SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form S-8
Registration Statement
Under
The Securities Act of 1933
NOVA NATURAL RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
Commission File Number
COLORADO 0-15078 84-1227328
(State or other jurisdiction of Commission (IRS Employer
of incorporation or organization) File Number Identification No.)
4340 East Kentucky Avenue, Suite 418
Glendale, CO 80246-2060
- -------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Stock Issuance Pursuant to Employment Agreements,
Long Range Corporate Planning and Business Development, Legal Services
And 2001 Stock Option Plan
--------------------------------------------------------
(Full title of the plan)
Copy to:
Edward Chan Mark D. Stubbs, Esq.
4340 East Kentucky Avenue 212 2nd Avenue West
Suite 418 Twin Falls, Idaho 83301
Glendale, CO 80246-2060 P.O. Box 1884
(720) 524-1363 (208) 734-6677
(Name, address and telephone
number of agent for service)
Approximate date of proposed sales pursuant to the plan: From
time to time after the effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
Title of Amount to be Proposed Proposed Amount of
Securities to be Registered: Maximum maximum Registration Fee
Registered: offering price per aggregate
Common Stock 24,153,000 share: offering Price: $784.97
Par Value $.10 $.13 $3,139,890.00
1) Calculated in accordance with Rule 457(c) solely for the
purpose of determining the registration fee. The offering price
is based on the average bid and asked price as reported on
the OTC Bulletin Board on August 30, 2001.
PART I
INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I
of the Registration Statement on Form S-8 will be sent or given to
participants in the 2001 Non-Qualified Stock Option Plan (the
"Stock Plan") as specified under Rule 428(b)(i) under the
Securities Act of 1933, as amended (the "Securities Act"). In
accordance with Rule 428(a) under the Securities Act and the
requirements of Part I of Form S-8, such documents are not being
filed with the Securities and Exchange Commission (the "Commission")
either as part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424 under the
Securities Act. The Registrant shall maintain a file of such
documents in accordance with the provisions of Rule 428(a)under the
Securities Act. Upon request, the Registrant shall furnish to the
Commission or its staff a copy or copies of all documents included
in such file.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated by reference into this
Registration Statement and are made a part hereof:
(a) The Company's Annual Report on Form 10-KSB for the fiscal
year ended September 30, 2000.
(b) The Company's Form 8-K, as amended, for an event which
occurred on February 27, 2001.
(c) All other reports filed pursuant to Section 13(a)or 15(d)
of the Exchange Act since the end of the fiscal year covered by the
Annual Report referred to in Item 3(a) above, including, but not
limited to, the Company's quarterly reports on Form 10-QSB for the
fiscal quarter ended June 30, 2001.
All reports and other documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended, prior to the filing of
a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of the
filing of such reports and documents.
ITEM 4. DESCRIPTION OF SECURITIES
Common Stock
General. The Company is authorized to issue 300,000,000 shares
of Common Stock, $.10 par value per share.
The holders of the Common Stock are entitled to receive
dividends when, as and if declared by the Board of Directors, out of
funds legally available therefor. In the event of liquidation,
dissolution or winding up of the Company, the holders of the Common
Stock are entitled to share ratably in all assets remaining
available for distribution to them after payment of liabilities and
after provision has been made for each class of stock, if any, having
preference over the Common Stock. The holders of the Common Stock
as such have no conversion, preemptive or other subscription rights
and there are no redemption provisions applicable to the Common Stock.
Voting Rights. The holders of the Common Stock are entitled to
one vote for each share held of record on all matters to be voted on
by stockholders. There is no cumulative voting with respect to
the election of directors, with the results that the holders of
shares having more than fifty percent (50%) of the votes for the
election of directors can elect all of the directors.
Dividend Policy. To date, the Company has not paid any
dividends on its Common Stock. The payment of dividends, if any,
in the future is within the discretion of the Board of Directors
and will depend upon the Company's earnings, its capital requirements
and financial condition and other relevant factors. The Board does
not intend to declare any dividends in the foreseeable future, but
instead intends to retain all earnings, if any, for use in the
Company's business operations.
Preferred Stock
General. There are no outstanding issued shares of Convertible
Preferred Stock. The Company is authorized to issue three million
(3,000,000) shares of Series A Convertible Preferred Stock with a
par value of $1.00 per share, and two million (2,000,000) shares of
Series B Convertible Preferred Stock.
Voting Rights. There are no outstanding issued shares of
Convertible Preferred Stock of any series.
Dividend Policy. There are no outstanding issued shares of
Convertible Preferred Stock of any series so there is currently no
policy regarding dividends on Preferred Stock.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Revised Statutes of the State of Colorado and the Company's
Articles of Incorporation, provide for the indemnification of the
Companies directors for liabilities and expenses that they may incur
in such capacities. In general, Directors and Officers are
indemnified with respect to actions taken in good faint in a manner
reasonably believed to by in or not opposed to, the best interests of
the Company, and with respect to any criminal action or proceeding,
actions that the indemnitee had no reasonable cause to believe were
unlawful.
The provisions affecting personal liability do not abrogate a
director's fiduciary duty to the Company and its shareholders, but
eliminate personal liability for monetary damages for breach of
that duty. The provisions do not, however, eliminate or limit the
liability of a director for failing to act in good faith, for
engaging in intentional misconduct or knowingly violating a law, for
authorizing the illegal payment of a dividend or repurchase of
stock, for obtaining an improper personal benefit, for breaching
a director's duty of loyalty, which is generally described as
the duty not to engage in any transaction which involves a
conflict between the interest of the Company and those of the
director, or for violations of the federal securities laws.
The provisions regarding indemnification provide, in essence,
that the Company will indemnify its directors against expenses
(including attorneys fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with any
action, suit or proceeding arising out of the director's status as
a director of the Company, including actions brought by or on behalf
of the Company (shareholder derivative actions). The provisions do
not require a showing of good faith. Moreover, they do not provide
indemnification for liability arising out of willful misconduct,
fraud, or dishonesty, for "short-swing" profits violations under
the federal securities laws, for the receipt of illegal remuneration
or if the director received a benefit in money, property or services
to which the director is not legally entitled.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
4.1. Consulting Agreement dated June 8, 2001 with Patrick Au
d/b/a CPC Johnsen Investment Management LLC
4.2 Employment Agreement with Edward Chan dated August 23, 2001.
4.3 Employment Agreement with Brian B. Spillane dated August 23,
2001.
4.4 Employment Agreement with Chris Tse dated August 23, 2001.
4.5 Consultant Agreement with Mark D. Stubbs Esq. Dated July 10,
2001
4.6 2001 Non-Qualified Stock Option Plan
4.7 Resale Prospectus
5.1 Opinion and consent of Mark D. Stubbs Esq. Re: the legality
of the shares being registered.
23.1 Consent of Mark D. Stubbs (included in Exhibit 5.1)
23.2 Consent of Hein + Associates LLP, Certified Public Accountants
23.3 Consent of Eddy S.L. Chin, Chartered Accountant.
ITEM 9. UNDERTAKINGS
(a) The registrant hereby undertakes:
(1) To file, during any period in which offers or sells are
being made, a post-effective amendment to this registration statement
to include any material information with respect to the plan of
distribution not previously disclosed in the statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining liability under
the Securities Act of 1933, each post-effective amendment shall be
treated as a new registration statement of the securities offered,
and the offering of the securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment of any of the securities that remain unsold at the
end of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly
caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the city of
Glendale, State of Colorado on the 28th day of August, 2001.
NOVA NATURAL RESOURCES, INC.
By: /s/
-----------------------------------------
EDWARD S. CHAN, PRESIDENT AND CEO
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following
persons in the capacities and on the date indicated.
Signatures Title Date
--------------- --------- --------
/s/ Edward S. Chan President, CEO, Treasurer August 29, 2001
- - ------------------------ (Principal Executive Officer)
EDWARD S. CHAN
/s/ Brian B. Spillane, Secretary and Director August 29, 2001.
- - ------------------------
BRIAN B. SPILLANE
EXHIBIT 4.1
CONSULTING AGREEMENT
This consulting agreement (this "Agreement") is made effective
the 8th day of June, 2001 by and between Nova Natural Resources
Corporation, (the "Company"), and Patrick Au d/b/a CPC Johnsen, a
personal services company, whose principal place of business in 30
Rawlings Avenue, Richmond Hill, Ontario, Canada L4S 1B5 (the
"Consultant").
RECITALS
WHEREAS, the Company wishes to engage the Consultant with
respect to certain aspects of its business; and,
WHEREAS, the Consultant is willing to make available to the
Company the consulting services provided for in the Agreement as set
forth below.
AGREEMENT
NOW THEREFORE, in consideration of the premises and the
respective covenants and agreements of the parties herein contained,
the parties hereto agree as follows:
1. TERM.
The term of this Agreement shall commence on the date hereof
and end two years thereafter on the anniversary date hereof unless
extended in a writing signed by both parties.
2. CONSULTING SERVICES
Consultant agrees to provide the following services for the
Company:
(a) Long range corporate planning and business development,
including but not limited to the development of corporate
strategy, market direction and implantation of business
plans.
(b) Review and analysis of potential markets and customers
in such markets.
(c) Review of operations and analysis of deviations from the
business plan for such markets.
(d) Identify appropriate merger/acquisition candidates in the
PRC.
(e) Screen candidates to focus on those which fit into Company's
criteria, eliminating those which do not fit the desired
profile.
(f) Work with Company to develop and refine criteria which will
further Company's corporate objectives and take maximum
advantage of the present desire of many Chinese companies to
be part of a publicly-traded American company which is
Chinese-controlled.
(g) Assist in the negotiations, regardless of duration, to work
out terms whereby Company either merges with, makes an
investment in, or purchases the candidates outright.
(h) Provide on-going advice and assistance in assimilating
acquired companies into Company, which tasks will include
assisting in resolving any managerial difficulties which may
arise after the transaction takes place.
3. COMPENSATION.
(a) Initial Issuance of Shares of Stock. In consideration
of the consulting services set forth in paragraph 2 (a) and subject
to the terms and conditions set forth herein the Company hereby
agrees to issue to Consultant ten million (10,000,000) shares of the
Company's Common stock and register such shares at the time of
initial issuance, or immediately thereafter, on Form S-8 under the
Securities Act of 1933 pursuant to the Company's Non-Qualified Stock
Option Plan 2001, and the terms and rules thereof.
(b) Issuance and Delivery. One half of The Common Stock,
that is, five million (5,000,000) shares shall issued and delivered
within 45 days of completion of the registration, at which time, the
Company shall deliver to the Consultant:
(i) the certificate or certificates evidencing the Shares
to be issued to the Consultant and the respective dates,
registered in the name of the Consultant; and
(ii) evidence that the Shares or the Stock Option plan
have been registered on Form S-8 to be filed upon issuance of
the Shares to the Consultant, registering for resale thereof.
(c) Second Issuance of Shares of Stock. In further consideration
of the consulting services set forth in paragraph 2 (a), and subject
to the terms and conditions set forth herein the Company hereby
agrees to issue to Consultant an additional five million (5,000,000)
shares of the Company's Common stock and register such shares at the
time of issuance, or immediately thereafter. This final delivery of
said Shares shall occur prior to the expiration of one year from the
anniversary date hereof.
(d) Expenses. During the term of the Consultant's engagement
hereunder. The Consultant shall be entitled to receive prompt
reimbursement for all reasonable expensesincurred by the Consultant
in performing services hereunder including all travel and living
expenses while away from home on business at the request of and in
the service of the Company, provided that such expenses are incurred
and accounted for in accordance with the policies and procedures
established by the Company, and that any expenses in excess of $500.00
have been pre-approved in writing by the Company.
4. CONFIDENTIAL INFORMATION.
(a) Confidential Information. In connection with the providing
of Consulting Services, hereunder, the Company may provide the
Consultant with information concerning the Company which the Company
deems confidential (the "Confidential Information"). The Consultant
understands and agrees that any Confidential Information disclosed
pursuant to this Agreement is secret, proprietary and of great
value to the Company, which value may be impaired if the secrecy of
such information is not maintained. Consultant further agrees that
he will take reasonable security measures to preserve and protect
the secrecy of such Confidential Information, and to hold such
information in confidence and not to disclose such information, either
directly or indirectly to any person or entity during the term of
this agreement or any time following the expiration or termination
hereof; provided, however, that the Consultant may disclose the
Confidential Information to an assistant to whom disclosure
is necessary for the providing of services under this agreement.
(b) Exclusions. For purposes of this paragraph 4, the term
Confidential Information shall not include Information which (i)
becomes generally available to the public other than as a
result of a disclosure by the Consultant or his assistants,
agents or advisors, or (ii) becomes available on a non-confidential
basis to the Consultant from a source other than the Company or
it's advisors, provided that such source is not known to the
Consultant to be bound by a Confidentiality agreement with or other
obligation of secrecy to the Company or another party.
(c) Government Order. Notwithstanding anything to the contrary
in this Agreement, the Consultant shall not be precluded from
disclosing any of the Confidential Information pursuant to a valid
order of any governmental or regulatory authority, or pursuant to
the order of any court or arbitrator.
(d) Injunctive Relief. The Consultant agrees that, since a
violation of this paragraph 4 would cause irreparable injury to the
Company, and that there may not be an adequate remedy at law for
such violation, the Company shall have the right in addition to any
other remedies available at law or in equity, to enjoin the
Consultant in a court of equity for violating the provisions of this
paragraph 4.
5. REPRESENTATION AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Consultant that
as of the date hereof and as of the Closing Date (after giving
effect to the transactions contemplated hereby):
(a) Existence and Authority. The Company is a corporation duly
organized and validly existing in good standing under the laws of
its jurisdiction of incorporation and has full power and authority
to own its respective property, carry on its respective business
as no being conducted, and enter into and perform its obligations
under this Agreement and to issue and deliver the Shares to be issued
by it hereunder. The Company is duly qualified as a jurisdiction in
which it is necessary to be so qualified to transact business as
currently conducted. This Agreement, has been duly authorized by
all necessary corporate action, executed, and delivered by the
Company, and constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance
with its terms subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights of creditors generally and to general principals
of equity.
(b) Authorization and Validity of Shares. The Shares have
been or will be duly authorized and validly issued and outstanding,
fully paid and non-assessable and free of any preemptive rights.
The Shares are not subject to any lien, pledge, security interest
or other encumbrance.
(c) Authorization of Agreement. The Company has taken all
actions and obtain all consents or approvals necessary to authorize
it to enter into this Agreement.
