EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT
10.20
EXECUTIVE
EMPLOYMENT
AGREEMENT
This
EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made effective this July
31, 2006, by and between CAPITAL GOLD CORPORATION, a Delaware corporation
(“Employer”), and XXXXXXX X. XXXXXXXXX, a Pennsylvania resident
(“Executive”).
WHEREAS,
Executive has dutifully served as an executive officer of Employer for the
past
10 years, during which time Employee has received compensation below that
generally received by an executive officer of a company in the Employer’s
industry;
WHEREAS,
the Employer has finally reached the stage of its development where it can
commence mining operations;
WHEREAS,
Executive agrees to be employed by Employer for the period and upon and subject
to the terms herein provided; and
WHEREAS,
Employer agrees to employ Executive for the period and upon and subject to
the
terms herein provided;
THEREFORE,
in consideration of the foregoing and of the mutual promises, covenants and
agreements contained herein, the legal sufficiency of which is hereby
acknowledged, and intending to be legally bound, Employer and Executive agree:
1. Employment.
Upon
and subject to the terms provided herein, Employer agrees to employ Executive,
and Executive hereby agrees to be employed by Employer, as Employer’s Vice
President of Investor Relations, or other substantially similar
position.
2. Term
of Employment.
Subject
to the terms set forth in this Agreement, Employer agrees to employ Executive
and Executive hereby agrees to be employed by Employer for a period (the
“Employment Period”) commencing from the date hereof until the third anniversary
of the date hereof. The Employment Period shall automatically renew for
successive one-year periods unless either party provides the other party with
written notice of its intent not to renew at least thirty (30) days prior to
the
expiration of the then current Employment Period.
3. Compensation.
(a) Base
Salary.
As
compensation for the services rendered pursuant to this Agreement, Employer
agrees to pay Executive a base salary at an annual rate of not less than
$120,000, 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 Executive. The amount of the base salary shall be reviewed
periodically and may be increased at the sole discretion of Employer.
(b) Bonus.
Executive shall be eligible for any annual incentive bonus opportunity offered
by Employer to employees at Executive’s level. In the event of any conflict
between this Agreement and any incentive bonus plan adopted by Employer for
its
officers and employees, this Agreement shall control. The amount of this bonus,
as well as the criteria necessary to earn a bonus, may be changed at any time
by
Employer and shall be within the sole discretion of Employer. All bonuses paid
pursuant to this Agreement will be subject to applicable withholdings and
deductions and will be paid no earlier than fifteen (15) days and no later
than
ninety (90) days after Employer’s fiscal year end for which the bonus is earned.
If Executive’s employment terminates, voluntarily or involuntarily, prior to the
last day of the fiscal year for which the bonus applies, Executive acknowledges
that he is not entitled to any bonus not yet paid at the time of the termination
because any such unpaid bonus will not be earned, vested, due, or owing.
Executive hereby expressly forfeits and waives any such unpaid
bonus.
(c) Vacation. For
each
full twelve (12) months of employment, Executive shall be entitled to receive
four (4) weeks paid vacation. One (1) week of paid vacation may be carried
forward from one calendar year to the next calendar year only (the “Carried
Forward Vacation”). If applicable, Executive’s first week of vacation each
calendar year shall be deemed the Carried Forward Vacation.
(d) Benefits.
Executive shall be entitled to participate in the employee benefits plans
offered to all employees of Employer. Employer shall not be required to
establish or continue any benefit plans or take any action to cause Executive
to
be eligible for any such benefits on a basis more favorable than that applicable
to all its employees generally.
(e) Stock
Options. Executive
will be eligible to participate in any stock option or other equity compensation
plan adopted by Employer during the term of this Agreement and applicable to
other employees at Executive’s level (the “Equity Plan”). The number of options,
vesting schedule, exercise price, and all other terms and conditions of the
stock options shall be set forth in an option agreement pursuant to the
applicable plan and shall be commensurate with Executive’s position, as
determined by the Committee of Employer’s Board of Directors charged with
administering the Equity Plan, in its sole discretion. Employer may, consistent
with its obligations under such a plan or plans, amend or discontinue any or
all
stock option plans at any time. Contingent upon Executive executing this
Agreement and as additional consideration for Executive executing this Agreement
and being bound by the obligations set forth herein, Employer will grant
Executive on the date hereof, a two year option to purchase 250,000 shares
of
Employer’s common stock, which shall be subject to the terms and conditions set
forth in this Section 3(e) and the Stock Option Agreement(s) attached hereto
as
Exhibit A.
Executive understands and acknowledges that such option
cannot be exercised unless and until the issuance of the option has been
approved by the Company’s stockholders.
(f) Expense
Reimbursement.
Employer shall reimburse Executive for all reasonable and documented travel,
entertainment and other business expenses actually and properly incurred by
him
in relation to Employer’s business, as they are incurred. No such expense
reimbursement shall be allowed with regard to such expenses that exceed $5,000
unless such expenses have been pre-approved by Employer in writing.
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(g) Office
and Duties.
Executive shall report to the President and Chief Executive Officer or such
other supervisor as designated by the President and Chief Executive Officer
of
Employer. Executive shall perform such tasks commensurate with this position
as
may from time to time be assigned by Employer. Executive shall devote all
business time, labor, skill, undivided attention and best ability to the
performance of Executive’s duties hereunder in a manner which will faithfully
and diligently further the business and interests of Employer. During the term
of employment, Executive shall not directly or indirectly pursue any other
business activity without the prior written consent of Executive’s supervisor,
with the exception of passive personal investments not in breach of any other
term or provision hereof. Executive agrees to travel to whatever extent is
reasonably necessary in the conduct of Employer’s business, at Employer’s
expense and pursuant to Employer’s standard policies and
procedures.
4. Termination
of Employment.
Notwithstanding any other provision of this Agreement, Executive’s employment
may be terminated as follows:
(a) Expiration.
This
Agreement may be terminated upon expiration of the term hereof. Following
termination pursuant to this Section 4(a), Employer’s only obligation to
Executive shall be to pay to Executive all accrued base salary, all accrued
vacation time and any reasonable and necessary business expenses incurred by
Executive in connection with his duties, all to the date of termination and
payable in a lump sum, less applicable deductions and withholdings, as soon
as
administratively practicable following Executive’s termination.
(b) Termination
for Cause.
This
Agreement may be terminated by Employer for Cause. For purposes of this
Agreement, “Cause” justifying the termination of this Agreement by Employer is
defined as: (1) failure or refusal to perform the services required hereunder;
(2) a material breach by Executive of any of the terms of this Agreement; or
(3)
Executive’s conviction of a crime that either results in imprisonment or
involves embezzlement, dishonesty, or activities injurious to Employer or its
reputation. Whether Cause exists under this Agreement shall be determined by
the
Employer in its reasonable discretion. Following termination pursuant to this
Section 4(b), Employer’s only obligation to Executive shall be to pay to
Executive all accrued base salary, all accrued vacation time and any reasonable
and necessary business expenses incurred by Executive in connection with his
duties, all to the date of termination and payable in a lump sum, less
applicable deductions and withholdings, as soon as administratively practicable
following Executive’s termination.
(c) Disability.
This
Agreement may be terminated by Employer upon at least thirty (30) days’ written
notice if Executive is prevented by illness, accident or other disability
(mental or physical) from performing the essential functions of the position
for
one or more periods cumulatively totaling three (3) months during any
consecutive twelve (12) month period. In the event this Agreement is terminated
pursuant to this Section 4(c), Employer shall pay to Executive all accrued
base salary, all accrued vacation time and any reasonable and necessary business
expenses incurred by Executive in connection with his duties, all to the date
of
termination and payable in a lump sum, less applicable deductions and
withholdings. In addition, Employer shall pay to Executive severance payments
in
an amount equal to one (1) month of Executive’s base salary, payable in a lump
sum, less applicable deductions and withholdings, as soon as administratively
practicable following Executive’s termination
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(“Disability
Severance Payments”). Severance payments made by Employer to Executive pursuant
to this Section 4(c) are conditioned on the Executive signing a
Confidential Severance Agreement and Release substantially in the form attached
hereto as Exhibit B.
(d) Death.
This
Agreement shall be automatically terminated in the event of Executive’s death
during the term of employment. In the event this Agreement terminates upon
Executive’s death, Employer shall pay Executive’s estate or beneficiary, as
applicable, all accrued base salary, all accrued vacation time and any
reasonable and necessary business expenses incurred by Executive in connection
with his duties, all to the date of termination and all payable in a lump sum,
less applicable deductions and withholdings, as soon as administratively
practicable following Executive’s termination.
(e) Without
Cause. This
Agreement may be terminated by Employer without Cause by giving notice at least
thirty (30) days prior to the effective termination date; provided that
Employer
pays Executive each of the following:
(i) Employer
shall pay Executive severance payments (the “Cash Severance Payments”) in an
amount equal to Executive’s base salary for three (3) months after the first
anniversary of Executive’s original employment with Employer regardless of the
date of this agreement, plus an additional one (1) month of base salary for
each
additional full year of employment (the “Cash Severance Payments”).
