Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the 22nd day of May 1997
BETWEEN:
ARCTIC PRECIOUS METALS, INC.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
(Fax No. 000-000-0000)
(hereinafter called "Arctic")
OF THE FIRST PART
- and -
XXXXXX XXXX
0000 X. Xxxx Xxxxxxxxx Xxxxxxx X.X.
Xxxxxxxx, XX 00000
(hereinafter called the "Employee")
OF THE SECOND PART
- and -
ROYAL OAK MINES INC.
BCE Place, Suite 2500
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
(Fax No. 000-000-0000)
(hereinafter called "Royal Oak")
OF THE THIRD PART
WHEREAS Arctic and the Employee wish to enter into a written agreement to
record the terms and conditions of the Employee's continued employment with
Arctic;
AND WHEREAS Arctic's parent company, Royal Oak, has agreed to assume certain
obligations herein and to guarantee the performance by Arctic of its
obligations to the Employee hereunder;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein
set out, the parties agree as follows:
1. EMPLOYMENT
Employee commenced employment with Arctic on February 27, 1995 and hereby
accepts continued employment with Arctic from and after May 22, 1997 on
the terms and subject to the conditions herein set forth.
2. DUTIES
Subject to instructions which may be received from time to time by the
Employee from the Chief Executive Officer of Arctic, the Employee is
hereafter engaged by Arctic as Executive Vice-President and Chief
Operating Officer and in such other executive capacities as may be
determined by the Chief Executive Officer of Arctic from time to time;
and,in furtherance of his duties, the Employee shall do the following:
(a) serve Arctic faithfully;
(b) observe all policies of Arctic and perform all services
associated with his position to the best of his ability;
(c) devote substantially all of his working time and attention to the
business of Arctic, except to the extent otherwise permitted by
the Chief Executive Officer;
(d) carry out all lawful instructions given to him by the Chief
Executive Officer; and
(e) endeavour to further the best interests of Arctic.
The Employee will be based in Kirkland, Washington but may from time to
time be called upon and hereby agrees to perform services elsewhere.
3. TERM
The term of this Agreement shall commence May 22, 1997 and continue
thereafter indefinitely unless earlier terminated in accordance with the
provisions of this Agreement.
4. ANNUAL SALARY AND BONUS
In consideration for services rendered hereunder, Arctic shall pay to the
Employee the following:
(a) Salary: Employee's salary shall be US$200,000 per annum. Arctic
agrees to review the salary at least every twelve (12)months and
may make adjustments, in its discretion, based on changes in
market pay rates for jobs similar to the Employee's, cost of
living and such other factors as Arctic deems relevant.
(b) Bonus: Employee will be eligible for an annual bonus award to a
maximum value of 50 percent of the salary unless Arctic, in its
discretion, determines to pay a higher maximum value. The amount
of the bonus is based on achievement of predetermined annual
performance objectives set for the Employee by the Chief
Executive Officer of Arctic and communicated to the Employee at
the beginning of the year.
5. OTHER BENEFITS
In addition to the annual salary and bonus award provided in paragraph 4
of this Agreement, Arctic shall provide the following benefits to the
Employee:
(a) Fringe Benefits
Arctic shall furnish to the Employee at Arctic's expense such
insurance (including, without limitation, medical, dental,
vision, hospitalization, life and disability insurance), pension,
and other benefits as are provided to senior executives by Arctic
including participation in the Company's supplementary executive
retirement plan and/or split dollar life insurance program.
(b) Stock Options
The Employee shall be entitled upon execution of this Agreement
to receive 65,000 new options to purchase shares of Arctic's
parent company, Royal Oak, which options are exercisable
following shareholder approval on a one-third (1/3) basis per
year commencing on the first anniversary of the date of this
Agreement and valid for a term of seven years with the price of
those options fixed at US $2.50. The terms of the option shall
be stipulated by Royal Oak in a separate Stock Option Agreement
to be executed by Royal Oak and the Employee prior to any options
being exercised thereunder. The Employee shall also be eligible
for future grants of stock options for shares in Royal Oak on
terms applicable to other senior officers of Arctic.
