FORM OF AMENDED AND RESTATED EMPLOYMENT AND SEVERANCE AGREEMENT
EXHIBIT
10.1
FORM
OF
AMENDED
AND RESTATED EMPLOYMENT AND SEVERANCE AGREEMENT
This
Amended and Restated Employment and Severance Agreement (this “Agreement”) dated
as of January 23, 2006 (the “Effective Date”) is between Apollo Gold
Corporation, a Yukon Territory Corporation (the “Parent”), and its wholly-owned
subsidiary, Apollo Gold, Inc., a Delaware corporation (jointly and severally
with Parent, the “Employer”) and
(“Officer”).
RECITALS
A. Employer
wishes to retain the services of Officer, and Employer and Officer wish to
formalize the terms and conditions of all their agreements and understandings.
B. Officer’s
continued employment by Employer, the mutual covenants stated in this Agreement,
and other valuable consideration, the receipt of which are acknowledged by
Officer and Employer, are sufficient consideration for this
Agreement.
AGREEMENT
The
parties agree as follows:
1. Employment.
As of
the Effective Date, Employer will continue to employ Officer as the
__________________, of Employer, and Officer accepts such employment under
the
terms described in this Agreement.
2. Resignation
as Director.
Upon
termination of employment, Officer agrees to resign as a member of the Board
of
Directors of Apollo Gold, Inc., and of each of its subsidiaries for which
Officer is a member of such company’s Board of Directors.
3. Term
of Employment.
Subject
to the terms set forth in this Agreement, Employer agrees to employ Officer
and
Officer hereby agrees to be employed by Employer for a period (the “Employment
Period”) commencing on the Effective Date and continuing through
February 18, 2006, unless sooner terminated in accordance with the
provisions of this Agreement.
4. Actions
of Employer.
All
actions and decisions of Employer contemplated in this Agreement will be made
by
the Board of Directors of Parent.
5. Duties
of Officer.
Officer’s principal duties on behalf of Employer as of the Effective Date are as
the _______________________ of Employer. In continuing employment with Employer,
Officer will undertake and assume the responsibility of performing for or on
behalf of Employer whatever duties are necessary and required in such a
position, as determined by the Board of Directors of Parent.
6. Compensation.
a. Base
Salary.
As
compensation for Officer’s services rendered pursuant to this Agreement through
termination of employment, Employer agrees to pay Officer an annual salary
of
U.S. $_________ (U.S. $__________ ______) (the “Base Salary”), payable in
installments in accordance with Employer’s standard payroll practices, subject
to such payroll and withholding deductions as are required by law or authorized
by Officer.
b. Benefits.
Officer
shall be entitled to participate in the employee benefits plans offered to
all
employees of Employer during the Employment Period, in accordance with the
terms
of such plans.
c. Expenses.
Employer agrees to pay Officer any reasonable and necessary business expenses
incurred by Officer in connection with Officer’s duties, all to the date of
termination of employment.
7. Termination
of Employment.
Notwithstanding any other provision of this Agreement, Officer’s employment may
be terminated as follows:
a. Expiration.
Unless
sooner terminated, Officer’s employment shall automatically terminate at close
of business on February 18, 2006. Following termination of employment pursuant
to this Section 7(a), Employer shall pay to Officer the each of the
following:
x. Xxxxxxxxx
Payment.
Within
nine (9) days of termination of employment, Employer shall pay to Officer
$__________, which represents (a) all accrued and unpaid base salary through
the
date of termination of employment; (b) all accrued and unpaid vacation pay
through December 31, 2005; (c) all other accrued and unpaid additional
entitlements of employment through the date of termination of employment, except
as listed in subsection 7(a)(i)(d); (d) an amount equal to vacation pay in
lieu
of vacation for 20 days of 2006 vacation entitlement that accrued on January
1,
2006, less any days taken prior to termination of employment; (e) an amount
equal to ______ (___) months’ premium for Officer’s life insurance policy; (f)
severance payments in an amount equal to ______ (___) months of Officer’s Base
Salary; and (g) US$__________, which represents Employer’s contribution to
Officer’s tax liability, less the trade in value of the vehicle that Officer is
utilizing immediately prior to the Effective Date (the “Employer Vehicle”),
based on the Xxxxxx Blue Book Trade-In Value of Employer Vehicle in good
condition and with the odometer reading provided by Officer to Employer in
writing as of the Effective Date plus 1,000 miles, payable in one lump sum,
and
less applicable deductions and withholdings (the “Severance Payment”).
ii. Share
Payment.
Subject
to approval from the American Stock Exchange (“AMEX”) and the Toronto Stock
Exchange (“TSX”), Employer shall also pay Officer (a) _______ (___) months of
Officer’s Base Salary, exchanged into Canadian dollars as reported by the Bank
of Canada for the conversion of US dollars into Canadian dollars, in the form
of
Parent common shares (the “Shares”) and
(b)
US$__________, which represents Employer’s contribution to Officer’s tax
liability ((a) and (b) collectively, the “Shares Payment), less applicable
deductions and withholdings. The number of Shares to be issued to Officer shall
be calculated based
on
the volume weighted average price five (5) days prior to Effective Date, as
quoted on the TSX. In
accordance with the policies of the TSX and AMEX, Employer shall make an
application promptly after the execution and delivery of this Agreement to
obtain the acceptance from each of the TSX and AMEX of the issuance of the
Shares (the "Exchange Consents"), and, if necessary, shall timely fix the price
of the Shares by filing a price reservation form with the TSX. Employer hereby
agrees to deliver the Shares to Officer (in accordance with the instructions
set
forth in a side letter between Officer and Employer dated as of the Effective
Date) within nine (9) days of termination of employment. Within two (2) days
of
the execution and delivery of the Severance Agreement and Release, Employer
agrees to prepare and deliver to Officer a prospectus supplement that will
provide for the delivery of the Shares to Officer pursuant to Employer's
existing shelf registration. The parties agree that Employer shall have the
right to provide a copy of this Agreement to the TSX and AMEX as required.