(d) No Violation. Neither the execution or delivery of this
Agreement, the issuance or delivery of Shares, the performance
by the Company of its obligations under this Agreement, nor the
consummation of the transactions contemplated hereby will conflict
with, violate constitute a breach of or a default (with the passage
of time or otherwise) under, require the consent or approval of or
filing with any person (other than consent and approvals which have
been obtained and filings which have been made) under, or result in
the imposition of a lien on or securities interest in any properties
or assets of the Company, pursuant to the charter or bylaws of the
Company, any award of any arbitrator or any agreement (including
any agreement with stockholders), instruments, order, judgement,
decree, statute, law, rule or regulation to which the Company is
party or to which any such person or any of their respective
properties or assets is subject.
(e) Registration. The Shares have been, or will be upon the
filing of an S-8 Registration Statement, registered pursuant to the
Securities Act of 1933, as amended, and all applicable state laws.
6. FILINGS.
The Company shall furnish to the Consultant, promptly after the
sending or filing thereof, copies of all reports which the Company
sends to its equity security holders generally, and copies of all
reports and registration statements which the Company files with the
Securities and Exchange Commission (the "Commission"), any other
securities exchange or the national Association of Securities Dealers,
Inc. ("NASD").
7. SUPPLYING INFORMATION.
The Company shall cooperate with the Consultant in supplying
such publicly available information as may be reasonably necessary
for the Consultant to complete and file any information reporting
forms.
8. INDEMNIFICATION.
(a) The Company shall indemnify the Consultant from and against
any and all expenses (including attorneys' fees), judgements, fines,
claims, cause of action, liabilities and other amounts paid
(whether in settlement or otherwise actually and reasonably
incurred) by the Consultant in connection with such action, suit or
proceeding if (i) the Consultant was made a party to any action, suit
or proceeding by reason of the fact that the Consultant rendered
advice or services pursuant to this Agreement, and (ii) the
Consultant acted in good faith and in a manner reasonably believed by
the Consultant to be in or not opposed to the interests of the
Company, and with respect to any criminal action or proceeding,
had no reasonable cause or believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the
Consultant did not act in good faith in or not opposed to the best
interests of the Company, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his
conduct was unlawful. Notwithstanding the foregoing, the Company shall
not indemnify the Consultant with respect to nay claim, issue or
matter as to which the consultant shall have been adjudged to be
liable for gross negligence or willful misconduct in the performance
other duties pursuant to this Agreement unless and only to the extent
that the court in which such action or suit was brought shall
determine upon application that, despite the adjunction of liability,
but in view of all the circumstances of the case, the Consultant
is fairly and reasonably entitled to indemnity for such expenses
which such court shall deem proper.
(b) The Consultant shall indemnify the Company from and against
any and all expenses (including attorney's fees), judgements, fines,
claims, causes of action, liabilities and other amounts paid (whether
in settlement or otherwise actually and reasonably incurred) by the
Company in connection with such action, suit or proceeding if (i)
the Company was made a party to any action, suit or proceeding by
reason of the fact that the Consultant rendered advice or services
pursuant to this Agreement, and (ii) the Consultant did not act in
good faith and in a manner reasonably believed by the Consultant to
be in or not opposed to the interests of the Company, and with
respect to any criminal action or proceeding, did not reasonably
believe his conduct was lawful. Notwithstanding the foregoing, the
Consultant shall not indemnify the Company with respect to any claim,
issue or matter as to which the Company shall have been adjudged to
be liable for gross negligence or willful misconduct in connection
with the performance of the Consultant's duties pursuant to this
Agreement unless and only to the extent that the court on which such
action or suit was brought shall determine upon application that,
despite the adjunction of liability, but in view of all circumstances
of the case, the Company is fairly and reasonably entitled to
indemnify for such expenses which such court shall deem proper.
9. INDEPENDENT CONTRACTOR STATUS.
It is expressly understood and agreed that this is a consulting
agreement only and does not constitute an employer-employee
relationship. Accordingly, the Consultant agrees that the consultant
shall be solely responsible for payment of his own taxes or sums due
to the federal, state, or local governments, overhead, workmen's
compensation, fringe benefits, pension contributions and other
expenses. It is further understood and agreed that the
Consultant is an independent contractor and the company shall
have no right to control the activities of the Consultant other
than during the express period of time in which the Consultant is
performing services hereunder, and that such control is not
because of any presumed employer-employee relationship. The
Consultant shall have no authority to bind the company.
The parties further acknowledge that the Company's services
hereunder are not exclusive, but that the Consultant shall
performing services and undertaking other responsibilities, for
and with other entities or persons, which may directly or indirectly
compete with the Company. Accordingly, the services of the
Consultant hereunder are on a part time basis only, and the Company
shall have no discretion, control of, or interest in, the Consultant's
services which are not covered by the terms of the Agreement. The
Company hereby waives any conflict of interest which now exists or
may hereafter arise with respect to Consultant's current employment
and future employment.
10. NOTICE.
All notices provided by this Agreement shall be in writing
and shall be given by facsimile transmission, overnight courier
by registered mail or by personal delivery, by one party to the other,
addressed to such other party at the applicable address set forth
below, or to such other address as may be given for such purpose by
such other party by notice duly given hereunder. Notice shall be
deemed properly given on the date of the delivery.
To Consultant: Patrick Au d/b/a CPC Johnsen
30 Rawlings Avenue
Richmond Hill, Ontario, Canada L4S 1B5
To the Company: Nova Natural Resources Corporation
4340 Kentucky Avenue, Suite 418
Glendale, Colorado 80246-2060
Fax: 720.524.1364
11. MISCELLANEOUS
(a) Waiver. Any term or provision of this Agreement may be
waived at any time by the party entitled to the benefit thereof by a
written instrument duly executed by such party.
(b) Entire Agreement. This Agreement contains the entire
understanding between the parties hereto with respect to the
transactions contemplated hereby, and may not be amended, modified,
or altered except by an instrument in writing signed by the party
against whom such amendment, modification, or alteration is sought
to be enforced. This Agreement supercedes and replaces all other
agreements between the parties with respect to any services to be
performed by the Consultant of behalf of the Company.
(c) Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Colorado.
(d) Binding Effect. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
(e) Construction. The captions and headings contained herein
are inserted for convenient reference only, are not a part hereof
and the same shall not limit or construe the provisions to which
they apply. Reference in this agreement to "paragraphs" are to
the paragraphs in this Agreement, unless otherwise noted.
(f) Expenses. Each party shall pay and be responsible for the
cost and expanses, including, without limitations, attorney's fees,
incurred by such party in connection with negotiation, preparation
and execution of this Agreement and the transactions contemplated
hereby.
(g) Assignment. No party hereto may assign any of its rights
or delegate any of its obligations under this Agreement without the
express written consent of the other party hereto.
(h) No Rights to Others. Nothing herein contained or implied is
intended or shall be construed to confer upon or give to any person,
firm or corporation, other than the parties hereto.
(i) Counterparts. This Agreement may be executed simultaneously
in two counterparts, each of which shall be deemed an original,
but both of which together shall constitute on and the same agreement,
binding upon both parties hereto, notwithstanding that both parties
are not signatories to the original or the same counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date and year first above written.
NOVA NATURAL RESOURCES CORPORATION
By: /s/
-------------------------------
Edward S. Chan, Its President
Patrick Au d/b/a CPC JOHNSEN
By: /s/
-------------------------------
------------------------Its Manager
(type or print)
EXHIBIT 4.2
EXECUTIVE EMPLOYMENT AGREEMENT
EDWARD CHAN
This document will set forth the terms of the agreement between
EDWARD CHAN ("Employee") and NOVA NATURAL RESOURCES CORPORATION, a
Colorado corporation, ("NOVA" or "Employer")and is effective as of
March 1, 2001.
1. Employment.
Employee will serve as President and Chief Executive Officer of
NOVA and as such Employee will perform those duties which are normal
and customary in the industry for like positions. Employee will be
responsible for the leadership of NOVA which includes, but is not
limited to, the development and implementation of company strategy,
communication within and without NOVA, and organizational structure
and integrity including the determination and definition of
employees' responsibilities. Employee's position includes the
express powers, as well as the implied powers, necessary to
effectuate all tasks that are reasonably necessary. In Employee's
capacity as President and Chief Executive Officer of NOVA, Employee
will perform such duties for NOVA and its affiliates as they may
reasonably require and will report directly to the NOVA Board of
Directors, through its Chairman, and through the managing directors
of NOVA. Employee will perform full-time services on an exclusive
basis for NOVA and its affiliates.
2. Term.
The term of this Agreement will commence on the date hereof and
continue until terminated by either party giving to the other not
less than 90 days notice in writing; provided, however, that Employee
and Company may not give such notice during the first thirty six (36)
months of the term hereof; and, provided further, that this Agreement
will in any event terminate on the seventh anniversary hereof.
Employee acknowledges that NOVA is not required to actually utilize
Employee's services hereunder, but this shall not release NOVA of its
obligation to pay Employee the compensation set forth herein, subject
to NOVA's right to terminate this Agreement or to continue Employee's
employment after expiration of the term hereof, and Employee
expressly acknowledges that no promises or understandings to the
contrary have been made or reached.
3. Base Compensation.
NOVA will pay Employee a base salary of $120,000 per annum.
NOVA will be responsible for all applicable withholding taxes,
including unemployment insurance, workers compensation insurance,
if applicable, social security taxes and NOVA's portion of state and
federal taxes. Such salary will be payable in regular monthly
installments on NOVA's regular paydays during the term. Salary may
be paid in stock but as soon as NOVA's cash flow allows, in cash.
Employee may, subject to available funds and at the sole discretion
of NOVA, Employee may sell all or a portion of stock issued in lieu
of salary, back to NOVA at Employee's cost.
4. Severance.
Upon termination of this Agreement by NOVA pursuant to Section
2 above, NOVA agrees to pay Employee in cash in US dollars any
portion of the salary owed to date and for the 90-day notification
period during which the services of Employee are not required by NOVA.
Additionally, NOVA agrees to pay any bonus compensation (as
determined in accordance with Section 5 below) which is accrued but
unpaid as of the last day of the 90-day notification period (whether
or not Employee renders services hereunder until such date), plus any
accrued vacation pay or other paid time off, to such date. All
severance compensation set forth in this Section 4 shall be paid in a
single lump sum payment which shall be due and payable on the last
day of the 90-day notification period, with the exception of accrued
but unpaid bonus compensation (as determined in accordance with
Section 5 below), which shall be paid in accordance with Section 5.
All benefits set forth in Section 6 hereof, except any pension or
other retirement benefits but including the annual expense
reimbursement advance (or a pro rata portion thereof, as applicable),
will also continue for a 15 month period after the date of the
termination notice delivered by NOVA pursuant to Section 2.
5. Bonus Compensation.
NOVA agrees to implement a bonus plan as approved by the Board
of Directors, which will reward Employee for his performance and
achievement based on standards set by the Board.
6. Other Benefits.
Employee will receive a quarterly expense reimbursement advance
in an amount as determined by the board, Employee will account for
all expenses in accordance with NOVA's then prevailing policy
(which shall include appropriate itemization and substantiation of
expenses incurred, and shall require receipts for all expenses over
$25.00), not less than monthly. NOVA will additionally reimburse
Employee for Employee's reasonable and necessary business expense in
excess of such amount in accordance with its then prevailing policy.
Employee will be entitled to four (4) weeks vacation per year with
pay during the term of this agreement. Employee may accrue no more
than five (5) weeks of vacation and any vacation accrued and not used
by the end of the calendar year in excess of five (5) weeks shall be
lost. Any travel undertaken on behalf of NOVA may be business class
or better, as NOVA policy permits). Employee may take Employee's
spouse on business trips with Employee so long as Employee reimburses
NOVA for (i) the difference between the value of one business class
(or first class, if applicable) airfare and the aggregate cost of the
airfare for Employee and Employee's spouse, and (ii) all other
incremental or additional costs incurred or occasioned by Employee's
spouse. Employee may be granted options in accordance with the NOVA
Share Option and Bonus Schemes. The grant of options is at the
discretion of the management of NOVA. Employee and Employee's
family will be eligible to participate in the current NOVA health and
medical plans when established, at no cost to Employee. Employee
expressly agrees and acknowledges that after the expiration of the
term hereof, Employee will be entitled to no additional benefits not
expressly set forth herein, except as specifically provided under the
benefit plans referred to herein and those benefit plans in which
Employee may subsequently become a participant, and subject in all
cases to the terms and conditions of each such plan.
NOVA will, at least quarterly, reimburse employee for all
expenses incurred by employee for medical care (as defined in Section
213(e) of Title 26 of the United States Code) of employee, employee's
spouse, and employee's dependents (as defined in Section 152 of Title
26 of the United States Code). Expenses for medical care (as defined
in Section 213(e) of Title 26 of the United States Code), include
all amounts for hospital bills, doctor and dental bills, drugs, and
premiums on accident and health insurance, including hospitalization,
medical, and surgical insurance. Dependents (as defined in Section
152 of Title 26 of the United States Code), includes any member of
employee's family over one-half of whose support is furnished by
employee.
NOVA may, in its discretion, pay directly any or all of the
above- defined expenses in lieu of making reimbursements for such
expenses. In that event, NOVA shall be relieved of all further
responsibility with respect to that particular medical expense.
Reimbursement to, or the payment on behalf of, employee covered
by the accident and health plan, including employee's spouse and
dependents, shall be limited to a maximum during each calendar year
of five thousand dollars ($5,000.00), and does not include cost of
an individual coverage under any group hospitalization and major
medical insurance policy covering the employees of NOVA. If the
commencement day of employment of employee covered by such plan shall
be after the beginning of any calendar year, or if employee covered
by this plan terminates his employment prior to the end of any
calendar year for any reason other than death or permanent disability,
employee's maximum reimbursement for such calendar year shall, in any
such event, be reduced proportionately on the basis of the number of
full months of employment during such calendar year.
When applying for reimbursement under the above-stated plan,
employee shall submit to NOVA, at least quarterly, all doctor, dental,
hospitalization, or any other medical bills, including premium
notices for health or accident insurance, for verification by NOVA
prior to payment. Failure to comply with this provision may, within
the discretion of NOVA, terminate employee's right to reimbursement.
Payment by NOVA under the above-stated plan may be made at thetime or
times determined by NOVA in its discretion, but in no event shall
such payments be made later than the end of the month following the
close of any calendar year.
Reimbursement for medical care provided under the above-stated
plan shall be made by NOVA only in the event and to the extent that
such reimbursement or payment is not provided for under any insurance
policy or policies, whether owned by NOVA or by employee, and to the
extent of the coverage under any such policy or policies, NOVA shall
be relieved of any and all liability under the above-stated plan.