(c) Business Expenses
Arctic agrees to reimburse the Employee quarterly for all
ordinary and necessary business expenses incurred by the Employee
in the performance of his duties under this Agreement and the
Employee shall provide vouchers and statements in respect of
all such expenses in a timely manner.
(d) Membership
Arctic agrees to provide the employee with one reasonably priced
business club membership for the purposes of personal and family
use and for entertaining. All meals and sundry expenses for
personal use will be to the account of the employee, with Arctic
responsible for and paying all reasonable expenses incurred by
the Employee for the purpose of entertaining clients and business
associates.
(e) Vacation
The Employee shall be entitled to four weeks of paid vacation
during each full calendar year in which he is employed by Arctic
pursuant to this Agreement, the timing of such vacation being
mutually agreed upon between the Employee and Arctic. Vacation
entitlement is non-cumulative and must be taken in the year in
which it is earned unless otherwise agreed to in writing by the
Chief Executive Officer.
(f) Demand Loan
The Employee will be eligible to borrow from Arctic an aggregate
maximum amount of US $90,000.00 interest free for the purpose of
financing a home. Repayment of such loan in the amount of US
$15,000.00 per year shall be guaranteed by the Employee and
security, in the form of a second mortgage on the said home,
shall be provided by the Employee to secure repayment of the
loan to Arctic. The terms of the loan shall be stipulated by
Arctic in a separate written Loan Agreement to be executed by the
Employee and Arctic prior to any advances being made thereunder
and shall include a requirement for repayment of any amount then
outstanding within 120 days of cessation of the Employee's
employment hereunder for any reason whatsoever.
6. TERMINATION AND COMPENSATION AT TERMINATION
Notwithstanding anything herein contained to the contrary, this Agreement
shall terminate in the following manner and the Employee shall be
compensated as indicated:
(a) Termination by Arctic for Cause
This Agreement and the employment of the Employee may be
terminated effective immediately for cause by the giving of
written notice of dismissal by Arctic to the Employee. As
used herein, "cause" includes, but shall not be limited
to, competing with or publicly denigrating the business of
Arctic, unauthorized disclosure or use of Confidential
Information in breach of paragraph 7 herein, repetition of
conduct subject and subsequent to progressive discipline, gross
misconduct or gross negligence by the Employee in the performance
of his duties hereunder, the commission by the Employee of an
act of theft, dishonesty, embezzlement or vandalism against
Arctic, its parent Royal Oak or any of their respective related,
associated or subsidiary companies, or the conviction of the
Employee for any indictable criminal offence or a felony or
criminal offence of moral turpitude.
If this Agreement is terminated by Arctic for cause, the
Employee shall continue to accrue and receive his salary and
benefits through to the date of termination indicated in the
notice of dismissal only. No additional compensation or payment
shall or need be made by Arctic to the Employee.
(b) Termination by Arctic Without Cause
This Agreement and the employment of the Employee hereunder may
be terminated by Arctic effective at any time without cause by
giving the Employee at least 24 months' prior written notice of
termination. In the event such notice is given, the employment
of the Employee shall terminate on the date specified in the
said notice. In lieu of notice, Arctic may, in its discretion,
terminate the employment of the Employee immediately by making
payments to the Employee of all salary and bonus, equal to the
salary and bonus received by the Employee with respect to the
last completed fiscal year of Arctic prior to such notice and
continuing (if possible, and in accordance with applicable
statutory provisions, or if not, paying the present value of)
all benefits which would have accrued to the benefit of the
Employee to the date of termination had the period of notice of
termination required by this Agreement been given. The parties
hereto acknowledge that this Agreement and the period of notice
referred to herein are fair and reasonable in all the
circumstances.
The Employee hereby acknowledges and agrees that, should Arctic
or its parent company, Royal Oak, subsequently take over or
otherwise acquire control of additional properties and/or
projects which substantially increases the duties and
responsibilities of the position of Executive Vice-President
and Chief Operating Officer herein assumed, then any
reassignment of the Employee by Arctic to the position of Chief
Operating Officer of North American Operations or some like
position, at a salary and benefits comparable to those held by
the Employee prior to any such takeover or acquisition, will
not constitute or be deemed to constitute constructive dismissal
or termination of the employment of the Employee hereunder.
(c) Termination of Change of Control
For purposes of this Agreement, "Change in Control" means any one
or more of the following:
(i) the acquisition by any person or group of related persons
or persons acting jointly or in concert of more than 30%
of the issued and outstanding common shares of Arctic or
its parent company Royal Oak (calculated on a
non-diluted basis), whether acquired in a single
transaction or a series of transactions, whether or not
one or more of those transactions occurred before the
date hereof;
(ii) the election to the Board of Directors of Arctic or its
parent company Royal Oak of persons employed by or
representing any one person or group of related persons
or persons acting jointly or in concert and
constituting 40 percent or more of the Board.
Should a Change of Control occur, the Employee's employment with
Arctic or any successor corporation shall be hereby guaranteed
to age 62 in such senior management or consulting capacity as
may be determined by Arctic or its successor corporation at a
salary and bonus equal to the salary and bonus received by the
Employee with respect to the last completed fiscal year of
Arctic, and benefits (on a fully vested basis) comparable to
those accorded the Employee prior to such Change of Control.
Should the Employee elect to pursue such guaranteed employment to
age 62, he hereby agrees to fully and capably perform all duties
assigned to him by Arctic or its successor corporation and waives
any subsequent right to or claim for constructive dismissal
during the course of such employment and compensation on
termination after age 62 beyond the minimum required by law.
Conversely, should the Employee elect to reject such guarantee of
employment to age 62 and to terminate his employment with Arctic
or its successor corporation within the period for election
specified below, then the Employee shall be entitled to the
compensation and benefit package outlined in subparagraph (b)
above and shall be further given the right to immediately
exercise all approved outstanding options, subject to
confirmation of Exchange approval as specified in each Stock
Option Agreement.
The Employee shall have three (3) months from the date of any
Change of Control to make the election whether to pursue or
reject the aforesaid guarantee of employment.
The parties hereto acknowledge that this Agreement and the
compensation packages proposed in lieu of notice in
subparagraphs (b) and (c) herein are fair and reasonable in all
the circumstances.
(d) Termination by the Employee
This Agreement and the employment of the Employee hereunder may
be terminated by the Employee upon at least three (3) months'
prior written notice to Arctic given at any time. If the
Employee so terminates this Agreement and his employment
hereunder, he shall continue to accrue and will receive his
annual salary and benefits (excluding bonus entitlement) through
to the date specified in his notice of termination and no more.
Upon receipt of such notice, Arctic may, in its discretion,
immediately terminate the employment of the Employee by making
payment to the Employee of all salary and continuing (if
possible, and in accordance with applicable statutory
provisions, or if not possible, paying the present value of)
all benefits which would have accrued to the benefit of the
Employee to the date of termination specified in his notice of
termination.
(e) Termination by Mutual Agreement
This Agreement and the employment of the Employee hereunder may
be terminated by mutual agreement in writing of the parties
hereto. The Employee shall continue to accrue and receive his
annual salary and benefits through to the date of termination
settled upon pursuant to such mutual agreement.
The fact of termination of the Employee's employment in
accordance with subparagraphs (d) and (e) herein and the terms
of such termination shall be maintained as confidential by the
Employee and shall not be disclosed to anyone other than
Employee's legal and financial advisors until the Employee
is so authorized by the Chief Executive Officer of Arctic.
(f) Termination by Death
The Agreement and the employment of the Employee hereunder shall
be terminated by the death of the Employee. All compensation
to the Employee shall cease at his death.
