EXHIBIT 10.02
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as
of the 11th day of September, 1998, by and between Alta Gold Co.
a Nevada corporation ("Employer"), and Xxxxxx X. Xxxxx
("Executive").
For and in consideration of the mutual covenants contained
herein and of the mutual benefits to be derived hereunder, the
parties agree as follows:
1. EMPLOYMENT. Employer hereby employs Executive to
perform those duties generally described in this Agreement, and
Executive hereby accepts and agrees to such employment on the
terms and conditions hereinafter set forth.
2. TERM. The term of this Agreement shall commence on
October 16, 1998, and end on October 15, 2001.
3. DUTIES. During the term of this Agreement, Executive
shall be employed by Employer and shall occupy the office of
President, Chairman and Chief Executive Officer. Executive
agrees to serve in such offices or positions with Employer or any
subsidiary of Employer. Executive agrees to continue to serve as
a member of the Board of Directors of Employer, and to serve as a
director of any subsidiary of Employer, for no additional
compensation subject to removal by the shareholders of Employer.
Executive shall devote substantially all of his working time
and efforts to the business of Employer and its subsidiaries and
shall not during the term of this Agreement be engaged in any
other substantial business activities which will significantly
interfere or conflict with the reasonable performance of his
duties hereunder. However, this shall not be construed as
preventing Executive from holding mining properties located in
eastern Nevada in which he has had an interest for many years.
4. COMPENSATION. For all services rendered by Executive,
Employer shall pay to Executive a salary of $267,500 per year
while serving as President, Chairman and Chief Executive Officer.
All salary payments shall be subject to withholding and other
applicable taxes. To compensate for cost of living increases,
the rate of salary shall be increased annually effective January
1, 1999, and on each anniversary thereafter, as the Board of
Directors, on the recommendation of its compensation committee
may determine or, in the absence of such determination, in the
amount of 7% over the applicable salary rate during the preceding
12-month period. In the event Executive resigns from his
position with Employer and not otherwise under the circumstances
set forth at paragraphs 14 or 15 herein, compensation payments to
Executive shall be limited to compensation for services rendered
by Executive.
5. INCENTIVE COMPENSATION. Employer shall provide
Executive with incentive compensation in the form of cash and
stock bonuses not less often than once each year during the term
of this Agreement. The amount of such bonuses shall be
determined by the Board of Directors of Employer or a
compensation committee thereof taking into consideration the
relative contribution by Executive to the business of Employer,
the economy in general, and such other factors as the Board of
Directors or compensation committee deems relevant.
6. EMPLOYMENT BENEFITS. Employer shall provide health and
medical insurance for Executive in a form and program to be
chosen by Employer for its full-time employees. Executive shall
be entitled to participate in any retirement, pension, profit
sharing, or other plan approved by the Board of Directors.
7. WORKING FACILITIES. Employer shall provide to
Executive at Employer's principal executive offices suitable
executive offices and facilities appropriate for his position and
suitable for the performance of his responsibilities.
8. VACATIONS. Executive shall be entitled each year to
paid vacation of at least 5 weeks. Vacations shall be taken by
Executive at a time and with starting and ending dates mutually
convenient to Employer and Executive. Vacations or portions of
vacations not used in one employment year shall carry over to the
succeeding employment year, but shall thereafter expire if not
used within such succeeding year.
9. EXPENSES. Employer will reimburse Executive for
expenses incurred in connection with Employer's business,
including expenses for travel, lodging, meals, beverages,
entertainment, and other items upon Executive's periodic
presentation of an account of such expenses as required by
Employer's policies and procedures.
