EMPLOYMENT AGREEMENT
Exhibit 10.1
THIS EMPLOYMENT AGREEMENT, made as of the 8th day of February 2007 or such earlier date that
the parties agree (the “Effective date”) (the “Agreement”) by and between GOLDEN STAR
RESOURCES LTD. or its nominee (the “Company”) and XX. XXXXXX X. XXXX (the
“Employee”).
WHEREAS the Company wishes to have the benefit of the Employee’s services; and
WHEREAS the Employee wishes to be so employed.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained,
THE PARTIES HERETO AGREE AS FOLLOWS:
1. Employment
(a) The Company shall employ the Employee, and the Employee shall serve in the employ of
the Company and render exclusive and full-time services to the Company in such other offices of the
Company or its affiliates as may be designated by the Board of Directors or the President and Chief
Executive Officer, on the terms and conditions set forth in this Agreement and subject to the
direction of the President and Chief Executive Officer. The Employee shall be employed as Senior
Vice President and Chief Financial Officer.
(b) The Employee shall not serve as a director, general partner or manager of any other
entity without the prior written consent of the Board of Directors.
(c) The Employees principal place of business with respect to his services to the Company
shall be the Corporation’s offices in Littleton, Colorado.
(d) The Employee acknowledges that he will be required to travel extensively and perform
his duties in other locations and the Employee shall undertake such amount of travel away from his
principal place of employment as may reasonably be necessary for the business of the Company.
2. Term of Employment
The Agreement shall become effective on the Effective Date. Unless the Employee’s employment is
terminated as provided in Section 5, the term of the Employee’s employment under this Agreement
(the “Term”) shall be for one (1) year from the Effective Date. The Term shall be extended
automatically for successive one-year periods on each successive anniversary of the Effective Date,
unless the Employee or the Company provides written notice to the other at least three (3) months
prior to the anniversary of the Effective Date of his or its intention not to extend the Term, in
which case the Term shall end on that anniversary of the Effective Date.
If the Company notifies the Employee of its intent not to extend the Term, the Agreement and the
Employee’s employment shall be deemed to have been terminated without cause pursuant to Section
5(b)(ii) and the Employee shall be entitled to the payments and other benefits set forth in Section
5(b)(ii).
3. Services
The Employee shall devote his entire business time, best efforts, skills and attention to the
Company in fulfilling his duties and responsibilities hereunder faithfully and diligently. The
Employee shall assume and perform to the best of his abilities the responsibilities of Senior Vice
President and Chief Financial Officer of the Company as well as such other responsibilities as may
be assigned to him by the President and Chief Executive Officer of the Company and as are
appropriate to the offices he holds. The Employee will engage in no other business or activity for
compensation except for the management of his personal investments and any business or activity
with respect to which he has received the prior written consent of the Board of Directors. The
Employee shall report to the President and Chief Executive Officer.
4. Compensation and Benefits
The Employee shall be entitled to the following benefits:
(a) The Company shall pay to the Employee, and the Employee hereby accepts, a salary (the
“Base Salary”) at the rate of U.S.$210,000 per annum. The Employee’s salary may be
increased from time to time by the Board of Directors of the Company during the term of the
Agreement and, upon any increase; such increased salary shall then become the Base Salary. The
Base Salary shall be payable in equal bi-monthly installments in arrears.
(b) The Employee shall be entitled to participate in the Company’s Amended and Restated
Stock Option Plan and in any successor option plan. Subject to the approval of the Board of
Directors, the number of options to be granted shall be 200,000. The value of each option shall be
determined using a Black Scholes valuation.
(c) The Employee shall be entitled to participate in the Company’s Executive Management
Performance Bonus Plan and in any successor bonus plan. The target bonus level shall be 40% of
Base Salary but this may vary between 0% and 80% depending on results and performance.
(d) The Company shall reimburse the Employee for all reasonable and documented travel,
entertainment and other business expenses actually and properly incurred by him in connection to
his duties hereunder. The Employee shall render expense accounts requesting reimbursements of his
expenses hereunder within a reasonable period of time following such expense and in accordance with
such documentation and verification as the President and Chief Executive Officer of the Company may
from time to time require.
(e) The Employee shall be entitled to participate in such of the Company’s benefit and
deferred compensation plans as are from time to time available to executive officers of the
Company, including medical and dental health plans, life and disability insurance plans,
supplemental retirement programs and other fringe benefit plans (provided, however, that
the Employee’s benefits may be modified or the Employee may be denied participation in any such
plan because of a condition or restriction imposed by law or regulation or third-party insurer or
other provider relating to participation.
