Employment Agreement
Exhibit 10.ii
This Agreement is made effective on the 13th day of February, 2006, between CDE
Australia Pty Ltd, ABN 40 113 667 682 (“Company”), and Xxxxxxx X. Xxxxxx (“Employee”).
WITNESSETH:
In consideration of the mutual promises and covenants herein contained to be kept and
performed by the parties hereto, the parties agree as follows:
1. Employment. The Company agrees to, and hereby does, employ Employee as Managing Director
and Sr. Vice President of Coeur Australia, a wholly owned subsidiary of Coeur d’ Xxxxx Xxxxx
Corporation, and Employee accepts such employment, on the terms and conditions of this Agreement.
2. Term Of Employment. The initial term of this Agreement shall be from February 13, 2006
through June 30, 2007, unless sooner terminated as herein provided. It is further agreed that this
Agreement may be considered for a one year extension during the month of June, 2006, to the end
that the parties may be then bound to a full two year duration of this Agreement. It is understood,
however, that termination can occur in accordance with the provisions of paragraph 7 below,
notwithstanding anything to the contrary in this paragraph 2.
3. Compensation. The Company shall pay to Employee during the duration of the term of this
Agreement as follows:
(a) A base salary of US $220,000 annually, payable in equal monthly installments, which may be
reviewed annually during any Agreement year, but which may not be decreased, and any higher salary
to become the base salary for the purposes of this provision, it being understood, however, that
failure to increase the salary shall not be grounds for termination of this Agreement;
(b) A one time signing bonus, payable in cash of US$15,000 before taxes and withholdings. The
signing bonus will be fully vested upon Employee and payable within 30 days of Employees initial
term of Employment.
(b) Such other compensation and benefits that may be made available by the Company in the
discretion of the Board of Directors, consisting of bonuses, short-term and long-term incentive
plans, pension plan, retirement plan, profit sharing plan, stock purchase plan and any other kind
or type of incentive programs approved by the Board. It is understood that Employee shall be a
participant in equivalent Australian compensation and benefit programs, including both pension and
welfare benefit plans, to those which exist for the executive staff of the Company in the United
States;
(c) Employee shall be entitled to earn an annual incentive bonus during each calendar year of
this Agreement payable in cash pursuant to the Company’s Annual Incentive Plan (AIP) equal to no
less than 40%% of Employee’s then current annual salary, which, at the date of this Agreement, is
the potential sum of US$88,000 and a maximum of US$176,000. In addition, Employee shall be
entitled to earn a long-term incentive bonus, payable in cash and/or stock, stock options or other
compensation under the Company’s Long Term Incentive Plan (LTIP) with a target level of 50% or a
potential US$110,000. Such bonuses are at the discretion of the board of directors; and
(d) Employee will be eligible for a Company provided vehicle.
(e) The Company will contribute 10.89% of the Executive base salary to a complying
superannuation fund of Employee’s choice, which shall be annually reviewed for compliance with
Australian laws.
4. Duties. Employee, during the term of this Agreement, shall perform the duties usually
and customarily associated with the office specified in paragraph (1) above and as assigned to
Employee from time-to-time by the Sr. Vice President of Operations of Coeur d’ Xxxxx Xxxxx
Corporation or such other person as designated by the CEO. As a part of Employee’s duties it is
agreed that Employee will become familiar with and comply with Employee’s duties under the
Xxxxxxxx-Xxxxx laws and under the Company’s corporate governance policies, and Employee will
promptly execute the necessary public filings and certify the contents of such documents on the
date of their filing.
Employee shall devote Employee’s best efforts and substantially all of Employee’s time during
business hours to advance the interests of the Company. Employee shall not engage in business
activity in competition with the Company.
5. Vacation. Employee shall be entitled to four (4) weeks of vacation during each contract
year of this Agreement commencing with the year 2006-2007, during which the compensation provided
in this Agreement shall be paid in full.
6. Disability. In the event Employee becomes disabled (inability or incapacity due to
physical or mental illness or injury to perform Employee’s duties) during the term of this
Agreement, which renders Employee unable to perform Employee’s duties, Employee shall be entitled
to participate in the Company’s disability payment plan in effect at the time of the disability.