Notwithstanding the foregoing, Cash Severance Payments shall not exceed 12
months of base salary. Such Cash Severance Payments shall be paid in equal
monthly installments to Executive beginning
in the month following Executive’s termination.
In
addition, Employer shall pay to Executive all accrued base salary, all accrued
vacation time and any reasonable and necessary business expenses incurred by
Executive in connection with his duties, all to the date of termination and
payable in a lump sum,
less
applicable deductions and withholdings,
as soon
as administratively practicable following Executive’s termination.
(ii) If
and
when the Company adopts a health insurance plan for its employees and Executive
is covered under such plan, provided that Executive timely elects continuation
coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985,
as
amended (“COBRA”), Employer shall pay, on Executive’s behalf, the portion of
premiums of Executive’s group health insurance, including coverage for
Executive’s eligible dependents, that Employer paid immediately prior to
Executive’s separation of employment with Employer (“COBRA Payments”) for a
period of twelve (12) months (“COBRA Period”). Employer will pay such COBRA
Payments for Executive’s eligible dependents only for coverage for which those
dependents were enrolled immediately prior to the date of Executive’s separation
of employment. Executive will continue to be required to pay that portion of
the
premium of Executive’s health coverage, including coverage for Executive’s
eligible dependents, that Executive was required to pay as an active employee
immediately prior to the date of Executive’s separation of employment. For the
balance of the period that Executive is entitled to coverage under COBRA after
the COBRA Period, if any, Executive shall be entitled to maintain coverage
for
Executive and Executive’s eligible dependents at Executive’s sole
expense.
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(iii) The
Cash
Severance Payments and the COBRA Payments (if any) shall be paid so long as
Executive is not in breach of any term of this Agreement, including, without
limitation, Sections 5, 6, and 7 hereof. The Cash Severance Payments and COBRA
Payments (if any) made by Employer to, or on behalf of, Executive pursuant
to
this Section 4(e) are conditioned on the Executive signing a Severance
Agreement and Release substantially in the form attached hereto as Exhibit B.
(f) Material
Breach. This
Agreement may be terminated by Executive for a material breach by Employer
of
any of the terms of this Agreement, upon thirty (30) days’ written notice
specifying the breach, and failure of Employer to either (i) cure or diligently
commence to cure the breach within the 30-day notice period, or (ii) dispute
in
good faith the existence of the material breach. Following termination pursuant
to this Section 4(f), Employer shall pay to Executive Cash Severance
Payments (as defined and calculated in section 4(e)(i)). Such severance payments
shall be paid in equal monthly installments to Executive beginning
in the month following Executive’s termination.
Such
severance payments shall be paid so long as Executive is not in breach of any
term of this Agreement, including, without limitation, Sections 5, 6, and 7
hereof. In addition, Employer shall pay to Executive all accrued base salary,
all accrued vacation time and any reasonable and necessary business expenses
incurred by Executive in connection with his duties, all to the date of
termination and payable in a lump sum,
less
applicable deductions and withholdings,
as soon
as administratively practicable following Executive’s termination. Severance
payments made by Employer to Executive pursuant to this Section 4(f) are
conditioned on the Executive signing a Confidential Severance Agreement and
Release substantially in the form attached hereto as Exhibit B.
(g) Resignation.
This
Agreement may be terminated by Executive for any reason or no reason at all
by
giving notice to Employer of Executive’s resignation at least sixty (60) days
prior to the effective resignation date. Following termination pursuant to
this
Section 4(g), Employer’s only obligation to Executive shall be to pay to
Executive all accrued base salary, all accrued vacation time and any reasonable
and necessary business expenses incurred by Executive in connection with his
duties, all to the date of termination and payable in a lump sum, less
applicable deductions and withholdings.
(h) Termination
Upon a Change of Control.
In the
event of a Termination Upon a Change of Control as defined in the Agreement
Regarding Change In Control (“Change In Control Agreement”) attached hereto as
Exhibit C,
Employer’s obligation to Executive shall be as set forth in the Change In
Control Agreement.
5. Proprietary
Information.
(a) Executive
represents and warrants to Employer that (i) Executive is not subject to any
limitation or agreement restricting employment by Employer or performance of
Executive’s duties hereunder, and (ii) neither Executive nor any third party has
any right or claim to Executive’s work produced on behalf of Employer or using
the property, personnel, or facilities of Employer. Executive shall not
misappropriate proprietary rights of Employer or any third party.
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(b) Executive
further agrees not to make, use, disclose to any third party, or permit to
be
made, used, or disclosed, any records, plans, papers, articles, notes,
memoranda, reports, lists, records, drawings, sketches, specifications, software
programs, data, or other materials of any nature relating to any matter within
the scope of the business of Employer or concerning any of its dealings or
affairs (“Materials”), whether or not developed, in whole or in part, by
Executive and whether or not embodying Confidential Information (defined below),
otherwise than for the benefit of Employer. Executive shall not, after the
termination of employment, use, disclose, or permit to be used or disclosed,
any
such Materials, it being agreed that all such Materials shall be and remain
the
sole and exclusive property of Employer. Immediately upon the termination of
employment, Executive shall deliver all such Materials, and all copies thereof,
to Employer, at its designated office.
6. Non-Competition;
Non-Solicitation; Anti-Raiding; Non-Disparagement.
Without
the prior written approval of the President or Chief Executive Officer of
Employer, Executive shall not, directly or indirectly, during his employment
and
until the end of one (1) year after termination of employment (however such
termination occurs, including, without limitation, termination pursuant to
Section 4(a), 4(b), 4(c), 4(e), 4(f), or 4(g)):
(a) Engage
in
a “Competing Business’’ in the “Territory”, as those terms are defined below,
whether as a sole proprietor, partner, corporate officer, employee, director,
shareholder, consultant, agent, independent contractor, trustee, or in any
other
manner by which Executive holds any beneficial interest in a Competing Business,
derives any income from any interest in a Competing Business, or provides any
service or assistance to a Competing Business. “Competing Business” shall mean
any business that mines or produces minerals which is competitive with the
business of Employer or any of its Affiliates (defined below), as conducted
or
under development at any time during the term of employment. “Affiliates” shall
mean any entity controlled by or under common control with Employer or any
joint
venture, partnership or other similar entity to which Employer is a party.
“Territory” shall mean anywhere within a 50 mile radius of Caborca in the state
of Sonora, Mexico. The provisions of this Section 6 will not restrict
Executive from owning less than five percent of the outstanding stock of a
publicly-traded corporation engaged in a Competing Business;
(b) Acquire,
lease or otherwise obtain or control any beneficial, direct or indirect interest
in mineral rights, or other rights or lands necessary to develop, any mineral
property in which Employer or any of its Affiliates at the time of termination
as a beneficial interest or is actively seeking to acquire, or that is within
a
distance of five (5) kilometers from any point on the outer perimeter of any
such property in which Employer or any of its affiliates has a beneficial
interest or that it is seeking to acquire;
(c) Conduct
any exploration or production activities or otherwise work on or in respect
of
any mineral property within a distance of five (5) kilometers from any point
on
the outer perimeter of any mineral property in which Employer or any of its
affiliates then has a beneficial interest or is actively seeking to
acquire;
(d) (i) Contact
or solicit, or direct or assist others to contact or solicit, for the purpose
of
promoting any person’s or entity’s attempt to compete with Employer or any of
its Affiliates,
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in
any
business carried on by Employer or any of its Affiliates during the period
in
which Executive was an employee of Employer, any suppliers, independent
contractors, vendors, or other business associates of Employer or any of its
Affiliates that were existing or identified prospective suppliers, independent
contractors, vendors, or business associates during such period, or
(ii) otherwise interfere in any way in the relationships between Employer
or any of its Affiliates and their suppliers, independent contractors, vendors,
and business associates;
(e) (i) Solicit,
offer employment to, otherwise attempt to hire, or assist in the hiring of
any
employee or officer of Employer or any of its Affiliates; (ii) encourage,
induce, assist or assist others in inducing any such person to terminate his
or
her employment with Employer or any of its Affiliates; or (iii) in any way
interfere with the relationship between Employer or any of its Affiliates and
their employees; or
(f) Make
any
public statement or perform or do any other act prejudicial or injurious to
the
reputation or goodwill of Employer or any of its Affiliates or otherwise
interfere with the business of Employer or any of its Affiliates.