Notwithstanding anything in this Agreement to the contrary, in the event
Employer is not able to obtain the necessary approvals from the TSX or AMEX,
Employer and Officer agree and acknowledge that this Agreement shall be null
and
void. Receipt by the Parent of a letter from each of TSX and AMEX providing
approval or conditional approval shall be sufficient proof that Employer
obtained the necessary approvals.
iii. No
Change of Control and Change of Control Payments.
Employer shall also pay to Officer either (i) severance payments in an amount
equal to ________ (___) months of Officer’s Base Salary, payable in one lump
sum, less applicable deductions and withholdings, on February 18, 2008, if
there
has not been a Change of Control (as defined below) between the Effective Date
and February 18, 2008 (the “No COC Payment”), or (ii) in the event there is a
Change of Control between the Effective Date and February 18, 2008, severance
payments in an amount equal to ________ (___) months of Officer’s Base Salary
plus a pro rata bonus payment equal to 35% of ________ (___) months of Officer’s
Base Salary, payable no later than at the closing of the transaction which
results in a Change of Control (the “COC Payment”). Employer agrees to gross up
the COC Payment for an estimate of FICA, federal, and state taxes, utilizing
a
33% tax rate, regardless of the actual rate applicable to Officer, with the
gross up amount computed by dividing the COC Payment amount by 0.67 and
subtracting the COC Payment (the “Gross Up Payment”). Employer will pay to
Officer the COC Payment and the Gross Up Payment together in one lump sum,
less
applicable deductions and withholdings. For purposes of this Agreement, “Change
of Control” shall have the meaning set forth in Schedule
A.
iv. COBRA
Payments or Opt Out Cash Payment.
At
Officer’s election, Employer will pay either (i) the COBRA Payments (as defined
below), or (ii) the Opt Out Cash Payment (as defined below) provided that
Officer notifies Employer in writing of Officer’s election no later than
February 18, 2006.
(1) COBRA
Payments. Provided that Officer timely elects continuation coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
Employer shall pay, on Officer’s behalf, the portion of premiums of Officer’s
medical, prescription drug, dental, and vision coverage under the Apollo Gold
Employee Health Benefit Plan, including coverage for Officer’s Dependents (as
defined below), that Employer paid immediately prior to Officer’s termination
employment with Employer for a period (the “COBRA Period”) of ________ (___)
months after the first day of the Officer’s coverage under COBRA or, if earlier,
until the Officer no longer qualifies for such coverage under COBRA (the “COBRA
Payments”). Employer will pay such premiums for Officer’s eligible dependents
only for coverage for which those dependents were enrolled immediately prior
to
the date of Officer’s termination of employment (“Officer’s Dependents”).
Officer will continue to be required to pay that portion of the premium of
Officer’s health coverage, including coverage for Officer’s eligible dependents,
that Officer was required to pay as an active employee immediately prior to
the
date of Officer’s termination of employment. From the date of termination of
employment through the end of the COBRA Period, Employer agrees that Officer
and
Officer’s Dependents shall be entitled to medical, prescription drug, dental,
and vision coverage that is at least as financially beneficial to the Officer
and Officer’s Dependents as the Officer’s and Officer’s Dependents’ coverage
immediately prior to the date of termination of employment.
(2) Opt
Out
Cash Payment. Within nine (9) days of termination of employment, Employer shall
pay Officer $18,000 (the “Opt Out Cash Payment”) provided that Officer executes
a COBRA Waiver Form no later than February 18, 2006, substantially in the form
attached hereto as Exhibit
B.
In the
event that Officer revokes such COBRA Waiver Form at any point during the COBRA
election period, Officer shall reimburse Employer for the entire amount of
the
Opt Out Cash Payment within nine (9) days of such revocation.
v. Additional
Benefits.
Provided that Standard Life Insurance Company approves the continuation of
long
term disability benefits and life insurance benefits to the Officer after
termination of employment, Officer shall be entitled to such coverage under
the
long term disability and life insurance policies in place immediately prior
to
the Termination Date (“Additional Benefits”) for a period of ____ months (the
“Additional Benefits Period”). Officer will pay the full premiums for such
policies from the date Officer’s employment is terminated until the end of
the Additional Benefits Period at such times and in such a manner as
required by such policies (“Officer Payments”). Beginning on August 19, 2006,
Employer will reimburse Officer for that portion of the premiums of Officer’s
long term disability and life insurance policies which were in place immediately
prior to the termination of employment that Employer was paying on behalf of
Employee immediately prior to termination of employment until the end of the
Additional Benefits Period (“Additional Benefits Payments”). In the event that
the long term disability and life insurance policies lapse or are terminated
as
a result of Officer’s failure to make adequate or timely Officer Payments,
Employer shall no longer be obligated to provide the Additional Benefits to
Officer (“Forfeited Policy Benefit”). Officer shall be solely responsible for
any required premiums for such policies after ________, 20___. Notwithstanding
the foregoing, in the event that Standard Life Insurance Company does not
approve such continuation, each of the Parties agree to negotiate the portion
of
the severance package represented by this Section 7(a)(v) in good
faith.
vi. Title
Transfer.
Within
nine (9) days of termination of employment, Employer agrees to deliver
possession and title of the Employer Vehicle to Officer (“Title
Transfer”).
vii. Employer’s
Obligations Subject to Execution of Severance Agreement.
