Amendment To The Management Services Agreement
Amendment
To
The
This
Amendment (the “Amendment”), entered into effective the 21st
day of
December 2007, is to the Management Services Agreement entered into on September
1, 2006, as amended on August 31, 2007 (the “Agreement”), by and between White
Mountain Titanium Corporation (“WMTC”) and Xxxxxxx X. Xxxxxxx (the “Service
Provider” or “Xx. Xxxxxxx”).
RECITALS:
A. WMTC
is
intent on retaining senior management, including Xx. Xxxxxxx, through providing
competitive compensation; and
B. The
notification period in the Agreement is 90 days, which together with overall
ownership and compensation has been an expressed concern of several shareholders
and prospective investors; and
C. Xx.
Xxxxxxx has been engaged to provide key services for the ongoing operation
of
WMTC at compensation levels below that of persons in similar corporate
circumstances; and
D. Xx.
Xxxxxxx has expressed concern in the event of a corporate takeover that he
be
compensated in a manner which would take into account the prior reduced
compensation; and
E. A
change
of control could result in the termination of the Agreement which would cause
a
material detrimental effect on the economic and noneconomic incentives of Xx.
Xxxxxxx to remain with WMTC; and
F.
In
addition to the loss of cash and bonus compensation existing under the
Agreement, Xx. Xxxxxxx’x job security could be threatened, as well as career
advancement commensurate with seniority and skills, marketability, professional
respect, and satisfaction of working at a respected company; and
G. WMTC
believes that providing compensation which accounts for a potential change
of
control would assure Xx. Xxxxxxx that he would be fairly compensated in such
event and permit him to focus his entire attention on the business needs of
WMTC; and
H. Section
7(d) of the Agreement grants to the parties the right to amend the Agreement
upon approval of each of the parties thereto.
NOW,
THEREFORE, for additional consideration of the parties, the receipt and
sufficiency of which is hereby acknowledged by each party, the parties hereto
agree as follows:
1. Section
3
of the Agreement is amended to read as follows:
Term
and Renewal.
Subject
to the terms of Section 4 of this Agreement, the term of this Agreement shall
be
for a period of one year from the Effective Date, unless it is terminated
earlier as provided herein. Beginning on that date, and on each anniversary
thereafter, unless it is terminated earlier as provided herein or WMTC delivers
written notice to Service Provider of its intention not to extend the Agreement
at least one hundred twenty (120) days before such anniversary date, the term
of
this Agreement shall automatically be extended for one additional year. The
restrictive covenants in paragraph 5 hereof shall survive the termination of
this Agreement.
2. Section
4(a) of the Agreement is amended to read as follows:
Termination
Without Cause.
Either
WMTC or Service Provider may terminate this Agreement at any time without cause
(as defined below), provided that the terminating party gives written notice
of
termination to the other party at least one hundred twenty (120) days before
the
date of such termination.
3. Section
4A is added to the Agreement immediately following Section 4 to read as
follows:
Termination
Upon Change of Control
In
the
event of termination upon a change of control of WMTC, the following provisions
shall apply:
(a)
“Termination
Upon Change of Control” means:
(i)
any
termination of the employment of the Service Provider by WMTC without cause
during the period commencing on or after the date that WMTC first publicly
announces a definitive agreement that would result in a Change of Control (as
defined below), even though still subject to approval by WMTC’s stockholders and
other conditions and contingencies; or
(ii)
any
resignation by the Service Provider based on a diminution of responsibilities
where (1) such diminution of responsibilities occurs during the period
commencing on or after the date that WMTC first publicly announces a definitive
agreement that would result in a Change of Control (as defined below), even
though still subject to approval by WMTC’s stockholders and other conditions and
contingencies, and ending on the date which is twelve (12) months following
the
Change of Control, and (2) such resignation occurs within one-hundred and twenty
(120) days following such diminution of responsibilities.
(b) The
term
“Termination Upon Change of Control” shall not include any other termination,
including a termination of the Service Provider (i) by WMTC for cause; (ii)
by
WMTC as a result of the disability of party; (iii) as a result of the death
of
the party; or (iv) as a result of the voluntary termination of employment by
the
party for reasons other than a diminution of responsibilities.
2
(c) “Change
of Control” means:
(i)
any
“person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), other than a trustee or
other fiduciary holding securities of WMTC under an employee benefit plan of
WMTC, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under
the Exchange Act), directly or indirectly, of securities of WMTC representing
30% or more of (A) the outstanding shares of common stock of WMTC or (B) the
combined voting power of WMTC’s then-outstanding securities;
(ii)
WMTC
is party to a merger or consolidation, or series of related transactions, which
results in the voting securities of WMTC outstanding immediately prior thereto
failing to continue to represent (either by remaining outstanding or by being
converted into voting securities of the surviving or another entity) at least
fifty (50%) percent of the combined voting power of the voting securities of
WMTC or such surviving or other entity outstanding immediately after such merger
or consolidation;
(iii)
the
sale or disposition of all or substantially all of WMTC’s assets (or
consummation of any transaction, or series of related transactions, having
similar effect);
(iv)
there occurs a change in the composition of the Board of Directors of WMTC
within a two-year period, as a result of which fewer than a majority of the
directors are incumbent directors;
(v)
the
dissolution or liquidation of WMTC; or
(vi)
any
transaction or series of related transactions that has the substantial effect
of
any one or more of the foregoing.
(d) In
the
event of termination upon a Change of Control, the Service Provider shall
receive the following compensation: (i) immediate payment of a severance amount
equal to three times the highest annual base cash compensation paid the Service
Provider; (ii) the immediate vesting of any outstanding unvested options,
warrants, or other convertible instruments; (iii) the pro rata amount of any
bonuses for which the Service Provider is eligible; (iv) the extension of the
exercise period of any options, warrants, or other convertible instrument for
at
least six months following such termination.
4. Except
as
amended hereby, the Agreement shall continue to be, and shall remain, in full
force and effect. Except as provided herein, this Amendment shall not be deemed
(i) to be a waiver of, or consent to, or a modification or amendment of, any
other term or condition of the Agreement or (ii) to prejudice any right or
rights which the parties may now have or may have in the future under or in
connection with the Agreement or any of the instruments or agreements referred
to therein, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
5. The
terms
of the Agreement are incorporated herein by reference and shall form a part
of
this Amendment as if set forth herein in their entirety.
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IN
WITNESS WHEREOF,
each of
the parties hereto has executed this Agreement the respective day and year
set
forth below.
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White
Mountain Titanium Corporation
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Date:
January 10, 2008
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By
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/s/
Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx
Xxxxxxxxx, President
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/s/
Xxxxxxx X. Xxxxxxx
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Xxxxxxx
X. Xxxxxxx, Individually
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