7. Confidentiality.
(a) The
term
“Confidential Information” shall include, but not be limited to, the whole or
any portion or phase of (i) any confidential, or proprietary or trade secret,
technical, business, marketing or financial information, whether pertaining
to
(1) Employer or its Affiliates, (2) its or their suppliers, or (3) any third
party which Employer or its Affiliates is under an obligation to keep
confidential including, but not limited to, methods, know-how, techniques,
systems, processes, software programs, works of authorship, supplier lists,
projects, plans, and proposals, and (ii) any software programs and programming
prepared for Employer’s benefit whether or not developed, in whole or in part by
Executive. For purposes of this Agreement, “Confidential Information” shall
include, but shall not be limited to, strategies, analysis, concepts, ideas,
or
plans; operating techniques; demographic and trade area information; prospective
site locations know-how; improvements; discoveries, developments; designs,
techniques, procedures; methods; machinery, devices; drawings; specifications;
forecasts; new products; research data, reports, or records; marketing or
business development plans, strategies, analysis, concepts or ideas; contracts;
general financial information about or proprietary to Employer, including,
but
not limited to, unpublished financial statements, budgets, projections,
licenses, and costs; pricing; personnel information; and any and all other
trade
secrets, trade dress, or proprietary information, and all concepts or ideas
in
or reasonably related to Employer’s business. All such Confidential Information
is extremely valuable and is intended to be kept secret to Employer; is the
sole
and exclusive property of Employer or its Affiliates; and, is subject to the
restrictive covenants set forth herein. The term Confidential Information shall
not include any information generally available to the public or publicly
disclosed by Employer (other than by the act or omission of Executive),
information disclosed to Executive by a third party under no duty of
confidentiality to Employer or its Affiliates, or information required by law
or
court order to be disclosed by Executive.
(b) Executive
shall not, without Employer’s prior written approval, use, disclose, or reveal
to any person or entity any of Employer’s Confidential Information, except as
required in
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the
ordinary course of performing duties hereunder. Executive shall not use or
attempt to use any Confidential Information in any manner which has the
possibility of injuring or causing loss, whether directly or indirectly, to
Employer or any of its Affiliates.
(c) In
the
event that Executive’s employment with Employer is terminated for any reason
whatsoever, he shall return to Employer, promptly upon Employer’s written
request therefore, any documents, photographs, tapes, discs, memory devices,
and
other property containing Confidential Information which were received by him
during his employment, without retaining copies thereof.
8. Acknowledgments.
Executive acknowledges that the covenants contained in Sections 5, 6, and 7,
including those related to duration, geographic scope, and the scope of
prohibited conduct, are reasonable and necessary to protect the legitimate
interests of Employer. He further acknowledges that the covenants contained
in
Sections 5, 6, and 7 are designed, intended, and necessary to protect, and
are
reasonably related to the protection of, Employer’s trade secrets, to which he
will be exposed and with which he will be entrusted. Specifically, without
limitation, Executive is entrusted with trade secrets regarding: the strategic
planning initiatives; business development plans; budgets; financial
information; management training; future business plans; and operational
strategies and procedures.
9. Forfeiture
of Severance Payments.
If
Executive breaches Sections 5, 6, or 7 of this Agreement
during
the term that severance payments are made pursuant to Sections 4(c), 4(e),
or
4(f) of this Agreement, Executive shall pay back to Employer all severance
payments received to date.
Nothing
contained in this Section 9 shall be construed as prohibiting Employer from
pursuing any other remedies available to it in the event of the breach of
Sections 5, 6, or 7, including the equitable remedies set forth in Section
11.
10. Non-exclusivity
of Rights.
Amounts
that are vested benefits or that Executive is otherwise entitled to receive
under any plan, policy or program of, or contract or agreement with Employer
at
or subsequent to termination of employment (however
such termination occurs, including, without limitation, termination pursuant
to
Section 4(a), 4(b), 4(c), 4(e), 4(f), 4(g), or 4(h)) shall be payable in
accordance with such plan, policy or program of, or any contract or agreement
except as explicitly modified by this Agreement.
11. Equitable
Remedies.
The
services to be rendered by Executive and the Confidential Information entrusted
to Executive as a result of his employment by Employer are of a unique and
special character, and any breach of Sections 5, 6, or 7 will cause Employer
immediate and irreparable injury and damage, for which monetary relief would
be
inadequate or difficult to quantify. Employer will be entitled to, in addition
to all other remedies available to it, injunctive relief and specific
performance to prevent a breach and to secure the enforcement of Sections 5,
6,
or 7. Executive acknowledges that injunctive relief may be granted immediately
upon the commencement of any such action without notice to Executive and in
addition may recover monetary damages. In the event a court requires posting
of
a bond, the parties agree to a maximum $5,000 bond. Executive further
acknowledges that his duties under this Agreement shall survive termination
of
his employment, whether the termination is voluntary or involuntary, rightful
or
wrongful, and shall continue until Employer consents in writing to the release
of
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Executive’s
obligations under this Agreement. The parties further agree that the provisions
of Sections 5, 6, and 7 are separate from and independent of the remainder
of
this Agreement and that these provisions are specifically enforceable by
Employer notwithstanding any claim made by Executive against Employer.
12. Attorney’s
Fees.
In the
event Executive breaches, or threatens to breach, any provision of this
Agreement, Executive acknowledges that he shall be solely and fully responsible
for all fees and costs, including without limitation, all attorney’s fees and
costs, incurred by Employer in enforcing this Agreement if Employer is the
prevailing party in any litigation.
13. Entire
Agreement; Amendments.
This
Agreement (including all exhibits) constitute the entire understanding between
the parties with respect to the subject matter herein and therein, and they
supersede any prior or contemporaneous understandings or agreements. This
Agreement may be amended, supplemented, or terminated only by a written
instrument duly executed by each of the parties.
14. Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
affect its interpretation. References to Sections are to Sections
hereof.
15. Gender;
Number.
Words
of gender may be read as masculine, feminine, or neuter, as required by context.
Words of number may be read as singular or plural, as required by
context.
16. Severability.
The
covenants in this Agreement shall be construed as independent of one another,
and as obligations distinct from one another and any other contract between
Executive and Employer. If any provision of this Agreement is held illegal,
invalid, or unenforceable, such illegality, invalidity, or unenforceability
shall not affect any other provisions hereof. It is the intention of the parties
that in the event any provision is held illegal, invalid, or unenforceable,
that
such provision be limited so as to effect the intent of the parties to the
fullest extent permitted by applicable law. Any claim by Executive against
Employer shall not constitute a defense to enforcement by Employer of this
Agreement.
17. Survival.
The
provisions of Sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 16, 17, 18, 19, 20,
21
and 22 shall survive the termination of this Agreement.
18. Notices.
All
notices, demands, waivers, consents, approvals, or other communications required
hereunder shall be in writing and shall be deemed to have been given if
delivered personally, if sent by facsimile with confirmation of receipt, if
sent
by certified or registered mail, postage prepaid, return receipt requested,
or
if sent by same day or overnight courier service to the following
addresses:
If
to
Employer, to:
Capital
Gold Corporation
00
Xxxxxx
Xxxxxx, 00xx
Xxxxx
-0-
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxxx X. Xxxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If
to
Executive, to:
Xxxxxxx
X. Xxxxxxxxx
0000
Xxxxxxxxxx Xxx
Xxxxxxx,
XX 00000
Telephone:
(000) 000-0000
Facsimile:
Notice
of
any change in any such address shall also be given in the manner set forth
above. Whenever the giving of notice is required, the giving of such notice
may
be waived by the party entitled to receive such notice.
19. Waiver.
The
failure of any party to insist upon strict performance of any of the terms
or
conditions of this Agreement shall not constitute a waiver of any of such
party’s rights hereunder.
20. Assignment.
Other
than as provided below, neither party may assign any rights or delegate any
of
obligations hereunder without the prior written consent of the other party,
and
such purported assignment or delegation shall be void; provided that Employer
may assign the Agreement to any entity that purchases the stock or assets of,
or
merges with, Employer or any Affiliate. This Agreement binds, inures to the
benefit of, and is enforceable by the successors and permitted assigns of the
parties and does not confer any rights on any other persons or
entities.
21. Governing
Law.
This
Agreement shall be construed and enforced in accordance with New York law except
for any New York conflict-of-law principle that might require the application
of
the laws of another jurisdiction.
22. Submission
to Jurisdiction: Service: Waivers.
With
respect to any claim arising out of this Agreement, each party hereto (a)
irrevocably submits, for itself and its property, to the jurisdiction of the
state court located in the City and County of New York, New York, the federal
court located in New York, New York, and appellate courts therefrom, (b) agrees
that the venue for any suit, action or proceeding arising out of or relating
to
this Agreement shall be exclusive to and limited to such courts, and (c)
irrevocably waives any objection it may have at any time to the laying of venue
of any suit, action or proceeding arising out of or relating to this Agreement
brought in any such court, irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum and further irrevocably waives the right to object, with
respect to such claim, suit, action or proceeding brought in any such court
that
such court does not have jurisdiction over it. Each party irrevocably consents
to the service of process in any suit, action or proceeding in any of the
aforesaid courts by the
-10-
mailing
of copies of process to the other party or parties hereto, by certified or
registered mail at the address specified in Section 18.