Employer’s obligation to pay or deliver to Officer each of the Severance
Payment; Shares Payment; No COC Payment or the COC Payment, as the case may
be;
COBRA Payments or the Opt Out Cash Payment, as the case may be; Additional
Benefits Payments; and Title Transfer is conditioned on the Officer signing
a
Severance Agreement and Release substantially in the form attached hereto as
Exhibit
A
and on
the Officer not revoking such Severance Agreement and Release.
b. Resignation.
Officer
may terminate this Agreement by resigning at any time for any reason or no
reason at all prior to the Termination Date by giving Employer written notice
at
least 5 days before the effective date of the resignation. Following termination
of employment pursuant to this section 7(b), Employer’s only obligation to
Officer shall be to pay to Officer all accrued and unpaid base salary, all
accrued and unpaid vacation time, and any reasonable and necessary business
expenses incurred by Officer in connection with his duties, all to the date
of
termination of employment and payable in a lump sum, less applicable deductions
and withholdings, within seven (7) days of termination of
employment.
c. For
Cause.
Employer
may terminate Officer’s employment at any time prior to the Termination Date for
Cause. For purposes of this Agreement, “Cause” means: (i) the failure to follow
the written directions of the Board of Directors of Parent which are not
inconsistent with this Agreement or contrary to applicable law, or contrary
to
the standards of ethical conduct for attorneys at law as promulgated by the
Supreme Court of the states in which Officer is admitted to practice law, (ii)
failure to correct performance deficiencies after the receipt of written notice
setting forth the performance deficiencies and 15 days to cure such
deficiencies, (iii) acts of dishonesty, fraud, misrepresentation, harassment
or
employment discrimination, and (iv) indictment for a felony. Whether Cause
exists under this Agreement shall be determined by the Parent’s Board of
Directors in its reasonable discretion. Following termination of employment
pursuant to this Section 7(c), Employer’s only obligation to Officer shall be to
pay to Officer all accrued and unpaid base salary, all accrued and unpaid
vacation time, and any reasonable and necessary business expenses incurred
by
Officer in connection with his duties, all to the date of termination of
employment and payable in a lump sum, less applicable deductions and
withholdings, within seven (7) days of termination of employment.
d. Death.
This
Agreement shall automatically be terminated in the event of Officer’s death
during the term of employment. In the event this Agreement terminates pursuant
to this Section 7(d), Employer shall pay Officer’s successor under Section 16
herein each of the following: (i) the Severance Payment and (ii) either the
COC
Payment or No COC Payment, as the case may be, and each of (i) and (ii) shall
be
payable in a lump sum, less applicable deductions and withholdings, within
seven
(7) days of termination. In addition, Employer shall continue to make the COBRA
Payments described in Section 7(a)(iii) for Officer’s eligible dependents that
Officer, and Officer’s eligible dependents, would have been entitled to if the
Agreement would have terminated pursuant to Section 7(a).
8. Unemployment
Compensation.
If
Officer’s employment ends on February 18, 2006, by operation of this Agreement,
Employer will not contest any application Officer makes for unemployment
compensation benefits; provided, however, that such inaction will not be deemed
an admission or waiver for any other purpose whatsoever, nor will it be
admissible as evidence in any future proceedings. The Employer does not
guarantee that any state will approve Officer’s application for unemployment
compensation benefits.
9. Stock
Options.
All
stock options granted to Officer prior to the termination of Officer’s
employment will vest immediately upon termination of employment. In addition,
if
Officer’s employment is terminated pursuant to Section 7(a) or as a result of
Employer’s breach of this Agreement, Officer shall be entitled to exercise such
stock options up to and including December 31, 2006. If Officer’s employment is
terminated for any reason other than pursuant to Section 7(a) or as a result
of
Employer’s breach of this Agreement, Officer shall forfeit all stock options
which are unexercised as of the date of termination of employment. Employer
shall arrange for implementation of a cashless exercise program for the options
and shall pay the cashless exercise program fees when options are exercised,
which program shall be in full force and effect so that Officer can implement
cashless exercise on a same-day basis within nine (9) days after February 18,
2006. Each of Employer and Officer agree that in the event the existing option
agreements between Employer and Officer, or the plans under which such options
were granted to Officer, contain provisions which are contrary to this Section
9, this Section 9 shall govern.
10. Confidential
Information and Trade Secrets.
a. Confidential
Information.
Officer
acknowledges that information, observations, and data obtained by Officer,
both
prior to the Effective Date while Officer was employed by Employer (or any
predecessor whose stock or assets have been acquired by Employer, if applicable)
and after the Effective Date, concerning the business or affairs of Employer
(or
any such predecessor, as the case may be) constitute confidential information,
are trade secrets, are the property of Employer, and are essential and
confidential components of Employer’s business. Officer will not directly or
indirectly disclose to any person or use any of such information, observations
or data, except in the course of Officer’s employment with Employer, and except
to the extent that:
i. the
information was within the public domain at the time it was provided to
Officer;
ii. the
information was published or otherwise became part of the public domain after
it
was provided to Officer through no fault of Officer;
iii. the
information already was in Officer’s possession at the time Employer (or a
predecessor) disclosed it to Officer, was not acquired by Officer directly
or
indirectly from anyone with a duty of confidentiality to Employer (or any
predecessor), and was not acquired by Officer under circumstances in which
Officer already was an employee of or a consultant to Employer (or any
predecessor), or had a duty of confidentiality to Employer (or any
predecessor);
iv. the
information after the Effective date becomes available to Officer from a source
other than Employer (or any predecessor), which source did not acquire the
information directly or indirectly from anyone with a duty of confidentiality
to
Employer (or any predecessor); or
v. the
information is required to be disclosed (A) by any federal or state law
rule or regulation, including the standards of ethical conduct for attorneys
at
law as promulgated by the Supreme Court of the states in which Officer is
admitted to practice law, (B) by any applicable judgment, order, or decree
of any court, governmental agency or arbitrator having or purporting to have
jurisdiction in the matter, or (C) pursuant to any subpoena or other
discovery request in any litigation, arbitration or other proceeding, but if
Officer proposes to disclose the information in accordance with (A), (B), or
(C), Officer will first give Employer reasonable prior notice of the proposed
disclosure of any such information so as to provide Employer an opportunity
to
consult with Officer as to the applicability of such law, rule, or regulation
or
to appear before any court, governmental agency, or arbitrator in order to
contest the disclosure, as the case may be, and prior to any such disclosure
will redact such information to the maximum extent permissible.