7. Termination Of Employment. This Agreement shall be terminated as follows:
(a) In accordance with paragraph 2 above upon the expiration of the term of this Agreement or
any extension thereof;
(b) Upon the death of Employee;
(c) By mutual agreement of the parties;
(d) Upon disability of Employee, when such disability renders Employee unable to perform
Employee’s duties for more than 90 continuous days;
(e) By the Company without giving any reason for termination, but with the understanding that
the compensation provided herein, except for benefits normally provided in group plans (the
“Excluded Benefits”), but including the base compensation, vehicle allowance, target annual
incentive bonus and the long term incentive bonus if Employee is so entitled (it being understood,
however, as to the incentive plans the Plan documents control the Employee’s rights) (“Included
Benefits”), shall be paid or provided in full to Employee in accordance with this Agreement, for
the period of the remaining duration of this Agreement and that this compensation shall include
payment in lieu of notice of termination required by law. It is agreed that the Company may set-off
against the compensation and Included Benefits due to Employee under this subparagraph any items of
like compensation which Employee receives from other employment after the date of termination,
there being no affirmative obligation for Employee to obtain other employment following
termination;
(f) By the Company “For Cause”. For purposes of this Agreement, any of the following
constitutes For Cause termination:
| (i) | failure to perform Employee’s duties, as defined below, after having received from the Company written documentation that Employee’s duties are not being performed, which written documentation shall specify how performance is deficient, and Employee then fails to resume satisfactory performance promptly after receipt of such documentation and failure of performance is not satisfactorily rectified, or | ||
| (ii) | a serious and substantial failure to perform Employee’s duties, which failure is so obvious and so harmful to Company that written documentation and an opportunity to rectify conduct need not be afforded by Company to Employee, or | ||
| (iii) | a conviction of, or plea of nolo contendere to, a felony, or engagement in illegal conduct which may not constitute a felony but which is injurious to the Company, in either such case Company need not allow Employee to rectify nonperformance, or | ||
| (iv) | a material breach of Employee’s obligations under the “Confidentiality Agreement’ as described in section 8 herein. |
For purposes of this provision, Failure To Perform duties in section (f)(i) above includes,
but is not limited to; misfeasance or nonfeasance of duty which was intended to, or does in fact,
injure the Company’s reputation or its business or relationships; willful and continued failure of
Employee to substantially perform his duties under this Agreement (except by reason of physical or
mental disability, which is dealt with in paragraph 7(d) above); personal dishonesty in the
performance of Employee’s duties; and/or material breach by Employee of the covenants
contained in paragraph 4 above;
(g) Upon change in control of Company, as “Change in Control” is defined in the so-called
Change in Control Agreement between Company and Employee, a copy of which is attached hereto as
Attachment A, and which will be executed by the parties hereto when this Agreement is executed by
them. In the event of termination for this reason, Employee’s and Company’s rights with respect to
compensation and all other matters related to employment shall be as specified in the Change in
Control agreement, and not this Agreement; and
(h) Upon the insolvency or dissolution of the Company or the cessation of business or
operations; and
(i) By Employee for “Good Reason”. For purposes of this Agreement, Good Reason is defined to
mean any of the following;
| (i) | a material reduction in Employee’s responsibilities, authorities or duties compared to those in existence on the effective date of this Agreement which is evidence of the duties contemplated by paragraph 4; or | ||
| (ii) | failure of the Company to pay to Employee any amount otherwise vested and due under this Agreement or under any plan or policy of the Company, |
| which failure in either (i) or (ii) above is not cured within five days from receipt by the Company of written notice from Employee which specifies the details of the failure. |
In the event of termination of this Agreement for any of the reasons specified above other than
item (e) regarding termination by the Company without giving any reason, Employee shall be entitled
to be paid his base salary prorated for the calendar year to the date of termination. All other
benefits, if any, following such termination shall be paid in accordance with the plans, policies
and practices of the Company which are in effect on the date of termination. As to termination in
accordance with item (e) above, Employee shall be paid in accordance with that subparagraph.
8. Confidentiality. Employee agrees to keep information acquired in connection with
Employee’s employment confidential, in accordance with the Confidentiality Agreement which is
attached to this Agreement, marked Attachment B, to be executed by Employee when this Agreement is
executed. With respect to confidentiality, Attachment B controls the rights, duties and obligations
of the parties, rather than this paragraph 8.
9. Specific Performance. Employee understands that the obligations undertaken by Employee
as set forth in this Agreement are unique, and that Company will likely have no adequate remedy at
law in the event such obligations are breached. Employee therefore confirms that Company has the
right to seek specific performance if Company feels such remedy is essential to protect the rights
of Company. Accordingly, in addition to any other remedies which Company might have in law or
equity, it shall have the right to have all obligations specifically performed, and to obtain injunctive relief,
preliminary or otherwise, to secure performance.