[SIGNATURE
PAGE FOLLOWS]
-11-
IN
WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
EMPLOYER
:
CAPITAL
GOLD CORPORATION
By:
s/
Xxxxxxx X. Xxxxxxxx
Xxxxxxx
X. Xxxxxxxx, President
EXECUTIVE:
s/Xxxxxxx
X. Xxxxxxxxx
Xxxxxxx
X. Xxxxxxxxx
-12-
EXHIBIT
A
STOCK
OPTION AGREEMENT
THE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY,
NOR
HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF
THIS
OFFERING OR THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO
THE
CONTRARY IS A CRIMINAL OFFENSE.
CAPITAL
GOLD CORPORATION
00
Xxxxxx Xxxxxx
00xx
Xxxxx
Xxx
Xxxx, XX 00000-0000
OPTION
No.
Shares: 250,000
Option
No. 2006-
Expiration
Date: July 31, 2008
This
Is
To Certify That, FOR VALUE RECEIVED, XXXXXXX X. XXXXXXXXX, residing at 0000
Xxxxxxxxxx Xxx, Xxxxxxx, XX 00000 ("Holder") is entitled to purchase, subject
to
the provisions of this Option from CAPITAL GOLD CORPORATION, a Delaware
corporation ("Company") at any time from July 31, 2006 (subject to prior
stockholder and TSX approval as required in section (a) below) and not later
than 5:00 P.M., New York Time on July 31, 2008 at a purchase price of $0.32
per
share (market price on July 31, 2006), Two Hundred Fifty Thousand (250,000)
restricted shares of common stock $.0001 par value, of the Company ("Common
Stock"). The number of shares of Common Stock to be received upon the exercise
of this Option and the price to be paid for a share of Common Stock may be
adjusted from time to time as hereinafter set forth.
(a)
EXERCISE OF OPTION. Except as described below, this Option may be exercised
in
whole or in part at any time from July 31, 2006 until the Expiration date set
forth above by presentation and surrender thereof to the Company or at the
office of its stock transfer agent, if any, with the Exercise Form annexed
hereto duly executed and accompanied by payment of the Exercise Price for the
number of shares specified in such form, together with all federal and state
taxes applicable upon such exercise. If this Option should be exercised in
part
only, the Company shall, upon surrender of this Option for cancellation, execute
and deliver a new Option evidencing the right of the holder to purchase the
balance of the shares purchasable hereunder. Upon receipt by the Company of
this
Option and a properly executed Exercise Form at the office or agency of the
Company, in proper form for exercise, the Holder shall be deemed to be the
holder of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that
A-1
the
stock
transfer books of the Company shall then be closed or that certificates
representing such shares of Common Stock shall not then be actually delivered
to
the Holder.
Notwithstanding
the foregoing, this Option cannot be exercised unless and until the issuance
of
the Option has been approved by the TSX and the Company’s stockholders.
(b) RESTRICTION
ON RESALE. The
Holder represents that the shares to be acquired by Holder upon the exercise
of
this Option will be purchased for investment and not with a view to, or for
resale in connection with, any distribution of stock within the meaning of
the
Securities Act of 1933, as amended (the "Act"). By such representation, the
Holder means that he will acquire the shares for his own account for investment
and that no one else will have any beneficial ownership in such shares nor
will
such shares be subject to any pledge or lien. Further, the Holder understands
that the shares will not be registered under the Act by reason of a specific
exemption provided therein. Because the shares are unregistered under the Act,
they must be held indefinitely unless subsequently registered under the Act
or
an exemption from such registration is available. The Holder further understands
that in the event that there is a continued market for the Company's Common
Stock, any routine sales of the shares made in reliance upon Rule 144 can be
made only in limited amounts in accordance with the terms and conditions of
that
rule, and in the event that rule is not applicable or is unavailable for any
reason, Registration under the Act or compliance with exemption will be
required. The Holder understands that the Company is under no obligation to
register under the Act the Common Stock that Holder may acquire pursuant to
this
Option, nor to effect compliance with any exemption from
registration.
The
Holder agrees that each certificate representing any or all of the shares shall
bear on its face a legend in substantially the following form:
"These
securities have not been registered under the Securities Act of 1933, as
amended. They may not be sold or transferred in the absence of an effective
Registration Statement under that Act without an opinion of counsel satisfactory
to the Company that such Registration is not required."
“By
virtue of the legend above, the securities represented by this certificate
may
not be traded through the facilities of Canadian stock exchanges and this
certificate will not constitute "good delivery" in settlement of transactions
on
Canadian stock exchanges”
The
Holder further consents that the Company will place a stop order on the
certificates evidencing the shares, restricting the transfer of the shares,
except in compliance with the Act.
(c)
RESERVATION OF SHARES. The Company hereby agrees that at all times there shall
be reserved for issuance and/or delivery upon exercise of this Option such
number of shares of its Common Stock as shall be required for issuance or
delivery upon exercise of this Option.
(d) FRACTIONAL
SHARES. No fractional shares or scrip representing fractional shares shall
be
issued upon the exercise of this Option. With respect to any fraction of
a
A-2
share
called for upon any exercise hereof, the Company shall round up or down to
the
nearest whole share.
(e)
RIGHTS OF THE HOLDER. The Holder shall not by virtue hereof, be entitled to
any
rights of a shareholder in the Company, either at law or equity and the rights
of the Holder are limited to those expressed in this Option and are not
enforceable against the Company, except to the extent set forth
herein.
(f)
ADJUSTMENTS. Subject and pursuant to the provisions of this Section (f), the
Option Price and number of Common Shares subject to this Option shall be subject
to adjustment from time to time as set forth hereinafter.
(A) If
the
Company shall, at any time, subdivide its outstanding Common Shares by
recapitalization, reclassification, split up thereof, or other such issuance
without additional consideration, the appropriate Option Price immediately
prior
to such subdivision shall be proportionately decreased, and if the Company
shall
at any time combine the outstanding Common Shares by recapitalization,
reclassification or combination thereof, the Option Price immediately prior
to
such combination shall be proportionately increased. Any such adjustment to
the
Option Price or the corresponding adjustment to the Option Price shall become
effective at the close of business on the record date for such subdivision
or
combination.
(B) In
the
event that prior to the expiration date of this Option the Company adopts a
resolution to merge, consolidate, or sell percentages in all of its assets,
each
Option holder upon the exercise of his Option will be entitled to receive the
same treatment as a holder of any other share of Common Stock. In the event
the
Company adopts a resolution for the liquidation, dissolution, or winding up
of
the Company's business, the Company will give written notice of such adoption
of
a resolution to the Holder of this Option. Thereupon all liquidation and
dissolution rights under this Option will terminate at the end of thirty (30)
days from the date of the notice to the extent not exercised within those thirty
(30) days.
(C) If
any
capital reorganization or reclassification of the capital stock of the Company
or consolidation or merger of the Company with another corporation, shall be
effected in such a way that holders of Common Stock shall be entitled to receive
stock, securities, cash or assets with respect to or in exchange for Common
Stock, then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, the Holder shall have the right thereafter and
until the expiration date to exercise such Option for the kind and amount of
stock, securities, cash or assets receivable upon such reorganization,
reclassification, consolidation, merger or sale by a holder of the number of
shares of Common Stock for the purchase of which such Option might have been
exercised immediately prior to such reorganization, reclassification,
consolidation, merger or sale, subject to adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
(f).
(D) In
case
at any time the Company shall declare a dividend or make any other distribution
upon any stock of the Company payable in Common Stock, then such Common Stock
issuable in payment of such dividend or distribution shall be deemed to have
been issued or sold without consideration.
A-3
(E)
Upon
any adjustment of the appropriate respective Option Price as hereinabove
provided, the number of Common Shares issuable upon exercise of each class
of
Option shall be changed to the number of shares determined by dividing (i)
the
aggregate Option Price payable for the purchase of all shares issuable upon
exercise of that class of Option immediately prior to such adjustment by (ii)
the appropriate Option Price per share in effect immediately after such
adjustment.
(F) No
adjustment in the Option Price shall be required under Section (f) hereof unless
such adjustment would require an increase or decrease in such price of at least
25% provided, however, that any adjustments which by reason of the foregoing
are
not required at the time to be made shall be carried forward and taken into
account and included in determining the amount of any subsequent adjustment,
and
provided further, however, that in case the Company shall at any time subdivide
or combine the outstanding Common Shares as a dividend, said amount of 25%
per
share shall forthwith be proportionately increased in the case of a combination
or decreased in the case of a subdivision or stock dividend so as to
appropriately reflect the same.
(G) On
the
effective date of any new Option Price the number of shares as to which any
Option may be exercised shall be increased or decreased so that the total sum
payable to the Company on the exercise of such Option shall remain
constant.
(H) The
form
of Option need not be changed because of any change pursuant to this Article,
and Options issued after such change may state the Option Price and the same
number of shares as is stated in the Options initially issued pursuant to this
Option. However, the Company may at any time in its sole discretion (which
shall
be conclusive) make any change in the form of Option that the Company may deem
appropriate and that does not affect the substance thereof, and any Option
thereafter issued or countersigned, whether in exchange or substitution for
an
outstanding Option or otherwise, may be in the form as so changed.