vi. Notwithstanding
any other provision in this Agreement, this Section 10 is not intended to
prohibit or restrict Officer from communicating to Employer (through Employer’s
then current and duly appointed executive officers, directors, or legal counsel)
any information or confirming prior legal advice concerning Employer or any
of
its past or present subsidiaries or affiliates (individually each a “Company”
and collectively the “Companies”) to whom Officer has at any time furnished
legal services.
b. Return
of Documents, Etc.
Officer
represents and warrants that, prior to termination of Officer’s employment,
Officer will return to the Employer any and all property, documents, and files,
including any documents (in any recorded media, such as papers, computer disks,
copies, photographs, maps, transparencies, and microfiche) that relate in any
way to any Company or any Company’s business, whether or not developed,
produced, or conceived, in whole or in part, by Officer during the term of
his
employment with Employer. Officer agrees that, to the extent that Officer
possesses any files, data, or information relating in any way to any Company
or
any Company’s business on any personal computer, he will delete those files,
data, or information (and will retain no copies in any form). Officer also
will
return any Company tools, equipment, calling cards, credit cards, access cards
or keys, any keys to any filing cabinets, vehicles, vehicle keys, and all other
Company property in any form prior to the date of termination of Officer’s
employment. Officer hereby expressly acknowledges that the foregoing steps
are
necessary to protect the Company’s proprietary interests in its trade secrets,
confidential information, and copyrights, and that Employee is not entitled
to
use, disclose, or otherwise benefit from the Company’s proprietary
interests. Officer understands that any breach of this Section 10(b)
will also constitute a misappropriation of the Company’s proprietary rights, and
may constitute a theft of the Companies’ trade secrets under applicable local,
state, and federal statutes, and will result in a claim for injunctive relief,
damages, and/or criminal sanctions and penalties against Officer by any Company,
and possibly others. Notwithstanding the foregoing, Employer acknowledges that
Officer has advised Employer with respect to the obligation of an attorney
at
law to maintain client records, acknowledges that the Companies may be unable
as
a result of the provisions of this Agreement to obtain effective assistance
of
counsel from Officer as a result of the prohibition of Officer maintaining
such
records, and hereby knowingly waives in writing all record keeping obligations
with respect to each of the Companies otherwise imposed upon Officer under
applicable laws, including standards of professional conduct promulgated by
the
Supreme Courts of the jurisdictions wherein Officer is admitted to practice
law.
Employer agrees to maintain all records that Officer provides to Employer for
a
period of six (6) years after the date of termination of Officer’s employment
and to keep confidential, to the extent permissible by applicable law, all
of
Officer’s personal information which may be incorporated into such
records.
c. Non-solicitation.
During
the 6 months following the last day of Officer’s employment, Officer will not
solicit or attempt to solicit for employment any person while such person is
an
employee or officer of Employer or of any subsidiary of Employer.
d. Non-Disparagement.
Officer
agrees that he will not disparage, criticize, or demean Employer, its
reputation, employees, directors, officers, services, manner of conducting
business, customers, or suppliers, or any other aspect of Employer, by any
communication whatsoever. Likewise, Employer will not disparage, criticize,
or
demean Officer, Officer’s reputation, or any other aspect of Officer, by any
communication whatsoever.
11. Release
of Officer.
Based
on the information known to Employer, Employer has no intent to bring any claim
or action against Officer, nor does Employer have any intent to investigate
or
look for additional facts which may change Employer’s current intent not to
bring any claim or action against Officer; provided,
however,
if any
information comes to Employer’s attention which would require Employer to
conduct an investigation or bring a claim or action against Officer, Employer
can not assure Officer that Employer will not pursue such an investigation
or
such claims or actions. Notwithstanding the foregoing, based on the information
known to Employer, Employer considers it highly unlikely that any information
will come to the attention of Employer which would require Employer to conduct
an investigation or pursue any claim or action against Officer. Notwithstanding
the foregoing, if Officer breaches any of Officer’s obligations under this
Agreement, this Section 11 shall be null and void and Employer may pursue any
available remedies against Officer for such breach.
12. Injunctive
Relief.
Both
Officer and Employer expressly acknowledge that the subject matter of this
Agreement is unique, and that any breach of Officer’s and Employer’s respective
obligations under Section 10 is likely to result in irreparable injury to
Employer or to Officer, as the case may be, and the parties therefore expressly
agree that either party will be entitled to obtain specific performance of
this
Agreement through injunctive relief and such ancillary remedies of an equitable
nature as a court may deem appropriate. Such equitable relief will be in
addition to, and the availability of such equitable relief will not preclude,
any legal remedies or other remedies which might be available to such party.
If
Officer or Employer breaches any provisions in Section 10, Employer or Officer,
as the case may be, is entitled to apply for equitable relief in any court
of
competent jurisdiction prior to initiation of mediation. Employer’s or Officer’s
application for temporary injunctive relief will not limit Employer or Officer
from pursuing any other available remedies for such breach.
13. Remedy
for Employer’s Breach.
If
Employer breaches Section 7 or 10 of this Agreement, the Severance Agreement
and
Release will be null and void and Officer may pursue any available remedies
against Employer for such breach.
