EXHIBIT 10.7
SERVICES AGREEMENT
THIS AGREEMENT, is made effective this 4th day of February, 1997,
between GOLD RESERVE CORPORATION , a Montana Corporation, with its
principal office in Spokane, Washington, herein referred to as
"Corporation", and Xxxxx X. Xxxxx, of Spokane, Washington, herein
referred to as the "Executive".
In consideration of the mutual covenants and benefits as herein set
forth, the parties hereto agree as follows:
SECTION ONE
-----------
EMPLOYMENT
1. The Corporation hereby employs the Executive as its Senior Vice
President, with the primary duty to oversee all mining and
technically related activities, and the Executive hereby accepts
such employment and agrees to devote all of his efforts for the
benefit of the Corporation and to faithfully, industriously, and
to the best of his ability, experience and talents, perform all of
his required and assigned duties. Executive shall perform the
duties of the Senior Vice President subject to the general
supervision and pursuant to the orders, advice and direction of
the President of the Corporation.
Executive shall also render such other reasonable and unrelated
services and duties as may be assigned to him from time to time by
the President of the Corporation.
SECTION TWO
-----------
TERM OF EMPLOYMENT
2. The primary term of this Agreement shall be for a period of two
(2) years commencing February 4, 1997 and will continue under the
provisions of this Agreement until terminated as provided in
Section 5.
SECTION THREE
-------------
COMPENSATION
3. The Corporation shall pay Executive, and the Executive shall
accept from the Corporation, compensation at the minimum rate of
U.S. $175,000 per year, prorated and payable bi-monthly or on such
other basis as the parties may hereafter agree. Such minimum
compensation may be adjudged for merit or other raises as from
time to time determined by the Board of Directors or any Committee
thereof having such authority. The Executive shall be
entitled to a minimum paid vacation of four (4) weeks in any
calendar year. If the Executive shall not use all vacation days in
any calendar year, Executive shall be permitted to carry over those
vacation days into the subsequent calendar year up to a maximum of
50% of the Executive's annual paid vacation days in any one calendar
year. Unused vacation days in excess of the number of days allowed
to be carried over to the subsequent year will be monetized in
accordance with the Executive's compensation. Such monies shall be
applied by the Executive against the exercise price of the
Executive's stock options that approximate such monies.
SECTION FOUR
------------
OTHER BENEFITS
4. In addition to the compensation as provided above, Corporation
shall provide for Executive the following additional benefits:
(1) Term insurance on the life of the Executive, when put into
effect, equal to at least U.S. $350,000, with proceeds
thereof upon Executive's death to be payable to Executive's
named beneficiary;
(2) Participation in all the Corporation's benefits, including
medical, dental, vision, stock option and KSOP plans,
retirement plan, bonus, holiday and any and all other plans
(including disability insurance) that may be made available
to employees;
(3) Upon the one year anniversary (February 5, 1998), the
Company shall grant a bonus of U.S. $44,062.50 which funds
will be used to exercise 5,000 shares pursuant to
Executive's stock options;
(4) Indoor parking near Corporation's offices;
(5) Payment of dues in professional associations as may be
required to maintain the Executive's membership in such
associations;
(6) Attendance at appropriate conferences, seminars and
educational programs as may be necessary with the approval
of the President;
(7) Reimbursement for all expenses incurred in connection with
the performance of services to the Corporation, including
entertainment, travel and other expenses incidental to the
duties undertaken hereunder, provided that such expenses
shall be reasonable and necessary and that Executive shall
submit bills and vouchers, when possible, supporting all
requests for reimbursement in accordance with Corporation's
policies;
(8) An appropriate office, which office will be located in
Spokane, Washington, which shall be the principal place of
employment during the term of the Agreement. The Executive
hereby acknowledges that the current business of the
Corporation requires its senior executives to be absent,
from time to time, from the principal place of employment to
other locations; and
(9) Such directors and officers liability insurance coverage as
may be available from time to time to all directors and
officers.
SECTION FIVE
------------
TERMINATION
5. This agreement will terminate or may be terminated by any one of
the following:
(1) By mutual agreement.