7. Termination by NOVA.
NOVA may terminate this Agreement:
(a) for cause by delivery of written notice if Employee has
engaged in willful material breach of duty in the course of Employee's
employment, in the case of Employee's habitual neglect of Employee's
duty or conviction of a felony; or
(b) by delivery of written notice if Employee has suffered a
disability which prevents Employee's performance of Employee's
full-time duties under this Agreement. For purposes hereof, Employee
will be deemed to have suffered a disability if any physical or
mental condition prevents Employee from providing full-time services
to NOVA for an aggregate of 90 days during any period of 180 days.
Notwithstanding the foregoing, however, prior to termination by NOVA
pursuant to Section 7(a), Employee shall have a period of 30 days in
which to cure any breach under Section 7(a) (if such breach is of a
nature that it can be cured) from the date of delivery of a notice to
Employee by NOVA setting forth in detail the particular failure or
other breach of duty hereunder. In the event of termination by
NOVA under Section 7(a) Employee shall be entitled to receive no
further compensation or benefits hereunder except for base
compensation and benefits which shall have vested or accrued and
remain unpaid as of the last consecutive day upon which Employee
render full-time services hereunder and Employee shall not be
entitled to receive any accrued but unpaid bonus compensation. In
the event of termination by NOVA under Section 7(b), Employee
be entitled to receive $120,000 and any bonus compensation which is
accrued but unpaid as of the date of the termination notice delivered
by NOVA. All benefits set forth in Section 6 hereof, other than any
pension or other retirement, will continue for a 12-month period
after the date of such termination notice.
8. Termination by Employee.
Employee may terminate this Agreement at any time subject to
the provisions set forth in Section 2 above and in the event of such
termination, Employee shall be entitled to receive no further
compensation or benefits hereunder except for benefits which have
vested, unpaid base compensation which has accrued and bonus
compensation which has been earned and remains unpaid as of the last
consecutive day upon which Employee renders full-time services
hereunder.
9. Constructive Termination.
In the event that (i) any person or entity (other than NOVA)
becomes the beneficial owner of securities of NOVA representing
majority of the voting power of the securities of NOVA, (ii) or in
the event that any person or entity (other than NOVA) becomes the
beneficial owner of securities of NOVA representing a majority of the
voting power of the securities of NOVA, (iii) or in the event that a
Change of Control of NOVA (as hereinafter defined) occurs, (iv) or in
the event that all or substantially all of NOVA's assets (as computed
on a consolidated basis) are sold, or (v) in the event that NOVA is
merged with any entity and such entity is the survivor and a person
or entity (other than NOVA) becomes the beneficial owner of
securities of such survivor representing a majority of the voting
power of the securities of such survivor, (in each case referenced in
clauses (i) through (v) above, a "Sale of the Company"), NOVA shall
be deemed to have terminated Employee upon consummation of such
transaction, and $240,000 shall be paid to Employee in cash at the
closing of such transaction. In addition, the amount of any accrued
but unpaid bonus compensation as of the date of closing of the Sale
of the Company (as determined in accordance with Section 5 hereof)
shall be paid to Employee in cash within thirty (30) days after the
date of closing. In the event of such constructive termination,
Employee agrees to cooperate with NOVA, its affiliates and/or the
purchaser for a period of up to ninety (90) days following the
closing at NOVA's request to assist in the transition to a new
management and/or winding up or liquidation of NOVA and/or its
affiliates; provided, however, that it is specifically agreed that
Employee shall not be required during such 90-day period to provide
services to the Company in the capacity set forth in Section 1
hereof. All benefits set forth in Section 6 hereof, other than any
pension or other retirement benefits but including the expense
reimbursement advance, will also continue for a 15-month period after
the closing of the Sale of the Company. For purposes of this
Agreement, the term "Change of Control of NOVA" shall mean a change
in the composition of the Board of Directors of NOVA such that the
incumbent members of the Board of Directors on the date hereof (as
the composition of the same is subsequently changed from time to time
hereafter by election, retirement and removal in the normal course of
affairs) cease to represent a majority of the members of such Board
as a result of (i) a change in ownership of NOVA Common Shares, (ii)
the consolidation or merger of NOVA with or into an unrelated third
party, or (iii) a proxy solicitation done for the purpose of
effecting such a change.
10. Material Breach; Liquidation Damages.
Employee may terminate this Agreement upon material breach by
NOVA of any material provision hereof by delivering written notice to
NOVA's Board of Directors; provided, however, that prior to
termination of Employee, NOVA shall have a period of 30 days in which
to cure such breach (if such breach is of a nature that it may be
cured) from the date of delivery of a notice to NOVA by Employee
setting forth in detail the particular breach hereunder. Upon such
termination, Employee shall be entitled to receive as liquidated
damages the severance compensation set forth in Section 4 above
(including any accrued but unpaid bonus compensation as set forth
therein) and the benefits outlined in Section 6 hereof (other than
any pension or other retirement benefits but including the expense
reimbursement advance), for one year or for the remaining term of the
contract which ever is greater.
11. Disputes.
Any dispute or controversy arising under, out of, in connection
with or in relation to the termination of this Agreement (i) by NOVA
pursuant to Section 7(a), (ii) by Employee pursuant to Section 10, or
(iii) pursuant to Section 9, shall be determined and settled by
submission for hearing to an arbitrator in an expedited arbitration
proceeding conducted in Glendale, Colorado in accordance with the
rules and procedures of the American Arbitration Association. Such
submission and hearing shall be initiated by any party by delivery of
written notice to the other party demanding a hearing and specifying
the controversy or dispute to be settled. The decision of the
arbitrator shall be binding and conclusive on the parties hereto. In
the case of a dispute arising under Section 7(a) hereunder, if NOVA
is determined by the arbitrator to have terminated this Agreement
other than in accordance with the provisions of Section 7(a),
Employee shall be entitled to receive the severance compensation set
forth in Section 4 (including any accrued but unpaid bonus as set
forth therein) in a lump sum payment (less any portion thereof
previously paid to Employee) and to receive all other benefits set
forth in Section 6 (other than any pension or other retirement
benefits but including the expense reimbursement advance) for a
period of 15 months after the date the arbitrator's decision is
rendered (as reduced by any period of time during the pendancy of
the arbitration in which Employee received such benefits). In the
case of a dispute arising under Section 10 hereof, if Employee is
determined by the arbitrator to have terminated this Agreement other
than in accordance with the provisions of Section 10 hereof, Employee
shall not be entitled to receive any compensation or benefits from or
after the last consecutive day upon which Employee rendered full-time
services hereunder except for base compensation, bonus compensation
and benefits which shall have accrued, been earned or vested as of
such day, and if Employee shall have received any compensation to
which Employee is not entitled hereunder, Employee shall immediately
pay over to NOVA an amount equal to such unearned compensation.
Because time is of the essence in the resolution of any dispute or
controversy to be settled pursuant to this Section 11, the parties
agree that any unreasonable delay of the proceedings before the
arbitrator by any party hereto may be the subject of sanctions by the
arbitrator and each of the parties hereto agrees to use its best
efforts to cause the final resolution of any dispute or controversy
hereunder to occur within three months of the date of termination
giving rise thereto.
12. Duty to Mitigate; Offset.
It is expressly agreed and understood that in the event of the
termination of this Agreement (i) by NOVA pursuant to Section 2
hereof, (ii) by Employee pursuant to Section 10 hereof, or (iii)
pursuant to Section 9 hereof, Employee shall have no affirmative duty
to mitigate the damages payable to Employee by NOVA and further that
no amounts actually earned or accrued by Employee for employment or
similar services during the period of time subsequent to such
termination will be offset against any amounts to which Employee is
otherwise entitled hereunder.
13. Entire Agreement; Modification; Etc.
This Agreement sets forth the entire understanding between
Employee and NOVA, and there are no terms, conditions,
representations, warranties or covenants other than those contained
herein and all prior personal service or employment agreements
(whether written, oral or implied) between Employee (or any company
through which Employee provide Employee's services) and NOVA or any
affiliate or predecessor of NOVA are terminated as of the
commencement of the term of this Agreement and Employee hereby waives
all rights under any such prior personal service or employment
agreements which accrue after the date of the execution hereof. No
term or provision of this Agreement may be amended, waived, released,
discharged or modified in any respect except in writing, signed by
each of the parties hereto or by the party to be bound thereby. No
waiver of any breach or default shall constitute a waiver of any
other breach or default, whether of the same or any other provision.
A delay or failure to assert rights or a breach of this Agreement
shall not be deemed to be a waiver of such right either with respect
to that breach or any subsequent breach.
14. Assignment.
This Agreement may not be assigned by either party.
15. Colorado Law.
This Agreement will be governed by and construed in accordance
with the internal laws of the State of Colorado applicable to
contracts to be executed and performed wholly in that state.
NOVA NATURAL RESOURCES CORPORATION
By: ____________________________ Dated:
Director
READ, ACCEPTED AND AGREED TO:
________________________________ Dated:
Edward Chan
EXHIBIT 4.3
EXECUTIVE EMPLOYMENT AGREEMENT
BRIAN B. SPILLANE
This document will set forth the terms of the agreement between BRIAN
B. SPILLANE ("Employee")and NOVA NATURAL RESOURCES CORPORATION, a
Colorado corporation, ("NOVA" or "Employer") and is effective as of
March 1, 2001.
1. Employment.
Employee will serve as Secretary of NOVA and as such Employee
will perform those duties which are normal and customary in the
industry for like positions. Employee will be responsible to the
President and CEO of NOVA and will perform all assigned tasks, which
include, but are not limited to, assisting in the development and
implementation of company strategy, communication within and
without NOVA, and organizational structure and integrity including
the determination and definition of employees' responsibilities.
Employee's position includes the express powers, as well as the
implied powers, necessary to effectuate all tasks that are reasonably
necessary. In Employee's capacity as an employee of NOVA, Employee
will perform such duties for NOVA and its affiliates as they may
reasonably require and as assigned and will report directly to the
President of NOVA.
2. Term.
The term of this Agreement will commence on the date hereof and
continue until terminated by either party giving to the other not
less than 90 days notice in writing; provided, however, that
Employee and Company may not give such notice during the first thirty
six (36) months of the term hereof; and, provided further, that this
Agreement will in any event terminate on the seventh anniversary
hereof. Employee acknowledges that NOVA is not required to actually
utilize Employee"s services hereunder, but this shall not release
NOVA of its obligation to pay Employee the compensation set forth
herein, subject to NOVA's right to terminate this Agreement or to
continue Employee's employment after expiration of the term hereof,
and Employee expressly acknowledges that no promises or understandings
to the contrary have been made or reached.
3. Base Compensation.
NOVA will pay Employee a base salary of $72,000 per annum.
NOVA will be responsible for all applicable withholding taxes,
including unemployment insurance, workers compensation insurance,
if applicable, social security taxes and NOVA's portion of state and
federal taxes. Such salary will be payable in regular monthly
installments in US dollars, on NOVA's regular paydays during the
term. Salary may be paid in stock but as soon as NOVA's cash flow
allows, in cash. Employee may, subject to available funds and at
the sole discretion of NOVA, Employee may sell all or a portion of
stock issued in lieu of salary, back to NOVA at Employee's cost.
4. Severance.
Upon termination of this Agreement by NOVA pursuant to Section
2 above, NOVA agrees to pay Employee in cash in US dollars any
portion of the salary owed to date and for the 90-day notification
period during which the services of Employee are not required by NOVA.
Additionally, NOVA agrees to pay any bonus compensation (as
determined in accordance with Section 5 below) which is accrued but
unpaid as of the last day of the 90-day notification period (whether
or not Employee renders services hereunder until such date), plus any
accrued vacation pay or other paid time off, to such date. All
severance compensation set forth in this Section 4 shall be paid in a
single lump sum payment which shall be due and payable on the last
day of the 90-day notification period, with the exception of accrued
but unpaid bonus compensation (as determined in accordance with
Section 5 below), which shall be paid in accordance with Section 5.
5. Bonus Compensation.
NOVA agrees to implement a bonus plan as approved by the Board
of Directors, which will reward Employee for his performance and
achievement based on standards set by the Board.
6. Other Benefits.
Employee will receive a quarterly expense reimbursement advance
in an amount as determined by the board. Employee will account for
all expenses in accordance with NOVA's then prevailing policy (which
shall include appropriate itemization and substantiation of expenses
incurred, and shall require receipts for all expenses over $25.00),
not less than monthly. NOVA will additionally reimburse Employee
for Employee's reasonable and necessary business expense in excess of
such amount in accordance with its then prevailing policy. Employee
will be entitled to three (3) weeks vacation per year with pay during
the term of this agreement. Employee may accrue no more than four
(4) weeks of vacation and any vacation accrued and not used by the
end of the calendar year in excess of four (4) weeks shall be lost.
Any travel undertaken on behalf of NOVA may be business class (or
better, as NOVA policy permits). Employee may take Employee's spouse
on business trips with Employee so long as Employee reimburses NOVA
for (i) the difference between the value of one business class (or
first class, if applicable) airfare and the aggregate cost of the
airfare for Employee and Employee's spouse, and (ii) all other
incremental or additional costs incurred or occasioned by Employee's
spouse. Employee may be granted options in accordance with the NOVA
Share Option and Bonus Schemes. The grant of options is at the
discretion of the management of NOVA. Employee and Employee's
family will be eligible to participate in the current NOVA health
and medical plans when established, at no cost to Employee. Employee
expressly agrees and acknowledges that after the expiration of the
term hereof, Employee will be entitled to no additional benefits not
expressly set forth herein, except as specifically provided under the
benefit plans referred to herein and those benefit plans in which
Employee may subsequently become a participant, and subject in all
cases to the terms and conditions of each such plan.
NOVA will, at least quarterly, reimburse employee for all
expenses incurred by employee for medical care (as defined in Section
213(e) of Title 26 of the United States Code) of employee, employee's
spouse, and employee's dependents (as defined in Section 152 of
Title 26 of the United States Code). Expenses for medical care (as
defined in Section 213(e) of Title 26 of the United States Code),
include all amounts for hospital bills, doctor and dental bills,
drugs, and premiums on accident and health insurance, including
hospitalization, medical, and surgical insurance. Dependents (as
defined in Section 152 of Title 26 of the United States Code),
includes any member of employee's family over one-half of whose
support is furnished by employee.
NOVA may, in its discretion, pay directly any or all of the
above- defined expenses in lieu of making reimbursements for such
expenses. In that event, NOVA shall be relieved of all further
responsibility with respect to that particular medical expense.