14. Severability.
Each
provision of this Agreement is intended to be severable, and if any portion
of
this Agreement is held invalid, illegal, unenforceable or void for any reason,
the remainder of this Agreement will nonetheless remain in full force and
effect. Any portion held to be invalid, unenforceable, or void will, if
possible, be deemed amended or reduced in scope, but such amendment or reduction
in scope will be made only to the minimum extent required for purposes of
maximizing the validity and enforceability of this Agreement.
15. Non-Waiver.
The
failure to enforce any right arising under this Agreement or any similar
agreement on one or more occasions will not be deemed or construed to be a
waiver of that right under this Agreement or any other agreement on any other
occasion, or of any other right on that occasion or any other
occasion.
16. Successors
and Assigns.
This
Agreement is binding upon, and will inure to the benefit of, Employer and
Officer, and their respective heirs, personal and legal representatives,
successors, and assigns and is binding upon and will inure to the benefit of
any
person or entity succeeding Employer, by merger, consolidation, purchase of
assets or stock, or otherwise, but the interests of Officer under this Agreement
are not subject to the claims of Officer’s creditors, and may not be voluntarily
or involuntarily assigned, alienated or encumbered, except as required by law.
If Officer dies before all payments or other benefits under this Agreement
are
paid out, Officer’s spouse, or if none, Officer’s personal representative, shall
be paid such amounts when due, and shall have the right and authority to enforce
any provision of this Agreement.
17. Payment
of Officer’s Fees and Expenses.
Employer shall pay for all reasonable legal fees and expenses incurred by the
Officer as a result of, first, the Officer’s obtaining legal or other
professional representation concerning negotiations leading up to the final
draft of this Agreement and Officer’s entitlements under this Agreement, up to
$5,000; second, as a result of the Officer’s obtaining legal or other
representation to obtain or enforce Officer’s right to any benefits, payment or
other entitlement under this Agreement, if the Officer substantially prevails
in
such effort; and, third, the Officer’s obtaining legal or other professional
representation in connection with any tax audit or proceeding to the extent
such
cost is attributable to any payment or benefit provided hereunder and not
attributable to any action or inaction of the Officer.
18. Defaults
in Payments.
If
Employer fails to make payments to Officer pursuant to the terms of this
Agreement, any such due and unpaid amounts shall bear interest daily as of
the
date such payment was due and payable until paid in full, at a rate equal to
twelve (12%) per annum compounded daily, or 0.0328767% per day.
19. Tax
Defense and Indemnity.
In
the
event that the Internal Revenue Service (“IRS”) notifies Officer that the IRS
has selected any or all of Officer’s 2006, 2007, or 2008 federal income tax
returns for examination and one of the issues of the examination is, or appears
to Officer to potentially involve, a determination of whether or not Code
Section 4999 (regarding excise tax on golden parachute payments) or Code Section
409A (regarding inclusion in income of deferred compensation), Officer shall
immediately notify Employer of that fact. Employer shall have the right to
represent Officer with respect to those issues, and Officer shall cooperate
with
Employer in such representation, including promptly providing Employer (or
its
designated lawyer and/or CPA) with a power of attorney on IRS Form 2848 to
represent Officer. Officer may also provide such a power of attorney to
Officer’s designated representative(s), but on all issues regarding Code
Sections 4999 and 409A, Employer shall have exclusive authority from Officer
to
deal with the IRS and in any subsequent tax litigation, including settlement
of
such issues. In the event an IRS or court determination results in additional
tax, penalty, and/or interest to Officer, Employer shall reimburse Officer
the
aggregate amount of such tax, penalty, and/or interest plus an additional amount
of 50% of the aggregate tax, penalty, and/or interest, which is intended to
reimburse Officer for taxes on the aggregate amount at the rate of 33%
(recognizing that the tax reimbursement is itself taxable).
20. Notices.
All
notices, requests, demands, claims, and other communications under this
Agreement must be in writing. Any notice, request, demand, claim, or other
communication under this Agreement will be deemed duly given only if it is
sent
by registered or certified mail, return receipt requested, postage prepaid,
or
by courier, hand-delivery, or by telecopy or facsimile, and must be addressed
to
the intended recipient as follows:
If
to
Employer:
Apollo
Gold Corporation
Attention:
President and Chief Executive Officer
0000
X.
Xxxxxxxx Xxxxxx
Xxxxx
000
Xxxxxxxxx
Xxxxxxx, XX 00000
Telephone:
000-000-0000
Facsimile:
000-000-0000
If
to
Officer:
______________________
______________________
______________________
Telephone:
_____________
Facsimile:
______________
Notices
will be deemed given and received three days after mailing if sent by certified
mail, when delivered if sent by courier, and one business day after receipt
of
confirmation by person or machine if sent by telecopy or facsimile transmission.
Either party may change the address to which notices, requests, demands, claims
and other communications under this Agreement are to be delivered by giving
the
other party notice in the manner set forth above.
21. Governing
Law and Forum.
Employer and Officer acknowledge and agree that the State of Colorado has a
substantial connection with this Agreement. This Agreement will therefore be
governed by and construed according to the internal laws of the State of
Colorado, without regard to conflict of law principles. The parties further
agree that any action brought to enforce this Agreement must be brought
exclusively in a state or federal court of competent jurisdiction located in
Denver, Colorado, and the parties consent to personal jurisdiction of such
courts and waive any defense of forum non-conveniens. Without limiting the
generality of the foregoing, Parent expressly waives its rights, if any, to
contest the enforceability in Canada or any other jurisdiction of any judgment
of such courts of competent jurisdiction located in Denver, Colorado, under
The
Hague Convention on the Recognition and Enforcement of Foreign Judgments in
Civil and Commercial Matters or any similar treaty or law.
