AMENDMENT NO. 3 TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT 10.1
AMENDMENT
NO. 3 TO
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
This
Amendment No. 3 (the “Third Amendment”) to the Amended and Restated Employment
Agreement dated May 21, 2003 (the “Employment Agreement”) as further amended
pursuant to Amendment No. 1 dated January 23, 2006 and Amendment No. 2 dated
March 20, 2009 is entered into as of June 18, 2010 (the “Effective Date”) by and
among Apollo Gold Corporation, a Yukon territory Corporation (“Parent”) and its
wholly-owned subsidiary, Apollo Gold Inc., a Delaware corporation (jointly and
severally with Parent, the “Employer”), and R. Xxxxx Xxxxxxx (“Executive”).
Capitalized terms used and not otherwise defined herein shall have the
respective meanings set forth in the Employment Agreement, as
amended.
RECITALS
WHEREAS, the Employer desires
that the Executive continue to be employed by the Employer and the Executive is
willing to continue to be employed by the Employer;
WHEREAS, Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), places certain
restrictions, among other things, as to the timing of distributions from
nonqualified deferred compensation plans and arrangements, including severance
payments;
WHEREAS, the Employer and
Executive have at all times administered and construed each provision of the
Employment Agreement consistent with the requirements of Section 409A, including
the short-term deferral exception to Section 409A;
WHEREAS, the Employer and
Executive desire to clarify certain ambiguous terms and conditions of the
Employment Agreement to confirm that those terms and conditions that are not
grandfathered from the requirements of Section 409A of the Code pursuant to
Treasury Regulation 1.409A-6 comply with the documentary requirements of the
final Section 409A Treasury Regulations, including the short-term deferral
exception of Section 409A of the Code and Treasury Regulation 1.409A-1(b)(4),
and to continue Executive’s employment with the Employer in accordance with
those clarified terms and conditions.
NOW, THEREFORE, in
consideration of the mutual promises set forth herein, the parties hereto hereby
agree as follows:
1. Section
3(a) is hereby amended to add the following new sentence at the end of Section
3(a):
“Any
bonus awarded to the Executive shall be paid in accordance with the Company’s
customary practices, but in no event later than the 15th day of the third
calendar month following the close of the calendar year for which such bonus is
earned.”
2. Section 5
of the Employment Agreement is hereby amended in its entirety to read as
follows:
“The Executive shall be reimbursed by
the Company for business expenses incurred as a result of his work on behalf of
the Company. The Company shall reimburse the Executive for such
expenses upon presentation of supporting documentation satisfactory to the
Company in accordance with the tax principles applicable in Canada (at times
when the Executive is resident in Canada) or in accordance with the tax
principles applicable in the United States (at times when the Executive is
resident in the United States) for such reimbursement and the Company’s
established reimbursement policies, as those policies may be modified from time
to time in the Company’s discretion.
The
following provisions shall be in effect for any reimbursements to which the
Executive otherwise becomes entitled under this Agreement, including (without
limitation) the reimbursements provided under this Section 5 and the allowances
provided in Section 3(d) and Section 3(f), in order to assure that such
reimbursements are effected in compliance with the applicable requirements of
Section 409A of the Code:
(i) The
amount of reimbursements to which the Executive may become entitled in any one
calendar year shall not affect the amount of expenses eligible for reimbursement
hereunder in any other calendar year;
(ii) The
Executive’s right to reimbursement cannot be liquidated or exchanged for any
other benefit or payment; and
(iii) In
no event will any expense be reimbursed after the close of the calendar year
following the calendar year in which that expense is incurred.”
3. Section
6(e) of the Employment Agreement is hereby amended in its entirety to read as
follows:
“In the event of a Change of Control,
the Executive’s employment shall be deemed to have been terminated without cause
(whether or not the Executive’s employment actually terminates at the time of
the Change of Control) and the Executive shall become entitled to receive the
following payments and benefits:
(i) Any
stock options granted to the Executive but not vested shall be deemed to have
immediately vested as of the date of the Change of Control;
(ii) The
Company shall pay to the Executive a lump-sum cash payment in an amount equal to
(a) three times the Executive’s base salary (at the annual rate in effect on the
effective date of the Change of Control) plus (b) 50% of the Executive’s bonus
entitlement, times three. Such payment shall be paid to the Executive
within thirty days following the effective date of the Change of Control;
and
(iii) The
Executive shall be entitled to a lump-sum cash payment, in a dollar amount equal
to (a) thirty-six times the Company’s monthly cost of health care coverage for
the Executive and his spouse and eligible dependents under the Company’s
employee group health plan at the level of coverage in effect for Executive and
his spouse and eligible dependents at the time of the Change of Control, plus
(b) three times the Executive’s annual automobile allowance pursuant to Section
3(d), plus (c) three times the Executive’s annual social/sports club dues
allowance pursuant to section 3(f). Such payment shall be paid to the
Executive within thirty days following the effective date of the Change of
Control.
