EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is entered
into as of the 9th day of June, 1995, by and between Alta Gold Co. a
Nevada corporation ("Employer"), and Xxxxx X. Xxxx ("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
June 9, 1995, and end on October 15, 1998.
3. Duties. During the term of this Agreement, Executive
shall be employed by Employer and shall occupy the office of Vice
President - Engineering and Construction. Executive agrees to serve in
such offices or positions with Employer or any subsidiary 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.
4. Compensation. For all services rendered by Executive,
Employer shall pay to Executive a salary of $101,650 per year while
serving as Vice President - Engineering and Construction. 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, 1996, and on each anniversary
thereafter, as the Board of Directors, on the recommendation of its
compensation committee may determine or, in the absense 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 15 or 16 herein, compensation
payments to Executive shall be limited to compensation for services
rendered by Executive.
5. Employment Signing Bonus. Upon the implementation
of this Employment Agreement the Employer shall provide the option to
Executive at the end of each year of Employment to purchase 30,000
shares of common stock of Employer at a market price of $.75 (seventy-
five cents) for a period of three years from date of option. A total
option of 90,000 shares.
Executive shall have the rights of a stockholder with respect to
the options which have not been issued and/or exercised, including any
cash dividends declared thereon; any stock dividend, stock split or other
change in the common stock of Employer; or any merger or sale of all
or substantially all of the assets or other acquisition of Employer, and
any and all new, substituted, or additional securities to which Executive
is entitled.
Should Executive die during the term of this contract, the
remainder of the 90,000 shares from this contract shall be awarded to
his estate and exercisable for a period of ten years from the date of
grant.
6. 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.
7. 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.
8. 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.
9. 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.
10. 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.
11. 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 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.
12. 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.
13. 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 one-half of the
compensation provided for in paragraph 4 hereof, and during the third
consecutive 9-month period, one-fourth 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 15 herein from
Employer and Employer may thereupon terminate this Agreement.
14. 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 hereunder.
If Employer terminates this Agreement for Cause, all of Employer's
obligations hereunder shall terminate.
15. 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 18
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 his salary as provided in paragraph
4; and
(b) 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 year during which his employment terminates, but
prorated to reflect the number of full months of his employment
during the year of termination.
(c) The remaining amount of his Signing Bonus. In
addition, Executive's coverage under the Employer's insured
employee benefit plan, as provided in paragraph 7, shall continue
through the term of this Agreement.
16. Termination Payment for Change in Control. If
Executive resigns or is discharged by Employer (or is deemed to be discharged
pursuant to paragraph 18 below) as the direct and sole result of a
change in control, or in reasonable anticipation of a change in control,
then, in lieu of any payment otherwise paid or payable to Executive
under paragraph 15 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 16, 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 17 herein.
17. Tax Limitation. If Employer reasonably determines that
the payment provided for in paragraph 16 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 Payment. Employer shall make
such determination within a reasonable time after Executive's
resignation or discharge, but not to exceed 30 days thereafter.
18. Deemed Termination of Employment. For purposes of
paragraph 16 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.
19. 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:
(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.
20. 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.
21. Stock Registration Provisions. During the term of this
Agreement, Executive shall have the following rights and obligations
with respect to registration under the Securities Act of 1933 and
applicable blue sky laws of shares of common stock ("Shares") of
Employer owned of record by Executive:
(a) Company Registration. Employer shall notify
Executive, at least thirty (30) days prior to the filing of any
Registration Statement on forms X-0, X-0, X-0, X-0 or any
successor forms under the Securities Act of 1933 covering any
class of stock of the Employer and will upon the written request
of Executive delivered at least fifteen (15) days prior to such
filing, include in any such Registration Statement such
information as may be required to register such number of
Executive's Shares as Executive may request. Executive and
Employer shall each include customary representations,
warranties, indemnifications, and contribution provisions in any
underwriting agreement entered into in connection with such
registration.