10. COVENANT NOT TO DISCLOSE PROPRIETARY INFORMATION. For
a period of three years after termination of Executive's
employment, Executive agrees that he will not directly or
indirectly use, employ, publish, or otherwise disclose any
procedures, policies, practices, trade secrets, computer
software, formulas, client opportunities, or other information of
a proprietary nature in the establishment, opening, or operation
of a business, or in connection with engaging in business with,
serving as an officer, director, employee or agent of, or owning
any equity interest (other than ownership of ten percent or less
of the outstanding stock of any corporation listed on the New
York or American Stock Exchange or included in the National
Association of Security Dealers Automated Quotation System) in
any person, firm, corporation, or business entity, that engages
in mining activities in the United States that are competitive
with Employer's mining activities. The parties intend that this
covenant not to disclose proprietary information shall be
construed as a series of separate covenants. If in any judicial
proceeding a court shall refuse to enforce any of the separate
covenants
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deemed included in this paragraph, then the unenforceable
covenants shall be deemed eliminated from these provisions for
the purpose of those proceedings to the extent necessary to
permit the remaining separate covenants to be enforced.
This covenant not to disclose proprietary information shall
not be construed as restricting the Executive's right to own
shares in any company or limited partnership or business entity,
provided they do not perform services, or participate in any way
in the management of, a business entity which competes in any
manner outlined above.
This covenant shall survive the termination of this
Agreement.
11. NONDISCLOSURE OF INFORMATION. In further consideration
of employment and the continuation of employment by Employer,
Executive will not, directly or indirectly, during or after the
term of employment disclose to any person not authorized by
Employer to receive or use such information, except for the sole
benefit of Employer, any of Employer's confidential or
proprietary data, information, or techniques, or give to any
person not authorized by Employer to receive it any information
that is not generally known to anyone other than Employer or that
is designated by Employer as "Limited", "Private", or
"Confidential", or similarly designated.
12. DISABILITY. If Executive is unable to perform his
services by reason of illness or incapacity for a period of more
than 9 consecutive months, the compensation thereafter payable to
him during the second consecutive 9-month period shall be fifty
percent (50%) of the compensation provided for in paragraph 4
hereof, and during the third consecutive 9-month period, twenty-
five percent (25%) of the salary provided for in paragraph 4;
PROVIDED, however, that no such compensation shall be payable
after the termination of this Agreement. During such 27-
consecutive-month period, Executive shall be entitled to receive
incentive compensation in the same proportion as Executive's
incentive compensation to his annual salary set forth in
paragraph 4 paid to Executive, if any, for the fiscal year last
preceding the date such illness of incapacity commenced.
Notwithstanding the foregoing, if such illness or incapacity does
not cease to exist within such 27-consecutive-month period,
Executive shall not be entitled to receive any further
compensation nor any payments set forth in paragraph 14 herein
from Employer and Employer may thereupon terminate this
Agreement.
13. TERMINATION FOR CAUSE. Except as set forth in the
foregoing paragraph, Employer may not terminate this Agreement
during its term without cause ("Cause"). Employer, however, may
terminate this Agreement for Cause by showing that Executive has
materially breached its terms; that Executive, in the
determination of the Board of Directors has been grossly
negligent in the performance of his duties; that he has
substantially failed to meet written standards established by
Employer for the performance of his duties; or that he has
engaged in material willful or gross misconduct in the
performance of his duties
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hereunder. If Employer terminates this Agreement for Cause, all
of Employer's obligations hereunder shall terminate.
14. PAYMENTS FOR TERMINATION WITHOUT CAUSE. In the event
that Employer terminates this Agreement without Cause and not as
the direct result of a change in control, as that phrase is
defined in paragraph 17 hereof, Executive shall be compensated by
Employer in a single lump sum payment, payable within 30 days
after termination of employment, of the following amounts:
(a) The amount of one year's salary, at his then
current annual salary; and
(b) Incentive compensation, in the same proportion as
Executive's incentive compensation to his annual, as paid to
Executive, if any, for the fiscal year last preceding the
year during which his employment terminates, but prorated to
reflect the number of full months of his employment during
the year of termination.
(c) Executive's coverage under the Employer's insured
employee benefit plan, as provided in paragraph 6, shall
continue through the term of this Agreement.