Employee agrees that the arbitration provision below will not be used to assert dismissal of an
action in court for injunctive relief, and agrees that the availability of arbitration is not
intended by the parties to prevent Company from seeking specific performance and injunctive relief.
10. Arbitration. The Company and Employee will attempt to resolve any disputes under this
Agreement by negotiation. If any matter is not thereby resolved, within 30 days after written
notice by either party to the other, any dispute or disagreement arising out of or relating to this
Agreement, or the breach of it, will be subject to exclusive, final and binding arbitration before
one arbitrator to be conducted in Coeur d’Alene, Idaho in accordance with the Uniform Arbitration
Act of the State of Idaho and the applicable laws of the State of Idaho governing arbitration of
disputes. The parties to this Agreement specifically acknowledge that any such dispute under this
Agreement, even though this Agreement is between an employer and an employee, is subject to said
Act. Each party hereby submits to the exclusive jurisdiction of the state courts in Kootenai
County, Idaho if it is necessary to proceed in court to enforce this paragraph 10.
11. Other Items. The parties also agree:
(a) This Agreement shall not be amended or modified in any way unless the amendment or
modification is in writing, signed by the parties. There shall be no oral modification of this
Agreement.
(b) No provision of this Agreement shall be waived by conduct of the parties or in any other
way.
(c) This Agreement and its validity, interpretation, construction and performance shall be
governed by the laws of the State of Idaho.
(d) Employee acknowledges that he received upon execution of this Agreement a copy of the
Company’s Xxxxxxx Xxxxxxx Policy, Attachment C.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written
above.
| CDE Australia Pty Ltd. | ||||
By |
||||
| Xxxxxx Xxxxxxx- Chairman and CEO | ||||
| Employee- Xxxxxxx X. Xxxxxx | ||||
EXHIBIT A:
Change in Control Agreement
Change in Control Agreement
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, dated as of February 13, 2006, is made and entered into between Coeur d’ Xxxxx
Xxxxx Corporation, parent company to CDE Australia Pty Ltd, (the “Company”) and Xxxxxxx X. Xxxxxx
(the “Executive”) and is made in light of the following circumstances:
A. The Company recognizes the valuable services that the Executive will render and desires to
be assured that the Executive will continue his active participation in the management and business
of the Company; and
B. The Company considers the establishment and maintenance of a sound and vital management to
be essential to protecting and enhancing the best interests of the Company and its shareholders,
and the Company recognizes the existence and continued likely existence of possible change in
control of the Company, as defined below, causing uncertainty among management and resulting in the
possible departure or distraction of members of management to the detriment of the Company and its
shareholders; and
C. The Executive is willing to serve the Company, but desires assurance that in the event of
any such change in control of the Company, he will be protected against the financial impact of an
unexpected termination.
NOW, THEREFORE, the Company agrees that the severance benefits described below will be
provided, subject to the terms and conditions set forth below, to the Executive in the event the
employment of the Executive with the Company or its subsidiaries is terminated subsequent to a
change in control of the Company, as defined below, under the circumstances described below:
1. Company’s Right to Terminate. During the Term of Agreement, as defined below, the
Executive agrees, so long as he continues to be employed as an officer of the Company or any of its
subsidiaries, to continue to perform his regular duties as such officer of the Company in
accordance with the Employment Agreement dated as of February 13, 2006. Notwithstanding the
foregoing, the Company may terminate the employment of the Executive at any time, subject to
providing the benefits hereinafter specified in accordance with the terms hereto and subject to all
terms and conditions of the Employment Agreement of February 13, 2006.
2. Effective Date. The “Effective Date” shall be the date of this Agreement as above set
forth.
3. Term of Agreement. This Agreement shall have a termination date which is identical to
the Employment Agreement and shall continue from day-to-day until terminated in accordance with the
termination provisions of the Employment Agreement, unless a change in control of the
Company, as
defined below, shall have occurred prior to
that date, in which event it shall continue in effect during the two (2) year period immediately
following such change in control as provided herein.
4. Change in Control. No benefits shall be payable hereunder unless there shall have
occurred a Change in Control of the Company, as defined below, and the employment of the Executive
by the Company shall have been thereafter terminated in the manner described in Section 5 hereof.