In no event shall the Executive become
entitled to a payment pursuant to this Section 6(e) and pursuant to Section 6(f)
of the Employment Agreement. In the event of a Change of Control in
which the Executive’s employment with the Company continues following the
effective date of the Change of Control, Section 6(f) of the Employment
Agreement shall terminate, and no payment will be made pursuant to such
section.
4. Section
6(f) of the Employment Agreement is hereby amended in its entirety to read as
follows:
“The
Executive’s employment may be terminated without cause by majority vote of the
Board. In the event that the Executive’s employment is terminated
pursuant to this section 6(f), in compensation for the Executive’s loss of
employment, the Executive shall become entitled to receive the following
benefits and payments, and the Executive shall not have the duty to mitigate
damages:
(i) Any
stock options granted to the Executive but not vested shall be deemed to have
immediately vested as of the Executive’s termination date;
(ii) The
Company shall pay to the Executive a lump-sum cash payment in an amount equal to
(a) three times the Executive’s base salary (at the annual rate in effect at the
time the Executive’s employment is terminated) plus (b) 50% of the Executive’s
bonus entitlement, times three. Such payment shall be paid to the
Executive within thirty days following the date of his Separation from Service
(as such term is defined in Section 19); and
(iii) The
Executive shall be entitled to a lump-sum cash payment, in a dollar amount equal
to (a) thirty-six times the monthly cost of COBRA continued health care coverage
for the Executive and his spouse and eligible dependents under the Company’s
employee group health plan at the level of coverage in effect for Executive and
his spouse and eligible dependents at the time of his termination and calculated
on the basis of cost of such COBRA coverage at that time, plus (b) three times
the Executive’s annual automobile allowance pursuant to Section 3(d), plus (c)
three times the Executive’s annual social/sports club dues allowance pursuant to
section 3(f) . Such payment shall be paid to the Executive within
thirty days following the date of the Executive’s Separation from Service (as
such term is defined in Section 19).”
5. The
following new Section 19 is hereby added to the Employment
Agreement:
“19. Code
Section 409A.
The
parties intend that the provisions of this Agreement either (i) are
grandfathered from the requirements of Section 409A of the Code or (ii) comply
with the requirements of the short-term deferral exception of Section 409A of
the Code and Treasury Regulations Section
1.409A-1(b)(4). Accordingly, to the extent there is any ambiguity as
to whether one or more provisions of this Agreement would otherwise contravene
the requirements or limitations of Code Section 409A applicable to the
grandfather rules or the short-term deferral exception, then those provisions
shall be interpreted and applied in a manner that does not result in a violation
of the requirements or limitations of Code Section 409A and the Treasury
Regulations thereunder that apply to such rules or such exception.”
If and to
the extent this Agreement may be deemed to create an arrangement subject to the
requirements of Section 409A, then no amounts which become payable by reason of
the Executive’s cessation of service shall actually be issued or distributed to
the Executive prior to the earlier of
(i) the first day of the seventh (7th) month following the date of his
Separation from Service due to such cessation of service or (ii) the date of the
Executive’s death, if the Executive is deemed at the time of such Separation
from Service to be a specified employee under Section 1.409A-1(i) of the
Treasury Regulations issued under Code Section 409A, as determined by the
Company in accordance with consistent and uniform standards applied to all other
Code Section 409A arrangements of the Company, and such delayed commencement is
otherwise required in order to avoid a prohibited distribution under Code
Section 409A(a)(2). The deferred payments shall be paid in a lump sum
on the first day of the seventh (7th) month following the date of the
Executive’s Separation from Service or, if earlier, the first day of the month
immediately following the date the Company receives proof of the Executive’s
death.
For
purposes of this Agreement, the term “Separation from Service” shall have the
meaning ascribed to such term under Code Section 409A and the Treasury
Regulations issued thereunder.”
6. Except as
modified by this Third Amendment, all the terms and provisions of the Employment
Agreement, as amended shall continue in full force and effect.
IN WITNESS WHEREOF, the
parties hereto have executed this Third Amendment as of the date first above
written.
| APOLLO GOLD CORPORATION | |||
|
By:
|
/s/ Xxxxxx Xxxxxxxx | ||
| Title: Sr. VP & CFO | |||
| APOLLO GOLD, INC. | |||
|
By:
|
/s/ Xxxxxx Xxxxxxxx | ||
| Title: Sr. VP & CFO | |||
|
By:
|
/s/ R. D. Xxxxxxx | ||
| X. XXXXX XXXXXXX | |||
