|
Exhibit 10.47
AMENDED SETTLEMENT AGREEMENT AND RELEASE
This
Amended Settlement Agreement and Mutual Release (the
“Amendment”) is effective as of the latest date
executed below, and is by and between Plaintiff, STEVEN D.
CRAIG, an individual, Sonia M. Merz Successor Trustee ESTATE
OF COLLETTE CRATER-CRAIG on behalf of the ESTATE OF COLLETTE
CRATER-CRAIG (“ESTATE OF COLLETTE CRATER-CRAIG”)
(STEVEN D. CRAIG and the ESTATE OF COLLETTE CRATER-CRAIG may
collectively be referenced as the “CRAIGS”), and
Defendant, GOLDEN PHOENIX MINERALS, INC. (hereinafter
“GOLDEN PHOENIX”) (all parties to this Amendment
shall collectively be referenced as the
“Parties”).
PRELIMINARY STATEMENTS
On
August 30, 2006, STEVEN D. CRAIG filed a Complaint in Washoe
County as Case No. CV06 02103, against GOLDEN PHOENIX, stating
claims for “Specific Performance of Stock Option
Agreements, Money Lent Against Defendant Golden Phoenix
Minerals, Inc., and Interest Accrued On Money Due and Owing To
Plaintiff And Against GOLDEN PHOENIX.”
A
dispute arose among the Parties regarding GOLDEN
PHOENIX’s payment of deferred or “back”
salaries, and interest thereon, related stock options in the
amount of 984,300 shares of stock at 15 cents per share, which
were granted by GOLDEN PHOENIX to STEVEN D. CRAIG during May
of 2000, for reimbursement of business expenses, and interest
thereon, and the exercise of additional options in the amount
of 340,000 shares of stock at 37 cents per share and options
for 250,000 shares of stock at 15 cents per share issued in
September of 2003 and February of 2005, respectively
(hereinafter “Lawsuit”).
COLLETTE
CRATER-CRAIG was named in the Third-Party Complaint filed by
GOLDEN PHOENIX which sought a declaration of rights regarding
the payments of the deferred “back” salaries,
business expenses, and interest thereon, and the options
subject to the Lawsuit. STEVEN D. CRAIG and COLLETTE
CRATER-CRAIG were married during the time STEVEN D. CRAIG was
employed by GOLDEN PHOENIX. The marriage was terminated after
any rights subject of the Lawsuit had accrued. On October 18,
2005, GOLDEN PHOENIX agreed to comply with court orders for
equal dispersement of assets owed to STEVEN D. CRAIG and to
provide STEVEN D. CRAIG with one half of the values owed to
him and COLLETTE CRATER-CRAIG to be provided the balance of
the funds. COLLETTE CRATER-CRAIG since became
deceased on December 3, 2006.
During
September 2007, the Parties agreed to settle and resolve the
Lawsuit, and any and all other actual or potential claims that
may or could have been brought between them (whether
permissive or compulsory) (“Claims”), without the
necessity for further litigation and expense by settling the
Lawsuit and the Claims, whether known or unknown regardless of
whether such claims were asserted in the Lawsuit, between
them.
The
Parties executed a Settlement Agreement and Release
(“Agreement”) during September 2007, whereby
GOLDEN PHOENIX agreed to retire the balance of “back
salaries,” not including interest, to the CRAIGS, as
against the fifteen (15) cents per share exercise price of the
984,300 shares subject to the options granted by GOLDEN
PHOENIX to STEVEN D. CRAIG in May 2000. GOLDEN PHOENIX would
then seek to arrange a purchase of the entirety of these
shares, 393,720 of which were registered and unrestricted and
590,580 of which were unregistered and restricted, by Third
Party purchasers at a 20% discount. The CRAIGS agreed to pay
all tax liability arising from the payment of the back
salaries and the exercise of the options. The CRAIGS
additionally agreed to pay amounts in excess of the back
salaries required to fully fund the exercise cost of the
984,300 options at fifteen (15) cents per share, to dismiss
the Lawsuit with prejudice and to release all
Claims.
Further
Settlement discussions took place between the Parties during
the period of time GOLDEN PHOENIX sought to arrange a purchase
of the identified shares by Third Parties and the Parties by
this writing have agreed to amend the Settlement whereby
GOLDEN PHOENIX will no longer seek to arrange a purchase of
the option shares by Third Parties but instead will act to
register the 590,580 unregistered and restricted shares and
the CRAIGS will themselves exercise the entirety of the
984,300 options at fifteen (15) cents per share, paying tax
and exercise amounts, as set forth more fully
below.
AGREEMENT
In
consideration of the foregoing, the agreements, mutual
covenants and conditions contained herein, and for other good
and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as
follows:
|
1.
|
Incorporation of Recitals . Each of the
preliminary statements is deemed to be true and correct, and the
same are hereby incorporated by reference as if fully stated
herein.
|
Paragraph 2 of the Agreement entitled “Consideration”
is hereby deleted in its entirety and amended by the following
language:
|
2.
|
Consideration. As consideration for this Agreement as
amended herein and STEVEN D. CRAIG’s dismissal of the Lawsuit
with prejudice, and the relinquishment of the Claims by both STEVEN
D. CRAIG and the authorized representative on behalf of the ESTATE
OF COLLETTE CRATER-CRAIG, the Parties have agreed as
follows:
|
|
a.
|
GOLDEN
PHOENIX will retire the balance of the “back salaries,”
not including interest, which the Parties agree total $129,586.55,
to the CRAIGS (one-half (1/2) of the back salaries or $64,793.28 on
behalf of STEVEN D. CRAIG and, one-half (1/2) of the back salaries
or $64,793.27 on behalf of the ESTATE OF COLLETTE CRATER-CRAIG) as
against the fifteen (15) cents per share exercise price of the
984,300 options granted by GOLDEN PHOENIX to STEVEN D. CRAIG during
May of 2000.
|
|
b.
|
GOLDEN
PHOENIX represents that it has filed a registration statement with
the SEC to register the 590,580 unregistered and restricted shares
subject to the options described herein, so that these shares may
be unrestricted and free-trading. The registration of these shares
are subject to review by the SEC and GOLDEN PHOENIX makes no
representations or guarantees regarding the timing of said
registration. GOLDEN PHOENIX will continue to act in good faith to
register these shares, including through any review the SEC may
require, however, the Agreement as amended herein is not
conditioned upon the registration of these shares. The CRAIGS
acknowledge and understand that the registration with the SEC of
the 590,580 shares described herein is pending and that these
shares may be unregistered and restricted at the time of the
execution of this Amendment and the issuance of Stock Certificates
as set forth in paragraph 2.g. The CRAIGS further acknowledge and
understand that in the event the Stock Certificates for the 590,580
shares are issued with restrictions, it is their sole
responsibility after these shares are registered, to obtain Stock
Certificates without restrictions, if they deem that such action is
necessary. In the event the 590,580 shares are registered prior to
the submission for and issuance of Stock Certificates, as set forth
in paragraph 2.g., GOLDEN PHOENIX will provide instructions to its
transfer agent that the Stock Certificates for these 590,580 shares
be issued without restriction.
|
|
c.
|
The
CRAIGS will pay all amounts in excess of the back salaries,
necessary to fully exercise the 984,300 options at fifteen (15)
cents per share at a total exercise cost of $147,645.00, plus the
Employee portion of the applicable Payroll taxes attributable to
STEVEN D. CRAIG for his one-half (1/2) share of the back salaries
and his taxable gain for the exercise of his one-half (1/2) share
of the options or 492,150 options. GOLDEN PHOENIX will pay the
Employer portion of the applicable Payroll taxes. For the purposes
of this settlement: the Employee portion of the applicable Payroll
taxes include, Federal Withholding, and the Employee’s
one-half (1/2) share of the Social Security and Medicare taxes; the
Employer portion of the applicable Payroll taxes include, the
Employer’s one-half (1/2) share of the Social Security and
Medicare taxes, Federal Unemployment Insurance, Nevada State
Unemployment Insurance, and Nevada Modified Business
Tax.
|
|
d.
|
Calculations
of taxes and payments pursuant to this settlement, including
example calculations at 3 different potential closing price values
for the taxes that are due from STEVEN D. CRAIG for the gain
realized by the exercise of the options, are attached as Exhibit
“A” to this Amendment. The parties acknowledge and
agree that the portion of the taxes due from STEVEN D. CRAIG
arising from the exercise of the options are dependent upon the
closing market price of the shares on the date the form entitled
“Request to Exercise Options” is executed by the STEVEN
D. CRAIG, as set forth in paragraphs 2.e.
|
|
e.
|
STEVEN
D. CRAIG will execute this Amendment simultaneously with the form
entitled, “Request to Exercise Options,” attached
hereto as Exhibit “B,” for the 492,150 options for
GOLDEN PHOENIX common stock at 15 cents per share, which are
subject to this Agreement as amended herein. The fair market value
utilized for calculating the Payroll taxes due for the gain
realized by the exercise of the options shall be determined by the
closing price of GOLDEN PHOENIX common stock shares as reported on
the “OTC Bulletin Board” on the date the “Request
to Exercise Options” is executed by STEVEN D.
CRAIG. Taxable gain realized by the exercise of the
options is the difference between the exercise price and the fair
market value of the GOLDEN PHOENIX common stock shares as
determined herein.
|
|
f.
|
Sonia
M. Merz, as the Successor Trustee for the ESTATE OF COLLETTE
CRATER-CRAIG, will, on behalf of the ESTATE OF COLLETTE
CRATER-CRAIG execute this Amendment simultaneously with the form
entitled, “Request to Exercise Options,” attached
hereto as Exhibit “C,” for the 492,150 options for
GOLDEN PHOENIX common stock at 15 cents per share, which are
subject to this Agreement as amended herein. The fair market value
utilized for calculating the taxes due for the gain realized by the
exercise of the options shall be determined by the closing price of
GOLDEN PHOENIX common stock shares as reported on the “OTC
Bulletin Board” on the date the “Request to Exercise
Options” is executed by Sonia M. Merz, as the Successor
Trustee for the ESTATE OF COLLETTE CRATER-CRAIG, will, on behalf of
the ESTATE OF COLLETTE CRATER-CRAIG. GOLDEN PHOENIX will issue IRS
forms 1099 to the ESTATE OF COLLETTE CRATER-CRAIG reporting the
payment of its one-half (1/2) share of back salaries and
additionally for the gain realized by the exercise of the options
as herein determined. Taxable gain realized by the exercise of the
options is the difference between the exercise price and the fair
market value of the GOLDEN PHOENIX common stock shares as
determined herein.
|
|
g.
|
GOLDEN
PHOENIX will submit instructions to its transfer agent to issue
separate Stock Certificates in directly proportionate amounts of
the 984,300 restricted and unrestricted shares, as identified
herein, in the name of (1) STEVEN D. CRAIG and (2) Sonia M. Merz
Successor Trustee Collette Crater-Craig Trust o
|
|