Reimbursement to, or the payment on behalf of, employee covered
by the accident and health plan, including employee's spouse and
dependents, shall be limited to a maximum during each calendar year
of five thousand dollars ($5,000.00), and does not include cost of an
individual coverage under any group hospitalization and major medical
insurance policy covering the employees of NOVA. If the commencement
day of employment of employee covered by such plan shall be after the
beginning of any calendar year, or if employee covered by this plan
terminates his employment prior to the end of any calendar year for
any reason other than death or permanent disability, employee's
maximum reimbursement for such calendar year shall, in any such
event, be reduced proportionately on the basis of the number of full
months of employment during such calendar year.
When applying for reimbursement under the above-stated plan,
employee shall submit to NOVA, at least quarterly, all doctor, dental,
hospitalization, or any other medical bills, including premium
notices for health or accident insurance, for verification by NOVA
prior to payment. Failure to comply with this provision may, within
the discretion of NOVA, terminate employee's right to reimbursement.
Payment by NOVA under the above-stated plan may be made at the
time or times determined by NOVA in its discretion, but in no event
shall such payments be made later than the end of the month following
the close of any calendar year.
Reimbursement for medical care provided under the above-stated
plan shall be made by NOVA only in the event and to the extent that
such reimbursement or payment is not provided for under any insurance
policy or policies, whether owned by NOVA or by employee, and to the
extent of the coverage under any such policy or policies, NOVA shall
be relieved of any and all liability under the above-stated plan.
7. Termination by NOVA.
NOVA may terminate this Agreement:
(a) for cause by delivery of written notice if Employee has
engaged in willful material breach of duty in the course of Employee's
employment, in the case of Employee's habitual neglect of Employee's
duty or conviction of a felony; or
(b) by delivery of written notice if Employee has suffered a
disability which prevents Employee's performance of Employee's
full-time duties under this Agreement. For purposes hereof, Employee
will be deemed to have suffered a disability if any physical or
mental condition prevents Employee from providing full-time services
to NOVA for an aggregate of 90 days during any period of 180 days.
Notwithstanding the foregoing, however, prior to termination by NOVA
pursuant to Section 7(a), Employee shall have a period of 30 days in
which to cure any breach under Section 7(a) (if such breach is of a
nature that it can be cured) from the date of delivery of a notice to
Employee by NOVA setting forth in detail the particular failure or
other breach of duty hereunder. In the event of termination by
NOVA under Section 7(a) Employee shall be entitled to receive no
further compensation or benefits hereunder except for base
compensation and benefits which shall have vested or accrued and
remain unpaid as of the last consecutive day upon which Employee
render full-time services hereunder and Employee shall not be
entitled to receive any accrued but unpaid bonus compensation. In
the event of termination by NOVA under Section 7(b), Employee shall
be entitled to receive $72,000 and any bonus compensation which is
accrued but unpaid as of the date of the termination notice delivered
by NOVA. All benefits set forth in Section 6 hereof, other than any
pension or other retirement benefits , will continue for a 12-month
period after the date of such termination notice under Section 7 (b).
8. Termination by Employee.
Employee may terminate this Agreement at any time subject to
the provisions set forth in Section 2 above and in the event of such
termination, Employee shall be entitled to receive no further
compensation or benefits hereunder except for benefits which have
vested, unpaid base compensation which has accrued and bonus
compensation which has been earned and remains unpaid as of the last
consecutive day upon which Employee renders full-time services
hereunder.
9. Constructive Termination.
In the event that (i) any person or entity (other than NOVA)
becomes the beneficial owner of securities of NOVA representing a
majority of the voting power of the securities of NOVA, (ii) or in
the event that any person or entity (other than NOVA) becomes the
beneficial owner of securities of NOVA representing a majority of the
voting power of the securities of NOVA, (iii) or in the event that a
Change of Control of NOVA (as hereinafter defined) occurs, (iv) or in
the event that all or substantially all of NOVA's assets (as computed
on a consolidated basis) are sold, or (v) in the event that NOVA is
merged with any entity and such entity is the survivor and a person
or entity (other than NOVA) becomes the beneficial owner of
securities of such survivor representing a majority of the voting
power of the securities of such survivor, (in each case referenced
in clauses (i) through (v) above, a "Sale of the Company"), NOVA
shall be deemed to have terminated Employee upon consummation of such
transaction, and $144,000 shall be paid to Employee in cash at the
closing of such transaction. In addition, the amount of any accrued
but unpaid bonus compensation as of the date of closing of the Sale
of the Company (as determined in accordance with Section 5 hereof)
shall be paid to Employee in cash within thirty (30) days after the
date of closing. In the event of such constructive termination,
Employee agrees to cooperate with NOVA, its affiliates and/or the
purchaser for a period of up to ninety (90) days following the
closing at NOVA's request to assist in the transition to a new
management and/or winding up or liquidation of NOVA and/or its
affiliates; provided, however, that it is specifically agreed that
Employee shall not be required during such 90-day period to provide
services to the Company in the capacity set forth in Section 1
hereof. All benefits set forth in Section 6 hereof, other than any
pension or other retirement benefits but including the expense
reimbursement advance, will also continue for a 15-month period after
the closing of the Sale of the Company. For purposes of this
Agreement, the term "Change of Control of NOVA" shall mean a change
in the composition of the Board of Directors of NOVA such that the
incumbent members of the Board of Directors on the date hereof (as
the composition of the same is subsequently changed from time to time
hereafter by election, retirement and removal in the normal course of
affairs) cease to represent a majority of the members of such Board
as a result of (i) a change in ownership of NOVA Common Shares, (ii)
the consolidation or merger of NOVA with or into an unrelated third
party, or (iii) a proxy solicitation done for the purpose of
effecting such a change.
10. Material Breach; Liquidation Damages.
Employee may terminate this Agreement upon material breach by
NOVA of any material provision hereof by delivering written notice to
NOVA's Board of Directors; provided, however, that prior to
termination of Employee, NOVA shall have a period of 30 days in which
to cure such breach (if such breach is of a nature that it may be
cured) from the date of delivery of a notice to NOVA by Employee
setting forth in detail the particular breach hereunder. Upon such
termination, Employee shall be entitled to receive as liquidated
damages the severance compensation set forth in Section 4 above
(including any accrued but unpaid bonus compensation as set forth
therein) and the benefits outlined in Section 6 hereof (other than
any pension or other retirement benefits but including the expense
reimbursement advance), for one year or for the remaining term of the
contract which ever is greater.
11. Disputes.
Any dispute or controversy arising under, out of, in connection
with or in relation to the termination of this Agreement (i) by NOVA
pursuant to Section 7(a), (ii) by Employee pursuant to Section 10, or
(iii) pursuant to Section 9, shall be determined and settled by
submission for hearing to an arbitrator in an expedited arbitration
proceeding conducted in Glendale, Colorado in accordance with the
rules and procedures of the American Arbitration Association. Such
submission and hearing shall be initiated by any party by delivery of
written notice to the other party demanding a hearing and specifying
the controversy or dispute to be settled. The decision of the
arbitrator shall be binding and conclusive on the parties hereto. In
the case of a dispute arising under Section 7(a) hereunder, if NOVA
is determined by the arbitrator to have terminated this Agreement
other than in accordance with the provisions of Section 7(a),
Employee shall be entitled to receive the severance compensation set
forth in Section 4 (including any accrued but unpaid bonus as set
forth therein) in a lump sum payment (less any portion thereof
previously paid to Employee) and to receive all other benefits set
forth in Section 6 (other than any pension or other retirement
benefits but including the expense reimbursement advance) for a
period of 15 months after the date the arbitrator's decision is
rendered (as reduced by any period of time during the pendancy of
the arbitration in which Employee received such benefits). In the
case of a dispute arising under Section 10 hereof, if Employee is
determined by the arbitrator to have terminated this Agreement other
than in accordance with the provisions of Section 10 hereof, Employee
shall not be entitled to receive any compensation or benefits from or
after the last consecutive day upon which Employee rendered full-time
services hereunder except for base compensation, bonus compensation
and benefits which shall have accrued, been earned or vested as of
such day, and if Employee shall have received any compensation to
which Employee is not entitled hereunder, Employee shall immediately
pay over to NOVA an amount equal to such unearned compensation.
Because time is of the essence in the resolution of any dispute or
controversy to be settled pursuant to this Section 11, the parties
agree that any unreasonable delay of the proceedings before the
arbitrator by any party hereto may be the subject of sanctions by the
arbitrator and each of the parties hereto agrees to use its best
efforts to cause the final resolution of any dispute or controversy
hereunder to occur within three months of the date of termination
giving rise thereto.
12. Duty to Mitigate; Offset.
It is expressly agreed and understood that in the event of the
termination of this Agreement (i) by NOVA pursuant to Section 2
hereof, (ii) by Employee pursuant to Section 10 hereof, or (iii)
pursuant to Section 9 hereof, Employee shall have no affirmative duty
to mitigate the damages payable to Employee by NOVA and further that
no amounts actually earned or accrued by Employee for employment or
similar services during the period of time subsequent to such
termination will be offset against any amounts to which Employee is
otherwise entitled hereunder.
13. Entire Agreement; Modification; Etc.
This Agreement sets forth the entire understanding between
Employee and NOVA, and there are no terms, conditions,
representations, warranties or covenants other than those contained
herein and all prior personal service or employment agreements
(whether written, oral or implied) between Employee (or any company
through which Employee provide Employee's services) and NOVA or any
affiliate or predecessor of NOVA are terminated as of the commencement
of the term of this Agreement and Employee hereby waives all rights
under any such prior personal service or employment agreements
which accrue after the date of the execution hereof. No term or
provision of this Agreement may be amended, waived, released,
discharged or modified in any respect except in writing, signed by
each of the parties hereto or by the party to be bound thereby. No
waiver of any breach or default shall constitute a waiver of any
other breach or default, whether of the same or any other provision.
A delay or failure to assert rights or a breach of this Agreement
shall not be deemed to be a waiver of such right either with respect
to that breach or any subsequent breach.
14. Assignment.
This Agreement may not be assigned by either party.
15. Colorado Law.
This Agreement will be governed by and construed in accordance
with the internal laws of the State of Colorado applicable to
contracts to be executed and performed wholly in that state.
NOVA NATURAL RESOURCES CORPORATION
By: ____________________________ Dated:
President
READ, ACCEPTED AND AGREED TO:
________________________________ Dated:
Brian B. Spillane
EXHIBIT 4.4
EXECUTIVE EMPLOYMENT AGREEMENT
CHRIS TSE
This document will set forth the terms of the agreement between CHRIS
TSE ("Employee") and NOVA NATURAL RESOURCES CORPORATION, a Colorado
corporation, ("NOVA" or "Employer") and is effective as of March 1,
2001.
1. Employment.
Employee will serve as a vice president of NOVA and as such
Employee will perform those duties which are normal and customary in
the industry for like positions. Employee will be responsible to the
President and CEO of NOVA and will perform all assigned tasks, which
include those indicated in Employee's Job Description. In Employee's
capacity as an employee of NOVA, Employee will perform such duties
for NOVA and its affiliates as they may reasonably require and as
assigned and will report directly to the President of NOVA. Employee
will perform full-time services on an exclusive basis for NOVA and
its affiliates.
2. Term.
The term of this Agreement will commence on the date hereof and
continue until terminated by either party giving to the other not
less than 90 days notice in writing; provided, however, that
Employee and Company may not give such notice during the first thirty
six (36) months of the term hereof; and, provided further, that this
Agreement will in any event terminate on the seventh anniversary
hereof. Employee acknowledges that NOVA is not required to actually
utilize Employee's services hereunder, but this shall not release
NOVA of its obligation to pay Employee the compensation set forth
herein, subject to NOVA's right to terminate this Agreement or to
continue Employee's employment after expiration of the term hereof,
and Employee expressly acknowledges that no promises or
understandings to the contrary have been made or reached.
3. Base Compensation.
NOVA will pay Employee a base salary of $48,000 per annum.
NOVA will be responsible for all applicable withholding taxes,
including unemployment insurance, workers compensation insurance,
if applicable, social security taxes and NOVA's portion of state and
federal taxes. Such salary will be payable in regular monthly
installments on NOVA's regular paydays during the term. Salary may
be paid in stock but as soon as NOVA's cash flow allows, in cash.
Employee may, subject to available funds and at the sole discretion
of NOVA sell all or a portion of stock issued in lieu of salary back
to NOVA at Employee's cost.
4. Severance.
Upon termination of this Agreement by NOVA pursuant to Section
2 above, NOVA agrees to pay Employee in cash in US dollars, any
portion of the salary owed to date and for the 90-day notification
period during which the services of Employee are not required by NOVA.
Additionally, NOVA agrees to pay any bonus compensation (as
determined in accordance with Section 5 below) which is accrued but
unpaid as of the last day of the 90-day notification period (whether
or not Employee renders services hereunder until such date), plus any
accrued vacation pay or other paid time off, to such date. All
severance compensation set forth in this Section 4 shall be paid in a
single lump sum payment which shall be due and payable on the last
day of the 90-day notification period, with the exception of accrued
but unpaid bonus compensation (as determined in accordance with
Section 5 below), which shall be paid in accordance with Section 5.
5. Bonus Compensation.
NOVA agrees to implement a bonus plan as approved by the Board
of Directors, which will reward Employee for his performance and
achievement based on standards set by the Board.
6. Other Benefits.
Employee will receive a quarterly annual expense reimbursement
advance in an amount as determined by the board. Employee will
account for all expenses in accordance with NOVA's then prevailing
policy (which shall include appropriate itemization and
substantiation of expenses incurred and shall require receipts for
all expenses over $25.00), not less than monthly. NOVA will
additionally reimburse Employee for Employee's reasonable and
necessary business expense in excess of such amount in accordance
with its then prevailing policy. Employee will be entitled to
two (2) weeks vacation per year with pay during the term of this
agreement. Employee may accrue no more than three (3) weeks
vacation and any vacation accrued and not used by the end of the
calendar year in excess of three (3) weeks shall be forfeited. Any
travel undertaken on behalf of NOVA may be business class (or
better, as NOVA policy permits). Employee may take Employee's spouse
on business trips with Employee so long as Employee reimburses NOVA
for (i) the difference between the value of one business class (or
first class, if applicable) airfare and the aggregate cost of the
airfare for Employee and Employee's spouse, and (ii) all other
incremental or additional costs incurred or occasioned by Employee's
spouse. Employee may be granted options in accordance with the NOVA
Share Option and Bonus Schemes. The grant of options is at the
discretion of the management of NOVA. Employee and Employee's family
will be eligible to participate in the current NOVA health and
medical plans when established, at no cost to Employee. Employee
expressly agrees and acknowledges that after the expiration of the
term hereof, Employee will be entitled to no additional benefits not
expressly set forth herein, except as specifically provided under the
benefit plans referred to herein and those benefit plans in which
Employee may subsequently become a participant, and subject in all
cases to the terms and conditions of each such plan.
