EXHIBIT 10.3
SEVERANCE AGREEMENT
THIS AGREEMENT is dated as of _______________.
BETWEEN:
KINROSS GOLD CORPORATION, a corporation incorporated under the laws of
the Province of Ontario (hereinafter called the "Corporation")
OF THE FIRST PART
- and -
____________________ (hereinafter called the "Executive")
OF THE SECOND PART
WHEREAS the Executive is an employee of the Corporation and is
considered by the Board of Directors of the Corporation to be a valued employee
that has devoted his ability, time, effort and energy to the affairs of the
Corporation;
AND WHEREAS the Corporation considers the continuance of a sound and
vital management to be essential to protecting and enhancing the best interests
of the Corporation and its shareholders;
AND WHEREAS the Corporation desires to assure itself of retaining the
services of the Executive (including his services without distraction by
uncertainties and risks in the event of a proposed change of control of the
Corporation) and to reward the Executive for his valuable, dedicated service to
the Corporation, should his service terminate under the circumstances
hereinafter described;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
mutual covenants herein contained and in consideration of the Executive
remaining in the employment of the Corporation at the present time, it is hereby
agreed as follows:
1. DEFINITIONS
(a) "AGREEMENT" means this Agreement as amended from time to time;
(b) "ANNUAL COMPENSATION" shall mean an amount equal to Executive's annual
base salary at the annual rate in effect at his Date of Termination,
plus all benefits, quantified as 15% of the Executive's annual base
salary, paid or payable excluding bonuses or foreign supplements.
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(c) "BOARD OF DIRECTORS" means the board of directors of the Corporation
as at the date of this Agreement.
(d) "CAUSE" shall mean termination of Executive's employment by the
Corporation or any subsidiary thereof or successor thereto, by reason
of Executive's:
(i) gross negligence in the performance of his duties;
(ii) wilful and continued failure to substantially perform his duties
determined on a historic basis prior to a Change of Control with
the Corporation;
(iii) wilful engagement in conduct which is materially injurious to
the Corporation or its subsidiaries (monetarily or otherwise);
or
(iv) conviction of a criminal offence involving moral turpitude.
For purposes of this subparagraph 1(d) no act, or failure to act, on
Executive's part shall be considered "wilful" unless done
intentionally, or intentionally omitted by Executive not in good faith
and without reasonable belief that his action or omission was in the
best interests of the Corporation.
(e) "CHANGE OF CONTROL" means the occurrence of any one or more of the
following events:
(i) a consolidation, merger, amalgamation, arrangement or other
reorganization or acquisition involving the Corporation or any
of its affiliates (as such is defined in the Business
Corporations Act (Ontario)) and another corporation or other
entity, as a result of which the holders of common shares of the
Corporation prior to the completion of the transaction hold less
that 50% of the outstanding common shares of the successor
corporation after completion of the transaction;
(ii) the sale, lease, exchange or other disposition, in a single
transaction or a series of related transactions, of assets,
rights or properties of the Corporation and/or any of its
subsidiaries which have an aggregate book value greater than 30%
of the book value of the assets, rights and properties of the
Corporation and its subsidiaries on a consolidated basis to any
other person or entity, other than a disposition to a
wholly-owned subsidiary of the Corporation in the course of a
reorganization of the assets of the Corporation and its
subsidiaries;
(iii) a resolution is adopted to wind-up, dissolve or liquidate the
Corporation;
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(iv) any person, entity or group of persons or entities acting
jointly or in concert (an "Acquiror") acquires or acquires
control (including, without limitation, the right to vote or
direct the voting)of Voting Securities owned of record or
beneficially by the Acquiror or which the Acquiror has the right
to vote or in respect of which the Acquiror has the right to
direct the voting, would entitle the Acquiror and/or associates
and/or affiliates of the Acquiror (as such terms are defined in
the Business Corporations Act (Ontario)) to cast or to direct
the casting of 20% of more of the votes attached to all the
Corporation's outstanding Voting Securities which may be cast to
elect directors of the Corporation or the successor corporation
(regardless of whether a meeting has been called to elect
directors);
(v) as a result of or in connection with: (A) the contested election
of directors, or; (B) a consolidation, merger, amalgamation,
arrangement or other reorganization or acquisitions involving
the Corporation or any of its affiliates and another corporation
or other entity, the nominees named in the most recent
Management Information Circular of the Corporation for election
to the Board of Directors shall not constitute a majority of the
Board of Directors; or
(vi) the Board adopts a resolution to the effect that a Change of
Control as defined herein has occurred or is imminent.
For the purposes of the foregoing "Voting Securities" means
common shares of the Corporation and any other shares entitled
to vote for the election of directors and shall include any
security, whether or not issued by the Corporation, which are
not shares entitled to vote for the election of directors but
are convertible into or exchangeable for shares which are
entitled to vote for the election of directors including any
options or rights to purchase such shares or securities.
(f) "DATE OF TERMINATION" shall mean the date specified in the Notice of
Termination.
(g) "NOTICE OF TERMINATION" shall mean notice which shall indicate the
specific termination provisions in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's employment
under the provisions so indicated.
(h) "SEVERANCE AMOUNT" shall mean an amount equal to: (A + B)
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Where: "A" = 2.5 x the Executive's Annual Compensation; and
"B" = 2.5 x the Executive's Target Bonus.
(i) "TARGET BONUS" shall mean an amount equal to the designated percentage
of the Executive's annual base salary, as outlined in Appendix A, as
of the Date of Termination.