If the managing underwriters for such registration advise
Employer in writing that in their opinion the total amount of
securities to be included in such registration statement exceeds
the amount which should reasonably be included in that offering
to achieve the Employer's financing goals, Employer may limit
the amount of stock to be included as follows: (i) first, all
securities Employer proposes to sell may be included, (ii)
second, the Shares of common stock requested to be included in
such registration by all executives and employees pursuant to
registration rights may be reduced and adjusted among
participating executives and employees on the basis of the
amount of shares owned of record by each employee, and (iii)
third, if applicable, other stocks requested to be included in such
registration may be similarly and ratably adjusted with all
executives' and employees' stock pro rata according to the
amount of stock owned of record by any proposed seller. All
incremental expenses of such registration will be allocated pro
rata according to the total number of shares included therein.
There shall be no limit on the number of registrations so
requested, but each such request shall cover an amount of Shares
having a proposed offering price of not less than one hundred
thousand dollars ($100,000.00).
(b) Registration of Request. In addition, Executive's
Shares may be registered on not more than two (2) separate
occasions, in such amounts as may be requested, in the following
circumstances: (i) within one year following the death or the
commencement of disability of Executive or (ii) at any time in a
reasonable amount and for a bona fide business purpose with the
approval of a majority of the independent, outside members of
the Board of Directors of Employer. Within thirty (30) days
after the receipt of a request for such registration by Executive's
estate or personal representative pursuant to phrase (i) of the
preceding sentence or the approval by the independent outside
directors pursuant to phrase (ii) of the preceding sentence,
Employer will commence the process of preparing for filing a
Registration Statement covering the Shares and use its best
efforts to cause such Registration Statement to become effective.
Employer and Executive shall use commercially reasonable
efforts to obtain an underwriter to firmly underwrite any such
offering; in the event that no underwriter reasonably acceptable
to Employer is willing to make a firm commitment, Employer
shall have no obligation to file the Registration Statement.
Employer may delay for up to ninety (90) days the filing of such
a Registration Statement if the Board of Directors of Employer
in good faith and for a bona fide corporate purpose determines
that a filing at a requested time would be adverse to Employer's
interests. Employer shall not be obligated to file any such
Registration Statement at any time during which it is impossible
or impracticable to include the required financial statements.
Employer and Executive shall provide all information required
for inclusion in such Registration Statement and any
underwriting agreement entered into in connection therewith
shall contain the customary representations, warranties,
indemnifications, and contribution provisions. All expenses of
such registration shall be allocated pro rata according to the total
number of shares included therein.
(c) General. In connection with each of the foregoing
registrations and subject to the provisions concerning expenses,
Employer shall also (i) use its best efforts to qualify the Shares
for public sale under the blue sky laws of such jurisdictions as
Executive may reasonably request, (ii) provide such number of
preliminary and final prospectuses as Executive may reasonably
request, and (iii) keep the final prospectus in any such
registration current for a reasonable period of time. In
connection with the indemnification and contribution to be
provided by Executive to any underwriter or Employer pursuant
to this paragraph 21, the aggregate liability of Executive shall
not exceed the aggregate net proceeds received by Executive
from the sale of the registered Shares, and, in connection with
contribution, shall also take into consideration the relative fault
of each contributing person.
22. 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.
23. 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.
24. Assignment. This Agreement may not be assigned by
either party without the prior written consent of the other party.
25. 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.
26. Enforcement. Executive acknowledges that any remedy
at law for breach of paragraphs 11 and 12 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 11 and 12 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.
27. Governing Law. This Agreement shall be governed by
and interpreted in accordance with the laws of the state of Nevada.
28. 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.
29. 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.
30. Litigation Expenses. In the event that it shall be
necessary or desirable for the Executive to retain legal counsel and/or
incur other costs and expenses in connection with the enforcement of any and
all of his rights under this Agreement, he shall be entitled to recover from
the Employer reasonable attorney's fees, costs, and expenses incurred by
him in connection with the enforcement of said rights. Payment shall
be made to the Executive by the Employer at the time these attorney's
fees, costs, and expenses are incurred by the Executive. If, however,
the Executive does not prevail in such enforcement actions, he shall
repay any such payments to the Employer.
AGREED AND ENTERED INTO as of the date first above
written.
EMPLOYER: ALTA GOLD CO.
By:______________________
Xxxxxx X. Xxxxx
President, Chairman and
Chief Executive Officer
EXECUTIVE:
_______________________________
Xxxxx X. Xxxx
