Exhibit 10.2
TERMINATION AGREEMENT
This Termination Agreement ("Agreement"), dated as of July 28th, 2005, is
made and entered into by and between U.S. Gold Corporation, a corporation
organized and existing under the laws of the State of Colorado ("U.S. Gold" or
"Employer") and Xxxxx X. Xxxx, an individual ("X. Xxxx" or "Employee")(Employer
and Employee may hereafter be collectively referred to as "Parties").
RECITALS
WHEREAS, U.S. Gold and X. Xxxx entered into that certain Employment
Agreement dated January 1, 1994, as amended June 1, 1995 and July 21, 1998
("Employment Agreement"); and
WHEREAS, the terms of the Employment Agreement, including provisions for
ongoing compensation and a potential cash severance payment, appear to be an
impediment to completion of certain corporate transactions that may be in the
best interests of the shareholders of U.S. Gold, including a contemplated
transaction; and
WHEREAS, X. Xxxx is willing to terminate the Employment Agreement and
compromise the form and amount of compensation provided for in the Employment
Agreement, as well as any other obligations that Employer may have to Employee,
in return for certain payments described below; and
WHEREAS, the Parties agree that it is in their mutual best interests to
terminate the Employment Agreement effective as of the date of this Agreement;
and
WHEREAS, it is the desire of both parties that X. Xxxx continue as an
employee of Employer on an at-will basis following termination of the Employment
Agreement, maintaining, for the duration of the at-will employment, the current
level of salary and health and dental insurance coverage presently in effect for
the benefit of the Employee, and the parties agree to a mutual one month notice
requirement to terminate the contemplated at-will employment.
NOW, THEREFORE, in consideration of the foregoing Recitals, which shall be
considered an integral part of this Agreement, and the mutual covenants and
agreements set forth below, the parties hereby agree as follows:
COVENANTS
1) Termination of Employment Agreement and Stock Option Agreement.
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a) The Employment Agreement is terminated effective immediately and
Employee shall have no further rights thereunder. All payment or
compensation to which Employee is entitled from Employer from this
time forward is set forth in this Agreement.
b) Notwithstanding the termination of the Employment Agreement, X. Xxxx
will continue in the employ of U.S. Gold subsequent to this date as an
at-will employee with a mutual one month notice requirement to
terminate the at-will employment. As such, his employment may be
terminated for no reason or any reason not prohibited by law.
c) That certain Stock Option Agreement between the Employer and Employee
dated November 6, 2003 is terminated as of the date of this Agreement
for the consideration as set forth only in this Agreement.
d) In connection with the termination of the Employment Agreement,
Employee agrees, by way of example, and not by way of limitation,
that:
i) Employee is no longer entitled to monthly compensation under
Section 3.1 of the Employment Agreement;
ii) Employee is not entitled to any severance payment under Section
4.1.4 of the Employment Agreement;
iii) Employee is no longer entitled to any employment benefits as
described under Section 3.2 of the Employment Agreement; and
iv) Employee is not entitled to payment for any other past, present
or future obligations that the Employer may have had under the
Employment Agreement.
2) Consideration to Employee.
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a) In consideration of the cancellation of the Employment Agreement,
Employer agrees to pay Employee Three Hundred One Thousand Five
Hundred Sixty Seven Dollars ($301,567.00) as a cash payment
simultaneous with the execution of this Agreement. Payment may be made
by electronic wire transfer, check, or any other cash arrangement
acceptable to both parties.
b) Employer agrees to grant and issue to Employee Two Hundred Seventy
Five Thousand Seven Hundred Eighty Four (275,784) shares of common
stock of U.S. Gold issued under and pursuant to Employer's
Non-Qualified Stock Option and Stock Grant Plan valued at Forty Cents
($0.39) per share simultaneous with the execution of this agreement.
c) Employer agrees to transfer 1,565,539 shares of Gold Resource
Corporation ("GRC") stock (presently owned by Employer; the "GRC
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Shares") to Employee simultaneous with the execution of this
Agreement. For purposes of this Agreement, the Shares shall be valued
at fair market value, as determined by Xxxxx Xxxxxxx & Company, Inc.,
in that certain fairness opinion prepared for Employer and dated July
25, 2005, and as discussed with tax counsel, the tax basis of the
portion of the consideration related to the GRC Shares reported by
Employer to the Internal Revenue Service shall be $92,366.80.
d) In connection with the transfer of the GRC Shares to Employee,
Employee represents and warrants as follows:
i) Employee is acquiring the stock for its own account for the
purpose of investment, and not with a view toward, or for sale in
connection with, any distribution thereof.
ii) Employee (i) has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and
risks of a proposed investment in GRC stock, or (ii) has been
advised by attorneys, accountants, or other representatives
having such knowledge and experience.
iii) Employee understands and acknowledges that all of the GRC Shares
will be "restricted securities" within the meaning of the
Securities Act of 1933, as amended, (the "Securities Act") and
applicable state securities law and agrees that the
Certificate(s) shall bear the following or a substantially
equivalent legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 AND MAY NOT BE TRANSFERRED UNLESS COVERED BY AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT, A "NO ACTION" LETTER FROM THE
SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH TRANSFER, OR AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
Employee further understands and acknowledges that stop transfer
instructions will be issued by GRC to its transfer agent with
respect to the GRC Shares.
iv) Employee understands and acknowledges that the GRC Shares will
not be registered under the Securities Act, and accordingly,
Employee recognizes that it may be required to bear the economic
risk of its investment until such GRC Shares are registered.