2. TERM
The term of this Agreement shall commence on the date hereof and continue
for a period of two and one-half years and shall continue thereafter for
successive 12 month periods unless a written notice (the "Notice") to the
contrary is given by either party to the other not less than three months prior
to the end of any such successive period; provided that if a Change of Control
shall occur prior to the date or within nine months following the date on which
the Notice is received by the party to whom it is addressed, the term of this
Agreement shall extend for a period of two years from the date on which such
Change of Control occurs, and shall continue thereafter for successive 12 month
periods, unless a written notice to the contrary is given by either party to the
other not less than nine months prior to the expiration of any such period.
3. TERMINATION FOLLOWING CHANGE OF CONTROL
If a Change of Control shall have occurred, Executive shall be entitled to
the benefits provided in paragraph 4 upon delivery of a written Notice of
Termination to the Corporation, as of the date specified therein.
4. COMPENSATION UPON TERMINATION
Following a Change of Control the Corporation or any subsidiary
thereof or successor thereto, provided that the Executive has been
employed by the Corporation for at least 12 months prior to the Change
in Control, then following the delivery of the written Notice of
Termination to the Corporation, the following shall occur:
A. SALARY AND BENEFITS. The Corporation shall pay Executive a lump
sum cash payment in an amount equal to the Severance Amount on or
before the fifth day after the last day of Executive's employment
with the Corporation;
B. STOCK OPTIONS. The Corporation shall cause any and all
outstanding options to purchase common shares in the capital of
the Corporation held by Executive to become immediately
exercisable in full and not to lapse until the expiry of their
original term (without regard to early termination provisions
relating to cessation of office or employment); and
C. LEGAL FEES. The Corporation shall pay all reasonable legal fees
and expenses incurred by Executive as a result of such
termination
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(including all such fees and expenses, if any, incurred in
contesting or disputing such termination or in seeking to obtain
or enforce any right or benefit provided by this Agreement)
promptly, from time to time, at Executive's request, as such fees
and expenses are incurred.
5. GENERAL
(a) AMOUNTS HEREIN NOT SUBJECT TO MITIGATION
Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any
provision of this Agreement and the obtaining of any such other
employment shall in no event effect any reduction of the Corporation's
obligations to make (or cause to be made), the payments and
arrangements required to be made under this Agreement.
(b) SUCCESSORS
This Agreement shall be binding upon and enure to the benefit of the
Corporation and any successor of the Corporation, by merger or
otherwise. This Agreement shall also be binding upon and enure to the
benefit of Executive, his heirs and personal representatives of his
estate.
(c) SEVERABILITY
Any provision in this Agreement which is prohibited or unenforceable
in any jurisdiction by reason of applicable law shall, as to such
jurisdiction, be in effect only to the extent of such prohibition or
unenforceability without invalidating or effecting the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
(d) TIME
Time shall be of the essence of this Agreement.
(e) CURRENCY
All of the sums of money referred to in this Agreement shall mean
Canadian funds.
(f) GOVERNING LAW
This Agreement shall be governed and construed in accordance with the
laws of the Province of Ontario and the federal laws of Canada
applicable therein.
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(g) ENTIRE AGREEMENT
This Agreement constitutes the entire agreement and understanding
between and among the parties hereto with respect to the subject
matter hereof and supersedes any prior agreement, representation or
understanding with respect thereto.
(h) AMENDMENTS
This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed
by all of the parties hereto.
(i) INDEPENDENT ADVICE
The Executive acknowledges having been advised that he is entitled to
obtain independent legal advice with respect hereto prior to executing
this Agreement.
(j) RELEASE OF CLAIMS
Notwithstanding any other provisions contained in this Agreement, the
Corporation shall require, as a condition precedent to the payment of
the Severance Payments to the Executive, that the Executive execute,
after his last day of employment by the Corporation, a release and
covenant in favor of the Corporation and its stockholders, officers,
employees, directors and affiliates in the form appended hereto as
Exhibit "A". If the Executive fails to provide the required release
and covenant, or within seven days following its delivery to the
Corporation revokes the required release and covenant, and the
Corporation has not alleged just cause for termination or denied a
Change in Control, the sole obligation of the Corporation to the
Executive under this Agreement shall be the payment of the equivalent
of two weeks salary calculated as at the time of termination.
(k) PLURAL AND GENDER:
Whenever used in this Agreement, words importing the singular number
only shall include the plural and vice versa and words importing the
masculine gender shall include the feminine gender.
(l) NOTICES
Any notice, request, consent, agreement or approval which may or is
required to be given pursuant to this Agreement, shall be in writing
and shall be sufficiently given or made if delivered or telecopied in
the case of:
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(i) the Corporation, addressed as follows:
Kinross Gold Corporation
00 Xxxx Xxxxxx Xxxx
00xx Xxxxx
Xxxxxxx XX X0X 0X0
Attention: VP, Human Resources
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(ii) the Executive (by delivery only), addressed as follows:
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or to such other address as the relevant party may from time to time
advise by notice in writing given pursuant to this section. The date
of receipt of any such notice, request, consent, agreement or approval
shall be deemed to be the date of delivery or telecopy (if during
normal business hours or, if not, the next business day).
(j) COUNTERPARTS
This Agreement may be executed in one or more counterparts which
together shall be deemed to constitute one valid and binding agreement
and delivery of the counterparts may be effected by means of a
telecopied transmission.
KINROSS GOLD CORPORATION
Per:
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SIGNED, SEALED AND DELIVERED )
in the presence of )
)
)
)
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Witness )