(2) Voluntarily and without cause, upon at least 3 months prior
written notice of termination by Corporation to the
Executive or by the Executive to the Corporation;
(3) By the Corporation for cause as hereinafter defined in
Section 10;
(4) Upon the death or disability of Executive subject to the
provisions in Section 6 (D); or
(5) Constructive termination by third parties subject to the
provisions in Section 6 (E).
SECTION SIX
-----------
SEVERANCE COMPENSATION
6 (A). Termination by Executive or by Corporation With Cause:
(1) If Executive shall voluntarily terminate his employment
under this Agreement pursuant to Section 5 (2) or if the
employment of the Executive is terminated by the Corporation
for cause pursuant to Section 5 (3), then all compensation
and benefits as heretofore provided in Section 3 shall
terminate immediately upon the effective date of termination
(accrued vacation not taken will be paid to Executive at his
then daily or weekly pay rate pursuant to the provision in
Section 3 at time of termination).
6 (B). Termination by Corporation Without Cause
(1) If Corporation shall terminate this Agreement for any reason
except cause pursuant to Section 5 (3) and as defined in
Section 10, then upon the termination of the Executive's
employment under this Agreement, the Corporation shall pay
an amount equal to 24 months' salary. The amount shall be
paid in one lump sum no later than the fifth (5th) day
following the date of termination of the Executive's
employment. All employee benefits provided to the Executive
shall be continued as if the Executive was still an employee
of the Corporation, for a period of one year from the date
of termination or until replacement of benefits of a
similar nature from a new employer. In the event Executive
has existing stock options, such options will be governed in
accordance with the terms of the respective option
agreement(s).
6 (C ). Termination for Good Reason (includes Change In Control)
(1) Executive shall be entitled to terminate his employment for
Good Reason. For purposes of this Agreement, "Good Reason"
shall mean, without Executive's express written consent, any
of the following:
i. the assignment to Executive of any duties
inconsistent with Executive's responsibilities from
those in effect immediately prior to a Change in
Control;
ii. a reduction by the Corporation in Executive's annual
base salary as in effect on the date hereof or as the
same may be increased from time to time or a failure
by the Corporation to increase Executive's salary at
a rate commensurate with that of other senior
executives of the Corporation;
iii. the relocation of the office of the Corporation where
Executive is employed at the time of a Change in
Control ("the CIC Location") to a location more than
fifty (50) miles away from the CIC Location or the
Corporation's requiring Executive to be based more
than fifty (50) miles away from the CIC Location
(except for required travel on the Corporation's
business to an extent substantially consistent with
Executive's business travel obligations just prior to
the Change in Control);
iv. the failure by the Corporation to continue to provide
Executive with benefits at least as favorable to
those enjoyed by Executive under any of the
Corporation's other benefits (Section 4) in which
Executive was participating at the time of the Change
in Control, the taking of any action by the
Corporation which would directly or indirectly
materially reduce any of such benefits or deprive
Executive of any material fringe benefit enjoyed by
Executive at the time of the Change in Control, or
the failure by the Corporation to provide Executive
with the number of paid vacation days to which
Executive is entitled to at the time of the Change in
Control; and, if the business of the Corporation for
which Executive's services are principally performed
is sold at any time after a Change in Control and the
purchaser of such business fails to agree to provide
Executive with the same or a comparable position,
duties, salary and benefits as provided to Executive
by the Corporation immediately prior to the Change in
Control.
6 (D). Termination By Death or Disability
(1) If Executive dies or becomes disabled before his employment
is otherwise terminated, in addition to payments otherwise
provided through insurance under Section 4 (1) and (2), the
Corporation will immediately pay an amount of compensation
equal to three month's annual salary as if Executive had
been terminated without cause and all employee benefits
theretofore provided to Executive will be continued for a
period of one year from the date of death or disability as
if the Executive was still an employee of the Corporation.
If such termination is due to Executive's death, payment
will be made in one lump sum to his beneficiary, to be named
in writing by Executive upon signing this Agreement, which
designation may be changed at any time by written notice
signed by Executive and delivered to the Secretary of
Corporation; if no beneficiary survives Executive, the
entire amount will be paid to his estate. If such
termination is due to Executive's disability, payment will
be made in one lump sum to Executive.