For purpose of this Agreement, a Change in Control of the Company (“Change in Control”) shall mean
and be determined to have occurred in the following instances:
| (i) | any organization, group or person (“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”) is or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 35% or more of the combined voting power of the then outstanding securities of the Company; or | ||
| (ii) | during any two-year period, a majority of the members of the Board serving at the Effective Date of this Agreement is replaced by directors who are not nominated and approved by the Board; or | ||
| (iii) | a majority of the members of the Board is represented by, appointed by or affiliated with any Person whom the Board has determined is seeking to effect a Change in Control of the Company; or | ||
| (iv) | the Company shall be combined with or acquired by another company and the Board shall have determined, either before such event or thereafter, by resolution, that a Change in Control will or has occurred. |
5. Termination Following Change in Control. If a Change in Control shall have occurred, the
Executive shall be entitled to the benefits provided in Section 6 hereof upon the subsequent
involuntary termination, whether actual or constructive, as defined below, of the employment of the
Executive within the two (2) year period immediately following such Change in Control, for any
reason other than termination for cause, disability, death, normal retirement or early retirement.
For the purposes of this section:
(a) “Constructive Involuntary Termination” shall mean voluntary termination of employment
by the Executive as a result of a significant change in the duties, responsibilities,
reporting relationship, job description, compensation, perquisites, office or location of
employment of Executive without the written consent of the Executive.
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(b) “Cause” shall mean termination of employment on account of (i) fraud,
misrepresentation, theft or embezzlement, (ii) intentional violation of laws involving
moral turpitude or which is materially injurious to the Company, (iii) willful and
continued failure by the Executive substantially to perform his or her
duties with the Company or its subsidiaries (other than failure resulting from the
Executive’s incapacity due to physical or mental illness), after a demand for substantial
performance is delivered to the Executive by the President or the Chairman of the Board of
the Company, which demand specifically identifies the manner in which the Executive has not
substantially performed his or her duties.
(c) “Disability” shall mean inability or incapacity, due to physical or mental illness, of
the Executive to perform his or her duties with the company for a period of three
continuous months.
Any termination of the employment of the Executive by the Company shall be communicated by a
written notice of termination addressed to the Executive and any termination of the employment of
the Executive by the Executive, except by death, shall be communicated by a written notice of
termination addressed to the President or Chairman of the Board of the Company. The notice of
termination shall specify the date of termination (“Date of Termination”) and the characterization
of the termination.
6. Benefits Upon Termination. If the Executive’s employment by the Company shall be
terminated as provided in Section 5 hereof, other than for cause, disability or death, the
Executive shall be entitled to the benefits provided below:
(a) Base Salary and Bonuses. The Company shall continue to compensate the Executive
at his or her full annual base salary at the rate in effect immediately prior to the
termination of the employment of the Executive, and to pay short-term and long-term bonuses
at target levels pursuant to the Company’s then current Long-Term Incentive Plan, for the
period of two (2) years following actual involuntary termination or Constructive
Involuntary Termination, if such termination occurs during the period in which this
Agreement is in effect (the “Salary Continuance Period”). Benefits paid in accordance with
this Subsection 6(a) shall not be reduced in the event the Executive is employed elsewhere
during this time period, or by reason of death or disability.
(b) Medical and Dental Benefits; Long-term Disability Benefits. The Company shall
maintain in full force and effect from the Date of Termination through the end of the
Salary Continuance Period, all medical and dental benefits and all long term disability
benefits in which the Executive was entitled to participate immediately prior to the Date
of Termination, to the same extent as if the Executive had continued to be an employee of
the Company during the Salary Continuance Period, provided that such continued
participation is feasible under the general terms and provisions of such plans and
programs. To the extent such continued participation is not feasible, the Company shall
arrange to provide the Executive with substantially the same benefits as those to which he
or she would have been entitled to receive under such plans and programs. All such medical
and dental benefits shall be subject to the group health plan continuation coverage
requirements as provided in Section 162(d) of the Internal Revenue Code of 1986, as amended
(The “Code”). All such medical and dental benefits shall be
discontinued upon employment by the Executive with another company and the commencement of
coverage of the Executive pursuant to a long-term disability plan of such new employer.
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(c) Stock Options. In the event of a Change in Control, all outstanding stock
options, stock appreciation rights, restricted stock, performance plan awards and
performance shares granted by the Company to the Executive under the Company’s Long-Term
Incentive Plan shall become immediately exercisable in full and otherwise vest 100% in
accordance with the subject to the provisions under Section 13 of such Long-Term
Performance Plan.
(d) Retirement Benefits.
(1) Defined Contribution Plans. The Company shall not use the provisions of
any defined contribution plan to deny a lump sum option to the Executive unless
this occurs under uniform treatment applicable to all plan participants.
