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EXHIBIT 10.20
EXECUTIVE EMPLOYMENT
AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT (this
"Agreement") is made effective this July 31, 2006, by and between
CAPITAL GOLD CORPORATION, a Delaware corporation ("Employer"), and
JEFFREY W. PRITCHARD, a Pennsylvania resident
("Executive").
WHEREAS, Executive has dutifully served as an
executive officer of Employer for the past 10 years, during which
time Employee has received compensation below that generally
received by an executive officer of a company in the
Employer’s industry;
WHEREAS, the Employer has finally reached the
stage of its development where it can commence mining
operations;
WHEREAS, Executive agrees to be employed by
Employer for the period and upon and subject to the terms herein
provided; and
WHEREAS, Employer agrees to employ Executive for
the period and upon and subject to the terms herein
provided;
THEREFORE, in consideration of the foregoing and
of the mutual promises, covenants and agreements contained herein,
the legal sufficiency of which is hereby acknowledged, and
intending to be legally bound, Employer and Executive
agree:
1. Employment . Upon and subject to the terms provided
herein, Employer agrees to employ Executive, and Executive hereby
agrees to be employed by Employer, as Employer’s Vice
President of Investor Relations, or other substantially similar
position.
2. Term of
Employment . Subject to the terms set forth in this
Agreement, Employer agrees to employ Executive and Executive hereby
agrees to be employed by Employer for a period (the "Employment
Period") commencing from the date hereof until the third
anniversary of the date hereof. The Employment Period shall
automatically renew for successive one-year periods unless either
party provides the other party with written notice of its intent
not to renew at least thirty (30) days prior to the expiration of
the then current Employment Period.
3. Compensation .
(a) Base Salary
. As compensation for the services rendered pursuant
to this Agreement, Employer agrees to pay Executive a base salary
at an annual rate of not less than $120,000, payable in
installments in accordance with Employer’s standard payroll
practices, subject to such payroll and withholding deductions as
are required by law or authorized by Executive. The amount of the
base salary shall be reviewed periodically and may be increased at
the sole discretion of Employer.
(b) Bonus .
Executive shall be eligible for any annual incentive bonus
opportunity offered by Employer to employees at Executive’s
level. In the event of any conflict between this Agreement and any
incentive bonus plan adopted by Employer for its officers and
employees, this Agreement shall control. The amount of this bonus,
as well as the criteria necessary to earn a bonus, may be changed
at any time by Employer and shall be within the sole discretion of
Employer. All bonuses paid pursuant to this Agreement will be
subject to applicable withholdings and deductions and will be paid
no earlier than fifteen (15) days and no later than ninety (90)
days after Employer’s fiscal year end for which the bonus is
earned. If Executive’s employment terminates, voluntarily or
involuntarily, prior to the last day of the fiscal year for which
the bonus applies, Executive acknowledges that he is not entitled
to any bonus not yet paid at the time of the termination because
any such unpaid bonus will not be earned, vested, due, or owing.
Executive hereby expressly forfeits and waives any such unpaid
bonus.
(c) Vacation. For each full twelve (12) months of employment, Executive
shall be entitled to receive four (4) weeks paid vacation. One (1)
week of paid vacation may be carried forward from one calendar year
to the next calendar year only (the "Carried Forward Vacation"). If
applicable, Executive’s first week of vacation each calendar
year shall be deemed the Carried Forward Vacation.
(d) Benefits . Executive shall be entitled to participate in the employee
benefits plans offered to all employees of Employer. Employer shall
not be required to establish or continue any benefit plans or take
any action to cause Executive to be eligible for any such benefits
on a basis more favorable than that applicable to all its employees
generally.
(e) Stock Options.
