SILVERADO GOLD MINES LTD.
COMPENSATION AGREEMENT
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THIS COMPENSATION AGREEMENT made and entered into this 8th day of May 1995 by
and between Xxxxx X. Xxxxxxx, (hereinafter, "Xx. Xxxxxxx") and Silverado Mines
Ltd., a British Columbia company having its principal offices located at Xxxxx
000, 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, XX X0X 0X0 (hereinafter, "the
Company")
WITNESSETH
WHEREAS, Xx. Xxxxxxx is the Chairman and a Member of the Board of Directors of
the Company as well as the Chief Operating Officer of the Company; and
WHEREAS, the Company recognizes the valuable services that Xx. Xxxxxxx has
rendered and is continuing to render to the Company and its subsidiaries and
believes that it is reasonable and fair to the Company that Xx. Xxxxxxx receive
fair treatment in the event of a Change in Control of the Company; and
WHEREAS, both Xx. Xxxxxxx and the Company wish formally to agree as to the terms
and conditions that will govern in the event of a Change of Control of the
Company and a subsequent termination of the employment of Xx. Xxxxxxx by the
Company for reasons other than Willful Misconduct by Xx. Xxxxxxx;
NOW THEREFORE, in consideration of these premises and the mutual covenants and
agreements hereinafter set forth and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by each of the
Parties hereto, the Parties hereby covenant and agree as follows:
1. the Term of this Compensation Agreement shall begin on the date hereof and
shall end on the third anniversary hereof; provided, however, that
a) the Term shall be automatically extended by one year as of the end of
each year in the Term unless either Party shall have given the other
at least ninety (90) days written notice of a desire not to extend,
and
b) the Term shall, in any event, end upon the occasion of Xx. Xxxxxxx'x
retirement as Chairman and a member of the Board of Directors of the
Company.
2. If, following a Change of Control of the Company, the Board of Directors of
the Company determines to terminate Xx. Xxxxxxx from any of the positions
he
SILVERADO GOLD MINES LTD.
COMPENSATION AGREEMENT
holds with the Company without his consent, and in the absence of
Willful Misconduct on the part of Xx. Xxxxxxx, Xx. Xxxxxxx shall be
entitled to receive:
a) a lump sum payment in the amount of
i) Six Million Dollars (U.S.) ($6,000,000 U.S.), plus
ii) the amount of annual bonuses that he would have received with
respect to each calendar year and partial calendar year in the
period of eighteen (18) months following the termination (or, if
shorter, the period beginning on the day following the
termination and ending on Xx. Xxxxxxx'x 65th birthday), assuming
that the amount of such bonuses for each complete calendar year
in such period would have equaled, and the amount of such bonuses
for each partial calendar year in such period would have equaled
a pro rata portion of the highest aggregate amount of, such
bonuses that he received for any one of the three calendar years
preceding the termination; and
b) continuation at the Company's expense for the period of eighteen (18)
months following the termination (or, if shorter, the period beginning
on the day following the termination and ending on Xx. Xxxxxxx'x 65th
birthday) of his participation in all retirement, medical, life
insurance, disability and other benefit plans and programs of the
Company in which he was entitled to participate before the termination
(or, in the case of any such plan or program the terms of which do not
permit such continued participation, equivalent benefits outside such
plan or program); and
c) executive job placement counseling at the Company's expense.
3. If, following a Change in Control of the Company, the Company terminates
Xx. Xxxxxxx for Willful Misconduct he shall be entitled to receive all of
the benefits set forth in paragraphs 2(b) and 2(c).
4. The Company shall pay all costs incurred by Xx. Xxxxxxx in enforcing the
provisions of this Compensation Agreement, including reasonable legal fees
and expenses.
5. Definitions:
a) For the purposes of this Compensation Agreement, a "Change of Control
of the Company" shall be deemed to have occurred if
i) there is a public offering or offerings of securities aggregating
more than seventy-five percent (75%) of the total combined voting
power of the Company's then outstanding securities; or
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SILVERADO GOLD MINES LTD.
COMPENSATION AGREEMENT
ii) any person is or becomes a "beneficial owner", directly or
indirectly, of securities of the Company representing more that
twenty percent (20%) of the total combined voting power of the
Company's then outstanding shares; or
iii) there occurs a change of control of the Company; or
iv) during any period of twelve consecutive months (not including any
period prior to the execution of this Compensation Agreement),
individuals who at the beginning of such period constitute the
Board of Directors of the Company or who represent institutions
that were represented on the Board of Directors of the Company at
the beginning of such period (hereinafter "the Original Board"),
and any new director (other than a director designated by a
person who has entered into an agreement with the Company to
effect a transaction describe in item (ii) hereof or whose
election by the Board of Directors of the Company or nomination
for election by the Company's stockholders was approved by a vote
of at least two-thirds (2/3) of the directors then still in
office who either were members of the Original Board or whose
election or nomination for election was previously so approved,
cease for any reason to constitute a majority of the Board of
Directors of the Company; or
v) the stockholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the
Company immediately prior thereto continuing to represent (either
by remaining outstanding of by being converted into voting shares
of the surviving entity) at least eighty percent (80%) of the
combined voting power of the voting securities of the Company of
such surviving entity outstanding immediately after such merger
or consolidation, or the stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement for
the sale or disposition by the Company or all or substantially
all of the Company's assets.
b) "Willful Misconduct" by Xx. Xxxxxxx shall be deemed to have occurred
if Xx. Xxxxxxx shall be convicted in a court of law of
i) an act of gross negligence which caused material damage to the
Company or its business;
ii) a felony involving money or other property;
iii) embezzlement or other criminal fraud; or
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SILVERADO GOLD MINES LTD.
COMPENSATION AGREEMENT
iv) a crime of moral turpitude.
6. This Compensation Agreement constitutes the entire agreement between the
Parties hereto and shall not be amended except by a writing executed
between the Parties. This Compensation Agreement shall be interpreted in
accordance with the laws of the Province of British Columbia.
IN WITNESS WHEREOF, the Parties hereto have set their hand and seals the year
and date first above written.
Agreed: Agreed:
SILVERADO GOLD MINES INC.
/s/ Xxxxx X. Xxxxxxx by: /s/ X. X. Xxxxxx
________________________ ___________________________
Xxxxx X. Xxxxxxx X.X. Xxxxxx, Director
for the Board of Directors
COMPENSATION AGREEMENT PAGE 4 OF 4 PAGES