22. Acknowledgement
by Officer.
Officer
has been afforded the opportunity to read, reflect upon and consider the terms
of this Agreement, has been afforded the opportunity to discuss this Agreement
with Officer’s attorney or other advisor or counselor, has read this entire
Agreement, fully understands its terms, has voluntarily executed this Agreement,
and has retained one executed copy of this Agreement for Officer’s
records.
23. Joint
and Several Liability.
Parent
and Employer shall be jointly and severally liable for all of the obligations
of
the Employer under this Agreement, notwithstanding that the Officer is employed
by Employer, with respect to employee services performed in the United States.
Parent hereby acknowledges and agrees that it receives direct and indirect
benefits under this Agreement and shall not contest the validity or
enforceability of this Agreement on grounds of lack of consideration, the
absence of an employment relationship between Officer and Parent, or
otherwise.
24. Integration
Clause and Modification.
This
Agreement; the Indemnification Agreement by and between Parent and Officer
dated
______________ and the Amended and Restated Indemnification Agreement by and
among Apollo Gold, Inc., Apollo Gold Finance, Inc., Montana Tunnels Mining,
Inc.
and Officer dated ______________ (collectively, the “Indemnity Agreements”);
and, except as modified by this Agreement, the existing option agreements
between Employer and Officer or the plans under which Officer’s existing options
were issued are the complete and exclusive statement of the agreement between
the parties and supersedes all proposals, prior agreements and all other
communications between the parties, oral or in writing, relating to the subject
matter of this Agreement, including, without limitation, the Amended and
Restated Employment Agreement by and among Parent, Employer, and Officer dated
_____________ and any previously executed option agreement. This Agreement
may
be amended or superseded only by an agreement in writing, signed by Officer
and
Employer’s duly authorized officer.
25. Continuing
Rights to Indemnity.
Anything in this Agreement to the contrary notwithstanding, Officer shall be
entitled to the benefit of all present and future rights to defense,
indemnification, and/or advancement of expenses under the Employers’ and their
subsidiaries’ certificates of incorporation and bylaws, under the Delaware
General Corporation Law and other similar laws, and under the indemnity
agreements to which Officer is a party or a beneficiary. Without limiting the
generality of the foregoing, Officer shall be entitled to all rights provided
for under the Indemnity Agreements. The Employer shall maintain in effect for
a
period of six (6) years after the Effective Date, director and officer liability
coverage in a form not substantially different from the Employers’ current
director and officer liability policy as of the date of
termination.
26. Survival.
The
provisions of Sections 7 through 26 of this Agreement shall survive the
termination of this Agreement.
ACCEPTED
AND AGREED WITH THE APPROVAL
OF ITS BOARD OF DIRECTORS:
| PARENT: | EMPLOYER: | |||
| APOLLO GOLD CORPORATION | APOLLO GOLD, INC. | |||
| By: | By: | |||
| Title: | Title: | |||
ACCEPTED
AND AGREED:
SCHEDULE
A
DEFINITION
OF “CHANGE OF CONTROL”
FOR
AMENDED AND RESTATED EMPLOYMENT AND SEVERANCE AGREEMENTS
1. Change
of Control
means
one or more of the following events, under the following
guidelines:
(a) Change
in Ownership.
Any one
person, or more than one person acting as a group (as defined in
Section 1(d), acquires ownership of stock of the Parent that, together with
stock held by such person or group, constitutes more than 50% of the total
fair
market value or total voting power of the stock of the Parent. However, if
any
one person or more than one person acting as a group is considered to own
more
than 50% of the total fair market value or total voting power of the stock
of
the Parent, the acquisition of additional stock by the same person or persons
shall not be considered to cause a change in the ownership of the Parent
(or to
cause a change in the effective control of the Parent, within the meaning
of
Section 1(b)). An increase in the percentage of stock owned by any one
person, or persons acting as a group, as a result of a transaction in which
the
Parent acquires its stock in exchange for property will be treated as an
acquisition of stock for this purpose.
(b) Change
in Effective Control.
Either
(a) any one person, or more than one person acting as a group (as
determined under Section 1(c)), acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such
person
or persons) ownership of stock of the Parent possessing 35% or more of the
total
voting power of the stock of the Parent, or (b) a majority of members of
the
Parent’s board of directors is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the members
of
the Parent’s board of directors prior to the date of the appointment or
election;
(c) Persons
Acting as a Group.
For the
purposes of this Section 1, persons will be not be considered to be acting
as a group solely because they purchase or own stock, or purchase assets,
of the
Parent at the same time, or as a result of the same public offering. However,
persons will be considered to be acting as a group if they are the owners
of a
corporation that enters into a merger, consolidation, purchase or acquisition
of
stock or assets, or similar business transaction with the Parent. If a person,
including an entity, owns stock in such a corporation and in the Parent at
a
time that both of the corporations enter into a merger, consolidation, purchase
or acquisition of stock or assets, or similar transaction, such shareholder
is
considered to be acting as a group with other shareholders in a corporation
only
with respect to, and to the extent of, the ownership in that corporation
prior
to the transaction giving rise to the change and not with respect to the
ownership interest in the other corporation.
(d) Attribution.
For
purposes of this Section 1, the attribution rules of Code Section 318 shall
apply to determine stock ownership. Stock underlying a vested option is
considered owned by the individual who holds the vested option (and the stock
underlying an unvested option shall not be considered owned by the individual
who holds the unvested option). For purposes of the preceding sentence, however,
if a vested option is exercisable for stock that is not substantially vested
(as
defined by Income Tax Regulations Sections 1.83-3(b) and (j)), the stock
underlying the option is not treated as owned by the individual who holds
the
option.
(e) Interpretation
under Code Section 409A.