Employee agrees that it will only sell, transfer, pledge or
hypothecate any of the GRC Shares pursuant to an effective
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registration statement under the Securities Act or in a
transaction wherein registration of the securities is not
required. Neither GRC nor U.S. Gold has any obligation to
register the GRC Shares to allow resale.
v) The undersigned is an accredited investor within the meaning of
Rule 501 of Regulation D of the Securities Act of 1933.
3) General Release and Indemnification.
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a) Release by Employee.
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On behalf of his heirs, executors, administrators and assigns,
Employee releases and forever discharges Employer, its subsidiaries,
affiliates, successors, assigns, directors, officers, managers,
representatives, shareholders, agents, employees and volunteers and
their respective heirs, personal representatives, administrators and
assigned (hereinafter collectively referred to as the "Employer
Releasees"), from any and all Causes of Action (as defined below)
arising from or relating to (1) termination of the Employment
Agreement, and (2) Employer's obligations pursuant to the Employment
Agreement. "Causes of Action" means any and all claims, demands,
obligations, actions, lawsuits, judgments, liens or liabilities
arising out of the numerous laws and regulations regulating
employment, including, without limitation, the Civil Rights Act of
1866, 1871, 1964, and 1991; the Employee Retirement Income Security
Act; the Equal Pay Act; the Fair Labor Standards Act; the National
Labor Relations Act; the Occupational Safety and Health Act; the Older
Workers Benefit Protection Act of 1990; the Consolidated Omnibus
Budget Reconciliation Act; the Rehabilitation Act of 1973; Executive
Order 11246; state anti-discrimination statutes; the Americans with
Disabilities Act; the Age Discrimination in Employment Act; the Family
Medical Leave Act; the state and federal Constitutions; municipal
ordinances; as well as other statutes and the laws of contract, tort
and any theory under common law or in equity. Notwithstanding the
foregoing, Employee does not waive any rights conferred by statute to
vested rights (if any) under any qualified retirement plan nor that
certain Indemnification Agreement dated September 21, 2004.
b) Waiver by Employee.
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Employee agrees that the payments made to him pursuant to this
Agreement are made in full and complete settlement and in full accord
and satisfaction of all Causes of Action he has against the Employer
Releasees relating to the termination of the Employment Agreement or
Employer's obligations under the Employment Agreement. Employee waives
all such Causes of Action he may have against the Employer Releasees
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and covenants not to xxx the Employer Releasees except for and to the
extent of any obligations of Employer contained in this Agreement that
are not performed.
c) Employee's Rights Under the Older Workers Benefit Protection Act.
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On July 2, 2005, Employee was advised in writing (i) to consult with
an attorney before signing this Agreement; (ii) that he has twenty one
(21) days in which to consider this Agreement; (iii) that he has seven
(7) days after signing this Agreement to revoke the Agreement; (iv)
that this Agreement will not be effective or enforceable until seven
(7) days after the date Employee signs it; and (v) that Employee will
not receive the monies payable pursuant to this Agreement until after
the expiration of the revocation period referred to above. Employee
understands and agrees that any revocation of this Agreement by him
must be in writing and delivered to a duly authorized representative
of the Employer during the revocation period.
4) Miscellaneous.
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a) No Admission of Liability.
--------------------------
Employee understands and agrees that the acceptance of the
above-mentioned payment is not to be construed in any way as an
admission of liability on the part of the Employer Releasees, but, on
the contrary, the Employer Releasees specifically deny any liability
to Employee and the Parties recognize that this Agreement is a
compromise of the Employer's obligations under the Employment
Agreement.
b) Backup Withholding.
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Employee represents that he is not subject to backup withholding
requirements and agrees to indemnify Employer for any liability
incurred as a result of not withholding for payments made under the
terms of this Agreement.
c) Reliance on Representations.
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Employee acknowledges that in executing this Agreement, he has not
relied upon any representation or statement not set forth herein.
d) Governing Law.
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This Agreement shall be deemed to have been made in the County of
Jefferson, State of Colorado, and shall be interpreted and construed
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and enforced in accordance with the laws of the State of Colorado and
before the courts of the State of Colorado.
e) Severability.
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If one or more paragraphs of this Agreement shall be ruled
unenforceable, the remaining portions shall remain in full force and
effect.
f) Employee Acknowledgements.
--------------------------
Employee has had an opportunity to consult an attorney before signing
this Agreement. The terms of this Agreement are the result of a
negotiated settlement. Employee has read this Agreement and
understands its terms. Employee has had sufficient time in which to
consider this Agreement. Employee enters into and signs this agreement
knowingly, voluntarily, freely, of his own volition and with such
consultation with counsel as he deemed appropriate. Employee is of
lawful age and legally competent to enter into this Agreement.
g) Entire Agreement.
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The Parties understand and agree that this Agreement constitutes the
entire agreement between them and supersedes and replaces any and all
understandings, obligations, representations and agreements, whether
written or oral, express or implied.
I HAVE READ THE FOREGOING TERMINATION AGREEMENT AND GENERAL RELEASE. I FULLY
UNDERSTAND THAT THIS AGREEMENT HAS IMPORTANT LEGAL CONSEQUENCES. I HAVE HAD AN
OPPORTUNITY TO HAVE THE AGREEMENT FULLY EXPLAINED TO ME BY MY ATTORNEY AND I
UNDERSTAND THE AGREEMENTS FINAL AND BINDING EFFECT, AND I AGREE THAT THE ONLY
PROMISES TO ME TO SIGN THIS AGREEMENT ARE THOSE STATED ABOVE.
/s/ Xxxxx X. Xxxx July 28, 2005
Xxxxx X. Xxxx -------------
Date
U.S. GOLD CORPORATION, a Colorado corporation
By: /s/ Xxxx X. Goth July 28, 2005
Title: Director Date
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