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(f) The Employee shall be entitled to participate in any and all applicable group savings or
retirement plans, or other fringe benefits of the Company as established by the Company from time
to time in which executive officers are eligible to participate, provided that the Employee
shall have fulfilled all eligibility requirements for such benefits.
(g) The Employee shall be entitled to four weeks of paid vacation during each year of
employment hereunder at such time or times as may be selected by the Employee and approved by the
President and Chief Executive Officer, and as are in accordance with the Company’s policies and
reasonable operating requirements. The Employee shall be entitled to all public holidays observed
by the Golden Star corporate office to a maximum of ten (10) days per annum.
5. Termination
The Agreement and Employee’s employment may be terminated in the following manner. In each case,
the Company shall have no obligations to the Employee following termination pursuant to Section 5,
other than as set forth in this Agreement and as provided in any benefit plans in which the
Employee is a participant at the date of termination.
| (a) | Upon Retirement: |
| (i) | Except as provided otherwise in Section 5(a)(ii), Employee’s employment shall automatically terminate upon the Employee’s sixty-fifth birthday. | ||
| (ii) | Upon recommendation from the President and Chief Executive Officer, the Board of Directors may, on or before the Employee’s sixty-fifth birthday and each subsequent birthday, approve the extension of his employment and this Agreement for one year, until his next birthday. | ||
| (iii) | At the time of termination, the Employee shall be paid in a lump sum payment all accrued salary, any benefits then due and payable under any plans of the Company in which the Employee is a participant (in accordance with the provisions of the applicable plan), accrued vacation pay and reimbursement of any appropriate business expenses incurred by the Employee in connection with his duties hereunder, all to the effective date of termination (“Accrued Compensation”). |
| (b) | By the Company: |
| (i) | For cause, immediately upon notice in writing from the Company to the Employee. For purposes of this Agreement, “cause” shall mean: (1) unless resulting from disability as defined in Section 5(b)(iv), the Employee’s material breach of any terms of this Agreement, if such material breach has not been cured within thirty (30) days following written notice of such breach to the Employee from the Company setting forth with specificity the nature of the breach or, if cure cannot reasonably be effected within such 30-day period, if the Employee does not commence to cure the breach within such 30-day period and thereafter pursue such cure continuously and with due diligence until cure has been fully effected; (2) the Employee’s willful dishonesty towards, fraud upon, crime against, bad faith action with respect to, deliberate or attempted injury to, or gross |
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| misconduct or material noncompliance with the Company’s policies and procedures which is materially injurious to the Company; (3) the Employee’s conviction for any felony crime (whether in connection with the Company’s affairs or otherwise); or (4) the Employee’s failure to comply with any lawful directive of the Board of Directors, the failure to comply with which is stated in such directive to be grounds for termination. At the time of termination, the Company shall pay the Accrued Compensation to the Employee. | |||
| (ii) | Without cause, at any time upon the giving of seven days prior written notice by the Company to the Employee or the Company’s election not to extend the Term of the Agreement pursuant to Section 2. The Company shall pay to the Employee in cash or cash equivalent acceptable to the Employee, in a lump sum at the time of termination, Accrued Compensation plus severance compensation (“Twelve Months Severance Compensation”) in an amount equal to 1.0 times the sum of (1) the Employee’s then current Base Salary, (2) the average of the target bonus for the Employee for the current year and the bonus paid to the Employee for the previous year, (3) the amount of employer contributions contributed to the Employee’s account for the most recent plan year before the termination date, under Administaff Retirement Services (ARS) 401k Plan or any successor plan and (4) the amount paid by the Company for welfare benefits on behalf of the Employee for the most recent year. | ||
| (iii) | Immediately and without notice upon the death of the Employee, in which case the Company shall have no further obligation to the Employee’s estate or representatives other than to pay Accrued Compensation up to and including the end of the month in which death occurred. | ||