Executive will be eligible to participate in any
stock option or other equity compensation plan adopted by Employer
during the term of this Agreement and applicable to other employees
at Executive’s level (the "Equity Plan"). The number of
options, vesting schedule, exercise price, and all other terms and
conditions of the stock options shall be set forth in an option
agreement pursuant to the applicable plan and shall be commensurate
with Executive’s position, as determined by the Committee of
Employer’s Board of Directors charged with administering the
Equity Plan, in its sole discretion. Employer may, consistent with
its obligations under such a plan or plans, amend or discontinue
any or all stock option plans at any time. Contingent upon
Executive executing this Agreement and as additional consideration
for Executive executing this Agreement and being bound by the
obligations set forth herein, Employer will grant Executive on the
date hereof, a two year option to purchase 250,000 shares of
Employer’s common stock, which shall be subject to the terms
and conditions set forth in this Section 3(e) and the Stock Option
Agreement(s) attached hereto as Exhibit A . Executive
understands and acknowledges that such option cannot be exercised
unless and until the issuance of the option has been approved by
the Company’s stockholders.
(f) Expense Reimbursement
. Employer shall reimburse Executive for all
reasonable and documented travel, entertainment and other business
expenses actually and properly incurred by him in relation to
Employer’s business, as they are incurred. No such expense
reimbursement shall be allowed with regard to such expenses that
exceed $5,000 unless such expenses have been pre-approved by
Employer in writing.
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(g) Office and Duties
. Executive shall report to the President and Chief
Executive Officer or such other supervisor as designated by the
President and Chief Executive Officer of Employer. Executive shall
perform such tasks commensurate with this position as may from time
to time be assigned by Employer. Executive shall devote all
business time, labor, skill, undivided attention and best ability
to the performance of Executive’s duties hereunder in a
manner which will faithfully and diligently further the business
and interests of Employer. During the term of employment, Executive
shall not directly or indirectly pursue any other business activity
without the prior written consent of Executive’s supervisor,
with the exception of passive personal investments not in breach of
any other term or provision hereof. Executive agrees to travel to
whatever extent is reasonably necessary in the conduct of
Employer’s business, at Employer’s expense and pursuant
to Employer’s standard policies and procedures.
4. Termination of
Employment . Notwithstanding any other provision of this
Agreement, Executive’s employment may be terminated as
follows:
(a) Expiration.
This Agreement may be terminated upon expiration of
the term hereof. Following termination pursuant to this Section
4(a), Employer’s only obligation to Executive shall be to pay
to Executive all accrued base salary, all accrued vacation time and
any reasonable and necessary business expenses incurred by
Executive in connection with his duties, all to the date of
termination and payable in a lump sum, less applicable deductions
and withholdings, as soon as administratively practicable following
Executive’s termination.
(b) Termination for Cause.
This Agreement may be terminated by Employer for
Cause. For purposes of this Agreement, "Cause" justifying the
termination of this Agreement by Employer is defined as: (1)
failure or refusal to perform the services required hereunder; (2)
a material breach by Executive of any of the terms of this
Agreement; or (3) Executive’s conviction of a crime that
either results in imprisonment or involves embezzlement,
dishonesty, or activities injurious to Employer or its reputation.
Whether Cause exists under this Agreement shall be determined by
the Employer in its reasonable discretion. Following termination
pursuant to this Section 4(b), Employer’s only obligation to
Executive shall be to pay to Executive all accrued base salary, all
accrued vacation time and any reasonable and necessary business
expenses incurred by Executive in connection with his duties, all
to the date of termination and payable in a lump sum, less
applicable deductions and withholdings, as soon as administratively
practicable following Executive’s termination.
(c) Disability.
