Exhibit 10.1
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EMPLOYMENT AGREEMENT
THIS AGREEMENT is made the 24th day of October, 2005, between U.S. Gold
Corporation, a Colorado Corporation (the "Employer") and Xxx X. Xxxxxxxxx (the
"Employee").
WHEREAS, Employer desires to secure the employment of Employee; and
WHEREAS, Employee desires to be employed by Employer;
NOW THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the Employer and Employee agree as follows:
ARTICLE 1
TERM OF EMPLOYMENT
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1.1 Employment. Effective with this Agreement, the Employer agrees to employ the
Employee and the Employee agrees to be employed by the Employer upon the terms
and conditions hereinafter set forth.
1.2 Term. The employment of the Employee by the Employer as provided herein
shall commence as of the date of this Agreement and shall terminate three years
from such date, unless extended by the Employee and Employer. Review to extend
the employment agreement must occur 6 months prior to the termination date of
this agreement.
1.3 Office and Support. Employee shall be provided an office to be located in
Reno, Nevada or other location mutually acceptable to both Employee and
Employer, and reasonable and necessary support staff at that location and/or
through other office location(s) of the Employer.
1.4 Place of Performance. In connection with Employee's employment by Employer,
Employee shall be based out of the Reno, Nevada area, except for required travel
on Employer's business to an extent reasonable and necessary for the performance
of the duties of Employee.
ARTICLE 2
DUTIES OF THE EMPLOYEE
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2.1 DUTIES. The Employee shall be employed with the title of President and Chief
Operating Officer and shall be subject to the general direction and control of
the Board of Directors and Chairman of the Board. Employee shall have such
responsibilities and authorities as are customarily performed by the President
and Chief Operating Officer, including but not limited to those duties as may
from time to time be assigned to Employee by the Board of Directors and the
Chairman of the Board. The Employer shall pay for educational undertakings
required to meet the duties. An addendum to this contract will be added within
30-60 days with a mutually agreed definition of duties.
2.2 Extent of Duties. Employee shall devote substantially her full time,
attention and energies to the business of the Employer.
2.3 Disclosure of Information.
2.3.1 The Employee recognizes and acknowledges that information, properties,
prospects, and business of the Employer and any other trade secrets or other
secrets as they may exist from time-to-time (collectively referred to as
"Confidential Information", excluding matters presently known to Employee or
such information that is in the public domain) are valuable, special and unique
assets of Employer's business. Therefore, Employee agrees that:
(i) Employee will hold in strictest confidence and not disclose,
reproduce, publish or use in any manner during her employment, without
the express authorization of the Board of Directors and/or Chairman of
the Board of the Employer, any Confidential Information relating to
any aspect of the Employer's business, except as such disclosure or
use may be required in connection with Employee's work for the
Employer.
(ii) Upon request or at the time of leaving the employ of the Employer, the
Employee will deliver to the Employer, and not keep or deliver to
anyone else, any and all Confidential Information and all notes,
memoranda, documents and in general, any and all materials, electronic
or written, and any and all material relating to the Employer's
business.
2.3.2 In the event of a breach or threatened breach by the Employee of the
provisions of this Section 2.3, the Employer shall be entitled to a restraining
order or an injunction (i) restraining the Employee from disclosing, in whole or
in part, any Confidential Information or from rendering any services to any
person, firm, corporation, association or other entity to whom such Confidential
Information, in whole or in part, has been disclosed or is threatened to be
disclosed; and/or (ii) requiring that Employee deliver to Employer all
Confidential Information, documents, notes, memoranda and any and all
discoveries or other material upon Employee's leave of the employ of the
Employer. Nothing herein shall be construed as prohibiting the Employer from
pursuing other remedies available to the Employer for such breach or threatened
breach, including the recovery of damages from the Employee.
ARTICLE 3
COMPENSATION OF THE EMPLOYEE
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3.1 Compensation. (a) As compensation for services rendered under this
Agreement, the Employee shall receive a salary of $170,000 per annum. (b) The
salary provided shall be paid in equal semi-monthly installments in accordance
with Employer's normal practices. (c) The salary provided in this subsection
shall in no way be deemed exclusive, and shall not prevent the Employee from
participating in any other compensation or benefit plans for the benefit of the
employees of the Employer.
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3.2 Benefits. Employee shall be entitled to four (4) weeks paid vacation per
year of employment (accrued on a monthly basis) and all paid holidays as
customarily extended to executive employees, provided that Employee shall use
her best efforts to schedule such vacation time so as not to substantially
interfere with the Employer's business. Accrual of unused vacation shall occur
over a rolling 24 month period, at the end of which rolling period any unused
vacation accrued over 24 months old will be forfeited. Employer shall provide
for medical health and dental insurance for Employee and her spouse with
benefits generally consistent with that extended other executive employees, or
at the election of Employee, Employer shall directly pay for such coverage or
Employee shall be reimbursed by Employer for the actual cost of generally
comparably priced medical health and dental insurance as directly maintained
from time-to-time by the Employee. Employee shall be entitled to up to 10 days
of combined sick leave and personal leave per calendar year which shall not
accrue if not used. After exhaustion of this sick leave and personal leave
benefit, additional days taken off by Employee shall be considered and charged
under paid vacation benefit per above.