7. Termination by NOVA.
NOVA may terminate this Agreement:
(a) for cause by delivery of written notice if Employee have
engaged in willful material breach of duty in the course of
Employee's employment, in the case of Employee's habitual neglect of
Employee's duty or conviction of a felony; or
(b) by delivery of written notice if Employee has suffered a
disability which prevents Employee's performance of Employee's
full-time duties under this Agreement. For purposes hereof, Employee
will be deemed to have suffered a disability if any physical or
mental condition prevents Employee from providing full-time services
to NOVA for an aggregate of 90 days during any period of 180 days.
Notwithstanding the foregoing, however, prior to termination by NOVA
pursuant to Section 7(a), Employee shall have a period of 30 days in
which to cure any breach under Section 7(a) (if such breach is of a
nature that it can be cured) from the date of delivery of a notice to
Employee by NOVA setting forth in detail the particular failure or
other breach of duty hereunder. In the event of termination by
NOVA under Section 7(a) Employee shall be entitled to receive no
further compensation or benefits hereunder except for base
compensation and benefits which shall have vested or accrued and
remain unpaid as of the last consecutive day upon which Employee
render full-time services hereunder and Employee shall not be
entitled to receive any accrued but unpaid bonus compensation. In
the event of termination by NOVA under Section 7(b), Employee shall
be entitled to receive $48,000 and any bonus compensation which is
accrued but unpaid as of the date of the termination notice delivered
by NOVA. All benefits set forth in Section 6 hereof, other than any
pension or other retirement benefits , will continue for a 12-month
period after the date of such termination notice under Section 7 (b).
8. Termination by Employee.
Employee may terminate this Agreement at any time subject to
the provisions set forth in Section 2 above and in the event of such
termination, Employee shall be entitled to receive no further
compensation or benefits hereunder except for benefits which have
vested, unpaid base compensation which has accrued and bonus
compensation which has been earned and remains unpaid as of the last
consecutive day upon which Employee renders full-time services
hereunder.
9. Constructive Termination.
In the event that (i) any person or entity (other than NOVA)
becomes the beneficial owner of securities of NOVA representing a
majority of the voting power of the securities of NOVA, (ii) or in
the event any person or entity (other than NOVA) becomes the
beneficial owner of securities of NOVA representing a majority of the
voting power of the securities of NOVA, (iii) or in the event a
Change of Control of NOVA (as hereinafter defined) occurs, (iv) or
in the event all or substantially all of NOVA's assets (as computed
on a consolidated basis) are sold, or (v) NOVA is merged with any
entity and such entity is the survivor and a person or entity (other
than NOVA) becomes the beneficial owner of securities of such
survivor representing a majority of the voting power of the
securities of such survivor, (in each case referenced in clauses (i)
through (v) above, a "Sale of the Company"), NOVA shall be deemed to
have terminated Employee upon consummation of such transaction, and
$96,000 shall be paid to Employee in cash at the closing of such
transaction. In addition, the amount of any accrued but unpaid bonus
compensation as of the date of closing of the Sale of the Company
(as determined in accordance with Section 5 hereof) shall be paid to
Employee in cash within thirty (30) days after the date of closing.
In the event of such constructive termination, Employee agrees to
cooperate with NOVA, its affiliates and/or the purchaser for a period
of up to ninety (90) days following the closing at NOVA's request to
assist in the transition to a new management and/or winding up or
liquidation of NOVA and/or its affiliates; provided, however, that it
is specifically agreed that Employee shall not be required during
such 90-day period to provide services to the Company in the capacity
set forth in Section 1 hereof. All benefits set forth in Section 6
hereof, other than any pension or other retirement benefits but
including the expense reimbursement advance, will also continue for
a 15-month period after the closing of the Sale of the Company. For
purposes of this Agreement, the term "Change of Control of NOVA"
shall mean a change in the composition of the Board of Directors of
NOVA such that the incumbent members of the Board of Directors on the
date hereof (as the composition of the same is subsequently changed
from time to time hereafter by election, retirement and removal in
the normal course of affairs) cease to represent a majority of the
members of such Board as a result of (i) a change in ownership of
NOVA Common Shares, (ii) the consolidation or merger of NOVA with or
into an unrelated third party, or (iii) a proxy solicitation done for
the purpose of effecting such a change.
10. Material Breach; Liquidation Damages.
Employee may terminate this Agreement upon material breach by
NOVA of any material provision hereof by delivering written notice to
NOVA's Board of Directors; provided, however, that prior to
termination of Employee, NOVA shall have a period of 30 days in which
to cure such breach (if such breach is of a nature that it may be
cured) from the date of delivery of a notice to NOVA by Employee
setting forth in detail the particular breach hereunder. Upon such
termination, Employee shall be entitled to receive as liquidated
damages the severance compensation set forth in Section 4 above
(including any accrued but unpaid bonus compensation as set forth
therein) and the benefits outlined in Section 6 hereof (other than
any pension or other retirement benefits but including the expense
reimbursement advance), for one year or for the remaining term of the
contract which ever is greater.
11. Disputes.
Any dispute or controversy arising under, out of, in connection
with or in relation to the termination of this Agreement (i) by NOVA
pursuant to Section 7(a), (ii) by Employee pursuant to Section 10, or
(iii) pursuant to Section 9, shall be determined and settled by
submission for hearing to an arbitrator in an expedited arbitration
proceeding conducted in Glendale, Colorado in accordance with the
rules and procedures of the American Arbitration Association. Such
submission and hearing shall be initiated by any party by delivery of
written notice to the other party demanding a hearing and specifying
the controversy or dispute to be settled. The decision of the
arbitrator shall be binding and conclusive on the parties hereto. In
the case of a dispute arising under Section 7(a) hereunder, if NOVA
is determined by the arbitrator to have terminated this Agreement
other than in accordance with the provisions of Section 7(a),
Employee shall be entitled to receive the severance compensation set
forth in Section 4 (including any accrued but unpaid bonus as set
forth therein) in a lump sum payment (less any portion thereof
previously paid to Employee) and to receive all other benefits set
forth in Section 6 (other than any pension or other retirement
benefits but including the expense reimbursement advance) for a
period of 15 months after the date the arbitrator's decision is
rendered (as reduced by any period of time during the pendancy of
the arbitration in which Employee received such benefits). In the
case of a dispute arising under Section 10 hereof, if Employee is
determined by the arbitrator to have terminated this Agreement other
than in accordance with the provisions of Section 10 hereof, Employee
shall not be entitled to receive any compensation or benefits from or
after the last consecutive day upon which Employee rendered full-time
services hereunder except for base compensation, bonus compensation
and benefits which shall have accrued, been earned or vested as of
such day, and if Employee shall have received any compensation to
which Employee is not entitled hereunder, Employee shall immediately
pay over to NOVA an amount equal to such unearned compensation.
Because time is of the essence in the resolution of any dispute or
controversy to be settled pursuant to this Section 11, the parties
agree that any unreasonable delay of the proceedings before the
arbitrator by any party hereto may be the subject of sanctions by the
arbitrator and each of the parties hereto agrees to use its best
efforts to cause the final resolution of any dispute or controversy
hereunder to occur within three months of the date of termination
giving rise thereto.
12. Duty to Mitigate; Offset.
It is expressly agreed and understood that in the event of the
termination of this Agreement (i) by NOVA pursuant to Section 2
hereof, (ii) by Employee pursuant to Section 10 hereof, or (iii)
pursuant to Section 9 hereof, Employee shall have no affirmative duty
to mitigate the damages payable to Employee by NOVA and further that
no amounts actually earned or accrued by Employee for employment or
similar services during the period of time subsequent to such
termination will be offset against any amounts to which Employee is
otherwise entitled hereunder.
13. Entire Agreement; Modification; Etc.
This Agreement sets forth the entire understanding between
Employee and NOVA, and there are no terms, conditions,
representations, warranties or covenants other than those contained
herein and all prior personal service or employment agreements
(whether written, oral or implied) between Employee (or any company
through which Employee provide Employee's services) and NOVA or any
affiliate or predecessor of NOVA are terminated as of the
commencement of the term of this Agreement and Employee hereby waives
all rights under any such prior personal service or employment
agreements which accrue after the date of the execution hereof.
No term or provision of this Agreement may be amended, waived,
released, discharged or modified in any respect except in writing,
signed by each of the parties hereto or by the party to be bound
thereby. No waiver of any breach or default shall constitute a
waiver of any other breach or default, whether of the same or any
other provision. A delay or failure to assert rights or a breach of
this Agreement shall not be deemed to be a waiver of such right
either with respect to that breach or any subsequent breach.
14. Assignment.
This Agreement may not be assigned by either party.
15. Colorado Law.
This Agreement will be governed by and construed in accordance
with the internal laws of the State of Colorado applicable to
contracts to be executed and performed wholly in that state.
NOVA NATURAL RESOURCES CORPORATION
By: ____________________________ Dated:
President
READ, ACCEPTED AND AGREED TO:
________________________________ Dated:
Chris Tse
EXHIBIT 4.5
ATTORNEY RETAINER AGREEMENT PRIVATE
NOVA NATURAL RESOURCES CORPORATION, A Colorado Corporation,
(hereinafter referred to as "Client") retains and agree to pay the
undersigned, (hereinafter referred to as "Attorney") and Attorney
agrees to represent the Client in the following legal matter on the
terms and conditions following:
Description Of Matter(s): General legal services as assigned from
time to time.
1. RETAINER AND FEES. Client will pay Attorney for services
rendered legal fees either on a per hour basis, as set forth herein,
or by payment of a regular retainer as set forth herein, plus all
costs, expenses, including paralegal services. Hourly time will be
charged to the nearest 1/10 of an hour. Hourly records will be sent
to Client on a regular basis and Client agrees to review said records
and raise any issues with Attorney within sixty (60) days of
receiving any statement or invoices. In the alternative, Client may
pay Attorney a retainer amount for general legal services which
retainer amount will be adjusted annually, based upon the work
performed by Attorney during the prior year. Client may pay the
Attorney by delivering securities of a value equal to the amount due,
at Client's option.
2. EXCLUDED LEGAL SERVICE. Unless specifically included by being
typed in or written in as part of the above description of this legal
matter, the fee does not include and an additional charge will be
made for all legal services performed in handling any other legal
matter for Client. Attorney reserves the right to refuse to provide
services and may retain outside legal counsel to assist on certain
matters with the consent of Client.
3. COSTS AND EXPENSES. The costs and expenses which are incurred
in furtherance of Client's legal matter are in addition to and are
not part of the attorneys' fee. Attorney will incur no extraordinary
expense nor any expense in excess of $500.00 without prior approval
of Client. Client will reimburse the actual amount of all such
ordinary and reasonable costs and expenses. Said costs and expenses
shall include but not be limited to disbursements, copy costs, long
distance charges, fax charges, mail and fed-ex charges, travel
expenses and other costs and expenses incurred on behalf of Client by
the Attorney, his staff, or persons employed by him for Client's case.
Client may object to the reasonableness of any such expenses or costs
within sixty (60) days of receiving a statement for payment thereof.
It is understood that Attorney is merely being reimbursed for said
costs and expenses and is not selling such to Client.
4. PAYMENT. All sums due to the Attorney shall be paid by the
Client upon presentation of statements therefor unless other
arrangements for payment satisfactory to the Attorney are made in
writing. All sums due are payable within 10 days of Client's
receipt of a statement. A late charge will be imposed on any
portion of the previous month's balance which is not timely paid of
1% per month or an annual percentage rate of 12%.
5. DISPUTE RESOLUTION. Client and Attorney agree that in the
event a dispute arises out of this agreement or any matter related to
the relationship between them as Attorney and Client, that said
matter or matters will be resolved first by mediation and then if
unsuccessful, by arbitration pursuant to the rules of mediation and
arbitration of the American Arbitration Association. In the
alternative, Client may elect to settle fee disputes by using
alternatives offered by the State Bar Association.
6. WITHDRAWAL. In the event that Client fails to pay any sums
to Attorney when due, Client hereby grants the Attorney authority to
withdraw as counsel for Client.
7. DISCLAIMER OF WARRANTY AND MERGER OF AGREEMENT. Attorney has
made no warranties as to the successful result or conclusion of
Client's legal matter, and all expressions made by Attorney relative
thereto are matters of Attorney's opinion only. This agreement
constitutes the entire agreement of the parties and supersedes all
prior written and oral agreements or representations regarding its
subject matter.
DATED this 10th day July, 2001.
Mark D. Stubbs, Attorney at Law NOVA NATURAL RESOURCES CORPORATION
/S/ /S/
- ------------------------------ ---------------------------
By:
---------------------------
EXHIBIT 4.6
NOVA NATURAL RESOURCES CORPORATION
2001 NON-QUALIFIED STOCK OPTION PLAN
This 2001 Non-Qualified Stock Option Plan correctly sets
forth the provisions of the 2001 Non-Qualified Stock Option Plan.
ARTICLE I
ESTABLISHMENT AND PURPOSE
I.1 Establishment. Nova Natural Resources Corporation, a
Colorado corporation ("Company"), hereby establishes a Non-Qualified
stock option plan for employees, members of the board of directors,
independent contractors, consultants and advisors, providing
material services other than those independent contractors and
consultants involved in capital-raising activities including
fundraising and public relations, to the Company and its present
and future subsidiaries which shall be known as the "2001
NON-QUALIFIED STOCK OPTION PLAN" (the "Plan"). None of the
options issued to employees pursuant to the Plan may constitute
incentive stock options within the meaning of Section 422 of the
Internal Revenue Code. Options issued pursuant to the Plan shall
constitute non-qualified options.
I.2 Purpose. The purpose of this Plan is to enhance
shareholder investment by attracting, retaining, and motivating key
employees, independent contractors, consultants and advisors of the
Company, and to encourage stock ownership by such persons by
providing them with a means to acquire a proprietary interest in the
Company's success.
ARTICLE II
DEFINITIONS
II.1 Definitions. Whenever used herein, the following
terms shall have the respective meanings set forth below, unless the
context clearly requires otherwise, and when said meaning is intended,
the term shall be capitalized.
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code, as amended.