This Agreement may be terminated by Employer upon at
least thirty (30) days’ written notice if Executive is
prevented by illness, accident or other disability (mental or
physical) from performing the essential functions of the position
for one or more periods cumulatively totaling three (3) months
during any consecutive twelve (12) month period. In the event this
Agreement is terminated pursuant to this Section 4(c),
Employer shall pay to Executive all accrued base salary, all
accrued vacation time and any reasonable and necessary business
expenses incurred by Executive in connection with his duties, all
to the date of termination and payable in a lump sum, less
applicable deductions and withholdings. In addition, Employer shall
pay to Executive severance payments in an amount equal to one (1)
month of Executive’s base salary, payable in a lump sum, less
applicable deductions and withholdings, as soon as administratively
practicable following Executive’s termination
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("Disability Severance Payments"). Severance
payments made by Employer to Executive pursuant to this
Section 4(c) are conditioned on the Executive signing a
Confidential Severance Agreement and Release substantially in the
form attached hereto as Exhibit B .
(d) Death. This Agreement shall be automatically terminated in the event
of Executive’s death during the term of employment. In the
event this Agreement terminates upon Executive’s death,
Employer shall pay Executive’s estate or beneficiary, as
applicable, all accrued base salary, all accrued vacation time and
any reasonable and necessary business expenses incurred by
Executive in connection with his duties, all to the date of
termination and all payable in a lump sum, less applicable
deductions and withholdings, as soon as administratively
practicable following Executive’s termination.
(e) Without Cause.
This Agreement may be terminated by Employer without
Cause by giving notice at least thirty (30) days prior to the
effective termination date; provided that
Employer pays Executive each of the following:
(i) Employer shall
pay Executive severance payments (the "Cash Severance Payments") in
an amount equal to Executive’s base salary for three (3)
months after the first anniversary of Executive’s original
employment with Employer regardless of the date of this agreement,
plus an additional one (1) month of base salary for each additional
full year of employment (the "Cash Severance Payments").
Notwithstanding the foregoing, Cash Severance Payments shall not
exceed 12 months of base salary. Such Cash Severance Payments shall
be paid in equal monthly installments to Executive beginning in the
month following Executive’s termination. In addition,
Employer shall pay to Executive all accrued base salary, all
accrued vacation time and any reasonable and necessary business
expenses incurred by Executive in connection with his duties, all
to the date of termination and payable in a lump sum, less
applicable deductions and withholdings, as soon as administratively
practicable following Executive’s termination.
(ii) If and when the
Company adopts a health insurance plan for its employees and
Executive is covered under such plan, provided that Executive
timely elects continuation coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended ("COBRA"), Employer
shall pay, on Executive’s behalf, the portion of premiums of
Executive’s group health insurance, including coverage for
Executive’s eligible dependents, that Employer paid
immediately prior to Executive’s separation of employment
with Employer ("COBRA Payments") for a period of twelve (12) months
("COBRA Period"). Employer will pay such COBRA Payments for
Executive’s eligible dependents only for coverage for which
those dependents were enrolled immediately prior to the date of
Executive’s separation of employment. Executive will continue
to be required to pay that portion of the premium of
Executive’s health coverage, including coverage for
Executive’s eligible dependents, that Executive was required
to pay as an active employee immediately prior to the date of
Executive’s separation of employment. For the balance of the
period that Executive is entitled to coverage under COBRA after the
COBRA Period, if any, Executive shall be entitled to maintain
coverage for Executive and Executive’s eligible dependents at
Executive’s sole expense.
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(iii) The Cash
Severance Payments and the COBRA Payments (if any) shall be paid so
long as Executive is not in breach of any term of this Agreement,
including, without limitation, Sections 5, 6, and 7 hereof. The
Cash Severance Payments and COBRA Payments (if any) made by
Employer to, or on behalf of, Executive pursuant to this
Section 4(e) are conditioned on the Executive signing a
Severance Agreement and Release substantially in the form attached
hereto as Exhibit B .
(f) Material Breach.
