FORM OF CHANGE OF CONTROL AGREEMENTChange of Control Agreement |
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Exhibit 10.4
FORM OF AGREEMENT
AGREEMENT by and between Canyon Resources Corporation, a Delaware corporation (the “Company”) and (the “Executive”), dated as of the day of 20___.
The Board of Directors of the Company (the “Board”), has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control, and to provide the Executive with compensation and benefits arrangements upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations. Therefore, in order to accomplish these objectives and to adequately reward Executive, the Board has caused the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions . The “Effective Date” shall be the first date upon which a “Change of Control” (as defined in Section 2) occurs.
2. Change of Control . For the purpose of this Agreement, a “Change of Control” shall mean:
(a) The acquisition, whether by purchase, share exchange, merger, amalgamation, etc., or other property exchange, by any individual, entity or group within the meaning of Section 13(d)(3) or 14(D)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of 30% or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Company Voting Securities”), provided , however , that any acquisition by the Company or any of its subsidiaries, or any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries, shall not constitute a Change of Control; or
(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any individual becoming a director subsequent to the date hereof whose election or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Company (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act); or
(c) (i) a complete liquidation or dissolution of the Company or (ii) sale or other disposition of all or substantially all of the assets of the Company other than to an Affiliated Company. As used herein, Affiliated Company means any company controlled by, controlling or under common control with the Company.
3. Employment Period . Prior to the Effective Date, this Agreement shall be binding upon both parties, but shall not be effective, and Executive and the Company shall not have any obligations to the other hereunder. After the Effective Date, the Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Company, for a period of twelve (12) months commencing on the Effective Date during the first two years of employment and eighteen (18) months thereafter (the “Employment Period”).
4. Terms of Employment .
(a) Position and Duties .
(i) During the Employment Period, the Executive’s position, authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date.
(ii) During the Employment Period, but excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities.
(b) Compensation .
(i) Base Salary . During the Employment Period, the Executive shall receive an annual base salary (“Annual Base Salary”) (which shall be paid in equal bi-monthly installments) at least equal to twelve times the highest monthly base salary paid or payable to the Executive by the Company and its affiliated companies in respect of the twelve-month period immediately preceding the month in which the Effective Date occurs. As used in this Agreement, the term “Affiliated Compan(ies)” includes any company controlled by, controlling or under common control with the Company.
(ii) Incentive, Stock Option, Savings and Retirement Plans . In addition to Annual Base Salary payable as hereinabove provided, the Executive shall be entitled to participate during the Employment Period in all incentive stock option, savings and retirement plans, practices, policies and programs applicable generally to any other Executives of the Company and its Affiliated Companies.
(iii) Welfare Benefit Plans . During the Employment Period, the Executive and/or the Executive’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its Affiliated Companies (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent generally applicable to any other Executives of the Company and its Affiliated Companies.
(iv) Expenses . During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the policies, practices and procedures of the Company and its Affiliated Companies in effect for the Executives at any time during the 90-day period immediately preceding the Effective Date.
(v) Fringe Benefits . During the Employment Period, the Executive shall be entitled to fringe benefits in accordance with the plans, practices, programs and policies of the Company and its Affiliated Companies in effect for the Executive at any time during the 90-day period immediately preceding the Effective Date.
(vi) Vacation . During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its Affiliated Companies as in effect at any time during the 90-day period immediately preceding the Effective Date.
5. Termination of Employment .
(a) Death or Disability . The Executive’s employment hereunder and the Employment Period shall terminate automatically upon the Executive’s death during the Employment Period. If the Company’s Board determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 11(b) of this Agreement of its intention to terminate the Executive’s employment. In such event, the Executive’s employment with the Company and the Employment Period shall terminate effective on the 30 th day after receipt of such notice by the Executive (the “Disability Effective Date”), if, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive’s duties. For purposes of this Agreement, “Disability” means the absence of the Executive from the Executive’s duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive’s legal representative (such agreement as to acceptability not to be withheld unreasonably).
(b) Cause . The Company may terminate the Executive’s employment and the Employment Period during the Employment Period for Cause. For purposes of this Agreement, “Cause” means (i) an action taken by the Executive involving willful and wanton misconduct or gross negligence, or (ii) the Executive being convicted of a felony or other crime which the Board reasonably determines would have an adverse impact on Executive’s ability to perform his duties.
(c) Good Reason . The Executive’s employment and the Employment Period may be terminated during the Employment Period by the Executive for Good Reason. For purposes of this Agreement, “Good Reason” means:
