EMPLOYMENT CONTRACT AGREEMENT effective as of the 15th day of October 2007.
AGREEMENT
effective
as of the 15th day of October 2007.
B
E T W E E N:
X.
X. Xxxxx,
of the
City of Toronto in the Province of Ontario.
(the
“Executive”)
-
and
-
Colombia
Goldfields Ltd.,
a
corporation incorporated under the laws of the State of Delaware
(the
“Company”)
IN
CONSIDERATION
of the
mutual covenants and agreements herein contained and of other good and valuable
consideration, the parties agree with one another as follows:
| 1. |
INTERPRETATION
|
|
1.1
|
Definitions
|
In
this
agreement, unless there is something in the subject matter or context
inconsistent therewith,
“Business”
means
the
business carried on by the Company and its affiliates of the exploration for
gold, silver and other precious metals;
“Business
Day”
means
any day of the week except Saturday, Sunday or any statutory or civic holiday
observed in Toronto, Ontario;
|
“Person”
includes an individual, corporation, partnership, joint venture,
trust,
unincorporated organization, the Crown or any agency or instrumentality
thereof or any other entity recognized by law;
and
|
|
“Related
Person”
In
this agreement, the following Persons shall be deemed to be related
to
each other:
|
1
| (a) |
a
body corporate and the Person who beneficially owns, directly or
indirectly, voting securities of such body corporate carrying more
than
50% of the voting rights attached to all voting securities of the
body
corporate for the time being outstanding;
|
| (b) | a body corporate and any affiliate thereof; |
| (c) | a partnership and any Person who is a partner thereof; |
| (d) |
a
trust or estate and any Person who has a substantial beneficial interest
therein or as to which such Person serves as trustee, executor or
in a
similar capacity;
|
| (e) | Persons who are spouses of one another; and |
| (f) |
a
Person and any relative of such Person or any relative of the spouse
of
such Person, where such relative has the same home as such
Person.
|
|
1.2
|
Headings
|
The
division of this agreement into paragraphs and subparagraphs and the insertion
of headings are for convenience of reference only and shall not affect the
construction or interpretation of this agreement. The headings in this agreement
are not intended to be full or precise descriptions of the text to which they
refer and shall not be considered part of this agreement. References to a
paragraph or a subparagraph are to the corresponding paragraph or subparagraph
of this agreement
|
1.3
|
Number
and Gender
|
In
this
agreement, words in the singular include the plural and vice-versa and words
in
one gender include all genders.
|
2.
|
EMPLOYMENT
|
The
Company agrees to employ the Executive as its President and the Executive
accepts such employment on and subject to the terms of this agreement. In
carrying out his duties and responsibilities as President of the Company, the
Executive shall comply with all lawful instructions as may from time to time
be
given by the Chief Executive Officer of the Company.
|
3.
|
GOODWILL
|
The
Executive shall use his best efforts during the term of this agreement to ensure
the continuity of and to preserve and maintain the goodwill of the Business.
For
a period of one year after the termination of the employment of the Executive
hereunder for any reason, the Executive shall not, directly or indirectly,
take
any action to damage the goodwill of the Business or the relationship of the
Company with its suppliers, consultants or employees.
2
|
4.
|
TERM
|
The
term
of this agreement shall commence on October 15, 2007 and shall continue for
a
term of two years unless until terminated in accordance with paragraph 11
hereof. This agreement shall automatically renew on the anniversary date of
the
agreement for a two-year term unless at least 30 days prior to the anniversary
date either party gives written notice to the other Party that this Agreement
is
not to renew.
|
5.
|
DUTIES
|
So
long
as this agreement continues in full force and effect, the Executive shall
perform such tasks and duties in his capacity as President of the Company as
are
ordinarily performed by the President of a public company and as may from time
to time be determined by the Board of Directors of the Company. The Executive
shall, in carrying out his obligations under this agreement, report directly
the
Chief Executive Officer of the Company.
The
Executive acknowledges that the hours of work involved will vary and be
irregular and are those hours required to meet the objectives of the Company.
The Executive acknowledges that this paragraph constitutes an agreement to
work
such hours where such agreement is required by applicable legislation. The
Executive also acknowledges that he is a senior officer of the Company and
is in
the position of a fiduciary with respect to the Company and all of its property
and assets, whether tangible or intangible.
The
Company acknowledges that the Executive from time to time may have
responsibilities and commitments to other organizations outside the scope of
this agreement. Provided such responsibilities and commitments do not conflict
with the Executive’s responsibilities, commitments, and undertakings contained
in this Agreement, such activities are hereby expressly permitted. In the event
of any conflict or perceived conflict, the Executive agrees to disclose such
conflict to the Company’s Board of Directors and use commercially reasonable
efforts to come to a mutually agreeable resolution.
|
6.
|
CONFIDENTIAL
INFORMATION
|
The
Executive acknowledges that as President of the Company, the Executive will
acquire information about certain matters and things which are confidential
to
the Company and which information is the exclusive property of the Company.
