MATHEWSON EMPLOYMENT AGREEMENT
XXXXXXXXX EMPLOYMENT
AGREEMENT
AGREEMENT,
made effective as of August 1, 2006, by and between GOLD RUN INC., a corporation (the
“Company”) incorporated under the laws of Delaware, and having an office at 000 Xxx Xx., Xxxxx 000,
Xxxxxxx, Xxxxxxx, Xxxxxx, X0X 0X0 and XXXX XXXXXXXXX (the “Employee”), an individual residing
at 0000 Xxxx Xxxxx, Xxxxxxx, Xxxxxx 00000;
WITNESSETH:
WHEREAS,
the Company desires to employ Employee as President and Chief Geologist of the Company to provide the services
hereinafter set forth, on the terms and subject to the conditions hereinafter set forth; and
WHEREAS,
the Employee desires to accept such employment on such terms and subject to such
conditions; and
WHEREAS,
the parties are this day executing an Amended and Restated Agreement made effective as of
May 9, 2006;
NOW,
THEREFORE, the parties hereto do hereby covenant and agree as follows:
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1. Employment and Term.
(a) The Company
hereby employs the Employee, and the Employee agrees to serve the Company as its President and Chief
Geologist.
(b) The term of
the Employee's employment hereunder shall commence on August 1, 2006 (the "Effective Date"), and
shall end on the third (3rd) anniversary of the Effective Date, unless the same shall be sooner terminated as
hereinafter provided (the “Term”).
2. Duties.
(a) Subject at
all times to the control of the Board of Directors of the Company (the “Board”), the Employee shall
report to the Company's CEO, and others as the Company may designate, and undertake activities and operations
as directed by the CEO and the Board, consistent with the typical duties and obligations of a President and
Chief Geologist of a junior exploration company. Employee shall lead a generative gold exploration program,
and without limiting the foregoing, Employee's duties shall include, without limitation, (a) generating
potential property acquisitions, (b) development, implementation and management of all exploration activities,
(c) recruitment of all personnel, consultants and contractors, (d) preparation and submission of periodic
reports and recommendations to Gold Run's CEO and Board respecting
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potential acquisitions,
divestments, exploration programs, strategic investments or agreements, (e) preparation of various technical
material, reports and summaries, which may be required pursuant to the requirements of laws, or as otherwise
deemed necessary by the Company’s CEO and Board to facilitate financing for the Company, and (f) travel
as may be deemed advisable and necessary by the Company's Board, consistent with Employee's duties and
obligations as an officer, director and controlling shareholder of the Company.
(b) The Company
and the Employee shall comply in all material respects with all federal, state and local laws, ordinances,
regulations, rules and orders applicable to its mining exploration operations or him, as the case may be, it
being understood and agreed that the Employee, shall be reasonably responsible to assure that the Company
remain in such compliance.
(c) The
Employee shall faithfully and diligently discharge his duties hereunder and use his best efforts to implement
the policies established by the Company's Board. The Employee will devote of his time and attention
exclusively to the rendering of his Services hereunder, subject to (i) four (4) weeks vacation per year of the
Term (a “Term Year”), and (ii) his rights set forth in Section 6. Employee shall not be entitled to
any additional salary in the event he fails to take such vacation or any portion thereof. In such event,
Employee shall not be entitled to an extended vacation in subsequent Term Years.
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3. Base Salary. During the
Term, the Company shall cause the Employee to receive a total base salary (the “Base Salary”) at the
rate of U.S. $120,000 per annum, payable in accordance with the payroll practices of the Company.
4. Expenses. The Employee
shall, during the Term, be entitled to receive reimbursement of all expenses reasonably incurred by the
Employee in performing his services hereunder, including all travel and living expenses while away from home
on business or incurred at the specific request or direction of the Company; provided that all such expenses
must be reasonable, and must be incurred and accounted for in accordance with the rules, policies, procedures
and guidelines, if any, established or to be established by the Company (as the same may be modified or
amended from time to time), and must be submitted to the Company, with appropriate expense vouchers and
substantiated by evidence competent to establish such expenses to the United States Internal Revenue Service
and otherwise as the Company may require.
5. Termination of
Employment. Any other provision of this Agreement to the contrary notwithstanding, Employee’s
employment may be terminated only as follows:
(a) At the option of the Company,
only in the event:
(i) of the death of the
Employee;
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(ii)
of the Employee's permanent disability, which shall mean the Employee’s substantial inability for a
period of three consecutive months, because of a physical or mental condition, to render the services required
hereunder; or
(iii)
of good cause shown at any time, as defined in Section 5(c), as determined by the Company's Board. If the
Company shall determine that there is good cause to terminate the Employee's employment, then the Company
shall send the Employee a written notice detailing such good cause and giving the Employee twenty (20) days to
correct or cure any defects, breaches or deficiencies which created such good cause. If the Employee has not
corrected or cured such defects, breaches or deficiencies to the Company's reasonable satisfaction within such
period, the Company may then proceed to terminate the Employee's employment; provided, however, that the
Company must advise the Employee of what defects, breaches or deficiencies the Employee had failed to correct
or cure and which resulted in his termination.
