EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered
into as of the 9th day of June, 1995, by and between
Alta Gold Co. a Nevada corporation ("Employer"), and
▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Executive").
For and in consideration of the mutual covenants
contained herein and of the mutual benefits to be
derived hereunder, the parties agree as follows:
1. Employment. Employer hereby employs
Executive to perform those duties generally described
in this Agreement, and Executive hereby accepts and
agrees to such employment on the terms and conditions
hereinafter set forth.
2. Term. The term of this Agreement shall
commence on October 19, 1995, and end on October 18,
1998.
3. Duties. During the term of this Agreement,
Executive shall be employed by Employer and shall
occupy the office of Senior Vice President and Chief
Financial Officer. Executive agrees to serve in such
offices or positions with Employer or any subsidiary of
Employer.
Executive shall devote substantially all of his
working time and efforts to the business of Employer
and its subsidiaries and shall not during the term of
this Agreement be engaged in any other substantial
business activities which will significantly interfere
or conflict with the reasonable performance of his
duties hereunder.
4. Compensation. For all services rendered by
Executive, Employer shall pay to Executive a salary of
$132,000 per year plus a $350 per month car allowance
while serving as Senior Vice President and Chief
Financial Officer. All salary payments shall be
subject to withholding and other applicable taxes. To
compensate for cost of living increases, the rate of
salary shall be increased annually effective January 1,
1996, and on each anniversary thereafter, as the Board
of Directors, on the recommendation of its compensation
committee may determine or, in the absense of such
determination, in the amount of 7% over the applicable
salary rate during the preceding 12-month period. In
the event Executive resigns from his position with
Employer and not otherwise under the circumstances set
forth at paragraphs 15 or 16 herein, compensation
payments to Executive shall be limited to compensation
for services rendered by Executive.
5. Employment Signing Bonus. Upon the
implementation of this Employment Agreement the
Employer shall provide the option to Executive at the
end of each year of Employment to purchase 40,000
shares of common stock of Employer at a market price of
$.75 (seventy-five cents) for a period of three years
from date of option. A total option of 120,000 shares.
All options, including the 80,000 share option granted
on October 19, 1992, are exercisable for a period of
ten years from the date of grant.
Executive shall have the rights of a stockholder
with respect to the options which have not been issued
and/or exercised, including any cash dividends declared
thereon; any stock dividend, stock split or other
change in the common stock of Employer; or any merger
or sale of all or substantially all of the assets or
other acquisition of Employer, and any and all new,
substituted, or additional securities to which
Executive is entitled.
Should Executive die during the term of this
contract, the remainder of the 120,000 shares from this
contract, together with any unexercised portion of the
80,000 share option granted on October 19, 1992, shall
be awarded to his estate and exercisable for a period
of ten years from the date of grant.
6. Incentive Compensation. Employer shall
provide Executive with incentive compensation in the
form of cash and stock bonuses not less often than once
each year during the term of this Agreement. The
amount of such bonuses shall be determined by the Board
of Directors of Employer or a compensation committee
thereof taking into consideration the relative
contribution by Executive to the business of Employer,
the economy in general, and such other factors as the
Board of Directors or compensation committee deems
relevant.
7. Employment Benefits. Employer shall provide
health and medical insurance for Executive in a form
and program to be chosen by Employer for its full-time
employees. Executive shall be entitled to participate
in any retirement, pension, profit sharing, or other
plan approved by the Board of Directors.
8. Working Facilities. Employer shall provide
to Executive at Employer's principal executive offices
suitable executive offices and facilities appropriate
for his position and suitable for the performance of
his responsibilities.
9. Vacations. Executive shall be entitled each
year to paid vacation of at least 5 weeks. Vacations
shall be taken by Executive at a time and with starting
and ending dates mutually convenient to Employer and
Executive. Vacations or portions of vacations not used
in one employment year shall carry over to the
succeeding employment year, but shall thereafter expire
if not used within such succeeding year.
10. Expenses. Employer will reimburse Executive
for expenses incurred in connection with Employer's
business, including expenses for travel, lodging,
meals, beverages, entertainment, and other items upon
Executive's periodic presentation of an account of such
expenses as required by Employer's policies and
procedures.