The
definition of Change of Control under this Section 1 is intended to comply
with applicable definitions and requirements of Code Section
409A(a)(1)(B)(2)(v), Internal Revenue Service Notice 2005-1, Q&A 11-14, and
Income Tax Proposed Regulations Section 1.409A-3(a)(5) and shall be
interpreted consistently therewith. Furthermore, to the extent that further
Internal Revenue Service guidance, including notices, rulings, regulations,
etc., are issued subsequent to such Proposed Regulations and modify the
applicable change in control event definitions and requirements, the definition
herein of Change of Control shall be deemed to have been modified accordingly
as
of the effective date of such change as set forth in such guidance.
EXHIBIT
A
FORM
OF
SEVERANCE
AGREEMENT AND RELEASE
This
SEVERANCE AGREEMENT AND RELEASE (this “Agreement”) is made by and among (i)
___________________ (“Officer”) and Apollo Gold Corporation (the “Parent”) and
Apollo Gold, Inc. (jointly and severally with Parent the “Company”). The Company
and Officer are referred to collectively as the “Parties” and individually as a
“Party.”
RECITALS
WHEREAS,
Officer’s employment with the Company ended effective _________;
WHEREAS,
this Agreement sets forth below the terms and conditions of an amicable
settlement and a full accord and satisfaction of all and all potential claims
and disputes between Officer and the Company; and
WHEREAS,
in order to accomplish this end, the Parties are willing to enter into this
Agreement.
NOW
THEREFORE, in consideration of the mutual promises and undertaking contained
herein, the sufficiency of which is acknowledged by the Parties, the Parties
to
this Agreement agree as follows.
TERMS
1. Separation
and Effective Date.
Officer’s employment with the Company ended on _____________. This Agreement
shall become effective (the “Effective Date”) on the eighth day after Officer’s
execution of this Agreement, provided that Officer has not revoked Officer’s
acceptance pursuant to Section 8(e) below.
2. Severance
Payments.
After
the expiration of the Effective Date, and on the express condition that Officer
has not revoked this Agreement, the Company will pay Officer severance payments
in an amount and in the manner set forth in Section 7(__) of the Officer’s
Amended and Restated Employment and Severance Agreement dated _________ __,
2006
(the “Employment Agreement”), less applicable withholdings and deductions (the
“Severance Payments”). The Severance Payments will be in check form and mailed
to Officer or direct deposited to an account designated by Officer.
3. General
Release.
(a) In
consideration of the Severance Payments by the Company to Officer pursuant
to
Section 2 above, Officer, individually and on behalf of Officer’s successors,
heirs, subrogees, assigns, principals, agents, partners, associates, attorneys,
and representatives, voluntarily, knowingly, and intentionally releases,
remises, waives, acquits, and discharges the Company and its predecessors,
successors, parents, subsidiaries, affiliates, and assigns and each of their
respective officers, directors, principals, shareholders, agents, attorneys,
insurers, representatives, board members, and employees, from any and all
actions, causes of action, claims, demands, losses, damages, costs, expenses,
judgments, liens, indebtedness, liabilities, and attorneys’ fees (including, but
not limited to any claims of entitlement for attorneys’ fees under any contract,
statute, or rule of law allowing a prevailing party or plaintiff to recover
attorneys’ fees), of every kind and description from the beginning of time
through the Effective Date (the “Released Claims”).
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(b) The
Released Claims include, but are not limited to, those which arise out of,
relate to, or are based upon: (i) Officer’s employment with the Company or the
termination thereof; (ii) statements, acts, or omissions by the Parties,
whether
in their individual or representative capacities; (iii) express or implied
agreements between the Parties and claims under any severance plan (except
as
provided herein); (iv) any stock or stock option grant agreement, or plan
(except as provided herein); all federal, state, and municipal statutes,
ordinances, and regulations, including, but not limited to, claims of
discrimination based on race, age, sex, disability, whistleblower status,
public
policy, or any other characteristic of Officer under the Age Discrimination
in
Employment Act, the Older Workers Benefit Protection Act, the Americans and
Disabilities Act, the Fair Labor Standards Act, the Equal Pay Act, Title
VII of
the Civil Rights Act of 1964 (as amended), the Family and Medical Leave Act,
the
Employee Retirement Income Security of 1974, the Rehabilitation Act of 1973,
the
Worker Adjustment and Retraining Notification Act, the Employment Relations
Act
of 1999, or any other federal, state, or municipal law prohibiting
discrimination or termination for any reason; (vi) state and federal common
law;
and (vii) any claim which was or could have been raised by Officer, including
any claim that this Agreement was fraudulently induced.
4. Unknown
Facts.
This
Agreement and the Released Claims include claims of every nature and every
kind,
whether known or unknown, suspected or unsuspected, past or present. Officer
hereby acknowledges that Officer may hereafter discover facts different from,
or
in addition to, those which Officer now knows or believes to be true with
respect to this Agreement, and Officer agrees that this Agreement, and Officer
agrees that this Agreement and the release contained herein shall be and
remain
effective in all respects, notwithstanding such different or additional facts
or
the discovery thereof.
5. No
Admission of Liability.
The
Parties agree that nothing contained herein, and no action taken by any Party
hereto with regard to this Agreement, shall be construed as an admission
by any
Party of liability or of any fact that might give rise to liability for any
purpose whatsoever.
6. No
Assignment.
Officer
hereby covenants and warrants that Officer has not assigned or transferred
to
any person any portion of any claims which are released, remised, waived,
acquitted, and discharged in Section 3 above.
-2-
7. No
Application.
Officer
agrees to waive reinstatement to employment with the Company. Officer further
promises not to apply in the future for employment with the Company or any
parent corporation of the Company, or their respective subsidiaries, successors,
or assigns. Officer understands that the Company will not consider, and is
under
no obligation to consider, any such application submitted by
Officer.
