief
that the Executive’s action or omission was in the best interest of the Company.
Any act, or failure to act, based upon direction given in a resolution duly
adopted by the Board or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interest of the Company.
6.4 By Executive for Good Reason.
During the Period of Employment, the Executive’s employment hereunder may be
terminated by the Executive for Good Reason. For purposes of this
Agreement, “Good Reason”
means, without the Executive’s written consent, (i) any material breach of this
Agreement by the Company (after the provision to the Company of a reasonable
opportunity to cure (if cure is possible) after written notice is provided by
the Executive), (ii) the assignment to the Executive of duties that are
inconsistent with those of the Chief Executive Officer of the Company or that
materially impair his ability to perform his duties (after the provision to the
Company of a reasonable opportunity to cure (if cure is possible) after written
notice is provided by the Executive), or (iii) the failure of the Board and
Executive to agree on duties, the amount of time and attention required, or the
amount of time required at the facilities of the Company.
6.5 Other than for Cause or Good
Reason. The Executive or the Company may terminate this Agreement for any
reason other than for Good Reason or Cause, respectively, upon thirty (30) days’
written notice to the Company or the Executive, as the case may be.
7. Obligations of the Company And
Forfeiture of Options Upon Termination. The following provisions and the
provisions of subsection 8.2 describe the entire obligations of the Company to
the Executive upon termination of his employment under this
Agreement.
7.1 Termination by Death or Disability or
by the Company for Cause or by Resignation without Good Reason. In the
event this Agreement terminates by reason of death or disability or the
termination of the Executive’s employment by the Company for Cause, or by reason
of the resignation of the Executive other than for Good Reason, (a) the Company
shall pay to the Executive all Accrued Obligations (as defined below) and (b)
the vesting of the options will cease. “Accrued Obligations” shall
mean, as of the Date of Termination, the sum of (i) the amount of any cash
compensation earned by the Executive as of the date of termination to the extent
not theretofore paid and (ii) any, expense reimbursements and other cash
entitlements accrued by the Executive as of the date of termination to the
extent not theretofore paid,
7.2 Resignation with Good Reason or
Termination without Cause If (i) the Company shall terminate
the Executive’s employment other than for Cause (and other than due to the
Executive’s death or Disability) or (ii) the Executive shall terminate his
employment for Good Reason, the Executive shall receive, in addition to the
Accrued Obligations, the cash compensation that would have been payable through
the termination of this Agreement and the vesting of the options will accelerate
so that in such event the options will be fully vested and
nonforfeitable.
8. Mitigation. In no event shall
the Executive be obligated to seek other employment or take any other action by
way of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement.
9. Indemnification. The Executive
shall be indemnified by the Company against liability as an officer and director
of the Company and any subsidiary or affiliate of the Company to the maximum
extent permitted by applicable law. To the full extent permitted under the
corporate governing documents of the Company, and subject to the terms of any
policies and procedures applicable to all directors and senior officers of the
Company, the Company shall advance to the Executive payment of reasonable costs
of defending against any claims covered by the foregoing indemnification
commitment. The Executive’s rights under this Section 10 shall continue so long
as he may be subject to such liability, whether or not this Agreement may have
terminated prior thereto.
10. Restrictive
Covenants.
11.1
Confidential Information.
The Executive agrees that, both during and after his employment by the
Company, he will maintain in confidence, and not disclose to any person or
entity or otherwise use, any Confidential Information, except in the good faith
performance of his duties or as authorized by the Company. Further, the
Executive agrees that he will not use any Confidential Information received by
the Company from a third party in any manner inconsistent with any agreement
between the Company and such third party of which he is made aware. The
Executive acknowledges that all memoranda, notes, documents, drawings,
specifications, software, media and other materials containing any Confidential
Information are the exclusive property of the Company and, in the event of the
termination of his employment, agrees to immediately deliver to the Company all
such material in his possession or control. “Confidential Information”
means any (i) information received by the Company from third parties which the
Company is obligated to keep confidential and (ii) any confidential or
proprietary information of the Company whether or not marked or otherwise
designated as confidential including, but not limited to, information that is
not generally known or readily ascertainable outside the Company regarding the
Company’s finances, employees, plans, marketing, customers, vendors, products,
technology, designs, techniques, research, development, testing, know-how and
other activities. The foregoing shall not apply to any compelled
testimony or production of information, either by legal process, subpoena or
otherwise or to any response to any request for information from any
governmental authority having jurisdiction over the Company; provided, however, that in the
event that a Executive is requested pursuant to, or required by, applicable law,
regulation or legal process to testify or otherwise respond to a request from
any governmental authority, Executive shall notify the Company promptly so that
the Company may seek a protective order or other appropriate remedy. In
the event that no such protective order or other remedy is obtained, or the
Company Party waives compliance with the terms of this Section 11.1, Executive
shall furnish only such information which he is advised by counsel is legally
required and will exercise reasonable efforts to obtain reliable assurance that
such information will be accorded confidential treatment.
11.2
Non-Competition;
Non-Solicitation. The Executive acknowledges that the nature of his
employment with the Company will give him access to trade secrets, confidential
information of a technological nature, and specialized training and expertise in
the specific businesses in which the Company competes. The Executive further
acknowledges that he will have access to Confidential Information concerning
customers of the Company and their specialized requirements, and concerning
employees of the Company and their specialized abilities. The Executive
acknowledges that the use of any of this information or expertise on behalf of a
competitor of the Company and/or the solicitation of customers or employees of
the Company would constitute unfair competition. Therefore, the Executive agrees
that, during the Term, he will not work directly or indirectly (as an employee,
consultant, advisor, owner or otherwise) for any business or activity which
competes anywhere in the Company’s worldwide marketplace with any product or
service of the Company, including any product or service that the Company was
actively researching, developing, manufacturing, marketing, distributing, or
otherwise commercially exploiting or preparing to exploit as of the Date of
Termination;
For
purposes of this subsection 11.2, “Term” means the period of the
Executive’s employment with the Company as well as a period of two (2) years
after termination of such employment for any reason.
12. Remedy for Violation of Section 11;
Severability.
12.1
Breach. The Executive
acknowledges that the Company has no adequate remedy at law and will be
irreparably harmed if the Executive breaches or threatens to breach the
provisions of Section 11 of this Agreement and, therefore, agrees that the
Company shall be entitled to injunctive relief to prevent any breach or
threatened breach of such section and that the Company shall be entitled to
specific performance of the terms of such section in addition to any other legal
or equitable remedy it may have.
13. No Withholding. All payments
required to be made by the Company hereunder to Cirrus Advisors, Inc. will not
be subject to withholding.
14.
Miscellaneous.
14.1 This
Agreement shall be governed by and construed in accordance with the laws of the
State of Idaho, without reference to principles of choice of law. The captions
of this Agreement are not part of the provisions hereof and shall have no force
or effect. This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective successors
or legal representatives.
17.2 All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party, by nationally recognized overnight
courier, or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the
Executive:
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Suite
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If to the
Company:
Atlas
Mining Company
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or to
such other address as either of the parties shall have furnished to the other in
writing in accordance herewith. Notices and other communications shall be
effective upon delivery, which may be established by a signed receipt or other
customary evidence.
17.3 The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
17.4 Any
party’s failure to insist upon strict compliance with any provision hereof shall
not be deemed to be a waiver of such provision or any other provision
hereof.
17.5 This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
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ATLAS
MINING COMPANY
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