15. TERMINATION PAYMENT FOR CHANGE IN CONTROL. If
Executive resigns or is discharged by Employer (or is deemed to
be discharged pursuant to paragraph 17 below) as the direct and
sole result of a change in control, then, in lieu of any payment
otherwise paid or payable to Executive under paragraph 14 hereof,
Employer shall pay to Executive an amount equal to 2.9 times the
average of the sum of amounts payable to Executive for salary,
bonus, and profit sharing for the five fiscal years immediately
preceding the date of the change in control or for such fewer
fiscal years if Executive has been employed by Employer for less
than five fiscal years, plus the remaining amount of the Signing
Bonus. Any amounts paid to Executive pursuant to this paragraph
15, shall be subject to any applicable federal, state, and local
tax withholdings and shall be payable in a lump sum to Executive
as soon as practicable after Executive's resignation or
discharge, but subject to the terms of paragraph 16 herein.
16. TAX LIMITATION. If Employer reasonably determines that
the payment provided for in paragraph 15 hereof (the "Termination
Payment") will likely result in a loss of a deduction to Employer
as provided under Section 280G of the Internal Revenue Code of
1986, or any successor provision thereto, and the imposition of
the excise tax payable to Executive as provided under Section
4999 to the Internal Revenue Code of 1986, or any successor
provision thereto, such Termination Payment shall be reduced by
the least amount required to avoid such loss of deduction and
imposition of excise tax (collectively referred to hereinafter as
the "Tax Penalties"). Employer shall make no Termination Payment
to Executive prior to determining whether the Tax Penalties will
apply to the Termination
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Payment. Employer shall make such determination within a
reasonable time after Executive's resignation or discharge, but
not to exceed 30 days thereafter.
17. DEEMED TERMINATION OF EMPLOYMENT. For purposes of
paragraph 15 hereof, Executive shall be deemed to have been
discharged by Employer if Executive voluntarily resigns before
the end of the term of this Agreement, but after a change in
control has occurred, provided the Executive could not be
discharged by Employer for Cause, has given Employer at least 30
days prior written notice of such resignation, and such
resignation occurs after any of the following:
(a) Executive is removed or released from any of his
titles, positions, or offices in effect immediately prior to
the occurrence of a change in control, or Executive's duties
and responsibilities in such titles, positions, or offices
are materially changed;
(b) Executive's base salary in effect immediately
before the change in control is reduced;
(c) Executive is removed from participation in any of
Employer's bonus or profit sharing programs, or any such
bonus or profit sharing programs in which Executive was or
was entitled to participate in immediately prior to the
change in control are discontinued;
(d) Executive's office is based more than 50 miles
from the location of the principal office at which Executive
was based immediately prior to the occurrence of the change
in control; or
(e) Employer deprives Executive of or otherwise
reduces any material fringe benefit, including perquisites,
provided to Executive by Employer immediately prior to the
occurrence of a change in control.
(f) Executive makes a determination in good faith that
as a result of the change in control and a change in
circumstances thereafter and since the date of this
Agreement significantly affecting his position, he is unable
to carry out the authorities, powers, functions or duties
attached to his position and the situation is not remedied
within 30 days after receipt by Employer of written notice
from the Executive of such determination.
18. DEFINITION OF CHANGE IN CONTROL. For purposes of this
Agreement, a "change in control" will be deemed to have occurred
on the first to occur of the following events:
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(a) As a result of a cash tender offer, stock exchange
offer or other takeover device, any person, as that term is
used in Section 13(d) and 14(b)(2) of the Securities
Exchange Act of 1934, is or becomes a beneficial owner,
directly or indirectly, of stock of Employer representing
thirty percent (30%) or more of the total voting power of
Employer's then outstanding securities;
(b) Any material realignment of the Board of Directors
of Employer or change in officers of Employer resulting from
a concerted shareholder action, including without limitation
a proxy flight, voting trusts or pooling arrangements;
(c) Any sale by Employer of thirty percent (30%) or
more of its assets to a single purchaser or to a group of
associated purchasers; or
(d) Any merger, consolidation, or other reorganization
of Employer with an entity, other than its affiliates,
whereby Employer is not the surviving entity or the
shareholders of Employer otherwise fail to retain
substantially the same direct or indirect ownership in
Employer or its affiliates immediately after any such
merger, consolidation, or reorganization.