(g)
ISSUANCE OF STOCK CERTIFICATES UPON EXERCISE OF OPTIONS. Upon the surrender
of
the Option and payment of the Option price as aforesaid, the Company shall
issue
and cause to be delivered with all reasonable dispatch to or upon the written
order of the Holder, a certificate or certificates (bearing the restrictive
legend set forth in Section (b) herein) for the number of full Common Shares
so
purchased upon the exercise of such Option. Such certificate or certificates
shall be deemed to have been issued and the Holder shall be deemed to have
become a holder of record of such shares as of the date of the surrender of
the
Option and payment of the Option Price as aforesaid provided, that if, at the
date of surrender of the Option and payment of such Option Price, the transfer
books for the Common Shares or other class of stock purchasable upon the
exercise of the Option shall be closed, the certificates for the shares in
respect of which the Option is then exercised shall be issuable as of the date
on which such books shall be opened, and until such date the Company shall
be
under no duty to deliver any certificates for such shares; provided further,
however, that the transfer books aforesaid, unless otherwise required by law
or
by applicable rule of any national securities exchange, shall not be closed
at
any one time for a period longer than 20 days. The rights of purchase
represented by the Option shall be exercisable at the election of the Holder,
either as an entirety or, from time to time, for part only
A-4
of
the
shares specified therein; and in the event that any Option is exercised in
respect of less than all of the shares specified therein at any time prior
to
the date of expiration of the Option, a new Option or Options will be issued
to
such Holder for the remaining number of shares specified in the Option so
surrendered.
(h)
NOTICES TO OPTIONHOLDER.
(A) Upon
any
adjustment of the Option Price and the number of shares issuable on exercise
of
the Option, then and in each such case the Company shall give written notice
thereof to the Holder, which notice shall state the Option Price resulting
from
such adjustment and the increase or decrease, if any, in the number of shares
purchasable at such price upon the exercise of the Option, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
(B)
In
case at any time
(a)
the
Company shall pay any dividends payable in stock upon its Common Stock or make
any distribution (other than regular cash dividends) to the holders of its
Common Stock,
(b)
the
Company shall offer for subscription pro rata to the holders of its Common
Stock
any additional shares of stock of any class or other rights,
(c)
there
shall be any capital reorganization or reclassification of the capital stock
of
the Company or consolidation or merger of the Company with, or sale of all
or
substantially all of its assets to, another corporation, or
(d)
there
shall be a voluntary or involuntary dissolution, liquidation or winding up
of
the Company, then in any one or more of such cases, the Company shall give
written notice in the manner set forth in Section (h) on the date on which
(i)
the books of the Company shall close or a record date shall be taken for such
dividend, distribution or subscription rights or (ii) such reorganization,
liquidation or winding up shall take place as the case may be. Such notice
shall
also specify the date as of which the holders of Common Stock of record shall
participate in such dividend, distribution, or subscription rights or shall
be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, or winding up, as the case may be. Such notice
shall be given and published at least 30 days prior to the action in question
and not less than 30 days prior to the record date or the date on which the
Company's transfer books are closed in respect thereof. Failure to give such
notice, or any defect therein, shall not affect the legality or validity of
any
of the matters set forth in this Section (h) inclusive.
(i)
APPLICABLE LAW. This Option shall be governed by, and construed in accordance
with, the laws of the State of New York.
A-5
CAPITAL
GOLD CORPORATION
ATTEST:
By:
_________________________________
Xxxxxxx
X. Xxxxxxxx, President
_________________________
Xxxxxx
Xxxxxxxx, Secretary
A-6
EXERCISE
FORM
Dated
____________, 20__
The
holder hereby irrevocably elects to exercise the within Option to the extent
of
purchasing __________ shares
of
Common Stock and hereby makes payment of $___________ in payment of the actual
Exercise Price thereof.
Name
____________________________________ Title
___________________________________
Signature:
_________________________________
A-7
EXHIBIT B
FORM
OF
SEVERANCE
AGREEMENT AND RELEASE
This
SEVERANCE AGREEMENT AND RELEASE (this “Agreement”) is made between (i)
______________ (“Employee”)
and (ii) CAPITAL GOLD CORPORATION, a Delaware corporation (the “Company”).
Employee and the Company are referred to collectively as the “Parties” and
individually as a “Party.”
RECITALS
WHEREAS,
Employee’s employment with the Company ended effective __________;
WHEREAS,
the Parties wish to resolve fully and finally any potential disputes regarding
Employee’s employment with the Company and any other potential disputes between
the Parties; 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 undertakings 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.
Employee’s employment with the Company ended on _________________________. This
Agreement shall become effective (the “Effective Date”) on the eighth day after
Employee’s execution of this Agreement, provided that employee has not revoked
Employee’s acceptance pursuant to Section 6(g) below.
2. Severance
Payments.
(a) After
the
expiration of the Effective Date, and on the express condition that Employee
has
not revoked this Agreement, the Company will pay Employee severance payments
in
an amount and in the manner set forth in Section 4 of Employee’s Employment
Agreement dated July 31, 2006 (the “Employment Agreement”), less applicable
withholdings and deductions (“Severance Payments”). The Severance Payments will
be mailed to Employee or direct deposited to an account designated by
Employee.
(b) Reporting
of and withholding on any Severance Payment under this Section 2 for tax
purposes shall be at the discretion of the Company in conformance with
applicable tax laws. If a claim is made against the Company for any additional
tax or withholding in connection with or arising out of the Severance Payments
pursuant to Section 2(a), Employee shall pay any such claim within thirty (30)
days of being notified by the Company and agrees to indemnify the
B-1
Company
and hold it harmless against such claims, including but not limited to any
taxes, attorneys’ fees, penalties or interest, which are or become due from the
Company.
3. General
Release.
(a) Employee,
for himself and for his affiliates, successors, heirs, subrogees, assigns,
principals, agents, partners, employees, associates, attorneys, and
representatives, voluntarily, knowingly and intentionally releases and
discharges the Company and its predecessors, successors, parents, subsidiaries,
affiliates, and assigns and each of their respective officers, directors,
principals, shareholders, agents, attorneys, board members, and employees from
any and all claims, actions, liabilities, demands, rights, damages, costs,
expenses, and attorneys’ fees (including but not limited to any claim 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”).
(b) The
Released Claims include but are not be limited to those which arise out of,
relate to, or are based upon: (i) Employee’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 (except as provided herein) and claims
under any severance plan; (iv) any stock or stock option grant, agreement,
or plan; (v) 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 Employee under the Age Discrimination in Employment Act,
the
Older Workers Benefit Protection Act, the Americans with Disabilities Act,
the
Fair Labor Standards Act, the Equal Pay Act, Title VII of the Civil Rights
Act
of 1964 (as amended), the Employee Retirement Income Security of 1974, the
Rehabilitation Act of 1973, the Worker Adjustment and Retraining Notification
Act, 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 Employee, including
any claim that this Agreement was fraudulently induced.
4. Unknown
Facts.
This
Agreement includes claims of every nature and kind, known or unknown, suspected
or unsuspected. Employee hereby acknowledges that he may hereafter discover
facts different from, or in addition to, those which he now knows or believes
to
be true with respect to this Agreement, and he 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.
B-2
6. Warranties.
Employee warrants and represents as follows:
a. He
has
read this Agreement, and he agrees to the conditions and obligations set forth
in it.
b. He
voluntarily executes this Agreement after having been advised 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. He
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. Prior
to
Employee’s execution of this Agreement, he has not used or disclosed any
information in a manner that would be a violation of Sections 7 or 8 set
forth below if such use or disclosure were to be made after the execution of
this Agreement.
e. He
has
full and complete legal capacity to enter into this Agreement.
f. He
has
had at least twenty-one days in which to consider the terms of this Agreement.
In the event that Employee executes this Agreement in less time, it is with
the
full understanding that he had the full twenty-one days if he so desired and
that he was not pressured by the Company or any of its representatives or agents
to take less time to consider the Agreement. In such event, Employee expressly
intends such execution to be a waiver of any right he had to review the
Agreement for a full twenty-one days.
g. He
understands that this Agreement waives any claim he may have under the Age
Discrimination in Employment Act. Employee may revoke this Agreement for up
to
seven days following its execution, and this Agreement shall not become
enforceable and effective until seven days after such execution. If Employee
chooses to revoke this Agreement, he must provide written notice to the
President and Chief Executive Officer of the Company by hand delivery and by
facsimile within seven calendar days of Employee’s execution of this Agreement.
If Employee does not revoke within the seven-day period, the right to revoke
is
lost.
h. He
admits, acknowledges, and agrees that he 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. He admits,
acknowledges, and agrees that he has been fully and finally paid or provided
all
wages, compensation, vacation, expenses (including, but not limited to,
relocation and travel expenses), bonuses, stock, stock options, or other
benefits from the Company which are or could be due to Employee from the
Company.
i. He
has
not taken any action or made any statement adverse to the Company’s interests
prior to signing this Agreement.