11. Covenant Not to Disclose Proprietary
Information. For a period of three years after
termination of Executive's employment, Executive agrees
that he will not directly or indirectly use, employ,
publish, or otherwise disclose any procedures,
policies, practices, trade secrets, computer software,
formulas, client opportunities, or other information of
a proprietary nature in the establishment, opening, or
operation of a business, or in connection with engaging
in business with, serving as an officer, director,
employee or agent of, or owning any equity interest
(other than ownership of ten percent or less of the
outstanding stock of any corporation listed on the New
York or American Stock Exchange or included in the
National Association of Security Dealers Automated
Quotation System) in any person, firm, corporation, or
business entity, that engages in mining activities in
the United States that are competitive with Employer's
mining activities. The parties intend that this
covenant not to disclose proprietary information shall
be construed as a series of separate covenants. If in
any judicial proceeding a court shall refuse to enforce
any of the separate covenants deemed included in this
paragraph, then the unenforceable covenants shall be
deemed eliminated from these provisions for the purpose
of those proceedings to the extent necessary to permit
the remaining separate covenants to be enforced.
This covenant not to disclose proprietary
information shall not be construed as restricting the
Executive's right to own shares in any company or
limited partnership or business entity, provided they
do not perform services, or participate in any way in
the management of, a business entity which competes in
any manner outlined above.
This covenant shall survive the termination of
this Agreement.
12. Nondisclosure of Information. In further
consideration of employment and the continuation of
employment by Employer, Executive will not, directly or
indirectly, during or after the term of employment
disclose to any person not authorized by Employer to
receive or use such information, except for the sole
benefit of Employer, any of Employer's confidential or
proprietary data, information, or techniques, or give
to any person not authorized by Employer to receive it
any information that is not generally known to anyone
other than Employer or that is designated by Employer
as "Limited", "Private", or "Confidential", or
similarly designated.
13. Disability. If Executive is unable to
perform his services by reason of illness or incapacity
for a period of more than 9 consecutive months, the
compensation thereafter payable to him during the
second consecutive 9-month period shall be one-half of
the compensation provided for in paragraph 4 hereof,
and during the third consecutive 9-month period, one-
fourth of the salary provided for in paragraph 4;
provided, however, that no such compensation shall be
payable after the termination of this Agreement.
During such 27-consecutive-month period, Executive
shall be entitled to receive incentive compensation in
the same proportion as Executive's incentive
compensation to his annual salary set forth in
paragraph 4 paid to Executive, if any, for the fiscal
year last preceding the date such illness of incapacity
commenced. Notwithstanding the foregoing, if such
illness or incapacity does not cease to exist within
such 27-consecutive-month period, Executive shall not
be entitled to receive any further compensation nor any
payments set forth in paragraph 15 herein from Employer
and Employer may thereupon terminate this Agreement.
14. Termination for Cause. Except as set forth
in the foregoing paragraph, Employer may not terminate
this Agreement during its term without cause ("Cause").
Employer, however, may terminate this Agreement for
Cause by showing that Executive has materially breached
its terms; that Executive, in the determination of the
Board of Directors has been grossly negligent in the
performance of his duties; that he has substantially
failed to meet written standards established by
Employer for the performance of his duties; or that he
has engaged in material willful or gross misconduct in
the performance of his duties hereunder. If Employer
terminates this Agreement for Cause, all of Employer's
obligations hereunder shall terminate.
15. Payments for Termination Without Cause. In
the event that Employer terminates this Agreement
without Cause and not as the direct result of a change
in control, as that phrase is defined in paragraph 18
hereof, Executive shall be compensated by Employer in a
single lump sum payment, payable within 30 days after
termination of employment, of the following amounts:
(a) The amount of his salary as provided in
paragraph 4; and
(b) Incentive compensation in the same
proportion as Executive's incentive
compensation to his annual salary set
forth in paragraph 4, paid to Executive,
if any, for the fiscal year last
preceding the year during which his
employment terminates, but prorated to
reflect the number of full months of his
employment during the year of
termination.