This Agreement may be terminated by Executive for a
material breach by Employer of any of the terms of this Agreement,
upon thirty (30) days’ written notice specifying the breach,
and failure of Employer to either (i) cure or diligently commence
to cure the breach within the 30-day notice period, or (ii) dispute
in good faith the existence of the material breach. Following
termination pursuant to this Section 4(f), Employer shall pay
to Executive Cash Severance Payments (as defined and calculated in
section 4(e)(i)). Such severance payments shall be paid in equal
monthly installments to Executive beginning in the month following
Executive’s termination. Such severance payments shall be
paid so long as Executive is not in breach of any term of this
Agreement, including, without limitation, Sections 5, 6, and 7
hereof. In addition, Employer shall pay to Executive all accrued
base salary, all accrued vacation time and any reasonable and
necessary business expenses incurred by Executive in connection
with his duties, all to the date of termination and payable in a
lump sum, less applicable deductions and withholdings, as soon as
administratively practicable following Executive’s
termination. Severance payments made by Employer to Executive
pursuant to this Section 4(f) are conditioned on the Executive
signing a Confidential Severance Agreement and Release
substantially in the form attached hereto as Exhibit B
.
(g) Resignation
. This Agreement may be terminated by Executive for
any reason or no reason at all by giving notice to Employer of
Executive’s resignation at least sixty (60) days prior to the
effective resignation date. Following termination pursuant to this
Section 4(g), Employer’s only obligation to Executive shall
be to pay to Executive all accrued base salary, all accrued
vacation time and any reasonable and necessary business expenses
incurred by Executive in connection with his duties, all to the
date of termination and payable in a lump sum, less applicable
deductions and withholdings.
(h) Termination Upon a Change
of Control . In the event of a Termination Upon
a Change of Control as defined in the Agreement Regarding Change In
Control ("Change In Control Agreement") attached hereto as
Exhibit C , Employer’s obligation to Executive
shall be as set forth in the Change In Control
Agreement.
5. Proprietary
Information .
(a) Executive
represents and warrants to Employer that (i) Executive is not
subject to any limitation or agreement restricting employment by
Employer or performance of Executive’s duties hereunder, and
(ii) neither Executive nor any third party has any right or claim
to Executive’s work produced on behalf of Employer or using
the property, personnel, or facilities of Employer. Executive shall
not misappropriate proprietary rights of Employer or any third
party.
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(b) Executive
further agrees not to make, use, disclose to any third party, or
permit to be made, used, or disclosed, any records, plans, papers,
articles, notes, memoranda, reports, lists, records, drawings,
sketches, specifications, software programs, data, or other
materials of any nature relating to any matter within the scope of
the business of Employer or concerning any of its dealings or
affairs ("Materials"), whether or not developed, in whole or in
part, by Executive and whether or not embodying Confidential
Information (defined below), otherwise than for the benefit of
Employer. Executive shall not, after the termination of employment,
use, disclose, or permit to be used or disclosed, any such
Materials, it being agreed that all such Materials shall be and
remain the sole and exclusive property of Employer. Immediately
upon the termination of employment, Executive shall deliver all
such Materials, and all copies thereof, to Employer, at its
designated office.
6. Non-Competition; Non-Solicitation; Anti-Raiding;
Non-Disparagement . Without the prior written approval of
the President or Chief Executive Officer of Employer, Executive
shall not, directly or indirectly, during his employment and until
the end of one (1) year after termination of employment (however
such termination occurs, including, without limitation, termination
pursuant to Section 4(a), 4(b), 4(c), 4(e), 4(f), or 4(g)):
(a) Engage in a
"Competing Business’’ in the "Territory", as those
terms are defined below, whether as a sole proprietor, partner,
corporate officer, employee, director, shareholder, consultant,
agent, independent contractor, trustee, or in any other manner by
which Executive holds any beneficial interest in a Competing
Business, derives any income from any interest in a Competing
Business, or provides any service or assistance to a Competing
Business. "Competing Business" shall mean any business that mines
or produces minerals which is competitive with the business of
Employer or any of its Affiliates (defined below), as conducted or
under development at any time during the term of employment.