B-3
7. Confidential
Information.
Except
as herein provided, all discussions regarding this Agreement, including, but
not
limited to, the amount of consideration, offers, counteroffers or other terms
or
conditions of the negotiations, shall be kept confidential by Employee from
all
persons and entities other than the Parties to this Agreement. Employee may
disclose the amount received in consideration of the Agreement only if necessary
(i) for the limited purpose of making disclosures required by law to agents
of the local, state, or federal governments; (ii) for the purpose of
enforcing any term of this Agreement; or (iii) in response to compulsory
process, and only then after giving the Company ten days advance notice of
the
compulsory process and affording the Company the opportunity to obtain any
necessary or appropriate protective orders. Otherwise, in response to inquiries
about this matter, Employee shall state, “My employment with the Company has
ended,” and nothing more. Employee hereby expressly acknowledges that any breach
of this Section 7 shall result in a claim for injunctive relief, damages and/or
criminal sanctions and penalties against Employee by the Company, and possibly
others.
8. Non-Disparagement.
Employee agrees not to make to any person any statement that disparages the
Company or reflects negatively on the Company, including, but not limited to,
statements regarding the Company’s financial condition, employment practices, or
its officers, directors, board members, employees, affiliates, attorneys,
customers, or vendors.
9. Return
of Company Property and Information.
Employee represents and warrants that, prior to his execution of this Agreement,
he will return to the Company 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 the Company or the Company’s business whether or not developed, produced,
or conceived, in whole or in part, by Employee during the term of his employment
with the Company. Employee agrees that, to the extent that he possesses any
files, data, or information relating in any way to the Company or the Company’s
business on any personal computer, he will delete those files, data, or
information (and will retain no copies in any form). Employee 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 he executes this Agreement. Employee
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. Employee
understands that any breach of this Section 9 will also constitute a
misappropriation of the Company’s proprietary rights, and may constitute a theft
of the Company’s 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 Employee by the Company, and possibly
others.
10. 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 Employee against the Company shall not constitute
a
defense to enforcement by the Company.
B-4
11. Assignment.
The
Company may assign its rights under this Agreement. Employee cannot assign
his
rights under this Agreement without the written consent of the
Company.
12. 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.
13. Survival
of Employment Agreement Terms and Agreement Regarding Change In
Control.
This
Agreement in no way affects or alters the surviving provisions set forth in
Section 17 of the Employment Agreement, or the Agreement Regarding Change In
Control dated July 31, 2006 between the Employer and the Employee (“CC
Agreement”). Those provisions and the CC Agreement are hereby incorporated by
reference and serve as part of the consideration for this Agreement. Employee
agrees to continue to abide by the surviving provisions set forth in Section
17
of the Employment Agreement to the extent that those provisions impose any
obligation upon Employee.
14. Entire
Agreement.
This
Agreement, the surviving provisions set forth in Section 17 of the Employment
Agreement and the CC 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. Employee acknowledges that he
has
not relied on any promise, representation, or statement other than those set
forth in this Agreement. This Agreement cannot be modified except in writing
signed by all Parties.
15. Venue
and Applicable Law.
This
Agreement shall be interpreted and construed in accordance with the laws of
the
State of New York, without regard to its conflicts of law provisions. Venue
and
jurisdiction shall be in the federal or state courts in New York, New
York.
[SIGNATURE
PAGE FOLLOWS]
B-5
IN
WITNESS WHEREOF, the Parties have executed this Agreement on the dates written
below.
EMPLOYEE:
_____________________________ __________________________
Name
Date
THE
COMPANY:
CAPITAL
GOLD CORPORATION
By:
__________________________________
_______________________________
Name:
Date
Title:
B-6
EXHIBIT
C
AGREEMENT
REGARDING
CHANGE
IN CONTROL
THIS
AGREEMENT (“Agreement”), is made and entered into as of the 31st
day of
July, 2006 (the “Effective Date”) by and between Capital Gold Corporation (the
“Company”) and Xxxxxxx X. Xxxxxxxxx (the “Executive”)
WITNESSETH
THAT:
WHEREAS,
the Company considers it essential to the best interests of its stockholders
to
xxxxxx the continuous engagement of key management personnel, and the Board
of
Directors of the Company (the “Board”) recognizes that, as is the case with many
publicly held corporations, a change in control might occur and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its stockholders; and
WHEREAS,
the Board has determined that appropriate steps should be taken to reinforce
and
encourage the continued attention and dedication of members of the Company’s
management, including the Executive, to their engagement without distraction
in
the face of potentially disturbing circumstances arising from the possibility
of
a change in control of the Company;
NOW,
THEREFORE, to induce the Executive to remain engaged by the Company and in
consideration of the premises and mutual covenants set forth herein, IT IS
HEREBY AGREED by and between the parties as follows:
1. AGREEMENT
TERM. The initial “Agreement Term” shall begin on the Effective Date and shall
continue through December 31, 2009. As of December 31, 2009, and as of each
December 31 thereafter, the Agreement Term shall extend automatically to the
third anniversary thereof unless the Company gives notice to the Executive
prior
to the date of such extension that the Agreement Term will not be extended.
Notwithstanding the foregoing, if a Change in Control (as defined in Section
7
below), occurs during the Agreement Term, the Agreement Term shall continue
through and terminate on the second anniversary of the date on which the Change
in Control occurs.
2.
ENTITLEMENT
TO CHANGE IN CONTROL BENEFITS. The Executive shall be entitled to the Change
in
Control Benefits described in Section 3 hereof if the Executive’s engagement by
the Company is terminated during the Agreement Term but after a Change in
Control (i) by the Company for any reason other than Permanent Disability or
Cause, (ii) by the Executive for Good Reason or (iii) by the Executive for
any
reason during the 30-day period commencing on the first date which is six months
after the date of the Change in Control. For purposes of this
Agreement:
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(a) A
termination of the Executive’s engagement shall be treated as a termination by
reason of “Permanent Disability” only if, due to a mental or physical
disability, the Executive is absent from the performance of services for the
Company for a period of at least twelve consecutive months and fails to return
to the performance of services within 30 days after receipt of a written demand
by the Company to do so.
(b) The
term
“Cause” shall mean the willful engaging by the Executive in illegal conduct or
gross misconduct which is demonstrably and materially injurious to the Company.
For purposes of this Agreement, no act, or failure to act, on the Executive’s
part shall be deemed “willful” unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the Executive’s
action or omission was in the best interest of the Company. Notwithstanding
the
foregoing, the Executive shall not be deemed to have been terminated for Cause
unless and until the Company delivers to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called and held for
such purpose (after reasonable notice to the Executive and an opportunity for
the Executive, together with counsel, to be heard before the Board) finding
that, in the good faith opinion of the Board, the Executive was guilty of
conduct set forth above and specifying the particulars thereof in
detail.
(c) The
term
“Good Reason” shall mean the occurrence of any of the following circumstances
without the Executive’s express written consent:
(i)
a
significant adverse change in the nature, scope or status of the Executive’s
position, authorities or services from those in effect immediately prior to
the
Change in Control, including, without limitation, if the Executive was,
immediately prior to the Change in Control, an executive officer of a public
company, the Executive ceasing to be an executive officer of a public
company;
(ii)
the
failure by the Company to pay the Executive any portion of the Executive’s
current compensation, or to pay the Executive any portion of any installment
of
deferred compensation under any deferred compensation program of the Company,
within seven days of the date such compensation is due;
(iii)
a
reduction in the Executive’s annual base compensation (or a material change in
the frequency of payment) as in effect immediately prior to the Change in
Control as the same may be increased from time to time;
(iv) the
failure by the Company to award the Executive an annual bonus in any year which
is at least equal to the annual bonus awarded to the Executive for the year
immediately preceding the year of the Change in Control;
(v) the
failure by the Company to award the Executive equity-based incentive
compensation (such as stock options, shares of restricted stock, or other
equity-based compensation) on a periodic basis consistent with the Company’s
practices with respect to timing, value and terms prior to the Change in
Control;
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(vi) the
failure of the Company to award the Executive incentive compensation of any
nature based on attained milestones when such milestones are attained.
(vii) the
failure of the Company to obtain a satisfactory agreement from any successor
to
the Company to assume and agree to perform this Agreement as contemplated by
Section 14.
For
purposes of any determination regarding the existence of Good Reason, any good
faith determination by the Executive that Good Reason exists shall be
conclusive.
3.
CHANGE
IN CONTROL BENEFITS. In the event of a termination of engagement entitling
the
Executive to benefits in accordance with Section 2, the Executive shall receive
the following:
(a) The
Executive shall be entitled to a lump sum payment in cash no later than twenty
business days after the Executive’s date of termination equal to the sum
of:
(i) an
amount
equal to three times the Executive’s base salary in effect on the date of the
Change in Control or, or if greater, as in effect immediately prior to the
date
of termination; plus
(ii) an
amount
equal to three times the Executive’s bonus award for the year immediately
preceding the year of the Change in Control.