(g) Termination by Permanent Disability
For the purpose of this Agreement, "Permanent Disability" means:
the Employee is unable to perform any and every duty of his
employment, and such disability may reasonably be expected to
exceed a period of six months.
If the Employee's employment is terminated due to Permanent Disability,
the following compensation shall be paid:
1. salary shall stop at the end of the month in which termination
occurs;
2. all employee benefits, except Arctic sponsored medical,
accidental and life insurance, shall cease with termination.
The medical insurance (with premium waiver for accidental and
life insurance) shall continue for the Employee and his
dependents for two (2) years under the same cost sharing
arrangement as between Arctic and its other employees.
Accidental and life coverage shall continue for as long as the
Employee remains disabled under the disability plan. The
Employee will be given the option, consistent with then
existing legislation, to convert medical coverage upon
cessation thereof to an individual policy;
3. the bonus payable under paragraph 4 (b) of this Agreement will
be payable at year end on a pro rata basis based on the period
of employment as a percentage of the full year.
If the parties cannot mutually agree upon whether the Employee has a
Permanent Disability or when the Employee became Permanently Disabled
for the purposes of this Agreement, then Arctic and the Employee shall
each appoint one doctor of medicine licensed to practice in the State
of Washington and the two doctors so appointed shall determine if the
Employee has a Permanent Disability and the time at which he became so
Permanently Disabled for the purposes of this Agreement. If the two
doctors so appointed cannot agree upon whether the Employee is or when
the Employee became Permanently Disabled, they shall appoint a third
doctor of medicine licensed to practice in the State of Washington and
the decision of the majority shall be binding on both parties
hereto and shall not be subject to appeal.
7. CONFIDENTIAL INFORMATION AND TRADE SECRETS
The Employee acknowledges that he has a fiduciary obligation to Arctic
and that, in the course of providing services hereunder, he will be
entrusted with confidential information and trade secrets ("Confidential
Information") concerning the present and contemplated projects, services
and techniques involved and used by Arctic, its parent company Royal Oak
and their respective associated, related and subsidiary companies in
connection with their respective businesses, the disclosure of any of
which to competitors of Arctic, Royal Oak or the general public would
be highly detrimental to the best interests of Arctic and not
compensable by damages. The Employee further acknowledges that the
right to maintain all such Confidential Information as confidential
constitutes a proprietary right which Arctic, its parent company
Royal Oak and their respective associated, related and subsidiary
companies are entitled to protect by way of injunctive relief in
addition to other remedies available to each on breach of such
confidentiality.
The Employee further acknowledges that the restrictions and prohibitions
set out herein are reasonable and proper based on the nature of the
business of Arctic, its parent company Royal Oak and their respective
associated, related and subsidiary companies, which businesses as of
the date hereof are to a significant extent carried on in Canada and
the United States. Accordingly, the Employee agrees that:
(a) he will not, during the term of this Agreement or at any time
thereafter, disclose any of such Confidential Information to any
person or use any of such Confidential Information for any
purpose other than those of Arctic and Royal Oak; and
(b) he will not, during the term of this Agreement or at any time
thereafter, disclose any information concerning the business of
Arctic, its parent company Royal Oak or their respective
associated, related and subsidiary companies which could
adversely affect the image or reputation of any of them.
The Employee agrees that the provisions of this paragraph 7 will, in
their entirety, survive termination of this Agreement by any party for
any reason and in any manner whatsoever.
8. PERFORMANCE GUARANTEE
In consideration of the Employee agreeing to transfer to and continue his
employment with Arctic, Royal Oak hereby guarantees to the Employee the
full performance by Arctic of each and every obligation hereunder
assumed by Arctic and further indemnifies and agrees to hold harmless
the Employee from and against any and all loss, damage, injury and
expense (including recovery of all legal fees and disbursements)
incurred by the Employee as a result of any breach by Arctic of its
obligations hereunder or in enforcing and securing to
the Employee all of his rights and entitlement hereunder.