Further, the Executive acknowledges that the Company's
business depends significantly upon the maintenance of trade secrets, data,
technical innovations and other confidential, proprietary information that
the
Company has developed over a long period of time and at great expense. The
Executive further acknowledges that the Company has developed a close and
valuable relationship with many of its consultants and suppliers. In partial
consideration for the Executive's
employment hereunder, the Executive covenants and agrees that he shall not,
at
any time during the term of his employment by the Company or thereafter, until
such information becomes part of the public domain, reveal, divulge or make
known to any persons or entity (other than the Company and its duly authorized
employees) or use for his own or any other's
benefit, the Company's
list of
consultants and suppliers, or its trade secrets, processes and materials,
formulae, research techniques or accomplishments, or his knowledge of any of
the
business or financial affairs of the Company, or any other information regarded
by the Company as confidential, except in the ordinary course of business as
the
Executive may be required to divulge in his capacity as a senior executive
of
the Company which during or after his employment pursuant hereto is made known
to the Executive. The Executive acknowledges that, without prejudice to any
and
all other rights of the Company, an injunction is the only effective remedy
to
protect the Company's
rights
and property as set out in this paragraph.
3
|
7.
|
VACATION
|
The
Executive shall be entitled to six weeks paid vacation per annum.
|
8.
|
EXPENSES
|
The
Company shall pay or reimburse the Executive for all travelling and other
out-of-pocket expenses actually and properly incurred by him in connection
with
his duties. The Executive shall obtain the consent of the Compensation Committee
of the Board of Directors of the Company before incurring any expenses of an
extraordinary nature.
|
9.
|
COMPENSATION
|
The
Company shall pay to the Executive and the Executive shall accept as
compensation for all his services and duties hereunder a salary of CDN $15,000
per month. The Executive’s salary shall be reviewed annually by the Chief
Executive Officer of the Company. The Executive's
salary
shall be payable, net of all statutory withholdings and deductions which the
Company is required to make from time to time, in monthly installments or at
such other times as the Company and the Executive may from time to time agree.
|
10.
|
BENEFITS
|
The
Executive shall be entitled to participate in any plans maintained from time
to
time by the Company for the benefit of Company employees, including, but not
limited to, those pertaining to group life, accident, sickness and medical
insurance and pensions, all within the terms of such plans. Participation by
the
Executive in any of the foregoing plans, programs and benefits is subject to
the
Executive being able to satisfy any pre-conditions of general application to
the
participation of all employees in such plans.
|
11.
|
TERMINATION
|
The
Executive’s employment hereunder may be terminated in each of the circumstances
in subparagraphs 11.1 to 11.6 inclusive:
4
|
11.1
|
Death
|
The
Executive’s employment hereunder shall automatically terminate upon his death
and amounts due and payable to the Executive at that time will be paid to his
estate or as directed by his executor.
|
11.2
|
Disability
|
The
Company may terminate the Executive’s employment hereunder if the Executive, by
reason of physical or mental disability, is unable to fulfill his obligations
and duties hereunder on a full time basis (other than by reason of authorized
vacation or leave) for a period in excess of 90 working days in any one-year
period.
|
11.3
|
Cause
|
The
Company may terminate the Executive’s employment hereunder at any time for
cause. For purposes of this agreement “Cause” means and is limited to (i)
willful and continued failure by the Executive to substantially perform the
duties provided herein after a written demand for substantial performance
delivered to the Executive by the Company, which demand identifies with
reasonable specificity the manner in which the Executive has not substantially
performed his duties, and the Executive’s failure to comply with such demand
within a reasonable time; (ii) engaging by the Executive in gross misconduct
or
gross negligence materially injurious to the Company; (iii) the commission
by
the Executive of any act in direct competition with or materially detrimental
to
the best interest of the Company; or (iv) the Executive’s conviction of having
committed a felony.
|
11.4
|
Without
Cause
|
The
Company may terminate the employment of the Executive hereunder at any time
without cause upon 30 days’ prior written notice to the Executive or payment in
lieu thereof. After the effective date of such termination, the Executive shall
be entitled to no further rights or benefits hereunder or in connection with
his
employment by the Company other than as specified in subparagraph 12.2. Subject
to applicable law, the foregoing represents the Company’s maximum termination
and severance obligations. This provision shall remain in full force and effect
unamended notwithstanding any other alterations to the Executive’s terms and
conditions of employment or to this contract, whether fundamental or otherwise,
unless the Executive and the Company otherwise agree in writing.
|
11.5
|
Termination
by the Executive
|
The
Executive may terminate his employment with the Company hereunder on 30 days’
written notice to the Company.