"Affiliates" shall mean any entity controlled by or under common
control with Employer or any joint venture, partnership or other
similar entity to which Employer is a party. "Territory" shall mean
anywhere within a 50 mile radius of Caborca in the state of Sonora,
Mexico. The provisions of this Section 6 will not restrict
Executive from owning less than five percent of the outstanding
stock of a publicly-traded corporation engaged in a Competing
Business;
(b) Acquire, lease
or otherwise obtain or control any beneficial, direct or indirect
interest in mineral rights, or other rights or lands necessary to
develop, any mineral property in which Employer or any of its
Affiliates at the time of termination as a beneficial interest or
is actively seeking to acquire, or that is within a distance of
five (5) kilometers from any point on the outer perimeter of any
such property in which Employer or any of its affiliates has a
beneficial interest or that it is seeking to acquire;
(c) Conduct any
exploration or production activities or otherwise work on or in
respect of any mineral property within a distance of five (5)
kilometers from any point on the outer perimeter of any mineral
property in which Employer or any of its affiliates then has a
beneficial interest or is actively seeking to acquire;
(d) (i) Contact
or solicit, or direct or assist others to contact or solicit, for
the purpose of promoting any person’s or entity’s
attempt to compete with Employer or any of its
Affiliates,
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in any business carried on by Employer or any of
its Affiliates during the period in which Executive was an employee
of Employer, any suppliers, independent contractors, vendors, or
other business associates of Employer or any of its Affiliates that
were existing or identified prospective suppliers, independent
contractors, vendors, or business associates during such period, or
(ii) otherwise interfere in any way in the relationships
between Employer or any of its Affiliates and their suppliers,
independent contractors, vendors, and business
associates;
(e) (i) Solicit, offer employment to, otherwise attempt to
hire, or assist in the hiring of any employee or officer of
Employer or any of its Affiliates; (ii) encourage, induce,
assist or assist others in inducing any such person to terminate
his or her employment with Employer or any of its Affiliates; or
(iii) in any way interfere with the relationship between
Employer or any of its Affiliates and their employees;
or
(f) Make any public
statement or perform or do any other act prejudicial or injurious
to the reputation or goodwill of Employer or any of its Affiliates
or otherwise interfere with the business of Employer or any of its
Affiliates.
7. Confidentiality .
(a) The term
"Confidential Information" shall include, but not be limited to,
the whole or any portion or phase of (i) any confidential, or
proprietary or trade secret, technical, business, marketing or
financial information, whether pertaining to (1) Employer or its
Affiliates, (2) its or their suppliers, or (3) any third party
which Employer or its Affiliates is under an obligation to keep
confidential including, but not limited to, methods, know-how,
techniques, systems, processes, software programs, works of
authorship, supplier lists, projects, plans, and proposals, and
(ii) any software programs and programming prepared for
Employer’s benefit whether or not developed, in whole or in
part by Executive. For purposes of this Agreement, "Confidential
Information" shall include, but shall not be limited to,
strategies, analysis, concepts, ideas, or plans; operating
techniques; demographic and trade area information; prospective
site locations know-how; improvements; discoveries, developments;
designs, techniques, procedures; methods; machinery, devices;
drawings; specifications; forecasts; new products; research data,
reports, or records; marketing or business development plans,
strategies, analysis, concepts or ideas; contracts; general
financial information about or proprietary to Employer, including,
but not limited to, unpublished financial statements, budgets,
projections, licenses, and costs; pricing; personnel information;
and any and all other trade secrets, trade dress, or proprietary
information, and all concepts or ideas in or reasonably related to
Employer’s business. All such Confidential Information is
extremely valuable and is intended to be kept secret to Employer;
is the sole and exclusive property of Employer or its Affiliates;
and, is subject to the restrictive covenants set forth herein. The
term Confidential Information shall not include any information
generally available to the public or publicly disclosed by Employer
(other than by the act or omission of Executive), information
disclosed to Executive by a third party under no duty of
confidentiality to Employer or its Affiliates, or information
required by law or court order to be disclosed by
Executive.