9. NOTICES
Wherever this Agreement requires or permits any consent, approval,
notice, request or demand from any party to another, the consent,
approval, notice, request or demand (including, without limitation,
telecopied communications) must be in writing to be effective and shall
be deemed to have been given on the earlier of receipt or five business
days after it is enclosed in any envelope, addressed to the party to be
notified at the address first above written (or such other addresses as
may be designated by written notice from time to time), properly stamped,
sealed and deposited in the mail system, in the case of Arctic, to the
attention of the Chief Executive Officer and in the case of Royal Oak to
the attention of Mr. W. J. V. Sheridan, Secretary. Any consent,
approval, notice, request or demand aforesaid if delivered or
telecopied shall be deemed to have been given on the day of such
delivery or telecopied transmission. Any such delivery shall be
sufficient, if left with any person at the above address of the Employee
in the case of the Employee, and with the receptionist at the above
addresses of Arctic and Royal Oak in the case of Arctic and Royal Oak
respectively.
10. ENTIRE AND BINDING AGREEMENT
The provisions contained herein and in any Stock Option Agreement or Loan
Agreement created in accordance with paragraphs 5 (b) and (f) herein
constitute the entire Agreement between the parties and supersede all
previous communications, representations, understandings and agreements,
whether oral or written, between the parties with respect to the subject
matter hereof.
Subject to the provisions hereof, this Agreement shall be binding upon
and shall enure to the benefit of the parties hereto and upon their
respective heirs, legal representatives, successors and permitted
assigns.
11. AMENDMENTS
No alteration or amendment to this Agreement will take effect unless the
same is in writing duly executed by each of the parties in the same
manner as this Agreement.
12. WAIVERS
One or more consents to or waivers of any breach of the terms or
provisions of this Agreement by any party shall not be construed as a
consent or waiver of a subsequent breach of the same term or provision,
nor shall it be considered a consent to or waiver of any other then
existing or subsequent breach of a different term or provision. The
consent or waiver by any party to or of any act by any other party
requiring such consent or waiver shall be deemed not to waive or render
unnecessary consent to or waiver of any subsequent similar act. No
custom or practice of any party shall constitute a waiver of any
other party's right to insist upon strict compliance with the terms and
provisions hereof.
15. SEVERABILITY
If any term or provision of this Agreement shall be or shall become
illegal or unenforceable, the remaining terms and provisions shall
nevertheless be valid, binding, and subsisting.
16. INTERPRETATION
For purposes of this Agreement, "person" includes any body corporate,
government or any subdivision or department thereof, trust,
unincorporated association, joint venture and/or partnership.
17. HEADINGS
Headings are for convenience of reference only and shall not affect the
interpretation of this Agreement.
18. ASSIGNMENT
Neither the rights nor obligations under this Agreement shall be assigned
or otherwise disposed of without the prior written consent of the
non-assigning party, except that Arctic may assign this Agreement to
any successor or related corporation without such consent.
19. APPLICABLE LAW
Whether pursuant to court proceedings or otherwise, the rights and
obligations of the parties under and pursuant to this Agreement shall be
construed under and governed by the laws of the State of Washington and
the parties hereby agree to submit to the exclusive jurisdiction of its
courts.
IN WITNESS WHEREOF this Agreement is executed by the parties as of the date
first above written.
ARCTIC PRECIOUS METALS, INC.
By:/s/ Xxxxxxxx X. Xxxxx c/s
----------------------------
Xxxxxxxx X. Xxxxx
(authorized signing officer)
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF:
/s/ Xxxx XxXxxxx /s/ Xxxxxx Xxxx l/s
--------------------- -----------------------
Xxxx XxXxxxx Xxxxxx Xxxx
Witness
ROYAL OAK MINES INC
By:/s/ Xxxxxxxx X. Xxxxx l/s
---------------------------
Xxxxxxxx X. Xxxxx
(authorized signing officer)