(c) "Committee" shall mean the Committee provided by
Article IV hereof, which may be created at the discretion of the
Board.
(d) "Company" means Nova Natural Resources Corporation, a
Colorado corporation.
(e) "Consultant" means any person or entity, including
a Parent Corporation or a Subsidiary Corporation, who provides
services (other than as an Employee) to the Company, a Parent
Corporation or a Subsidiary Corporation, and shall include
independent contractors, Non-Employee Officers and Non-Employee
Directors, as defined subsequently.
(f) "Date of Exercise" means the date the Company
receives notice, by an Optionee, of the exercise of an Option
pursuant to Section VIII.1 of this Plan. Such notice shall indicate
the number of shares of Stock the Optionee intends to exercise.
(g) "Employee" means any person, including an officer or
director of the Company or a Subsidiary Corporation, who is
employed by the Company or a Subsidiary Corporation or a director of
the Company or a Subsidiary Corporation.
(h) "Fair Market Value" means the fair market value of
Stock upon which an option is granted under this Plan, determined as
follows:
(i) So long as the Stock is listed or traded on the
OTC Bulletin Board, the NASDAQ Stock Market or a national securities
exchange, the Fair Market Value shall be the average of the last
reported sale prices of the Stock for the 20 trading days prior
to the date of grant of this option, provided that if no sale is made
on any such trading day, the last reported sale price shall be the
average of the closing bid and asked prices for such day; or
Otherwise, Fair Market Value shall be an amount, not less than book
value, determined by the Board, such determination to be final and
binding on the Holder.
(j) "Non-Employee Director" means a member of the Board
who is not an employee of the Company at the time an Option is
granted hereunder.
(k) Non-Employee Officer" means an officer of the Company
who is not an employee of the Company at the time an Option is
granted hereunder.
(l) "Non-qualified Option" means an Option granted
under this Plan which is not intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code.
Non-qualified Options may be granted at such times and subject to
such restrictions as the Board shall determine without conforming to
the statutory rules of Section 422 of the Code applicable to
incentive stock options.
(m) "Option" means the right, granted under this Plan,
to purchase Stock of the Company at the option price for a specified
period of time. For purposes of this Plan, an Option may be
a Non-qualified Option.
(n) "Optionee" means an Employee or Consultant holding an
Option under the Plan.
(o) "Parent Corporation" shall have the meaning set forth
in Section 424(e) of the Code with the Company being treated as the
employer corporation for purposes of this definition.
(p) "Subsidiary Corporation" shall have the meaning set
forth in Section 424(f) of the Code with the Company being treated
as the employer corporation for purposes of this definition.
(q) "Significant Shareholder" means an individual
who, within the meaning of Section 422(b)(6) of the Code, owns stock
possessing more than ten percent of the total combined voting power
of all classes of stock of the Company or of any Parent Corporation
or Subsidiary Corporation of the Company. In determining whether an
individual is a Significant Shareholder, an individual shall be
treated as owning stock owned by certain relatives of the individual
and certain stock owned by corporations in which the individual is
a shareholder, partnerships in which the individual is a partner,
and estates or trusts of which the individual is a beneficiary, all
as provided in Section 424(d) of the Code.
(r) "Stock" means the $.10 par value common stock of the
Company.
II.2 Gender and Number. Except when otherwise indicated by
the context, any masculine terminology when used in this Plan also
shall include the feminine gender, and the definition of any term
herein in the singular also shall include the plural.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
III.1 Eligibility and Participation. All Employees are
eligible to participate in this Plan and receive Non-qualified Options
under the Plan. All Consultants are eligible to participate in this
Plan and receive Non-qualified Options hereunder. Optionees in the
Plan shall be selected by the Board, in its sole discretion, from
among those Employees and Consultants who, in the opinion of the
Board, are in a position to contribute materially to the Company's
continued growth and development and to its long-term financial
success.
ARTICLE IV
ADMINISTRATION
IV.1 Administration. The Board shall be responsible for
administering the Plan.
a) The Board is authorized to interpret the Plan; to
prescribe, amend, and rescind rules and regulations relating to the
Plan; to provide for conditions and assurances deemed necessary
advisable to protect the interests of the Company; and to make all
other determinations necessary or advisable for the administration
of the Plan. Determinations, interpretations, or other actions made
or taken by the Board, pursuant to the provisions of this Plan, shall
be final and binding and conclusive for all purposes and upon all
persons.
(b) At the discretion of the Board, this Plan may be
administered by a Committee which shall be an executive committee of
the Board, consisting of not less than two members of the Board. The
members of such Committee may be directors who are eligible to r
receive Options under this Plan, but Options may be granted to such
persons only by action of the full Board and not by action of the
Committee. At such time as the Company has any class of equity
security which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934, the Committee shall consist solely
of two or more Non-Employee Directors as that term is defined in
Rule 16b-3 under that Act. Such Committee shall have full power and
authority, subject to the limitations of the Plan and any limitations
imposed by the Board, to construe, interpret and administer this
Plan and to make determinations which shall be final, conclusive
and binding upon all persons, including, without limitation, the
Company, the shareholders, the directors and any persons having any
interests in any Options which may be granted under this Plan, and,
by resolution or resolution providing for the creation and issuance
of any such Option, to fix the terms upon which, the time or times
at or within which, the price or prices at which any such shares
may be purchased from the Company upon the exercise of such Option.
Such terms, time or times and price or prices shall, in every case,
be set forth or incorporated by reference in the instrument or
instruments evidencing such Option, and shall be consistent with the
provisions of this Plan.
(c) If the Committee has been appointed, the Board may
from time to time remove members from, or add members to, the
Committee. The Board may terminate the Committee at any time.
Vacancies on the Committee, howsoever caused, shall be filled by the
Board. The Committee shall select one of its members as Chairman,
and shall hold meetings at such times and places as the Chairman may
determine. A majority of the Committee at which a quorum is present,
or acts reduced to or approved in writing by all of the members of
the Committee, shall be the valid acts of the Committee. A quorum
shall consist of two-thirds (2/3) of the members of the Committee.
(d) Where the Committee has been created by the Board,
references in this Plan to actions to be taken by the Board shall be
deemed to refer to the Committee as well, except where limited by
this Plan or by the Board.
(e) The Board shall have all of the enumerated powers of
the Committee, but shall not be limited to such powers. No member
of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any
Option granted under it.
ARTICLE V
STOCK SUBJECT TO THE PLAN
V.1 Number. The total number of shares of Stock hereby
made available and reserved for issuance under the Plan upon exercise
of Non-Qualified Options shall be 11,653,000. The aggregate number
of shares of Stock available under this Plan shall be subject to
adjustment as provided in Section V.3. The total number of shares of
Stock may be authorized but unissued shares of Stock, or Shares
acquired by purchase as directed by the Board from time to time in
its discretion, to be used for issuance upon exercise of Options
granted hereunder.
V.2 Unused Stock. If an Option shall expire or terminate
for any reason without having been exercised in full, the unpurchased
shares of Stock subject thereto shall (unless the Plan shall have
terminated) become available for other Options under the Plan.
V.3 Adjustment in Capitalization. In the event of any
change in the outstanding shares of Stock by reason of a stock
dividend or split, recapitalization, reclassification, or other
similar corporate change, the aggregate number of shares of Stock set
forth in Section V.1 shall be appropriately adjusted by the Board,
whose determination shall be conclusive; provided however, that
fractional shares shall be rounded to the nearest whole share. In
any such case, the number and kind of shares that are subject to any
Option (including any Option outstanding after termination of
employment) and the Option price per share shall be proportionately
and appropriately adjusted without any change in the aggregate Option
price to be paid therefor upon exercise of the Option.
ARTICLE VI
DURATION OF THE PLAN
VI.1 Duration of the Plan. Subject to approval of
shareholders, the Plan shall be in effect for ten years from the date
of its adoption by the Board. Any Options outstanding at the end of
said period shall remain in effect in accordance with their terms.
The Plan shall terminate before the end of said period if all Stock
subject to it has been purchased pursuant to the exercise of Options
granted under the Plan.
ARTICLE VII
TERMS OF STOCK OPTIONS
VII.1 Grant of Options. Subject to Section V.1, Options
may be granted to Employees or Consultants at any time and from time
to time as determined by the Board. The Board shall have complete
discretion in determining the terms and conditions and number of
Options granted to each Optionee. In making such determinations,
the Board may take into account the nature of services rendered by
such Employees or Consultants, their present and potential
contributions to the Company and its Subsidiary Corporations, and
such other factors as the Board in its discretion shall deem relevant.
(a) The Board is expressly given the authority to
issue amended or replacement Options with respect to shares of Stock
subject to an Option previously granted hereunder. An amended Option
amends the terms of an Option previously granted and thereby
supersedes the previous Option. A replacement Option is similar
to a new Option granted hereunder except that it provides that it
shall be forfeited to the extent that a previously granted Option
is exercised, or except that its issuance is conditioned upon the
termination of a previously granted Option.
VII.2 Option Agreement; Terms and Conditions to Apply
Unless Otherwise Specified. As determined by the Board on the date of
grant, each Option shall be evidenced by an Option agreement (the
"Option Agreement") that includes the non-transferability provisions
required by Section X.2 hereof and specifies: whether the Option
is a Non-qualified Option; the Option price; the duration of the
Option; the number of shares of Stock to which the Option applies;
any vesting or exercisability restrictions which the Board may
impose. All such terms and conditions shall be determined by the
Board at the time of grant of the Option.
(a) If not otherwise specified by the Board, the following
terms and conditions shall apply to Options granted under the Plan:
(i) Term. The duration of the Option shall be five
years from the date of grant.
(ii) Exercise of Option. Unless an Option is terminated
as provided hereunder, an Optionee may exercise his Option for up to,
but not in excess of, the amounts of shares subject to the Option
specified hereafter, The Optionee may exercise his Options in whole
or in part, and at any time and from time to time within its term but
it shall not be exercisable after the expiration of five (5) years
from the date on which it was granted.
(b) The Board shall be free to specify terms and
conditions other than those set forth above, in its discretion
provided Options already issued are not changed.
VII.3 Option Price. The Option Price shall be determined
by the Board of Directors, except that Option Price for consultants
and/or independent contractors may not be ess than Fair Market Value
on the date of grant. The Option exercise price shall be subject to
adjustment as provided in Section V.3 above.
VII.4 Term of Options. Each Option shall expire at such
time as then Board shall determine when it is granted, provided
however that under no circumstances shall a Non-qualified Option be
exercisable later than the tenth anniversary date of its grant.
VII.5 Exercise of Options. Options granted under the Plan
shall be exercisable at such times and be subject to such restrictions
and conditions as the Board shall in each instance approve, which
need not be the same for all Optionees.
VII.6 Payment. Payment for all shares of Stock shall be
made at the time that an Option, or any part thereof, is exercised,
and no shares shall be issued until full payment therefor has been
made. Payment shall be made (i) in cash, or (ii) if acceptable to
the Board, in Stock or in some other form.
ARTICLE VIII
WRITTEN NOTICE, ISSUANCE OF STOCK
CERTIFICATES, SHAREHOLDER PRIVILEGES
VIII.1 Written Notice. An Optionee wishing to exercise an
Option shall give written notice to the Company, in the form and
manner prescribed by the Board. Full payment for the shares exercised
pursuant to the Option must accompany the written notice.
VIII.2 Issuance of Stock Certificates. As soon as
practicable after the receipt of written notice and payment, the
Company shall deliver to the Optionee or to a permitted nominee of
the Optionee a certificate or certificates for the requisite number
of shares of Stock.
VIII.3 Privileges of a Shareholder. An Optionee or any
other person entitled to exercise an Option under this Plan shall not
have stockholder privileges with respect to any Stock covered by the
Option until the date of issuance of a stock certificate for such
stock.
ARTICLE IX
TERMINATION OF EMPLOYMENT OR SERVICES
IX.1 Death. If an Optionee's employment in the case of an
Employee, or provision of services as a consultant in the case of a
Consultant, terminates by reason of death, the Option may thereafter
be exercised at any time prior to the expiration date of the Option
or within 12 months after the date of such death, whichever period is
the shorter, by the person or persons entitled to do so under the
Optionee's will or, if the Optionee shall fail to make a testamentary
disposition of an Option or shall die intestate, the Optionee's legal
representative or representatives. The Option shall be exercisable
only to the extent that such Option was exercisable as of the date of
death.
IX.2 Termination other than for Cause or Due to Death. In
the event of an Optionee's termination of employment in the case of
an Employee, or termination of the provision of services as a
Consultant in the case of a Consultant, other than by reason of
death, the Optionee may exercise such portion of his Option as was
exercisable by him at the date of such termination (the "Termination
Date") at any time within three months of the Termination Date;
provided, however, that where the Optionee is an Employee, and is
terminated due to disability within the meaning of Code ss. 422, he
may exercise such portion of his Option as was exercisable by him on
his Termination Date within one year of his Termination Date. In any
event, the Option cannot be exercised after the expiration of the
term of the Option. Options not exercised within the applicable
period specified above shall terminate.
(a) In the case of an Employee, a change of duties or
position within the Company or an assignment of employment in a
Subsidiary Corporation or Parent Corporation of the Company, if any,
or from such a Corporation to the Company, shall not be considered
a termination of employment for purposes of this Plan.
(b) The Option Agreements may contain such provisions as the
Board shall approve with reference to the effect of approved
of absence upon termination of employment.
IX.3 Termination for Cause. In the event of an Optionee's
termination of employment in the case of an Employee, or termination
of the provision of services as a Consultant in the case of a
Consultant, which termination is by the Company or a Subsidiary
Corporation for cause, any Option or Options held by him under the
Plan, to the extent not exercised before such termination, shall
terminate upon notice of termination for cause.
ARTICLE X
RIGHTS OF OPTIONEES
X.1 Service. Nothing in this Plan shall interfere with or
limit in any way the right of the Company or a Subsidiary Corporation
to terminate any Employee's employment, or any Consultant's services,
at any time, nor confer upon any Employee any right to continue in
the employ of the Company or a Subsidiary Corporation, or upon any
Consultant any right to continue to provide services to the Company
or a Subsidiary Corporation.
X.2 Non-transferability. All Options granted under this
Plan shall be nontransferable by the Optionee, other than by will or
the laws of descent and distribution, and shall be exercisable
during the Optionee's lifetime only by the Optionee.
ARTICLE XI
OPTIONEE-EMPLOYEE'S TRANSFER
OR LEAVE OF ABSENCE
XI.1 Optionee-Employee's Transfer or Leave of Absence.