The
amount payable under this paragraph (d) shall be inclusive of the amounts,
if
any, to which the Executive would otherwise be entitled or by law and shall
be
in addition to (and not inclusive of) any amount payable under any written
agreement(s) directly between the Executive and the Company or any of its
subsidiaries.
(b) The
exercise price of all of the Company options owned by the Executive shall
decrease to $0.01 per share.
(c) The
Company shall provide the Executive with outplacement services and tax and
financial counseling suitable to the Executive’s position through the third
anniversary of the date of the Executive’s termination of engagement, or, if
earlier, the date on which the Executive becomes employed by another
employer.
4. MITIGATION.
The Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other engagement or otherwise. The
Company shall not be entitled to set off against the amounts payable to the
Executive under this Agreement any amounts owed to the Company by the Executive,
any amounts earned by the Executive in other engagement after the Executive’s
termination of engagement with the Company, or any amounts which might have
been
earned by the Executive in other engagement had the Executive sought such other
engagement.
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5. MAKE-WHOLE
PAYMENTS. If any payment or benefit to which the Executive (or any person on
account of the Executive) is entitled, whether under this Agreement or
otherwise, in connection with a Change in Control or the Executive’s termination
of engagement (a “Payment”) constitutes a “parachute payment” within the meaning
of section 280G of the Internal Revenue Code of 1986, as amended (the “Code”),
and as a result thereof the Executive is subject to a tax under section 4999
of
the Code, or any successor thereto, (an “Excise Tax”), the Company shall pay to
the Executive an additional amount (the “Make-Whole Amount”) which is intended
to make the Executive whole for such Excise Tax. The Make-Whole Amount shall
be
equal to (i) the amount of the Excise Tax, plus (ii) the aggregate amount of
any
interest, penalties, fines or additions to any tax which are imposed in
connection with the imposition of such Excise Tax, plus (iii) all income, excise
and other applicable taxes imposed on the Executive under the laws of any
Federal, state or local government or taxing authority by reason of the payments
required under clauses (i) and (ii) and this clause (iii).
(a) For
purposes of determining the Make-Whole Amount, the Executive shall be deemed
to
be taxed at the highest marginal rate under all applicable local, state, federal
and foreign income tax laws for the year in which the Make-Whole Amount is
paid.
The Make-Whole Amount payable with respect to an Excise Tax shall be paid by
the
Company coincident with the Payment with respect to which such Excise Tax
relates.
(b)
All
calculations under this Section 5 shall be made initially by the Company and
the
Company shall provide prompt written notice thereof to the Executive to enable
the Executive to timely file all applicable tax returns. Upon request of the
Executive, the Company shall provide the Executive with sufficient tax and
compensation data to enable the Executive or the Executive’s tax advisor to
independently make the calculations described in subparagraph (a) above and
the
Company shall reimburse the Executive for reasonable fees and expenses incurred
for any such verification.
(c) If
the
Executive gives written notice to the Company of any objection to the results
of
the Company’s calculations within 60 days of the Executive’s receipt of written
notice thereof, the dispute shall be referred for determination to independent
tax counsel selected by the Company and reasonably acceptable to the Executive
(“Tax Counsel”). The Company shall pay all fees and expenses of such Tax
Counsel. Pending such determination by Tax Counsel, the Company shall pay the
Executive the Make-Whole Amount as determined by it in good faith. The Company
shall pay the Executive any additional amount determined by Tax Counsel to
be
due under this Section 5 (together with interest thereon at a rate equal to
120%
of the Federal short-term rate determined under section 1274(d) of the Code)
promptly after such determination.
(d) The
determination by Tax Counsel shall be conclusive and binding upon all parties
unless the Internal Revenue Service, a court of competent jurisdiction, or
such
other duly empowered governmental body or agency (a “Tax Authority”) determines
that the Executive owes a greater or lesser amount of Excise Tax with respect
to
any Payment than the amount determined by Tax Counsel.
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(e) If
a
Taxing Authority makes a claim against the Executive which, if successful,
would
require the Company to make a payment under this Section 5, the Executive agrees
to contest the claim with counsel reasonably satisfactory to the Company, on
request of the Company subject to the following conditions:
(i)
The
Executive shall notify the Company of any such claim within 10 days of becoming
aware thereof. In the event that the Company desires the claim to be contested,
it shall promptly (but in no event more than 30 days after the notice from
the
Executive or such shorter time as the Taxing Authority may specify for
responding to such claim) request the Executive to contest the claim. The
Executive shall not make any payment of any tax which is the subject of the
claim before the Executive has given the notice or during the 30-day period
thereafter unless the Executive receives written instructions from the Company
to make such payment together with an advance of funds sufficient to make the
requested payment plus any amounts payable under this Section 5 determined
as if
such advance were an Excise Tax, in which case the Executive will act promptly
in accordance with such instructions.
(ii)
If
the Company so requests, the Executive will contest the claim by either paying
the tax claimed and suing for a refund in the appropriate court or contesting
the claim in the United States Tax Court or other appropriate court, as directed
by the Company; PROVIDED, HOWEVER, that any request by the Company for the
Executive to pay the tax shall be accompanied by an advance from the Company
to
the Executive of funds sufficient to make the requested payment plus any amounts
payable under this Section 5 determined as if such advance were an Excise Tax.
If directed by the Company in writing the Executive will take all action
necessary to compromise or settle the claim, but in no event will the Executive
compromise or settle the claim or cease to contest the claim without the written
consent of the Company; PROVIDED, HOWEVER, that the Executive may take any
such
action if the Executive waives in writing the Executive’s right to a payment
under this Section 5 for any amounts payable in connection with such claim.
The
Executive agrees to cooperate in good faith with the Company in contesting
the
claim and to comply with any reasonable request from the Company concerning
the
contest of the claim, including the pursuit of administrative remedies, the
appropriate forum for any judicial proceedings, and the legal basis for
contesting the claim. Upon request of the Company, the Executive shall take
appropriate appeals of any judgment or decision that would require the Company
make a payment under this Section 5. Provided that Executive is in compliance
with the provisions this section, the Company shall be liable for and indemnify
the Executive against any loss in connection with, and all costs and expenses,
including attorneys’ fees, which may be incurred as a result of, contesting the
claim, and shall provide to the Executive within 30 days after each written
request therefor by the Executive cash advances or reimbursement for all such
costs and expenses actually incurred or reasonably expected to be incurred
by
the Executive as a result of contesting the claim.
(f) Should
a
Tax Authority finally determine that an additional Excise Tax is owed, then
the
Company shall pay an additional Make-Whole Amount to the Executive in a manner
consistent with this Section 5 with respect to any additional Excise Tax and
any
assessed interest, fines, or penalties. If any Excise Tax as calculated by
the
Company or Tax Counsel, as the case may be, is finally determined by a Tax
Authority to exceed the amount required to be paid under
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applicable
law, then the Executive shall repay such excess to the Company within 30 days
of
such determination; provided that such repayment shall be reduced by the amount
of any taxes paid by the Executive on such excess which is not offset by the
tax
benefit attributable to the repayment.
6. TERMINATION
DURING POTENTIAL CHANGE IN CONTROL. If a Potential Change in Control (as defined
in Section 8) occurs during the Agreement Term, and the Company terminates
the
Executive’s engagement for reasons other than Permanent Disability or Cause
during such Potential Change in Control, the Executive shall be entitled to
receive the benefits that the Executive would have received under Section 3,
such benefits to be calculated based upon the Executive’s compensation prior to
the actual termination of engagement but paid within 20 business days of the
date of such termination.
7.
CHANGE
IN
CONTROL. For purposes of this Agreement, a “Change in Control” shall be deemed
to have occurred on the earliest of the following dates:
(a) the
date
any Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 30% or more of the combined voting power
of the Company’s then outstanding securities, excluding any Person who becomes
such a Beneficial Owner in connection with a transaction described in clause
(i)
of paragraph (c) below; or
(b)
the
date
on which the following individuals cease for any reason to constitute a majority
of the number of directors then serving: individuals who, on the date hereof,
constitute the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Company) whose appointment or election by the
Board
or nomination for election by the Company’s stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or recommended;
or
(c)
the
date
on which there is consummated a merger or consolidation of the Company or any
direct or indirect subsidiary of the Company with any other corporation or
other
entity, other than (i) a merger or consolidation (A) immediately following
which
the individuals who comprise the Board immediately prior thereto constitute
at
least a majority of the board of directors of the Company, the entity surviving
such merger or consolidation or, if the Company or the entity surviving such
merger or consolidation is then a subsidiary, the ultimate parent thereof and
(B) which results in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting securities
of
the surviving entity or any parent thereof), in combination with the ownership
of any trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any subsidiary of the Company, at least 50% of the
combined voting power of the securities of the Company or such surviving entity
or any parent thereof outstanding immediately after such merger or
consolidation, or (ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person
is
or becomes the Beneficial Owner, directly or indirectly, of securities of
the
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Company
representing 30% or more of the combined voting power of the Company’s then
outstanding securities; or
(d)
the
date
on which the stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company or there is consummated an agreement for the
sale
or disposition by the Company of all or substantially all of the Company’s
assets, other than a sale or disposition by the Company of all or substantially
all of the Company’s assets to an entity, at least 50% of the combined voting
power of the voting securities of which are owned by stockholders of the
Company, in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
subsidiary of the Company, in substantially the same proportions as their
ownership of the Company immediately prior to such sale.