(b) Executive shall
not, without Employer’s prior written approval, use,
disclose, or reveal to any person or entity any of Employer’s
Confidential Information, except as required in
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the ordinary course of performing duties
hereunder. Executive shall not use or attempt to use any
Confidential Information in any manner which has the possibility of
injuring or causing loss, whether directly or indirectly, to
Employer or any of its Affiliates.
(c) In the event
that Executive’s employment with Employer is terminated for
any reason whatsoever, he shall return to Employer, promptly upon
Employer’s written request therefore, any documents,
photographs, tapes, discs, memory devices, and other property
containing Confidential Information which were received by him
during his employment, without retaining copies thereof.
8. Acknowledgments . Executive acknowledges that the
covenants contained in Sections 5, 6, and 7, including those
related to duration, geographic scope, and the scope of prohibited
conduct, are reasonable and necessary to protect the legitimate
interests of Employer. He further acknowledges that the covenants
contained in Sections 5, 6, and 7 are designed, intended, and
necessary to protect, and are reasonably related to the protection
of, Employer’s trade secrets, to which he will be exposed and
with which he will be entrusted. Specifically, without limitation,
Executive is entrusted with trade secrets regarding: the strategic
planning initiatives; business development plans; budgets;
financial information; management training; future business plans;
and operational strategies and procedures.
9. Forfeiture of
Severance Payments . If Executive breaches Sections 5,
6, or 7 of this Agreement during the term that severance payments
are made pursuant to Sections 4(c), 4(e), or 4(f) of this
Agreement, Executive shall pay back to Employer all severance
payments received to date. Nothing contained in this Section 9
shall be construed as prohibiting Employer from pursuing any other
remedies available to it in the event of the breach of
Sections 5, 6, or 7, including the equitable remedies set
forth in Section 11.
10. Non-exclusivity of Rights . Amounts that are vested
benefits or that Executive is otherwise entitled to receive under
any plan, policy or program of, or contract or agreement with
Employer at or subsequent to termination of employment (however
such termination occurs, including, without limitation, termination
pursuant to Section 4(a), 4(b), 4(c), 4(e), 4(f), 4(g), or 4(h))
shall be payable in accordance with such plan, policy or program
of, or any contract or agreement except as explicitly modified by
this Agreement.
11. Equitable
Remedies . The services to be rendered by Executive and the
Confidential Information entrusted to Executive as a result of his
employment by Employer are of a unique and special character, and
any breach of Sections 5, 6, or 7 will cause Employer immediate and
irreparable injury and damage, for which monetary relief would be
inadequate or difficult to quantify. Employer will be entitled to,
in addition to all other remedies available to it, injunctive
relief and specific performance to prevent a breach and to secure
the enforcement of Sections 5, 6, or 7. Executive acknowledges that
injunctive relief may be granted immediately upon the commencement
of any such action without notice to Executive and in addition may
recover monetary damages. In the event a court requires posting of
a bond, the parties agree to a maximum $5,000 bond. Executive
further acknowledges that his duties under this Agreement shall
survive termination of his employment, whether the termination is
voluntary or involuntary, rightful or wrongful, and shall continue
until Employer consents in writing to the release of
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Executive’s obligations under this
Agreement. The parties further agree that the provisions of
Sections 5, 6, and 7 are separate from and independent of the
remainder of this Agreement and that these provisions are
specifically enforceable by Employer notwithstanding any claim made
by Executive against Employer.
12. Attorney’s Fees . In the event Executive breaches,
or threatens to breach, any provision of this Agreement, Executive
acknowledges that he shall be solely and fully responsible for all
fees and costs, including without limitation, all attorney’s
fees and costs, incurred by Employer in enforcing this Agreement if
Employer is the prevailing party in any litigation.
13. Entire
Agreement; Amendments . This Agreement (including all
exhibits) constitute the entire understanding between the parties
with respect to the subject matter herein and therein, and they
supersede any prior or contemporaneous understandings or
agreements. This Agreement may be amended, supplemented, or
terminated only by a written instrument duly executed by each of
the parties.
14. Headings . The headings in this Agreement are for
convenience of reference only and shall not affect its
interpretation. References to Sections are to Sections
hereof.
15. Gender;
Number . Words of gender may be read as masculine, feminine,
or neuter, as required by context. Words of number may be read as
singular or plural, as required by context.
16. Severability . The covenants in this Agreement shall be
construed as independent of one another, and as obligations
distinct from one another and any other contract between Executive
and Employer. If any provision of this Agreement is held illegal,
invalid, or unenforceable, such illegality, invalidity, or
unenforceability shall not affect any other provisions hereof. It
is the intention of the parties that in the event any provision is
held illegal, invalid, or unenforceable, that such provision be
limited so as to effect the intent of the parties to the fullest
extent permitted by applicable law. Any claim by Executive against
Employer shall not constitute a defense to enforcement by Employer
of this Agreement.
17. Survival . The provisions of Sections 4, 5, 6, 7, 8, 9,
10, 11, 12, 13, 16, 17, 18, 19, 20, 21 and 22 shall survive the
termination of this Agreement.
18. Notices . All notices, demands, waivers, consents,
approvals, or other communications required hereunder shall be in
writing and shall be deemed to have been given if delivered
personally, if sent by facsimile with confirmation of receipt, if
sent by certified or registered mail, postage prepaid, return
receipt requested, or if sent by same day or overnight courier
service to the following addresses:
If to Employer, to:
Capital Gold Corporation
76 Beaver Street, 26 th Floor
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New York, New York 10005
Attention: Gifford A. Dieterle
Telephone: (212) 344-2785
Facsimile: (212) 344-4537
If to Executive, to:
Jeffrey W. Pritchard
1011 Buckingham Way
Yardley, PA 19067
Telephone: (215) 736-1243
Facsimile:
Notice of any change in any such address shall
also be given in the manner set forth above. Whenever the giving of
notice is required, the giving of such notice may be waived by the
party entitled to receive such notice.
19. Waiver
. The failure of any party to insist upon strict performance of any
of the terms or conditions of this Agreement shall not constitute a
waiver of any of such party’s rights hereunder.
20. Assignment . Other than as provided below, neither party
may assign any rights or delegate any of obligations hereunder
without the prior written consent of the other party, and such
purported assignment or delegation shall be void; provided that
Employer may assign the Agreement to any entity that purchases the
stock or assets of, or merges with, Employer or any Affiliate. This
Agreement binds, inures to the benefit of, and is enforceable by
the successors and permitted assigns of the parties and does not
confer any rights on any other persons or entities.
21. Governing
Law . This Agreement shall be construed and enforced in
accordance with New York law except for any New York
conflict-of-law principle that might require the application of the
laws of another jurisdiction.
22. Submission to
Jurisdiction: Service: Waivers . With respect to any claim
arising out of this Agreement, each party hereto (a) irrevocably
submits, for itself and its property, to the jurisdiction of the
state court located in the City and County of New York, New York,
the federal court located in New York, New York, and appellate
courts therefrom, (b) agrees that the venue for any suit, action or
proceeding arising out of or relating to this Agreement shall be
exclusive to and limited to such courts, and (c) irrevocably waives
any objection it may have at any time to the laying of venue of any
suit, action or proceeding arising out of or relating to this
Agreement brought in any such court, irrevocably waives any claim
that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum and further irrevocably
waives the right to object, with respect to such claim, suit,
action or proceeding brought in any such court that such court does
not have jurisdiction over it. Each party irrevocably consents to
the service of process in any suit, action or proceeding in any of
the aforesaid courts by the
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mailing of copies of process to the other party
or parties hereto, by certified or registered mail at the address
specified in Section 18.