6 (E). Constructive Termination by Third Parties
(1) In the event Executive is taken hostage or otherwise
wrongfully imprisoned or restrained, against his will and
beyond his control, by a third party, all salary and
benefits under this Agreement shall continue until such time
as the Corporation may reasonably make determination that
Executive is unlikely to return to his position. At that
time, the Corporation may elect to make payment to
Executive's designated beneficiary in accordance with
Section 6 (D).
SECTION SEVEN
-------------
NON-TRANSFERABILITY
7. This is a personal agreement. No Executive's rights, benefits or
interests hereunder may be subject to sale, anticipation,
alienation, assignment, encumbrance, charge, pledge
hypothecation, transfer, or set-off in respect of any claim,
debt, or obligation or to execution, attachment, levy or similar
process, or assignment by operation of law. Any attempt,
voluntary or involuntary, to effect any such action shall be
null, void and of no effect.
SECTION EIGHT
-------------
DIRECTORSHIPS
8. The Executive shall be entitled to accept a position as a
director of other corporations, whether such corporation is
engaged in the mining industry or not, provided such directorship
is first approved by the Board of Directors.
SECTION NINE
------------
REPRESENTATIONS
9. The Corporation represents to the Executive and the Executive may
rely on such representations and warranties in entering into this
Agreement as follows:
(1) The common shares of Gold Reserve Corporation are listed for
trading on NASDAQ and The Toronto Stock Exchange.
(2) The financial statements, reports, and other information
provided by the Corporation and its respective officers
constitute complete and accurate disclosure of the status of
the affairs of Gold Reserve Corporation and do not know of
any other information, which if disclosed to the Executive,
might reasonably be expected to cause the Executive to
refrain from accepting employment with the Corporation or
affect the value of Gold Reserve Corporation shares.
SECTION TEN
-----------
DEFINITION OF CAUSE
10. Cause to terminate the Executive's employment shall mean (a) the
wilful and continued failure by the Executive to perform his
duties in breach of a fiduciary duty imposed by his current
position with the Corporation, (b) the wilful engaging by the
Executive of misconduct which is materially injurious to the
Corporation, monetarily or otherwise, or (c) the wilful violation
by the Executive of the provisions of this Agreement, or (d) for
any other "Cause" as determined in accordance with the laws of
the State of Washington.
SECTION ELEVEN
--------------
CHOICE OF LAW
11. The parties hereto agree that this Agreement and the performance
hereunder and all suits and special proceedings hereunder be
construed in accordance with and under and pursuant to the laws
of the State of Washington, and that in any action, special
proceedings or other proceeding that may be brought arising out
of, in connection with, or by reason of this Agreement, the laws
of the State of Washington shall be applicable and shall govern
to the exclusion of the law under any other forum, without regard
to the jurisdiction in which any action or special proceeding may
be instituted.
SECTION TWELVE
--------------
BINDING EFFECT
12. This Agreement shall be binding upon and shall inure to the
benefit of the Corporation, its successors or assigns and the
personal representative, heirs, executors and administrators of
the Executive.
SECTION THIRTEEN
----------------
CONFIDENTIALITY
13. Executive agrees that except as required for the performance of
his duties, obligations and responsibilities hereunder, he will
not at any time during the term of this Agreement or thereafter
divulge to any person, firm or corporation any confidential
information received by him during the course of his employment
and all such confidential information shall be kept confidential
and deemed the property of Corporation. For the purpose of this
provision, confidential information means, information known to
the Executive as a consequence of his employment by Corporation
and not generally known in the industry in which the Corporation
is engaged or otherwise available to third parties from sources
unrelated to or controlled by Corporation.
SECTION FOURTEEN
----------------
OTHER
14. In the event that the Company does not have sufficient assets to
complete the terms of this Agreement, this contract will be null
and void.
IN WITNESS WHEREOF, the parties have executed this Agreement at
Spokane, Washington on the day and year first above written.
GOLD RESERVE CORPORATION
--------------------------------
By: Xxxxxx X. Xxxx, President
and CEO
EXECUTIVE
-------------------------------- ---------------------------------
By: Xxxxx X. Xxxxx Witness
Named beneficiary of the Executive is ,
wife of the Executive. ------------------------------