For purposes of this Plan:
(a) A transfer of an Optionee who is an Employee from the
Company to a Subsidiary Corporation or Parent Corporation, or from
one such Corporation to another, or
(b) A leave of absence for such an Optionee which is duly
authorized in writing by the Company or a Subsidiary Corporation
shall not be deemed a termination of employment. However, under no
circumstances may an Optionee exercise an Option during any leave of
absence, unless authorized by the Board.
ARTICLE XII
AMENDMENT, MODIFICATION, AND
TERMINATION OF THE PLAN
XII.1 Amendment, Modification, and Termination of the Plan.
(a) The Board may at any time terminate, and from time
to time may amend or modify the Plan, provided, however, that no
such action of the Board, without approval of the shareholders, may:
(i) increase the total amount of Stock which may
be purchased through Options granted under the Plan, except as
provided in Article V;
(ii) change the class of Employees or Consultants
eligible to receive Options;
(b) No amendment, modification, or termination of the
Plan shall in any manner adversely affect any outstanding Option
under the Plan without the consent of the Optionee holding the Option.
ARTICLE XIII
ACQUISITION, MERGER OR LIQUIDATION
XIII.1 Acquisition.
(a) In the event that an Acquisition occurs with
respect to the Company, the Company shall have the option, but not
the obligation, to cancel Options outstanding as of the effective
date of Acquisition, whether or not such Options are then exercisable,
in return for payment to the Optionees of an amount equal to a
reasonable estimate of an amount (hereinafter the "Spread") equal
to the difference between the net amount per share payable in the
Acquisition or as a result of the Acquisition, less the exercise
price of the Option. In estimating the Spread, appropriate
adjustments to give effect to the existence of the Options shall be
made, such as deeming the Options to have been excised, with the
Company receiving the exercise price payable thereunder, and treating
the shares receivable upon exercise of the Options as being
outstanding in determining the net amount per share.
(b) For purposes of this section, an "Acquisition" shall
mean any transaction in which substantially all of the Company's
assets are acquired or in which a controlling amount of the Company's
outstanding shares are acquired, in each case by a single person or
entity or an affiliated group of persons and entities. For purposes
of this section, a controlling amount shall mean more than 50% of the
issued and outstanding shares of stock of the Company. The Company
shall have such an option regardless of how the Acquisition is
effectuated, whether by direct purchase, through a merger or similar
corporate transaction, or otherwise. In cases where the acquisition
consists of the acquisition of assets of the Company, the net amount
per share shall be calculated on the basis of the net amount
receivable with respect to shares upon a distribution and liquidation
by the Company after giving effect to expenses and charges, including
but not limited to taxes, payable by the Company before the
liquidation can be completed.
(c) Where the Company does not exercise its option under
this Section XIII.1 the remaining provisions of this Article XIII
shall apply, to the extent applicable.
XIII.2 Merger or Consolidation. Subject to any required
action by the shareholders, if the Company shall be the surviving
corporation in any merger or consolidation, any Option granted
hereunder shall pertain to and apply to the securities to which a
holder of the number of shares of Stock subject to the Option
would have been entitled in such merger or consolidation.
XIII.3 Other Transactions. A dissolution or a liquidation
of the Company or a merger and consolidation in which the Company is
not the surviving corporation shall cause every Option outstanding
hereunder to terminate as of the effective date of such dissolution,
liquidation, merger or consolidation. However, the Optionee either
(i) shall be offered a firm commitment whereby the resulting or
surviving corporation in a merger or consolidation will tender to the
Optionee an option (the "Substitute Option") to purchase its shares
on terms and conditions both as to number of shares and otherwise,
which will substantially preserve to the Optionee the rights and
benefits of the Option outstanding hereunder granted by the Company,
or (ii) shall have the right immediately prior to such dissolution,
liquidation, merger, or consolidation to exercise any unexercised
Options whether or not then exercisable, subject to the provisions of
this Plan. The Board shall have absolute and uncontrolled
discretion to determine whether the Optionee has been offered a firm
commitment and whether the tendered Substitute Option will
substantially reserve to the Optionee the rights and benefits of the
Option outstanding hereunder. In any event, any Substitute Option
for an Incentive Stock Option shall comply with the requirements of
Code Section 424(a).
ARTICLE XIV
SECURITIES REGISTRATION
XIV.1 Securities Registration. In the event that the
Company shall deem it necessary or desirable to register under the
Securities Act of 1933, as amended, or any other applicable statute,
any Options or any Stock with respect to which an Option may be or
shall have been granted or exercised, or to qualify any such Options
or Stock under the Securities Act of 1933, as amended, or any other
statute, then the Optionee shall cooperate with the Company and take
such action as is necessary to permit registration or qualification
of such Options or Stock.
XIV.2 Representations. Unless the Company has determined
that the following representation is unnecessary, each person
exercising an Option under the Plan may be required by the Company,
as a condition to the issuance of the shares pursuant to exercise of
the Option, to make a representation in writing (i) that he is
acquiring such shares for his own account for investment and not with
a view to, or for sale in connection with, the distribution of any
part thereof, (ii) that before any transfer in connection with the
resale of such shares, he will obtain the written opinion of counsel
for the Company, or other counsel acceptable to the Company, that
such shares may be transferred. The Company may also require that
the certificates representing such shares contain legends reflecting
the foregoing.
ARTICLE XV
TAX WITHHOLDING
XV.1 Tax Withholding. Whenever shares of Stock are to be
issued in satisfaction of Options exercised under this Plan, the
Company shall have the power to require the recipient of the Stock to
remit to the Company an amount sufficient to satisfy federal, state,
and local withholding tax requirements.
ARTICLE XVI
INDEMNIFICATION
XVI.1 Indemnification. To the extent permitted by law,
each person who is or shall have been a member of the Board shall be
indemnified and held harmless by the Company against and from any
loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him in connection with or resulting from any
claim, action, suit, or proceeding to which he may be a party or in
which he may be involved by reason of any action taken or failure
to act under the Plan and against and from any and all amounts paid
by him in settlement thereof, with the Company's approval, or paid by
him in satisfaction of judgment in any such action, suit, or
proceeding against him, provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same before
he undertakes to handle and defend it on his own behalf. The
foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such persons may be entitled
under the Company's articles of incorporation or bylaws, as a matter
of law, or otherwise, or any power that the Company or any Subsidiary
Corporation may have to indemnify them or hold them harmless.
ARTICLE XVII
REQUIREMENTS OF LAW
XVII.1 Requirements of Law. The granting of Options and the
issuance of shares of Stock upon the exercise of an Option shall be
subject to all applicable laws, rules, and regulations, and to such
approvals by any governmental agencies or national securities
exchanges as may be required.
XVII.2 Governing Law. The Plan, and all agreements
hereunder, shall be construed in accordance with and governed by
the laws of the State of Colorado.
ARTICLE XVIII
EFFECTIVE DATE OF PLAN
XVIII.1 Effective Date. The Plan shall be effective on
September 1, 2001.
ARTICLE XIX
NO OBLIGATION TO EXERCISE OPTION
XIX.1 No Obligation to Exercise. The granting of an Option
shall impose no obligation upon the holder thereof to exercise such
Option.
ARTICLE XX
STOCKHOLDER APPROVAL
XX.1 Stockholder Approval. This Plan shall be submitted
for approval and ratification by a vote of the holders of a majority
of the shares of Common Stock of the Company no later than
December 31, 2001 and shall not affect the validity of any Option
issued under this Plan.
THIS 2001 NON-QUALIFIED STOCK OPTION PLAN was adopted by
the Board of Directors of NOVA NATURAL RESOURCES CORPORATION on
August 28, 2001 to be effective on that date.
NOVA NATURAL RESOURCES CORPORATION
- -----------------------------------
Edward Chan, President and
Chief Executive Officer
EXHIBIT 4.7
RESALE PROSPECTUS
NOVA NATURAL RESOURCES CORPORATION
TO 11,653,000 SHARES OF COMMON STOCK WHICH THE SELLING SHAREHOLDERS
MAY RESELL UNDER THIS PROSPECTUS
You should read this resale prospectus carefully before you invest.
This prospectus relates to 11,653,000 shares of common stock $.10 par
value per share (the "Common Stock") of Nova Natural Resources
Corporation (the "Company"). The stockholders of the Company listed
in the "Selling Stockholders" section of this resale prospectus may
offer and resell shares of Common Stock under this resale prospectus
for their own accounts. Nova Natural Resources Corporation will not
receive any proceeds from the resale of these shares by the selling
stockholders.
These shares were issued or are issuable to the selling stockholders
and others as follows:
(i) 11,653,000 shares issued and issuable under the 2001
Non-Qualified Stock Option Plan (the "Plan")
The selling stockholders may offer their common stock through
public or private transactions, at prevailing market prices or at
privately negotiated prices. These future prices are not currently
known.
Nova Natural Resources Corporation stock is traded on the NASDAQ
OTC Bulletin Board under the symbol "NVNU". During the last 30
trading days prior to August 22, 2001, the average reported sale
price for the common stock on the NASDAQ OTC Bulletin Board was
$.11 per share.
See Risk Factors beginning on page 2 to read about factors you
should consider before buying shares of common stock.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER
REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION MADE TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is August 28, 2001.
RISK FACTORS
You should carefully consider the risks described below before
deciding whether to invest in Nova Natural Resources Corporation. If
any of the contingencies discussed in the following paragraphs or
other materially adverse events actually materialize, the business,
financial condition and results of operations of Nova Natural
Resources Corporation could be materially and adversely affected.
In such a case, the trading price of Nova Natural Resources
Corporation common stock could decline, and you could lose all or
part of your investment.
A variety of factors could cause the Company's actual results
and experience to differ materially from the anticipated results or
other expectations expressed in the Company's forward-looking
statements. The risks and uncertainties that may affect the
operations, performance, development and results of the Company's
business include, but are not limited to, the following:
Limited Sources of Funding
(a) Present and anticipated sources of funds may be insufficient to
meet the Company's working capital needs. In prior years, the
Company's manufacturing operations were able to utilize the credit of
a much larger parent company to finance its working capital needs.
Since these operations are no longer associated with that parent
company, the credit facilities of the parent are no longer available,
and it is more difficult and not always possible for the Company's
manufacturing operations to secure adequate financing to support the
level of sales the Company is capable of attaining. In addition, the
Company presently has no liquid funds in North America, and since
such funds are necessary to cover its administrative expenses and
other costs of maintaining its corporate office and fulfilling its
obligations as a public company, the Company will have to either
borrow such funds, transfer funds from its manufacturing operations,
or raise new capital to cover such costs. Its ability to raise funds
for such purposes is not known at this time.
Product Sales Subject to Market Fluctuations and Changing Technology
(b) The Company may not be able to attain the level of sales of its
products it has been able to achieve in the past. Sales of
electronic products which are manufactured by the Company --
Television sets, DVD equipment, Computers and Computer Monitors --
all are subject to fluctuations in both demand and in price dependent
on the strength of the economies into which these products are sold.
Forecasting the strength of these markets and the Company's ability
to maintain or increase market share is difficult at best.
Electronic technology changes rapidly, and the manufacture and sale
of these products is very competitive. The Company competes with
many companies, most of which are considerably larger. The Company
also manufactures products on an OEM basis for several large
electronics manufacturers, and the level of such sales is dependent
on the ability of those companies to market their brand-name products,
an ability over which the Company has no control.
Impact of China's Acceptance into the World Trade Organization
(c) If China is accepted into the World Trade Organization ("WTO"),
the Company will be positioned to expand its market area, which is
currently limited to Southeast Asia and the Middle East. At the
present time, it cannot be determined whether China will be accepted
into the WTO, when this will occur, or what effect it will actually
have on the Company's business and operations.
Impact of Changes in Chinese Government
(d) At present, the Chinese Government is supportive of numerous
measures which have been undertaken or are planned which are
favorable to the growth of manufacturing operations within the PRC,
particularly if such operations export a significant portion of their
production. A change in leadership is expected to take place within
the Chinese Government over the next several years. There can be no
guarantee that the Government will continue its supportive policies,
nor can it can determined what effect, if any, changes in Government
policy will have on the Company's operations in the future.
Fluctuations in Common Stock Price
(e) The Company's common stock is subject to wide fluctuations in
price due to, but not limited to the following factors:
(i) the amount of stock in public hands is small relative to the
capitalization of the Company, and trading volume has generally been
light, which tends to result in significant price changes dependent
on whether there is an abundance of either buyers or sellers;
(ii) variations in our quarterly or annual financial results, or
those of our competitors. The Company's electronics manufacturing
operations tend to be cyclical from quarter to quarter within a given
fiscal year.
(iii) the market's perception of companies involved in high-tech
activities varies considerably, and is greatly influenced by results
and projected results of other high-tech companies, even though there
may be little relation between the business activities of those
companies and those of our company;
(iv) an economic downturn is presently underway in the United
States, and in other countries. Prices of and the demand for common
stock usually reflect economic conditions;
(v) the comments of financial analysts about the Company's
prospects, both positive and negative, can greatly influence
purchases and sales of our common stock;
(vi) publicity -- both favorable and unfavorable;
Length of Time in Business
(f) The Company has not been in business for a long period of time,
and may encounter risks and difficulties unknown to it at this time
which could have an unfavorable effect on the Company's ability to
operate profitably.
Limited Window of Opportunity
(g) The Company believes there is currently a window of opportunity
to acquire other profitable high growth companies based in the PRC
which wish to attain multi-national status and achieve a listing of
their shares in the United States. Accordingly, we are discussing
with various such companies the possibility of exchanging shares of
Nova for the assets and/or shares of these companies. These
discussions have not yet resulted in the signing of a Letter of
Intent with any such company, and it cannot be determined when, or
if, a Letter of Intent might be signed, or if signed, whether the
transaction contemplated will be successfully completed. It is
Management's intent to pursue such opportunities if, in our judgment,
such transactions would be in the best interests of the shareholders.
However, there can be no guarantee that such transactions, if
successful, will be beneficial to the Company. Future revenues and
profits will depend heavily on management's ability to acquire
businesses, and to retain or attract management to operate these
businesses profitably. The Company may, from time to time acquire
a minority interest in such companies by exchanging shares of the
Company's common or preferred stock for shares of common or preferred
stock of such companies. In that event, the Company may have little
or no control over the operations of the company with which it has
exchanged shares. In addition, since such companies are likely
to be privately-held, the Company may be unable to sell the shares
so acquired at all, or at a price which will either recover the
Company's investment cost or provide a return on investment.