(c) The remaining amount of his Signing
Bonus. In addition, Executive's
coverage under the Employer's insured
employee benefit plan, as provided in
paragraph 7, shall continue through the
term of this Agreement.
16. Termination Payment for Change in Control.
If Executive resigns or is discharged by Employer (or
is deemed to be discharged pursuant to paragraph 18
below) as the direct and sole result of a change in
control, or in reasonable anticipation of a change in
control, then, in lieu of any payment otherwise paid or
payable to Executive under paragraph 15 hereof,
Employer shall pay to Executive an amount equal to 2.9
times the average of the sum of amounts payable to
Executive for salary, bonus, and profit sharing for the
five fiscal years immediately preceding the date of the
change in control or for such fewer fiscal years if
Executive has been employed by Employer for less than
five fiscal years, plus the remaining amount of the
Signing Bonus. Any amounts paid to Executive pursuant
to this paragraph 16, shall be subject to any
applicable federal, state, and local tax withholdings
and shall be payable in a lump sum to Executive as soon
as practicable after Executive's resignation or
discharge, but subject to the terms of paragraph 17
herein.
17. Tax Limitation. If Employer reasonably
determines that the payment provided for in paragraph
16 hereof (the "Termination Payment") will likely
result in a loss of a deduction to Employer as provided
under Section 280G of the Internal Revenue Code of
1986, or any successor provision thereto, and the
imposition of the excise tax payable to Executive as
provided under Section 4999 to the Internal Revenue
Code of 1986, or any successor provision thereto, such
Termination Payment shall be reduced by the least
amount required to avoid such loss of deduction and
imposition of excise tax (collectively referred to
hereinafter as the "Tax Penalties"). Employer shall
make no Termination Payment to Executive prior to
determining whether the Tax Penalties will apply to the
Termination Payment. Employer shall make such
determination within a reasonable time after
Executive's resignation or discharge, but not to exceed
30 days thereafter.
18. Deemed Termination of Employment. For
purposes of paragraph 16 hereof, Executive shall be
deemed to have been discharged by Employer if Executive
voluntarily resigns before the end of the term of this
Agreement, but after a change in control has occurred,
provided the Executive could not be discharged by
Employer for Cause, has given Employer at least 30 days
prior written notice of such resignation, and such
resignation occurs after any of the following:
(a) Executive is removed or released from
any of his titles, positions, or offices in effect
immediately prior to the occurrence of a change in
control, or Executive's duties and
responsibilities in such titles, positions, or
offices are materially changed;
(b) Executive's base salary in effect
immediately before the change in control is
reduced;
(c) Executive is removed from participation
in any of Employer's bonus or profit sharing
programs, or any such bonus or profit sharing
programs in which Executive was or was entitled to
participate in immediately prior to the change in
control are discontinued;
(d) Executive's office is based more than 50
miles from the location of the principal office at
which Executive was based immediately prior to the
occurrence of the change in control; or
(e) Employer deprives Executive of or
otherwise reduces any material fringe benefit,
including perquisites, provided to Executive by
Employer immediately prior to the occurrence of a
change in control.
(f) Executive makes a determination in good
faith that as a result of the change in control
and a change in circumstances thereafter and since
the date of this Agreement significantly affecting
his position, he is unable to carry out the
authorities, powers, functions or duties attached
to his position and the situation is not remedied
within 30 days after receipt by Employer of
written notice from the Executive of such
determination.
19. Definition of Change in Control. For
purposes of this Agreement, a "change in control" will
be deemed to have occurred on the first to occur of the
following events:
(a) As a result of a cash tender offer,
stock exchange offer or other takeover device, any
person, as that term is used in Section 13(d) and
14(b)(2) of the Securities Exchange Act of 1934,
is or becomes a beneficial owner, directly or
indirectly, of stock of Employer representing
thirty percent (30%) or more of the total voting
power of Employer's then outstanding securities;
(b) Any material realignment of the Board of
Directors of Employer or change in officers of
Employer resulting from a concerted shareholder
action, including without limitation a proxy
flight, voting trusts or pooling arrangements;
(c) Any sale by Employer of thirty percent
(30%) or more of its assets to a single purchaser
or to a group of associated purchasers; or
(d) Any merger, consolidation, or other
reorganization of Employer with an entity, other
than its affiliates, whereby Employer is not the
surviving entity or the shareholders of Employer
otherwise fail to retain substantially the same
direct or indirect ownership in Employer or its
affiliates immediately after any such merger,
consolidation, or reorganization.