(2) Defined Benefit Plan. The Executive shall be entitled to continued
credit for years of service under the defined benefit plan of the Company from the
date of Termination through the Salary Continuance Period, and any compensation
paid to the Executive pursuant to subsection 6(a) above shall be treated as salary
compensation for purposes of such plan. To the extent that such augmentation of the
defined benefit plan is not possible under such plan, the Company shall pay the
Executive an amount equal to the present value of such augmentation, or arrange to
provide the Executive with substantially the same benefit.
(e) Certain Executive Reimbursement. The Company shall pay the Executive an amount
necessary to reimburse the Executive for all legal fees and expenses incurred by the
Executive as a result of the Change in Control of the company and such termination of
employment, including any fees and expenses incurred in contesting or disputing any such
termination or in seeking to obtain or enforce any right or benefit provided by this
Agreement; provided, however, that the Company shall be obliged only to pay amounts
necessary to reimburse the Executive for legal fees and expense incurred by the Executive
with respect to any claim or claims made by him as to which he shall substantially prevail
in litigation relating thereto against the Company.
The payment provided for in subsection 6(a) hereof shall be subject to applicable payroll or
other tax required to be withheld by the Company. Payments to the Executive hereunder shall be
considered severance pay in consideration of past service and his or her continued service after
the date of this Agreement. The payment provided for in subsection 6(d)(1) hereof shall be made to
the Executive within five (5) business days after the Date of Termination. The Executive shall not
be required to mitigate the amount of any payment provided for in this Section 6 by seeking other
employment or otherwise,
and expect as provided in subsection 6(b) above, the amount of any payment provided for in this
Section 6 shall not be reduced by any compensation earned by the Executive as a result of
employment by another employer after the Date of Termination, or otherwise.
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7. Limitation on Payments. If the severance payments provided for under this Agreement,
either alone or together with other payments which the Executive would have the right to receive
from the Company, would constitute a “parachute payment,” as defined in Section 280G(a) of the Code
as in effect at the time of payment, such payment shall be reduced to the largest amount as will
result in no portion being subject to the excise tax imposed by Section 4999 of the Code or the
disallowance of a deduction by Company pursuant to Section 280G of the Code. The determination of
the amount of any reduction under this section, and the plan and payment to which such reductions
shall apply, shall be made in good faith by the Executive and such determination shall be binding
on the Company.
8. Successor; Binding Agreement
(a) The Company will require any successor (whether direct or indirect) by purchase, merger,
consolidation or otherwise, to all or substantially all of the business or assets of the Company by
agreement in form and substance satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the Company would be required
to perform it if no such succession had taken place.
(b) This Agreement shall inure to the benefit of and be enforceable by the personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees
of the Executive. If the Executive should die while any amount would be payable to the Executive
hereunder if the Executive had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the devisee, legatee or
other designee or, if there be no such designee, to the estate of the Executive.
9. Notices. For the purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by certified or registered mail, return receipt requested, postage prepaid,
addressed:
if to the Company:
|
Chairman and Chief Executive Officer | |
| Coeur d’ Xxxxx Xxxxx Corporation | ||
| 000 Xxxxx Xxxxxx | ||
| Xxxxx d’ Xxxxx, XX 00000 | ||
if to the Executive:
|
Xxxxxxx X. Xxxxxx | |
| 00 Xxxxxx Xxxxxx | ||
| Xxxxxxxx | ||
| Xxx Xxxxx Xxxxx 0000 | ||
| Xxxxxxxxx |
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or to such other address as either party may have furnished to the other in writing in accordance
herewith except the notice of change of address shall be effective only upon receipt.
10. Miscellaneous. No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by the Executive and
on behalf of the Company by the President, the chairman of the Board or such other officer as may
be specifically designated by the Board. No waiver by either party there of, or compliance with,
any condition or provision of this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the time or at any prior to subsequent
time. No agreements or representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set forth in this
Agreement. This Agreement shall not supersede or in any way limit the rights, duties or
obligations the Executive may have under any other written agreement with the Company. The
validity, interpretation, construction and performance of this Agreement shall be governed by the
laws of the State of Idaho.
11. Severability. The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
12. Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Coeur d’ Alene, Idaho in accordance with
the rules of the American Arbitration Association then in effect. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first-above written.
| THE COMPANY | COEUR D’ XXXXX XXXXX CORPORATION | |||||
| Xxxxxx X. Xxxxxxx | ||||||
| Chairman & CEO | ||||||
THE EXECUTIVE |
||||||
| Title: | ||||||
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EXHIBIT B:
Confidentiality Agreement
Confidentiality Agreement
EXHIBIT C:
Xxxxxxx Xxxxxxx Policy
Xxxxxxx Xxxxxxx Policy