A NOTE ABOUT FORWARD-LOOKING STATEMENTS
This prospectus contains both historical and forwardlooking
statements. All statements other than statements of historical fact
are, or may be deemed to be, forwardlooking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. The forwardlooking
statements in this prospectus are not based on historical facts, but
rather reflect the current expectations of the management of Nova
Natural Resources Corporation concerning future results and events.
The forward-looking statements generally can be identified by
the use of terms such as "believe," "expect," "anticipate," "intend,"
"plan," "foresee," "likely," "will" or other similar words or phrases.
Similarly, statements that describe the objectives, plans or goals
of Nova Natural Resources Corporation are or may be forwardlooking
statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of Nova Natural Resources Corporation
to be different from any future results, performance and achievements
expressed or implied by these statements. You should review
carefully all information, including the financial statements and the
notes to the financial statements included in this prospectus. In
addition to the factors discussed above under "Risk Factors," the
following important factors could affect future results, causing the
results to differ materially from those expressed in the
Forwardlooking statements in this prospectus:
- the timing, impact and other uncertainties related to
pending and future acquisitions by Nova Natural Resources Corporation
- the timing or ability to raise capital
- the ability to attract and retain qualified management
- interest rate fluctuations and other capital market
conditions.
These factors are not necessarily all of the important factors
that could cause actual results to differ materially from those
expressed in the forwardlooking statements in this prospectus. Other
unknown or unpredictable factors also could have material adverse
effects on the future results of Nova Natural Resources Corporation.
The forwardlooking statements in this prospectus are made only as of
the date of this prospectus and Nova Natural Resources Corporation
does not have any obligation to publicly update any forwardlooking
statements to reflect subsequent events or circumstances. Nova
Natural Resources Corporation cannot assure you that projected
results will be achieved.
USE OF PROCEEDS
Because this prospectus is solely for the purpose of permitting
the participants in the 2001 Non-Qualified Stock Option Plan
("Participants") employees of Nova being paid with share certificates
to offer and sell shares, Nova Natural Resources Corporation will not
receive any proceeds from the sale of the shares being offered. The
selling stockholders will receive all the proceeds. However, Nova
Natural Resources Corporation, will receive the proceeds from any
exercise of stock options which will be used for general corporate
purposes.
DETERMINATION OF OFFERING PRICE
This offering is solely for the purpose of allowing Participants
to sell shares. The Participants may elect to sell some or all of
their shares when they choose, in the near future or at a later date,
at the price at which they choose to sell. As the market develops,
the Participants will determine the price for their shares.
DILUTION
This offering is for sales of shares by Participants. Such
sales will not result in any dilution to the net tangible book value
per share of the common stock of Nova Natural Resources Corporation
before and after the sales.
PARTICIPANTS
The Participants acquired beneficial ownership of all the shares
offered for resale pursuant to this prospectus in compensatory
transactions. These transactions include stock bonuses for employees
and stock options issued or issuable under the 2001 Non-Qualified
Stock Option Plan. A shareholder is deemed to beneficially own
shares held in his or her name and certain shares he or she does not
own but has the right to acquire upon option exercise or otherwise
within 60 days after the date of this prospectus.
After the sales are complete, the selling stockholders under
this prospectus, beneficially owning 1% or more of the outstanding
common stock will be Brian B. Spillane 1.7% and Edward T.S. Chan 3.0%
based on 233,059,751 shares issued and outstanding on August 28,
2001.
PLAN OF DISTRIBUTION
Nova Natural Resources Corporation is registering this offering
of shares on behalf of the Participants. Nova Natural Resources
Corporation will pay all costs, expenses and fees related to the
registration, including all registration and filing fees, printing
expenses, fees and disbursements of its counsel, blue sky fees and
expenses. The Participants will pay any underwriting discounts
and selling commissions in connection with the sale of the shares.
The Participants may sell the shares covered by this prospectus
from time to time in one or more transactions through the OTC
Bulletin Board or an interdealer quotation system, on one or more
securities exchanges, in alternative trading markets or otherwise,
at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. The
Participant will determine the prices at which they sell their
shares in these transactions. The Participant may effect the
transactions By selling the shares to or through broker-dealers.
In effecting sales, broker-dealers engaged by the Participants may
arrange for other brokerdealers to participate in the resales. The
shares may be sold by one or more, or a combination, of the following:
- a block trade in which the brokerdealer attempts to sell
the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction,
- purchases by a brokerdealer as principal and resale by the
brokerdealer for its account,
- ordinary brokerage transactions and transactions in which
the broker solicits purchasers,
and
- privately negotiated transactions.
The amount of securities to be offered or resold by means of
this prospectus by each Participant, and any other person with whom
he or she is acting in concert for the purpose of selling securities
of Nova Natural Resources Corporation, is limited by SEC Rule 144(e)
(1) and (2). The number of shares resold may not exceed, during any
three-month period, the greater of:
- 1% of the shares of the class outstanding as shown by the
most recent report published by the issuer, or
- the average weekly reported volume of trading in such
securities during the four calendar weeks preceding the date of
receipt of the order to execute the transaction by the broker or the
date of execution of the transaction directly with a market maker.
For the purpose of determining the amount of securities sold during
any three-month period, the following provisions shall apply:
(i) Where both convertible securities and securities of the
class into which they are convertible are sold, the amount of
convertible securities sold shall be deemed to be the amount of
securities of the class into which they are convertible for the
purpose of determining the aggregate amount of securities of both
classes sold;
(ii) The amount of securities sold for the account of a
pledgee thereof, or for the account of a purchaser of the pledged
securities, during any period of three months within one year after
a default in the obligation secured by the pledge, and the amount of
securities sold during the same three-month period for the account
of the pledgor shall not exceed, in the aggregate, the amount
specified in paragraph SEC Rule 144(e)(1) or (2), whichever is
applicable;
(iii) The amount of securities sold for the account of a
donee thereof during any period of three months within one year after
the donation, and the amount of securities sold during the same
three-month period for the account of the donor, shall not exceed,
in the aggregate, the amount specified in paragraph SEC Rule 144(e)(1)
or (2), whichever is applicable;
(iv) Where securities were acquired by a trust from the
settlor of the trust, the amount of such securities sold for the
account of the trust during any period of three months within one
year after the acquisition of the securities by the trust, and the
amount of securities sold during the same three-month period for the
account of the settlor, shall not exceed, in the aggregate, the
amount specified in paragraph SEC Rule 144(e)(1) or (2), whichever is
applicable.
(v) The amount of securities sold for the account of the
estate of a deceased person, or for the account of a beneficiary
of such estate, during any period of three months and the amount of
securities sold during the same period for the account of the
deceased person prior to his death shall not exceed, in the
aggregate, the amount specified in SEC Rule 144(e) (1) or (2),
whichever is applicable; provided, that no limitation on amount
shall apply if the estate or beneficiary thereof is not an affiliate
of the issuer;
(vi) When two or more affiliates or other persons agree to
act in concert for the purpose of selling securities of an issuer,
all securities of the same class sold for the account of all such
persons during any period of three months shall be aggregated for
the purpose of determining the limitation on the amount of securities
sold;
(vii) The following sales of securities need not be
included in determining the amount of securities sold: securities
sold pursuant to an effective registration statement under the
Securities Act; securities sold pursuant to an exemption provided by
Regulation A under the Securities Act; securities sold in a
transaction exempt pursuant to Section 4 of the Securities Act and
not involving any public offering; and securities sold offshore
pursuant to Regulation S under the Securities Act.
The Participants may enter into hedging transactions with
broker-dealers. In these transactions, broker-dealers may engage in
short sales of the common stock in the course of hedging the
positions they assume with the Participants. The Participants also
may sell the common stock short pursuant to this prospectus and
redeliver the shares to close out these short positions. The
Participants may enter into option or other transactions with
broker-dealers that require the delivery to the broker-dealer
of the shares covered by this prospectus. The broker-dealer may then
resell or otherwise transfer the shares pursuant to this prospectus.
The Participants also may loan or pledge the shares to a
broker-dealer. The broker-dealer may then sell the loaned shares or,
upon a default by the Participant, the broker-dealer may sell the
pledged shares pursuant to this prospectus.
The Participants may engage in other financing transactions
that may include forward contract transactions or borrowings from
financial institutions in which the shares are pledged as security.
In connection with any of these forward contract transactions, the
Participants would pledge shares to secure their obligations and the
counterparty to these transactions would sell the common stock short
to hedge its transaction with the Participant. Upon a default by the
Participant under any of these financings, including a forward
contract transaction, the pledgee or its transferee may sell the
pledged shares pursuant to this prospectus. Any such pledgee or its
transferee will be identified in this prospectus by post-effective
amendment to the registration statement of which it is a part.
Broker-dealers or agents may receive compensation in the
form of commissions, discounts or concessions from the Participant.
Broker-dealers or agents may also receive compensation from the
purchasers of the shares for whom they act as agents or to whom they
sell as principals, or both. Compensation to a particular
broker-dealer may be in excess of customary commissions and will be
in amounts to be negotiated with a Participant in connection with the
sale. Broker-dealers or agents, any other participating
broker-dealers and the Participants may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities
Act in connection with sales of the shares. Accordingly, any
commission, discount or concession received by them and any profit on
the resale of the shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act.
Because the Participants may be deemed to be "underwriters" within
the meaning of Section 2(11)of the Securities Act, the Participants
will be subject to the prospectus delivery requirements of the
Securities Act.
The Participants will be subject to applicable provisions of
the Securities Exchange Act of 1934 and the associated rules and
regulations, including Regulation M. These provisions may limit
the timing of purchases and sales of shares of the common stock of
Nova Natural Resources Corporation by the participants. Nova Natural
Resources Corporation will make copies of this prospectus available
to the Participants and has informed them of the need for delivery
of copies of this prospectus to purchasers at or before the time of
any sale of the shares.
LEGAL OPINION
Stubbs Law Offices, Twin Falls, Idaho has passed upon the
legality of the shares offered by this prospectus.
EXPERTS
The consolidated statements of operations, stockholders'
equity and cash flows of Nova Natural Resources Corporation included
in this prospectus for the years ending September 30, 2000 and
September 30, 1999, have been included herein by reference, in
reliance on the report of Hein + Associates LLP, independent certified
public accountants, given on authority of that firm as experts in
accounting and auditing.
The combined statements of operations, stockholders' equity
and cash flows of Zhuhai Donghao Electronic Development Ltd. as
at December 31, 2000 and 1999 which appears in the Company's Report
on Form 8-K, as amended, for an event which occurred on February 27,
2001, has been included herein by reference, in reliance on the report
of Eddy S.L. Chin, Chartered Accountant, an independent chartered
accountant, given on authority of that firm as experts in accounting
and auditing.
With respect to the unaudited interim financial information
included herein, neither the independent certified public accountants
nor the chartered accountants, have audited the information and
neither has expressed an opinion or any other form of assurance with
respect to this information.
How To Obtain Additional Information
Nova Natural Resources Corporation has filed a registration
statement with the Securities and Exchange Commission relating to the
securities offered by this prospectus. The prospectus does not
contain all of the information set forth in the registration
statement. For further information with respect Nova Natural
Resources Corporation and the securities offered by this prospectus,
refer to the registration statement. In addition, Nova Natural
Resources Corporation is subject to the informational reporting
requirements of the Exchange Act and in accordance therewith file
reports, proxy statements and other information with the Securities
and Exchange Commission. These reports, proxy and information
statements and other information may be inspected and copied at the
public reference facilities maintained by the SEC. You may read
and copy the registration statement and any materials Nova Natural
Resources Corporation files with the Securities and Exchange
Commission at the Securities and Exchange Commission's Public
Reference Room at450 Fifth Street, N.W., Washington, DC 20549.
The public may obtain information on the operation of the Public
Reference Room by calling the Securities and Exchange Commission at
1800SEC0330. The Securities and Exchange Commission also maintains
an Internet site at www.sec.gov where Nova Natural Resources
Corporation Securities and Exchange Commission filings can be viewed.
EXHIBIT 5.1
STUBBS LAW OFFICES
212 2ND Avenue West
Twin Falls, 83301
Telephone 208-734-6677
Facsimile 208-733-8373
August 28, 2001
Nova Natural Resources Corporation
4340 Kentucky Avenue, Suite 418
Glendale, Colorado 80246-2060
Fax: 720.524.1364
Re: Form S-8 Registration Statement
Gentlemen:
You have requested that we furnish you our legal opinion with
respect to the legality of the following described securities of
Nova Natural Resources, Inc. Inc. (the "Company") covered by a Form
S-8 Registration Statement, as amended through the date hereof
(the "Registration Statement"), filed with the Securities and
Exchange Commission for the purpose of registering such securities
under the Securities Act of 1933 in connection with 10,000,000
shares of common stock, $.10 par value issuable pursuant to a
Consulting Agreement dated June 8, 2001; 2,500,000 shares of common
stock, $.10 par value issuable pursuant to Employment Agreements
Dated August 23, 2001, and July 10, 2001; and 11,653,000 shares of
common stock, $.10 par value issuable pursuant to the 2001
Non-Qualified Stock Option Plan (the "Shares.")
In connection with this opinion, we have examined the corporate
records of the Company, including the Company's Articles of
Incorporation, Bylaws, and the Minutes of its Board of Directors and
Shareholders meetings, the Agreement, the Registration Statement,
and such other documents and records as we deemed relevant in order
to render this opinion.
Based on the foregoing, it is our opinion that, after the
Registration Statement becomes effective and the Shares have been
issued and delivered as described therein, the Shares will be
validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion with Securities
and Exchange Commission as an exhibit to the Registration Statement
and further consent to statements made therein regarding our firm
and use of our name under the heading "Legal Matters" in the
Prospectus constituting a part of such Registration Statement.
/s/ Stubbs Law Offices
STUBBS LAW OFFICES
EXHIBIT 23.2
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in the Registration
Statement Form S-8 of Nova Natural Resources Corporation of our
report dated November 20, 2000, accompanying the financial statements
of Nova Natural Resources Corporation, also incorporated by reference
contained in such Registration Statement, and to the use of our name
and the statements with respect to us, as appearing under the heading
"Experts" in the Prospectus.
HEIN+ASSOCIATES LLP
Denver, Colorado
August 29, 2001
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
As an independent chartered accountant, I hereby consent to the
incorporation by reference in the Registration Statement on Form S-8
of my report relating to the financial statements of Nova Natural
Resources Corporation, which report appears in the Company's Report
on Form 8-K, as amended, for an event which occurred on February 27,
2001 and to all references to this firm included in such Registration
Statement.
/s/
EDDY S.L. CHIN
CHARTERED ACCOUNTANT
Toronto, Canada
August 28, 2001