20. Death During Employment. If Executive dies
during the term of this Agreement, Employer shall pay
to the estate, trustee, or other legally constituted
third party designated by Executive in six equal
monthly installments commencing on the first day of the
month immediately following the month in which
Executive dies, an amount equal to one year's salary
provided for in paragraph 4 of this Agreement, and
payment of incentive compensation in the same
proportion as Executive's incentive compensation to his
annual salary set forth in paragraph 4 paid to
Executive for the fiscal year last preceding the year
in which Executive dies, but prorated for the number of
full months of his employment during the year of his
death.
21. Stock Registration Provisions. During the
term of this Agreement, Executive shall have the
following rights and obligations with respect to
registration under the Securities Act of 1933 and
applicable blue sky laws of shares of common stock
("Shares") of Employer owned of record by Executive:
(a) Company Registration. Employer shall
notify Executive, at least thirty (30) days prior
to the filing of any Registration Statement on
forms ▇-▇, ▇-▇, ▇-▇, ▇-▇ or any successor forms
under the Securities Act of 1933 covering any
class of stock of the Employer and will upon the
written request of Executive delivered at least
fifteen (15) days prior to such filing, include in
any such Registration Statement such information
as may be required to register such number of
Executive's Shares as Executive may request.
Executive and Employer shall each include
customary representations, warranties,
indemnifications, and contribution provisions in
any underwriting agreement entered into in
connection with such registration.
If the managing underwriters for such registration
advise Employer in writing that in their opinion
the total amount of securities to be included in
such registration statement exceeds the amount
which should reasonably be included in that
offering to achieve the Employer's financing
goals, Employer may limit the amount of stock to
be included as follows: (i) first, all securities
Employer proposes to sell may be included, (ii)
second, the Shares of common stock requested to be
included in such registration by all executives
and employees pursuant to registration rights may
be reduced and adjusted among participating
executives and employees on the basis of the
amount of shares owned of record by each employee,
and (iii) third, if applicable, other stocks
requested to be included in such registration may
be similarly and ratably adjusted with all
executives' and employees' stock pro rata
according to the amount of stock owned of record
by any proposed seller. All incremental expenses
of such registration will be allocated pro rata
according to the total number of shares included
therein. There shall be no limit on the number of
registrations so requested, but each such request
shall cover an amount of Shares having a proposed
offering price of not less than one hundred
thousand dollars ($100,000.00).
(b) Registration of Request. In addition,
Executive's Shares may be registered on not more
than two (2) separate occasions, in such amounts
as may be requested, in the following
circumstances: (i) within one year following the
death or the commencement of disability of
Executive or (ii) at any time in a reasonable
amount and for a bona fide business purpose with
the approval of a majority of the independent,
outside members of the Board of Directors of
Employer. Within thirty (30) days after the
receipt of a request for such registration by
Executive's estate or personal representative
pursuant to phrase (i) of the preceding sentence
or the approval by the independent outside
directors pursuant to phrase (ii) of the preceding
sentence, Employer will commence the process of
preparing for filing a Registration Statement
covering the Shares and use its best efforts to
cause such Registration Statement to become
effective. Employer and Executive shall use
commercially reasonable efforts to obtain an
underwriter to firmly underwrite any such
offering; in the event that no underwriter
reasonably acceptable to Employer is willing to
make a firm commitment, Employer shall have no
obligation to file the Registration Statement.
Employer may delay for up to ninety (90) days the
filing of such a Registration Statement if the
Board of Directors of Employer in good faith and
for a bona fide corporate purpose determines that
a filing at a requested time would be adverse to
Employer's interests. Employer shall not be
obligated to file any such Registration Statement
at any time during which it is impossible or
impracticable to include the required financial
statements. Employer and Executive shall provide
all information required for inclusion in such
Registration Statement and any underwriting
agreement entered into in connection therewith
shall contain the customary representations,
warranties, indemnifications, and contribution
provisions. All expenses of such registration
shall be allocated pro rata according to the total
number of shares included therein.