3.3 Business Vehicle. The Employer shall provide Employee with an assigned
vehicle, suitable to the requirements and demands of the Duties of Employee,
with costs of insurance, operations and maintenance of such vehicle paid by
Employer. Employee's portion of any reasonable personal use of such vehicle
shall be determined annually and Employer shall report the imputed value
attributable to such personal use to the Internal Revenue Service as taxable
compensation to Employee in addition to the salary provide in Section 3.1.(a)
above.
3.4 Expenses. Employee shall be entitled to prompt reimbursement for all
reasonable and allocable expenses incurred by Employee in the performance of her
duties hereunder. Employee shall provide Employer with proper receipts and
substantiation for such expenses. Employer shall advance reasonable estimates of
such expenses upon request of employee.
3.5 Stock Options. Effective upon and subject to action of the Board of
Directors to be taken at the effect date of this Agreement, Employee shall then
be granted stock options to purchase 100,000 shares of stock of Employer at an
exercise price to be determined as the closing price of the shares on the day of
such option grant. Upon the sufficient increase to the authorized capitalization
of the Employer equity, and effective upon action of the Board of Directors to
be promptly taken as soon after such increase to authorized capitalization is
effective by required vote of the shareholders of the Employer, Employee shall
then be granted an additional 200,000 share stock option at an exercise price to
be determined as the closing price of the shares on the day of such grant. Each
of the option agreements shall be for a period of ten (10) years and will
include the general form, content, and conditions as used by the Employer in
other executive officer stock option agreements. These options shall be issued
under the Employer's Non-Qualified Stock Option and Stock Grant Plan. An annual
granting of stock options will be considered by the Board.
ARTICLE 4
TERMINATION OF EMPLOYMENT
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4.1 TERMINATION. The Employee's employment hereunder may be terminated without
any breach of this Agreement only under the following circumstances:
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4.1.1 Death. This Agreement shall terminate upon the death of Employee. In such
event Employer shall pay Employee's estate an amount equal to six (6) month's
salary, such amount being payable within three months after her death.
4.1.2 Disability. This Agreement shall not terminate upon the temporary
disability of the Employee, but the Employer may terminate this Agreement upon
the permanent disability of the Employee. "Disability" is defined as a condition
which prevents Employee's ability to perform. In such event, Employer shall pay
the Employee an amount equal to one (1) year's salary, such amount being payable
within three months after such termination.
4.1.3 Cause. The Employer may terminate the Employee's employment hereunder for
Cause. For purposes of this Agreement, the Employer shall have "Cause" to
terminate the Employee's employment hereunder upon the following: (1) the
willful and continued failure by the Employee substantially to perform her
duties hereunder (other than any such failure resulting form the Employee's
incapacity due to physical or mental illness, and/or Section 4.1.2), after
demand for substantial performance is delivered by the Employer that
specifically identifies the manner in which the Employer believes the Employee
has not substantially performed her duties; or (2) the willful engaging by the
Employee in misconduct which is materially injurious to the Employer, other than
business decisions made in good faith; or (3) the willful violation by the
Employee of the provisions of this Agreement. In such event, the Employer shall
pay the Employee her salary through the date of termination.
4.1.4 Termination by the Employee. Upon the occurrence of any of the following
events this Agreement may be terminated by the Employee:
(i) the sale by Employer of substantially all of its assets to a
single purchaser or to a group of affiliated purchasers;
(ii) the sale, exchange or other disposition in one transaction or a
series of related transactions, of at least 50% of the
outstanding voting shares of Employer;
(iii) a decision by Employer to terminate its business and liquidate
its assets;
(iv) the merger or consolidation of Employer with another entity or an
agreement to such a merger or consolidation or any other type of
reorganization where the Employer is not the surviving entity;
(v) there is material change in Employee's scope of authority, duties
or responsibilities without her written consent, or Employee is
required to report to any other person or committee other than
the Board of Directors and the Chairman of the Board.
If Employee elects to terminate this Agreement as provided under this Subsection
4.1.4, during the initial 180 days of the date of this Agreement, the Employer
shall pay Employee an amount equal to one (1) years salary; and if terminated
under this Subsection 4.1.4., and after 180 days of the date of this Agreement,
the Employer shall pay Employee an amount equal to two (2) years salary. Such
payment shall be paid in full not later than 90 days following the termination
of this Agreement (notwithstanding any other employment Employee may obtain.)
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4.1.5. Other Termination by the Employee. Employee may terminate this Agreement
for reasons other than as provided in
4.1.4 on 120 days' prior written notice to Employer. In such event, the Employer
shall pay the Employee her salary through the date of termination.