| (iv) | At any time upon 90-day notice in writing from the Company to the Employee, if the Employee shall by reason of disability have failed to perform his duties under the Agreement. During the 90-day notice period, the Employee shall be considered a full-time employee of the Company. The Employee’s disability means his incapacity due to physical or mental illness such that he is unable to perform his previously assigned duties where (1) such incapacity has been determined to exist by either (x) the Company’s disability insurance carrier or (y) the concurring opinions of two licensed physicians (one selected by the Company and one by the Employee) or (2) the Employee has failed for any three consecutive months in any calendar year or for six months in the aggregate in any two successive calendar years to have performed substantially all of his duties under this Agreement by reason of physical or mental illness, as determined by the Board of Directors. Any such separation for disability shall be only as not prohibited by the Americans with Disabilities Act. The Company shall pay to the Employee in a lump sum at the time of termination (x) Accrued Compensation, (y) such other payments as may be then due under any disability insurance policy of the Company in accordance with the terms of such policy and (z) payment to the Employee of an amount equal to the cost of COBRA coverage for the Employee to continue to participate in applicable benefit plans for one year. |
| (c) | By the Employee: |
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| (i) | for material breach of this Agreement by the Company, immediately upon notice in writing from the Employee to the Company, in which case the Employee shall have no further obligation to the Company, and the Company shall make a lump sum payment to the Employee in cash or cash equivalent acceptable to the Employee at the time of termination, of Accrued Compensation plus Twelve Months Severance Compensation. For purposes of this clause, “material breach” shall include: |
| (aa) | the reduction by the Company of the Employee’s Base Salary or other benefits; | ||
| (bb) | the non-payment of compensation and provision of benefits when, as and if due within 10 business days of written notice to the Company by the Employee that such payment was not made when due; | ||
| (cc) | the material reduction by the Company of the Employee’s responsibilities or title; and | ||
| (dd) | the failure of a successor entity to adopt this Agreement. |
| (ii) | voluntarily, if Sections 5(b)(i), 5(b)(ii), 5(c)(i) or 6 are not applicable, at any time upon three months’ notice in writing to the Company, in which case the Company shall pay to the Employee in a lump sum at the time of termination Accrued Compensation up to and including the date of termination. The Company may waive the requirement of written notice or the notice period in whole or in part, in which case the Company shall pay to the Employee in a lump sum at the time of termination an amount equal to Accrued Compensation through the date on which termination would have occurred had the notice not been waived. |
(d) Upon any termination of employment as set forth in this Section 5 or 6, the Employee
shall, unless otherwise advised by the Company, do the following:
| (i) | immediately resign all offices held (including directorships, if any) in the Company (and any subsidiary or other affiliated company of the Company and any entity in which Employee holds office at the direction of the Company) and, except as provided in this Agreement, the Employee shall not be entitled to receive any additional severance payment or additional compensation for loss of office or otherwise by reason of the resignation. If the Employee fails to resign as described herein, the Company is irrevocably authorized to appoint any other person in his name and on his behalf to sign any documents or do any things necessary or requisite to give effect to such resignation; and | ||
| (ii) | promptly return to the Company all books of account, computer files, maps, records, reports and other documents, materials and property of the Company in the possession or control of the Employee. |
(e) All amounts payable in cash or cash equivalent acceptable to Employee under this
Section 5 shall, within seven days of termination, at the option of the Company be delivered to the
Employee personally or be mailed to the Employee at the address referred to in Section 11(d).
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6. Change of Control
(a) In the event of a Termination Upon a Change in Control, the Company shall
immediately pay to the Employee in a lump sum payment Accrued Compensation and Change of Control
Severance. For the avoidance of doubt, a Termination Upon a Change of Control shall not constitute
a termination under Section 5 of this Agreement, and the Employee shall not be entitled to any
payment or benefits under Section 5. The Company shall have no further obligation to the Employee
except as provided under this Agreement and in any benefit plans in effect at the date of
termination which are applicable to Employee.
(i) “Termination Upon a Change in Control” shall mean a termination of the
Employee without cause within 12 months following a Change in Control (as defined below) or
a termination by the Employee for Good Reason within 12 months following a Change in
Control.
(ii) “Good Reason” shall mean any of the following (without the Employee’s
express written consent):
(1) the assignment to the Employee by the Company of duties
inconsistent with, or a substantial alteration in the nature or status of, the
Employee’s responsibilities immediately prior to a Change in Control;
(2) a reduction by the Company in the Employee’s compensation or
benefits as in effect on the date of a Change in Control;
(3) any material breach by the Company of any provision of this
Agreement, if such material breach has not been cured within thirty (30) days
following written notice of such breach by the Employee to the Company setting forth
with specificity the nature of the breach; or
(4) any failure by the Company to obtain the assumption and
performance of this Agreement by any successor (by merger, consolidation or
otherwise) or assign of the Company.