(b) At the
option of the Employee, only in the event of any material breach by the Company of the terms hereof, or of the
terms of that certain Amended and Restated Agreement between the parties made effective as of May 9, 2006;
provided, however, that the Employee shall give the Company twenty (20) days to cure any such alleged breach.
If the Company has not cured such breach within such period, then the Employee may resign from employment with
no penalty; provided, however, that he must first indicate to the Company the manner in which it has not cured
any such breach.
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(c)
For purposes of Section 5(a)(iii), “good cause” shall mean, but not be limited to:
(i)
the failure of the Employee substantially to perform the duties hereunder (other than failure resulting from
the Employee's incapacity resulting from physical illness or mental condition), after reasonable notice of
such failure and, if practicable, a reasonable opportunity to cure such failure;
(ii)
any material breach by the Employee of the terms hereof, as determined by the Company’s Board, subject to
reasonable notice of such breach(es) and, if practicable, a reasonable opportunity to cure his breaches;
(iii)
the commission by the Employee of (1) an act which constitutes a dishonest act against the Company, a
customer, a vendor, an employee, a consultant or an advisor to the Company, or (2) an act which constitutes a
fraud or felony under applicable law, or (3) any chronic violation of law; or
(iii)
the Employee abuses any substance deemed detrimental by the Company’s Board to the performance of his
duties during business hours or conducts business under the undue influence of such substances or his abuse of
such substances adversely affects his ability to perform his duties, which the Employee shall not have
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cured after reasonable notice
and a reasonable opportunity to cure.
(d) Upon the
termination of the Employee's employment as provided in this Agreement, the Employee or his legal
representatives shall be entitled to receive any Base Salary accrued to the date of such termination. In
addition, upon termination of the Employee's employment by the Company for any reason (including, but not
limited to, the reason set forth at Section 5.(a)(iv) hereof) other than those reasons specifically set forth
at Section 5.(a)(i) through (iii) hereof, the Company shall also pay to the Employee severance in an amount
equal to three (3) months' Base Salary; provided that, upon termination of the Employee's employment by the
Company by reason of the event set forth at Section 5.(a)(i) hereof, the Company shall pay to the estate of
the Employee severance in an amount equal to three (3) months’ Base Salary.
6. Employee
Undertaking. Employee will not hold, accept or otherwise acquire and position with another entity, as a
shareholder, partner, consultant, officer or director, which such position imposes on him, or may impose upon
him in the future, a duty which could result in a conflict of interest arising between Employee and the
Company respecting any aspect of mineral exploration, including, without limitation, acquisition or
divestiture of properties, access to financing, and personnel, except that Employee shall Be permitted to
continue with certain consulting activities presently being provided to Staccato Resources Inc., Great
American Minerals, Golden Chalice and Tone Resources, Ltd. (and any successor, including U.S. Gold Inc.) and
to other companies, not to exceed
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in the aggregate twenty-five
(25) days in any calendar year, and provided that the activities are non-competitive with the Company and
approved in advance by the CEO and the Company’s Board in writing.
7. Grant of
Royalty. The Company will grant Employee a one (1%) percent net smelter return royalty (“NSR”)
for all prospects generated by Employee and which are acquired by staking for the Company, exclusive of the
CVN, HC and RC properties. The Company will grant Employee a one-half (1/2%) percent NSR for all prospects
generated by Employee which are subsequently leased by the Company, provided that (i) such lease Carries a
total maximum NSR of four (4%) percent (inclusive of the one-half (1/2%) percent royalty to Employee), and
(ii) such lease does not adjoin claim from which Employee is otherwise entitled to receive participation in an
NSR. The Company will have the right to purchase such one-half (1/2%) percent NSR respecting leased prospects
for $250,000.
8. Stock or
Option Plan. The Board shall determine, from time to time, in its discretion whether and to what extent
the Employee may participate in any stock or option plan hereafter adopted by the Company.
9.
Confidential Information. Employee acknowledges that, as a result of his employment by the Company,
Employee will obtain secret and confidential information concerning the business of the Company, including,
without limitation, geological data obtained from the Company’s exploration activities and data relating
to prospective
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leasing opportunities being evaluated or which
have been evaluated by the Company, the identity of vendors and sources of supply, their needs and
requirements, the nature and extent of the Company’s arrangements with them, and related cost, price and
sales information. Employee also acknowledges that the Company would suffer substantial damage if, during the
period of his employment with the Company or thereafter, Employee should divulge secret and confidential
information relating to the business of the Company acquired by him in the course of his employment.
Therefore, Employee agrees that he will not at any time whether during the Term or for a period of one (1)
year thereafter, disclose or divulge at any time to any person, firm or Company, any secret or confidential
information obtained by Employee while employed by the Company, including but not limited to geological data
obtained from the Company’s exploration activities and data relating to prospective leasing opportunities
being evaluated or which have been evaluated by the Company, the operational, financial, business or other
affairs of the Company, trade “know how” or secrets, vendor lists, employee lists, consultant lists,
sources of supply, pricing policies, operational methods or technical processes.