5
|
11.6
|
Termination
by the Executive Upon Change of
Control
|
Upon
a
“Change in Control”, the Executive shall be entitled to terminate his employment
and, within 30 days, receive a lump sum payment from the Company equal to the
amounts prescribed in subparagraph 12.2 and all previously granted stock options
shall immediately vest. For purpose of this section “Change in Control” shall
have the same meaning as contained in the Company’s Stock Option Agreements and
shall mean:
|
(a)
|
any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act")),
other than a trustee or other fiduciary holding securities of the
Company
under an employee benefit plan of the Company, becomes the "beneficial
owner" (as defined in Rule 1 3d-3 promulgated under the Exchange
Act),
directly or indirectly, of securities of the Company representing
50%
or
more of (A) the outstanding shares of common stock of the Company
or (B)
the combined voting power of the Company's then-outstanding
securities;
|
|
(b)
|
the
Company is party to a merger or consolidation, or series of related
transactions, which results in the voting securities of the Company
outstanding immediately prior thereto failing to continue to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving or another entity) at least fifty (50%)
percent of the combined voting power of the voting securities of
the
Company or such surviving or other entity outstanding immediately
after
such merger or consolidation;
|
|
(c)
|
the
sale or disposition of all or substantially all of the Company's
assets
(or consummation of any transaction; or series of related transactions,
having similar effect);
|
|
(d)
|
there
occurs a change in the composition of the Board of Directors of the
Company within the term of this agreement, as a result of which fewer
than
a majority of the directors are Incumbent
Directors;
|
|
(e)
|
the
dissolution or liquidation of the Company;
or
|
|
(f)
|
any
transaction or series of related transactions that has the substantial
effect of any one or more of the
foregoing.
|
12. COMPENSATION
ON TERMINATION
6
|
12.1
|
Compensation
on Termination for Cause
|
If
the
Executive's
employment shall be terminated for cause, the Company shall pay the Executive
his salary through the date of termination together with any accrued vacation
pay and the Company shall have no further obligations to the Executive under
this agreement or in connection with his employment by the Company.
|
12.2
|
Compensation
on Termination without
Cause
|
If
the
Executive's
employment is terminated by the Company without cause, the Company, within
30
days of such termination, shall pay to the Executive an amount, to be inclusive
of all termination and severance amounts payable, as follows:
(a) 12
months’ salary; and
(b) all
vacation pay owing up to the date of termination;
net
of
all statutory deductions or withholdings which the Company is required to make
from time to time. The Company's
obligation to make payments to the Executive pursuant to this paragraph is
conditional upon the Executive fully complying with all of his covenants and
obligations hereunder from and after the date of termination of this agreement
(with no obligation to mitigate) and shall continue only so long as the
Executive is in full compliance with such covenants and obligations. Upon
termination, any and all stock options previously granted to Executive shall
immediately vest and become exercisable in accordance with the terms of the
Executive’s Employee Stock Option Agreement(s).
12.3 Compensation
on Termination by the Executive
Subject
to applicable law, the Executive acknowledges that he shall not be entitled
to
any compensation from and after the date that he terminates his employment
with
the Company pursuant to the provisions of subparagraph 11.5, unless the
Executive has terminated the agreement pursuant to the provisions of
subparagraph 11.6.
|
13.
|
NON
SOLICITATION / NON
COMPETITON
|
| 13.1 |
Non
Solicitation
|
During
the term of this agreement and for one year thereafter, the Executive agrees
not
to induce, directly or indirectly, any individual who to the
Executive's
knowledge is then employed by, or a consultant to, the Company on a full time
or
substantially full time basis in the Business by the Company or an affiliate
of
the Company to leave the employ of, or engagement with, the Company or such
affiliate, without the Company's
prior
written consent, and agrees not to suffer or permit any Related Person to do
so.
7
| 13.2 |
Non
Competition
|
During
the term of this agreement and for a period of one year thereafter, the
Executive shall not directly or indirectly, either as a principal, agent,
employee, employer, stockholder, co-partner or in any other individual or
representative capacity whatsoever engage in the Company’s business within 30
kilometers of the documented boundaries of the Company’s Marmato Mountain
Project. However, Executive may acquire up to five percent (5%) of any publicly
traded company, even if engaged in competition with the Company.
13.3 Severability
If
any
one or more of the covenants provide in this Agreement should be determined
by a
court of competent jurisdiction to be contrary to law, such covenant or
agreement shall be deemed and construed to be severable from the remaining
covenants and agreement herein contained and shall in no way affect the validity
of the remaining provisions of this Agreement.