(iii) A “Change in Control” shall be deemed to have occurred if (1) any
“person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934), other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, is or becomes the “beneficial owner” (as defined in
Rule 13d-3 under the 1934 Act), directly or indirectly, of more than thirty percent (30%) of
the then outstanding voting stock of the Company; or (2) persons who are Incumbent Directors
cease to constitute a majority of the Board of Directors; or (3) the stockholders of the
Company approve a merger, consolidation or amalgamation of the Company with any other
corporation, other than a merger, consolidation or amalgamation which would result in the
voting securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least fifty percent (50%) of the combined voting power of the
voting securities of the Company or such surviving entity outstanding immediately after such
merger, consolidation or amalgamation, or (4) the stockholders approve a plan of complete
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liquidation of the Company or the sale or disposition by the Company of all or
substantially all of the Company’s assets in one or a series of related
transactions.
(iv) “Incumbent Director” means any person who serves on the Board of
Directors of the Company as of the date of this Agreement and any person who is added to the
Board thereafter with the approval of a majority of the persons who are then Incumbent
Directors.
(v) “Change of Control Severance” means an amount equal to (a) two times the
sum of (1) the Employee’s Base Salary for the calendar year in which the termination became
effective, (2) the average of the target bonus for the Employee for the current calendar
year and the bonus paid to the Employee for the previous year, (3) the amount of employer
contributions contributed to the Employee’s account for the most recent plan year before the
termination date, under Administaff Retirement Services (ARS) 401k Plan or any successor
plan, and (4) the amount paid by the Company for welfare benefits on behalf of the Employee
for the most recent year, plus (b) a portion of the target bonus for the Employee for the
current calendar year which is pro rata to the portion of such year prior to the Employee’s
Change of Control Termination.
(b) In the event of a Termination Upon a Change of Control, the Company shall, at its
sole expense, provide the Employee with outplacement services, the scope and provider of which
shall be selected by the Employee in his sole discretion and the cost of which shall not exceed an
amount equal to 10% of the Employee’s then current Base Salary.
7. Acceleration and Vesting of Stock Options
All of the stock options granted to the Employee under the stock option plan of the Company or any
of its subsidiary companies shall become immediately exercisable and vested and shall remain
exercisable for a period of 12 months from the date of termination of the Employee (a) upon a
Change of Control or (b) if after the first anniversary of the Effective Date (i) the Board of
Directors of the Company shall fail at any given time to elect the Employee as a Vice-President of
the Company or to an executive position possessing comparable duties and responsibilities or (ii)
should the Company terminate the Agreement or the employment of the Employee without cause.
Notwithstanding any of the foregoing, under no circumstances shall an option remain exercisable for
more than 10 years after the date it was granted.
8. Confidentiality and Restrictive Covenant
The Employee acknowledges that as a condition of his employment he is required to maintain the
confidentiality of the Company’s confidential and proprietary information and, accordingly,
acknowledges that he is a party to and continues to be bound by the Confidentiality and Restrictive
Covenant Agreement dated as of February 2, 2007 between the Company and the Employee.
9. Company Policies
The Employee agrees to comply with the written policies of the Company, including the Code of
Ethics for Directors, Senior Executive and Financial Officers and other Executive Officers and the
Business Conduct and Ethics Policy (including the Xxxxxxx Xxxxxxx Policy). The Company shall
promptly notify the Employee of any modifications to its policies.
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10. Miscellaneous
(a) The failure to insist upon strict compliance with any of the terms, covenants or
conditions of this Agreement shall not be deemed a waiver of such terms, covenants or conditions,
and the waiver by either party of a breach of any provision of this Agreement shall not operate as
or be construed as a waiver of any subsequent breach thereof.
(b) Should a court or other body of competent jurisdiction determine that any provision
of this Agreement is invalid or unenforceable; such provision shall be adjusted rather than voided,
if possible, so that it is enforceable to the maximum extent possible, and all other provisions of
the Agreement shall be deemed valid and enforceable to the extent possible.
(c) This Agreement shall be governed by and construed in accordance with the laws of the
State of Colorado, without reference to principles of conflict of laws, and each of the parties
submits to the non-exclusive jurisdiction of the courts of the State of Colorado.