19. DEATH DURING EMPLOYMENT. If Executive dies during the
term of this Agreement, Employer shall pay to the estate,
trustee, or other legally constituted third party designated by
Executive in six equal monthly installments commencing on the
first day of the month immediately following the month in which
Executive dies, an amount equal to one year's salary provided for
in paragraph 4 of this Agreement, and payment of incentive
compensation in the same proportion as Executive's incentive
compensation to his annual salary set forth in paragraph 4 paid
to Executive for the fiscal year last preceding the year in which
Executive dies, but prorated for the number of full months of his
employment during the year of his death.
20. NONTRANSFERABILITY. Neither Executive, his spouse, his
designated contingent beneficiary, nor their estates shall have
any right to anticipate, encumber, or dispose of any payment due
under this Agreement. Such payments and other rights are
expressly declared nonassignable and nontransferable except as
specifically provided herein.
21. INDEMNIFICATION. Employer shall indemnify executive
and hold him harmless from liability for acts or decisions made
by him while performing services for Employer to the greatest
extent permitted by applicable law. Employer shall use its best
efforts to obtain coverage for Executive under any insurance
policy now in force or hereafter obtained during the term of this
Agreement insuring officers and directors of Employer against
such liability.
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22. ASSIGNMENT. This Agreement may not be assigned by
either party without the prior written consent of the other
party.
23. ENTIRE AGREEMENT. This Agreement is and shall be
considered to be the only agreement or understanding between the
parties hereto and supersedes and is controlling over any and all
other prior existing agreements between the parties with respect
to the employment of Executive by Employer. All negotiations,
commitments, and understandings acceptable to both parties have
been incorporated herein. No letter, telegram, or communication
passing between the parties hereto covering any matter during
this contract period, or any plans or periods thereafter, shall
be deemed a part of this Agreement; nor shall it have the effect
of modifying or adding to this Agreement unless it is distinctly
stated in such letter, telegram, or communication that it is to
constitute a part of this Agreement and is to be attached as a
rider to this Agreement and is signed by the parties to this
Agreement.
24. ENFORCEMENT. Executive acknowledges that any remedy at
law for breach of paragraphs 10 and 11 would be inadequate,
acknowledges that Employer would be irreparably damaged by an
actual or threatened breach thereof, and agrees that Employer
shall be entitled to an injunction restraining Executive from any
actual or threatened breach of paragraphs 10 and 11 as well as
any further appropriate equitable relief without any bond or
other security being required. In addition to the foregoing,
each of the parties hereto shall be entitled to any remedies
available in equity or by statute with respect to the breach of
the terms of this Agreement by the other party.
25. GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the state of Nevada.
26. SEVERABILITY. If and to the extent that any court of
competent jurisdiction holds any provision or any part thereof of
this Agreement to be invalid or unenforceable, such holding shall
in no way affect the validity of the remainder of this Agreement.
27. WAIVER. No failure by any party to insist upon the
strict performance of any covenant, duty, agreement, or condition
of this Agreement or to exercise any right or remedy consequent
upon a breach hereof shall constitute a waiver of any such breach
or of any other covenant, agreement, term, or condition.
28. ARBITRATION. Any dispute or claim arising out of or
related to this Agreement, or the rights or obligations of the
parties here to, shall be settled by arbitration in accordance
with the rules of the American Arbitration Association. Any such
arbitration shall be before a single arbitrator to be chosen on
the mutual agreement of both parties. Should the parties be
unable to agree, then an arbitrator will be appointed by the
American Arbitration
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Association. The arbitrator shall assess fees and costs as he
deems appropriate. All arbitration hearings shall be held in
Henderson, Nevada.
AGREED AND ENTERED INTO as of the date first above written.
EMPLOYER: ALTA GOLD CO.
By: /s/
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Compensation Committee Chairman
EXECUTIVE:
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
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