14.
GENERAL
|
14.1
|
Entire
Agreement
|
This
agreement constitutes the entire agreement between the parties pertaining to
the
employment of the Executive by the Company and supersedes all prior agreements,
negotiations, discussions and understandings, written or oral, between the
parties. There are no representations, warranties, conditions other agreements
or acknowledgments, whether direct or collateral, express or implied, that
form
part of or affect this agreement, or which induced any party to enter into
this
agreement or on which reliance is placed by any party, except as specifically
set forth in this agreement.
14.2
Amendment
This
agreement may be amended or supplemented only by a written agreement signed
by
each party.
|
14.3
|
Waiver
of Rights
|
Any
waiver of, or consent to depart from, the requirements of any provision of
this
agreement shall be effective only if it is in writing and signed by the party
giving it, and only in the specific instance and for the specific purpose for
which it has been given. No failure on the part of any party to exercise, and
no
delay in exercising, any right under this agreement shall operate as a waiver
of
such right. No single or partial exercise of any such right shall preclude
any
other or further exercise of such right or the exercise of any other
right.
8
|
14.4
|
Applicable
Law
|
This
agreement shall be governed by and construed in accordance with the laws in
force in the State of Delaware. Each party irrevocably submits to the
non-exclusive jurisdiction of the courts of Ontario with respect to any matter
arising hereunder or related hereto.
|
14.5
|
Time
|
Time
is
and shall remain of the essence of this agreement and all of its
provisions.
|
14.6
|
Notices
|
Any
notice, demand or other communication (in this paragraph, a "notice") required
or permitted to be given or made hereunder shall be in writing and shall be
sufficiently given or made if:
| (a) |
delivered
in person during normal business hours on a Business Day and left
with a
receptionist or other responsible employee of the relevant party
at the
applicable address set forth below;
|
| (b) |
sent
by prepaid first class mail; or
|
| (c) |
sent
by any electronic means of sending messages, including telex or facsimile
transmission, which produces a paper record ("Electronic Transmission")
during normal business hours on a Business Day charges prepaid and
confirmed by prepaid first class
mail;
|
in
the
case of a notice to the Executive, addressed to him at:
X.
X.
Xxxxx
3505
- 00
Xxxxxxx Xx., X.
Xxxxxxx,
XX X0X 0X0
and
in
the case of a notice to the Company, addressed to it at:
0
Xxxx
Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx, X0X 0X0
Attention:
Chief Executive Officer
Telecopier
No.: 000-000-0000
Each
notice sent in accordance with this paragraph shall be deemed to have been
received:
| (a) |
on
the day it was delivered;
|
9
|
(b)
|
on
the third Business Day after it was mailed (excluding each Business
Day
during which there existed any general interruption of postal services
due
to strike, lockout or other cause);
or
|
|
(c)
|
on
the same day that it was sent by Electronic Transmission or on the
first
Business Day thereafter if the day on which it was sent by Electronic
Transmission was not a Business
Day.
|
The
Executive or the Company may change the address for notice by giving notice
to
each other as provided in this paragraph.
|
14.7
|
Assignment
|
Neither
this agreement nor any rights or obligations hereunder shall be assignable
by
any party without the prior written consent of the other party. Subject thereto,
this agreement shall endure to the benefit of and be binding upon the parties
and their respective heirs, executors, administrators, legal personal
representatives, successors (including any successor by reason of amalgamation
or statutory arrangement of any party) and permitted assigns.
|
14.8
|
Other
|
| (a) |
During
the Term and thereafter while the Executive could have any liability,
the
Executive shall be named as an insured party in any liability insurance
policy (including the director and officer liability policy) which
shall
be maintained by the Company for the directors and/or senior
officers.
|
| (b) |
The
Company shall indemnify the Executive to the fullest extent permitted
by
the laws of the state of Delaware and the province of Ontario on
the date
hereof or as such laws from time to time may be
amended.
|
|
14.9
|
Further
Assurances
|
Each
party shall do such acts and shall execute such further documents, conveyances,
deeds, assignments, transfers and the like, and will cause the doing of such
acts and will cause the execution of such further documents as are within its
power as any other party may in writing at any time and from time to time
reasonably request be done and or executed, in order to give full effect to
the
provisions of this agreement.
IN
WITNESS WHEREOF the
parties have duly executed this agreement under seal this 12th day of November
2007.
SIGNED,
SEALED AND DELIVERED )
in
the
presence
of:
)
)
/s/ X.
Xxxxxxx
) /s/
X. X.
Xxxxx
Witness
X.
X. Xxxxx
10
By:
/s/ J. R.
Xxxxxx
X. X. Xxxxxx
11