8. Warranties.
Officer
warrants and represents as follows:
(a) Officer
has read this Agreement and agrees to the conditions and obligations set
forth
in this Agreement.
(b) Officer
voluntarily executes this Agreement after having been advised by the Company
to
consult with legal counsel and after having had opportunity to consult with
legal counsel and without being pressured or influenced by any statement
or
representation or omission of any person acting on behalf of the Company,
including, without limitation, the officers, directors, board members, committee
members, employees, agents, and attorneys for the Company.
(c) Officer
has no knowledge of the existence of any lawsuit, charge, or proceeding against
the Company or any of its officers, directors, board members, committee members,
employees, or agents arising out of or otherwise connected with any of the
matters herein released.
(d) Officer
has full and complete legal capacity to enter into this Agreement.
(e) Officer
has had at least twenty-one (21) days in which to consider the terms of this
Agreement. In the event that Officer executes this Agreement in less time,
it is
with the full understanding that Officer had the full twenty-one (21) days
if
Officer so desired and that Officer was not pressured by the Company or any
of
its representatives or agents to take less time to consider the Agreement.
In
such event, Officer expressly intends such execution to be a waiver of any
right
Officer had to review the Agreement for a full twenty-one (21)
days.
(f) Officer
understands that this Agreement waives any claim Officer may have under the
Age
Discrimination in Employment Act. Officer may revoke this Agreement for up
to
seven (7) days following its execution, and this Agreement shall not become
enforceable and effective until seven (7) days after such execution. If Officer
chooses to revoke this Agreement, Officer must provide written notice to
the
President and Chief Executive Officer of the Company by hand delivery and
by
facsimile within seven (7) calendar days of Officer’s execution of this
Agreement. If Officer does not revoke within the seven (7) day period, the
right
to revoke is lost.
(g) Officer
admits, acknowledges, and agrees that Officer is not otherwise entitled to
the
Severance Payments set forth in Section 2, and that such Severance Payments
are
good and sufficient consideration for this Agreement. Officer admits,
acknowledges , and agrees that Officer has been fully and finally paid or
provided all wages, compensation, vacation, expenses, bonuses, stock, stock
options, or other benefits from the Company which are or could be due to
Officer
from the Company.
(h) Officer
has not taken any action or made any statement adverse to the Company’s
interests prior to signing this Agreement.
-3-
9. Severability.
If any
provision of this Agreement is held illegal, invalid, or unenforceable, such
holding shall not affect any other provisions hereof. In the event any provision
is held illegal, invalid, or unenforceable, such provision shall be limited
so
as to effect the intent of the Parties to the fullest extent permitted by
applicable law. Any claim by Officer against the Company shall not constitute
a
defense to enforcement by the Company.
10. Enforcement.
The
releases contained herein do not release any claims for enforcement of the
terms, conditions, or warranties contained in this Agreement. The Parties
shall
be free to pursue any remedies available to them to enforce this Agreement.
11. Survival
of Employment Agreement Terms.
This
Agreement in no way affects or alters the surviving provisions set forth
in
Section 26 of the Employment Agreement. Those provisions are hereby incorporated
by reference and serve as part of the consideration for this Agreement. The
Parties agree to continue to abide by the surviving provisions set forth
in
Section 27 of the Employment Agreement to the extent that those provisions
impose any obligations upon each respective Party.
12. Entire
Agreement.
This
Agreement, and the surviving provisions set forth in Section 27 of the
Employment Agreement, constitute the entire agreement between the Parties
with
respect to the subject matter contained herein. This Agreement supersedes
any
and all prior oral or written promises or agreements between the Parties,
except
as otherwise provided herein. Officer acknowledges that Officer has not relied
on any promise, representation, or statement other than those set forth in
this
Agreement. This Agreement can not be modified except in writing signed by
all
Parties.
13. Venue
and Applicable Law.
This
Agreement shall be interpreted and construed in accordance with the laws
of the
State of Colorado, without regard to its conflicts of law provisions. Venue
and
jurisdiction shall be in the federal or state courts in Denver, Colorado.
If a
Party is required to initiate an action in court to enforce this Agreement,
the
prevailing Party shall be entitled to its costs and attorneys' fees from
the
other Party, to the extent such costs and fees are related to the enforcement
of
this Agreement.
14. Counterparts.
This
Agreement may be executed in identical counterparts, which, when considered
together, shall constitute the entire agreement among the Parties.
-4-
IN
WITNESS THEREOF, and intending to be legally bound, the Parties have executed
this Agreement as of the Effective Date.
OFFICER:
| STATE OF COLORADO | ) | ||
| ) ss. | |||
| COUNTY OF DENVER | ) |
The
foregoing instrument was acknowledged before me this ______ day of _________,
2006, by __________________.
Witness
my hand and official seal.
My
commission expires ____________________.
[SEAL]
Notary
Public
-5-
APOLLO
GOLD CORPORATION
By:
Title:
| STATE OF COLORADO | ) | ||
| ) ss. | |||
| COUNTY OF DENVER | ) |
The
foregoing instrument was acknowledged before me this ______ day of ,
2006,
by ___________________________________, as
for
Apollo Gold Corporation.
Witness
my hand and official seal.
My
commission expires ____________________.
[SEAL]
Notary
Public
-6-
APOLLO
GOLD, INC.
By:
Title:
| STATE OF COLORADO | ) | ||
| ) ss. | |||
| COUNTY OF DENVER | ) |
The
foregoing instrument was acknowledged before me this ______ day of
_______,
2006,
by ___________________________________, as __________________ for
Apollo Gold, Inc.
Witness
my hand and official seal.
My
commission expires ____________________.
[SEAL]
Notary
Public
|
-7-
|
|||