10.
Restrictions on Employee Upon Employee’s Termination. In the event Employee terminates his
employment and the Company is not at default of (i) its Funding Obligation pursuant to the provisions of the
Amended and Restated Agreement made effective as of May 9, 2006, and (ii) any material provision of this
Agreement, Employee shat not engage, directly or indirectly, in any activities related to the business
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of gold exploration within a
two (2) mile radius of any project or prospect in which the Company has either an interest or intent to
acquire any such interest at the date of termination. This restriction on Employee's activities shall
terminate eighteen (18) months from the date of such termination. In the event that the Company shall merge or
be acquired or if this Agreement is otherwise assigned by the Company to another entity, the Employee
expressly consents to the assignment of this provision to such successor or assignee.
11.
Construction and Enforcement of Sections 9 and 10. The parties hereto recognize and acknowledge that the
provisions of Sections 9 and 10 are of great importance and value to the Company. The Employee recognizes that
the provisions of Sections 9 and 10 are necessary for the Company's protection, are reasonable restraints
ancillary to the formation and organization of the business and the retention of the Employee to run the
business, and that the Company would be irreparably damaged by a breach thereof and would not be adequately
compensated by monetary damages. The Company, therefore, in addition to its other remedies, shall be entitled
to an injunction from any court having jurisdiction restraining any violation or threatened violation of the
provisions of Sections 9 and 10, without the necessity of proving monetary damages, without the necessity of
proving that monetary damages would be insufficient, and without the necessity of posting a bond. If any
provision of Sections 9 and 10 is held to be unenforceabIe because of the scope, duration or area of its
applicability, the court making such determination shall have the power to modify such scope, duration or
area,
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or all of them, and such
provision shall then be applicable in such modified form. If any provision of Sections 9 and 10 shall be held
to be invalid, prohibited or unenforceable in any jurisdiction for any reason, such provision, as to such
jurisdiction, shall be ineffective to the extent of such invalidity, prohibition or unenforceability, without
invalidating the remaining provisions of Sections 9 and 10 or affecting the validity or enforceability of such
provisions in any other jurisdiction.
12.
Release upon Termination or Expiration. In the event that the employment of the Employee with the
Company is terminated or expires for any reason, in exchange for payment in full of all amounts owing to
Employee under the terms of this Agreement at the date of termination, the Employee shall execute and deliver
to the Company a general release in form to be determined by the Company, to the effect that Employee
acknowledges that receipt of any monies and benefits pursuant to the terms of this Agreement is in full
satisfaction of any and all outstanding claims or entitlements which the Employee may otherwise have against
the Company, as well as the officers, directors, employees and agents of the Company.
13.
Company Reliance on Employee Representations. Employee acknowledges and understands that the Company
has relied, and is, relying upon the representations and Statements contained in that certain letter dated
September 27, 2006 sent by Employee to the Company in entering into this Agreement. This Agreement can only be
modified in writing which is signed by both Parties.
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14.
Entire Agreement; Amendment. This Agreement contains the entire agreement between the
Company and the Employee with respect to the subject matter thereof. This Agreement may
not be amended, waived, changed, modified or discharged except by an instrument in
writing executed by or on behalf of the party or parties against whom any amendment,
waiver, change, modification or discharge is sought.
15.
Notices. All notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered or mailed, by certified
mail, return receipt requested, as follows:
(a) To the
Company:
(b) To the
Employer:
Xx. XXXX XXXXXXXXX
0000 Xxxx Xxxxx
Xxxxxxx, Xxxxxx 00000
0000 Xxxx Xxxxx
Xxxxxxx, Xxxxxx 00000
and/or
such other persons and addresses as any party shall have specified in writing to the
other by notice as aforesaid.
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15.
Assignability. In the event of any sale or other disposition of all or a substantial part of the business of
the Company, whether by sale of stock, sale of assets, merger or otherwise, then the successors and assigns of
such business shall assume all of the Company’s obligations under this Agreement in respect of the
Company so that the Employee will continue to have all of the benefits of this Agreement to the same extent
that the Employee would have had had the aforesaid sale not taken place. This Agreement shall not be
assignable by Employee, but it shall be binding upon, and shall inure to the benefit of, his heirs, executors,
administrators and legal representatives. This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and assigns.
16.
Captions; Sections. The caption headings of the Sections and subsections of and to this Agreement are
for convenience of reference only and are not intended to be, and should not construed as, defining or
limiting the contents of such Sections and subsections. Unless otherwise indicated, all references in this
Agreement to Sections and subsections are to Sections and subsections of this Agreement.
17.
Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of Nevada applicable to contracts made and to be performed therein and the parties subject
to the exclusive jurisdiction of the courts sitting in the State of Nevada having jurisdiction for resolution
of all disputes arising under this agreement.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on November 20, 2006.
| By: | /s/ Xxxxxxx X. Xxxxx | ||
| Xxxxxxx X. Xxxxx, Director | |||
| /s/ Xxxxxx Xxxxxxxxx | /s/ Xxxx Xxxxxxxxx | ||
| XXXX XXXXXXXXX | |||
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