(d) Any and all notices referred to herein shall be in writing and may be delivered by
mail, by facsimile transmission or by hand. Notice shall be deemed given five days after mailing,
if mailed in the United States by registered mail, on the date of actual receipt if given by
facsimile transmission, or on the date of delivery, if delivered by hand.
Address for mailing, telecopy or delivery by hand shall be as follows:
| • | the Employee: |
Xxxxxx X. Xxxx
0000 Xxxxx Xxxxxxx Xxx
Xxxxxxxxx, XX 00000
0000 Xxxxx Xxxxxxx Xxx
Xxxxxxxxx, XX 00000
e-mail: xxxxxx@xxx.xxx
| • | To the Company: |
00000 X. Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx XX 00000
XXXXXX XXXXXX
Attention: President and CEO
Xxxxxxxxx XX 00000
XXXXXX XXXXXX
Attention: President and CEO
Fax: x0-000-000-0000
or such other address as either party may from time to time designate in writing.
(e) The parties hereby agree that any dispute or controversy arising out of or relating
to this Agreement, the Employee’s employment with the Company, or the termination or cancellation
of that employment or this Agreement, including without limitation any claim by the Employee under
any federal, state or local law or statute regarding discrimination in employment, shall be settled
by arbitration by a single arbitrator in accordance with the Commercial Arbitration Rules of the
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American Arbitration Association from time to time in force. The hearing on any such arbitration
shall be held in Denver, Colorado. If such Commercial Arbitration Rules and practices shall
conflict with the Colorado Rules of Civil Procedure or any other provisions of Colorado law then in
force, such Colorado rules and provisions shall govern. Arbitration of any such dispute or
controversy shall be a condition precedent to any legal action thereon. This submission and
agreement to arbitration shall be specifically enforceable.
Within thirty (30) days after the receipt by one party of a written notice to arbitrate delivered
by the other party, the parties shall mutually select the arbitrator. If the parties cannot agree
on such arbitrator, the selection of the arbitrator shall be made in accordance with the procedures
of the American Arbitration Association.
Awards shall be final and binding on all parties to the extent and in the manner provided by
Colorado law. Each award shall expressly entitle the prevailing party to recover such party’s
attorneys’ fees and costs, and the award shall specifically allocate such fees and costs between
the parties. All awards may be filed by any party with the Clerk of the District Court in the City
and County of Denver, Colorado, and an appropriate judgment entered thereon and execution issued
therefore. At the election of any party, said award may also be filed, and judgment entered
thereon and execution issued therefore, with the clerk of one or more other courts, state or
federal, having jurisdiction over the party against whom such an award is rendered or its property.
(f) This Agreement is personal to the Employee and without the prior written consent of
the Company shall not be assignable by the Employee, provided that a deceased Employee’s right to
payment hereunder may be assigned by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be binding upon the Company and its successors and
assigns.
The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly 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. As
used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor
to its business and/or assets that assumes and agrees to perform this Agreement by operation of
law, or otherwise.
(g) This Agreement supersedes any and all prior written and oral employment agreements
between the Company and the Employee and, together with the Confidentiality and Restrictive
Covenant Agreement between the Company and Employee dated February 2, 2007, represents the entire
agreement between the parties and may be amended, modified, superseded, or cancelled, and any of
the terms hereof may be waived, only by a written instrument executed by each party hereto or, in
the case of a waiver, by the party waiving compliance. The failure of any party at any time or
times to require performance of any provisions hereof shall not affect the right at a later time to
enforce the same.
(h) This Agreement may be executed by the parties hereto in counterparts, each of which
shall be deemed an original, but all such counterparts shall together constitute one and the same
instrument.
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(i) All compensation and benefits to the Employee hereunder shall be reduced by all federal,
state, local and other withholdings and similar taxes and payments required by applicable law.
SIGNING PAGE FOLLOWS
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year
appearing on page one of this Agreement.
| GOLDEN STAR RESOURCES LTD. | ||||
| By: | /s/ Xxx Xxxxxxxxx
|
/s/ Xxxxx X. Xxxx | ||
| Name: | Xxx Xxxxxxxxx
|
Witness | ||
| Title: | Vice President, Human Resources & Administration |
|||
| /s/ Xxx Xxxx | /s/ Xxxxx X. Xxxx | |||
| Xxxxxx X. Xxxx | Witness | |||
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