4.2 Notice of Termination. Any termination of the Employee's employment by the
Employer or by the Employee shall be communicated by written Notice of
Termination to the other party. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
employment under the provisions so indicated.
4.3 Date of Termination. "Date of Termination" shall mean (i) if the Employee's
employment is terminated by her death, the date of her death; and (ii) if the
Employee's employment is terminated for any other reason, the date indicated in
the Notice of Termination.
4.4 Remedies. Any termination of this Agreement shall not prejudice any other
remedy to which the Employer or Employee may be entitled, either at law, equity,
or under this Agreement.
ARTILE 5
INDEMNIFICATION
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5.1 Indemnification. To the fullest extent permitted by applicable law, Employer
agrees to indemnify Employee, her executors, administrators or assigns, for any
expenses which the Employee is or becomes legally obligated to pay in connection
with any proceeding. The Employer is obliged to defend Employee, hold her
harmless, and to advance her defense costs to the fullest extent permitted by
applicable law. As used in this Section the term "proceeding" includes any
threatened, pending or completed claim, action, suit or proceeding, whether
brought by or in the right of the Employer or otherwise and whether of a civil,
criminal, administrative or investigative nature, in which the Employee may be
or may have been involved as a party or otherwise, by reason of the fact that
Employee is or was an officer of the Employer, by reason of any actual or
alleged error or misstatement or misleading statement made or suffered by the
Employee, by reason of any action taken by her or of any inaction on her part
while acting as such officer, or by reason of the fact that she was serving at
the request of the Employer; provided, that in each such case Employee acted in
good faith and in a manner which she reasonably believed to be in or not opposed
to the best interests of the Employer, and, in the case of a criminal
proceeding, had no reasonable cause to believe that her conduct was unlawful.
The Employer shall make a diligent and reasonable commercial effort to obtain
liability and errors and omissions insurance policies for Directors and
Officers, and the Employee will be named as an insured in any such policies,
renewals or replacement insurance policies.
ARTICLE 6
GENERAL PROVISIONS
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6.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado.
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6.2 Entire Agreement. This Agreement supersedes any and all other Agreements,
whether oral or in writing, between the parties with respect to the employment
of the Employee by the Employer. Each party to this Agreement acknowledges that
no representations, inducements, promises, or agreements, orally or otherwise,
have been made by either party, or anyone acting on behalf of any party, that
are not embodied in this Agreement, and that no agreement, statement, or proxies
not contained in this Agreement shall be valid or binding.
6.3 Assignment. The rights and obligations of the parties hereto may not be
assigned or transferred by either party without the prior written consent of the
other party.
6.4 Notices. For purposes of this Agreement, notices, demands and all other
communications provided for in this agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, or by Fax with
receipt confirmation followed by mail delivery, addressed as follows:
If to Employee: Xxx X. Xxxxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxx, Xxxxxx 00000
Fax (000) 000-0000
If to Employer Chairman of the Board of Directors
U.S. Gold Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000-0000
Fax (000) 000-0000
Or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
6.5 Severability and Reasonableness. If any provision of this Agreement is
prohibited by or is unlawful or unenforceable under any applicable law of any
jurisdiction as to such jurisdiction, such provision shall be ineffective to the
extent of such prohibition without invalidating the remaining provisions hereof.
If nay provision of this Agreement is found to be unreasonable by a court of
competent jurisdiction, then the provision shall be modified by such court to
make the provision reasonable.
6.6 Section Headings. The section headings used in this Agreement are for
convenience only and shall not affect the construction of any terms of this
Agreement.
6.7 Survival of Obligations. Termination of this Agreement for any reason shall
not relieve Employer or Employee of any obligations accruing or arising prior to
such termination.
6.8 Amendments. This Agreement may be amended only by written agreement of both
Employer and Employee.
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6.9 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original by all of which, when taken together,
shall constitute only one legal instrument. This Agreement shall become
effective when copies hereof, when taken together, shall bear the signatures of
both parties hereto. It shall not be necessary in making proof of this Agreement
to produce or account for more than one such counterpart instrument.
6.10 Fees and Costs. Any controversy or claim arising out of or relating to this
Agreement or the breach thereof shall be settled by arbitration in the City and
County of Denver, Colorado in accordance with the rules then existing of the
American Arbitration Association and judgment upon the award may be entered in
any court having jurisdiction thereof with the prevailing party entitled to
reasonable attorneys fees and costs as determined by the arbitrator(s). Each
party shall pay fifty percent (50%) of all fees and costs of the arbitrator(s)
as well as all the costs of its own counsel and witnesses, and all other costs
associated with the preparation and presentation of its case, unless, subject to
the preceding sentence, the decision of the arbitrator(s) shall specify a
different apportionment of any or all of such costs and expenses.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
"Employer"
U.S. Gold Corporation, a Colorado corporation
By: /s/ Xxxxxxx X. Pass for Xxxxxx X. XxXxxx
Xxxxxx X. XxXxxx, Chairman of the Board of Directors
"Employee"
/s/ Xxx X. Xxxxxxxxx
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