Notwithstanding
the foregoing, a “Change in Control” shall not be deemed to have occurred by
virtue of the consummation of any transaction or series of integrated
transactions immediately following which the record holders of the common stock
of the Company immediately prior to such transaction or series of transactions
continue to have substantially the same proportionate ownership in an entity
which owns all or substantially all of the assets of the Company immediately
following such transaction or series of transactions.
For
purposes of this Agreement: “Affiliate” shall have the meaning set forth in Rule
12b-2 promulgated under Section 12 of the Exchange Act; “Beneficial Owner” shall
have the meaning set forth in Rule 13d-3 under the Exchange Act; “Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended from time to time;
and “Person” shall have the meaning given in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof, except that
such
term shall not include (i) the Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities under an employee benefit plan
of
the Company or any of its Affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the
Company.
8.
POTENTIAL
CHANGE IN CONTROL. A “Potential Change in Control” shall exist during any period
in which the circumstances described in paragraphs (a), (b), (c) or (d), below,
exist (provided, however, that a Potential Change in Control shall cease to
exist not later than the occurrence of a Change in Control):
(a) The
Company enters into an agreement, the consummation of which would result in
the
occurrence of a Change in Control, provided that a Potential Change in Control
described in this paragraph (a) shall cease to exist upon the expiration or
other termination of all such agreements;
(b) Any
Person (without regard to the exclusions set forth in subsections (i) through
(iv) of such definition) publicly announces an intention to take or to consider
taking actions the consummation of which would constitute a Change in Control;
provided that a Potential Change in Control described in this paragraph (b)
shall cease to exist upon the withdrawal of such
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intention,
or upon a determination by the Board that there is no reasonable chance that
such actions would be consummated;
(c)
Any
Person becomes the Beneficial Owner, directly or indirectly, of securities
of
the Company representing 20% or more of either the then outstanding shares
of
common stock of the Company or the combined voting power of the Company’s then
outstanding securities;
(d)
The
Board
adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control exists; provided that a Potential Change in Control
described in this paragraph (d) shall cease to exist upon a determination by
the
Board that the reasons that gave rise to the resolution providing for the
existence of a Potential Change in Control have expired or no longer exist.
9.
NONALIENATION.
The interests of the Executive under this Agreement are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors of the Executive or the
Executive’s beneficiary.
10. AMENDMENT.
This Agreement may be amended or canceled only by mutual agreement of the
parties in writing without the consent of any other person. So long as the
Executive lives, no person, other than the parties hereto, shall have any rights
under or interest in this Agreement or the subject matter hereof.
11.
APPLICABLE
LAW. The provisions of this Agreement shall be construed in accordance with
the
laws of the State of New York, without regard to the conflict of law provisions
of any state.
12.
SEVERABILITY.
The invalidity or unenforceability of any provision of this Agreement will
not
affect the validity or enforceability of any other provision of this Agreement,
and this Agreement will be construed as if such invalid or unenforceable
provision were omitted (but only to the extent that such provision cannot be
appropriately reformed or modified).
13.
WAIVER
OF
BREACH. No waiver by any party hereto of a breach of any provision of this
Agreement by any other party, or of compliance with any condition or provision
of this Agreement to be performed by such other party, will operate or be
construed as a waiver of any subsequent breach by such other party of any
similar or dissimilar provisions and conditions at the same or any prior or
subsequent time. The failure of any party hereto to take any action by reason
of
such breach will not deprive such party of the right to take action at any
time
while such breach continues.
14.
SUCCESSORS,
ASSUMPTION OF CONTRACT. This Agreement shall be binding upon and inure to the
benefit of the Company and any successor of the Company. 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 expressly assume and agree to perform this Agreement
in
the same manner and to
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the
same
extent that the Company would be required to perform it if no succession had
taken place. This Agreement is personal to the Executive and may not be assigned
by the Executive without the written consent of the Company. However, to the
extent that rights or benefits under this Agreement otherwise survive the
Executive’s death, the Executive’s heirs and estate shall succeed to such rights
and benefits pursuant to the Executive’s will or the laws of descent and
distribution; provided that the Executive shall have the right at any time
and
from time to time, by notice delivered to the Company, to designate or to change
the beneficiary or beneficiaries with respect to such benefits.
15.
NOTICES.
Notices and all other communications provided for in this Agreement shall be
in
writing and shall be delivered personally or sent by registered or certified
mail, return receipt requested, postage prepaid (provided that international
mail shall be sent via overnight or two-day delivery), or sent by facsimile
or
prepaid overnight courier to the parties at the addresses set forth below.
Such
notices, demands, claims and other communications shall be deemed
given:
(a) in
the
case of delivery by overnight service with guaranteed next day delivery, the
next day or the day designated for delivery;
(b) in
the
case of certified or registered U.S. mail, five days after deposit in the U.S.
mail; or
(c) in
the
case of facsimile, the date upon which the transmitting party received
confirmation of receipt by facsimile, telephone or otherwise;
provided,
however, that in no event shall any such communications be deemed to be given
later than the date they are actually received. Communications that are to
be
delivered by the U.S. mail or by overnight service or two-day delivery service
are to be delivered to the addresses set forth below:
to
the
Company:
Capital
Gold Corporation
00
Xxxxxx
Xxxxxx
00xx
Xxxxx
Xxx
Xxxx,
XX 00000
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with
a
copy (which shall not constitute notice) to:
Chief
Financial Officer
Capital
Gold Corporation
00
Xxxxxx
Xxxxxx
00xx
Xxxxx
Xxx
Xxxx,
XX 00000
or
to the
Executive:
Xxxxxxx
X. Xxxxxxxxx
0000
Xxxxxxxxxx Xxx
Xxxxxxx,
XX 00000
Each
party, by written notice furnished to the other party, may modify the applicable
delivery address, except that notice of change of address shall be effective
only upon receipt.
16. LEGAL
AND
ENFORCEMENT COSTS. The provisions of this Section 16 shall apply if it becomes
necessary or desirable for the Executive to retain legal counsel or incur other
costs and expenses in connection with enforcing any and all rights under this
Agreement or any other compensation plan maintained by the Company;
(a) The
Executive shall be entitled to recover from the Company reasonable attorneys’
fees, costs and expenses incurred in connection with such enforcement or
defense.
(b) Payments
required under this Section 16 shall be made by the Company to the Executive
(or
directly to the Executive’s attorney) promptly following submission to the
Company of appropriate documentation evidencing the incurrence of such
attorneys’ fees, costs, and expenses.
(c) The
Executive shall be entitled to select legal counsel; provided, however, that
such right of selection shall not affect the requirement that any costs and
expenses reimbursable under this Section 16 be reasonable.
(d) The
Executive’s rights to payments under this Section 16 shall not be affected by
the final outcome of any dispute with the Company.
17.
SURVIVAL
OF AGREEMENT. Except as otherwise expressly provided in this Agreement, the
rights and obligations of the parties to this Agreement shall survive the
termination of the Executive’s engagement with the Company.
18.
ENTIRE
AGREEMENT. Except as otherwise provided herein, this Agreement constitutes
the
entire agreement between the parties concerning the subject matter hereof and
supersedes all prior or contemporaneous agreements, between the parties relating
to the subject matter hereof; provided, however, that nothing in this Agreement
shall be construed to limit any policy or agreement that is otherwise applicable
relating to confidentiality, rights to inventions,
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copyrightable
material, business and/or technical information, trade secrets, solicitation
of
employees, interference with relationships with other businesses, competition,
and other similar policies or agreement for the protection of the business
and
operations of the Company and the subsidiaries.
19.
COUNTERPARTS.
This Agreement may be executed in two or more counterparts, any one of which
shall be deemed the original without reference to the others.
IN
WITNESS THEREOF, the Executive has hereunto set his hand, and the Company has
caused these presents to be executed in its name and on its behalf, and its
corporate seal to be hereunto affixed on this 31st
day of
July, 2006, all as of the Effective Date.
s/
Xxxxxxx X. Xxxxxxxxx
Xxxxxxx
X. Xxxxxxxxx
CAPITAL
GOLD CORPORATION
By:
s/
Xxxxxxx X. Xxxxxxxx
Xxxxxxx
X. Xxxxxxxx, President
ATTEST:
s/Xxxxxxxxxxx
Xxxxxxx
Xxxxxxxxxxx
Xxxxxxx, CFO
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