[SIGNATURE PAGE
FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed
this Agreement on the date first above written.
EMPLOYER :
CAPITAL GOLD CORPORATION
By: s/ Gifford A. Dieterle
Gifford A. Dieterle, President
EXECUTIVE:
s/Jeffrey W. Pritchard
Jeffrey W. Pritchard
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EXHIBIT A
STOCK OPTION AGREEMENT
THE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE
SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY
OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF
THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
CAPITAL GOLD CORPORATION
76 Beaver Street
26th Floor
New York, NY 10005-3402
OPTION
No. Shares: 250,000
Option No. 2006-
Expiration Date: July 31, 2008
This Is To Certify That, FOR VALUE RECEIVED,
JEFFREY W. PRITCHARD, residing at 1011 Buckingham Way, Yardley, PA
19067 ("Holder") is entitled to purchase, subject to the provisions
of this Option from CAPITAL GOLD CORPORATION, a Delaware
corporation ("Company") at any time from July 31, 2006 (subject to
prior stockholder and TSX approval as required in section (a)
below) and not later than 5:00 P.M., New York Time on July 31, 2008
at a purchase price of $0.32 per share (market price on July 31,
2006), Two Hundred Fifty Thousand (250,000) restricted shares of
common stock $.0001 par value, of the Company ("Common Stock"). The
number of shares of Common Stock to be received upon the exercise
of this Option and the price to be paid for a share of Common Stock
may be adjusted from time to time as hereinafter set
forth.
(a) EXERCISE OF OPTION. Except as described
below, this Option may be exercised in whole or in part at any time
from July 31, 2006 until the Expiration date set forth above by
presentation and surrender thereof to the Company or at the office
of its stock transfer agent, if any, with the Exercise Form annexed
hereto duly executed and accompanied by payment of the Exercise
Price for the number of shares specified in such form, together
with all federal and state taxes applicable upon such exercise. If
this Option should be exercised in part only, the Company shall,
upon surrender of this Option for cancellation, execute and deliver
a new Option evidencing the right of the holder to purchase the
balance of the shares purchasable hereunder. Upon receipt by the
Company of this Option and a properly executed Exercise Form at the
office or agency of the Company, in proper form for exercise, the
Holder shall be deemed to be the holder of record of the shares of
Common Stock issuable upon such exercise, notwithstanding
that
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the stock transfer books of the Company shall
then be closed or that certificates representing such shares of
Common Stock shall not then be actually delivered to the
Holder.
Notwithstanding the foregoing, this Option cannot
be exercised unless and until the issuance of the Option has been
approved by the TSX and the Company’s
stockholders.
(b) RESTRICTION ON
RESALE. The Holder represents that the
shares to be acquired by Holder upon the exercise of this Option
will be purchased for investment and not with a view to, or for
resale in connection with, any distribution of stock within the
meaning of the Securities Act of 1933, as amended (the "Act"). By
such representation, the Holder means that he will acquire the
shares for his own account for investment and that no one else will
have any beneficial ownership in such shares nor will such shares
be subject to any pledge or lien. Further, the Holder understands
that the shares will not be registered under the Act by reason of a
specific exemption provided therein. Because the shares are
unregistered under the Act, they must be held indefinitely unless
subsequently registered under the Act or an exemption from such
registration is available. The Holder further understands that in
the event that there is a continued market for the Company's Common
Stock, any routine sales of the shares made in reliance upon Rule
144 can be made only in limited amounts in accordance with the
terms and conditions of that rule, and in the event that rule is
not applicable or is unavailable for any reason, Registration under
the Act or compliance with exemption will be required. The Holder
understands that the Company is under no obligation to register
under the Act the Common Stock that Hol
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