(c) General. In connection with each of the
foregoing registrations and subject to the
provisions concerning expenses, Employer shall
also (i) use its best efforts to qualify the
Shares for public sale under the blue sky laws of
such jurisdictions as Executive may reasonably
request, (ii) provide such number of preliminary
and final prospectuses as Executive may reasonably
request, and (iii) keep the final prospectus in
any such registration current for a reasonable
period of time. In connection with the
indemnification and contribution to be provided by
Executive to any underwriter or Employer pursuant
to this paragraph 21, the aggregate liability of
Executive shall not exceed the aggregate net
proceeds received by Executive from the sale of
the registered Shares, and, in connection with
contribution, shall also take into consideration
the relative fault of each contributing person.
22. Nontransferability. Neither Executive, his
spouse, his designated contingent beneficiary, nor
their estates shall have any right to anticipate,
encumber, or dispose of any payment due under this
Agreement. Such payments and other rights are
expressly declared nonassignable and nontransferable
except as specifically provided herein.
23. Indemnification. Employer shall indemnify
executive and hold him harmless from liability for acts
or decisions made by him while performing services for
Employer to the greatest extent permitted by applicable
law. Employer shall use its best efforts to obtain
coverage for Executive under any insurance policy now
in force or hereafter obtained during the term of this
Agreement insuring officers and directors of Employer
against such liability.
24. Assignment. This Agreement may not be
assigned by either party without the prior written
consent of the other party.
25. Entire Agreement. This Agreement is and
shall be considered to be the only agreement or
understanding between the parties hereto and supersedes
and is controlling over any and all other prior
existing agreements between the parties with respect to
the employment of Executive by Employer. All
negotiations, commitments, and understandings
acceptable to both parties have been incorporated
herein. No letter, telegram, or communication passing
between the parties hereto covering any matter during
this contract period, or any plans or periods
thereafter, shall be deemed a part of this Agreement;
nor shall it have the effect of modifying or adding to
this Agreement unless it is distinctly stated in such
letter, telegram, or communication that it is to
constitute a part of this Agreement and is to be
attached as a rider to this Agreement and is signed by
the parties to this Agreement.
26. Enforcement. Executive acknowledges that any
remedy at law for breach of paragraphs 11 and 12 would
be inadequate, acknowledges that Employer would be
irreparably damaged by an actual or threatened breach
thereof, and agrees that Employer shall be entitled to
an injunction restraining Executive from any actual or
threatened breach of paragraphs 11 and 12 as well as
any further appropriate equitable relief without any
bond or other security being required. In addition to
the foregoing, each of the parties hereto shall be
entitled to any remedies available in equity or by
statute with respect to the breach of the terms of this
Agreement by the other party.
27. Governing Law. This Agreement shall be
governed by and interpreted in accordance with the laws
of the state of Nevada.
28. Severability. If and to the extent that any
court of competent jurisdiction holds any provision or
any part thereof of this Agreement to be invalid or
unenforceable, such holding shall in no way affect the
validity of the remainder of this Agreement.
29. Waiver. No failure by any party to insist
upon the strict performance of any covenant, duty,
agreement, or condition of this Agreement or to
exercise any right or remedy consequent upon a breach
hereof shall constitute a waiver of any such breach or
of any other covenant, agreement, term, or condition.
30. Litigation Expenses. In the event that it
shall be necessary or desirable for the Executive to
retain legal counsel and/or incur other costs and
expenses in connection with the enforcement of any and
all of his rights under this Agreement, he shall be
entitled to recover from the Employer reasonable
attorney's fees, costs, and expenses incurred by him in
connection with the enforcement of said rights.
Payment shall be made to the Executive by the Employer
at the time these attorney's fees, costs, and expenses
are incurred by the Executive. If, however, the
Executive does not prevail in such enforcement actions,
he shall repay any such payments to the Employer.
AGREED AND ENTERED INTO as of the date first above
written.
EMPLOYER: ALTA GOLD CO.
By:
_______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President, Chairman and
Chief Executive Officer
EXECUTIVE:
_______________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
