Exhibit 10.1
TERMINATION AGREEMENT
This Termination
Agreement ("Agreement"), dated as of July 28, 2005, is
made and entered into by and between U.S.
Gold Corporation, a corporation
organized and existing under the laws of
the State of Colorado ("U.S. Gold" or
"Employer") and William W. Reid, an
individual ("W. Reid" or
"Employee")(Employer and Employee may
hereafter be collectively referred to as
"Parties").
RECITALS
WHEREAS, U.S.
Gold and W. Reid entered into that certain Employment
Agreement dated January 1, 1994, as amended
June 1, 1995, July 21, 1998 and
January 1, 2003 ("Employment Agreement");
and
WHEREAS, the
terms of the Employment Agreement, including provisions for
ongoing compensation and a potential cash
severance payment, appear to be an
impediment to completion of certain
corporate transactions that may be in the
best interests of the shareholders of U.S.
Gold, including a contemplated
transaction; and
WHEREAS, W. Reid
is willing to terminate the Employment Agreement and
compromise the form and amount of
compensation provided for in the Employment
Agreement, as well as any other obligations
that Employer may have to Employee,
in return for certain payments described
below; and
WHEREAS, the
Parties agree that it is in their mutual best interests to
terminate the Employment Agreement
effective as of the date of this Agreement;
and
WHEREAS, it is the desire of both
parties that W. Reid continue as an
employee of Employer on an at-will basis
following termination of the Employment
Agreement, maintaining, for the duration of
the at-will employment, the current
level of salary and health and dental
insurance coverage presently in effect for
the benefit of the Employee, and the
parties agree to a mutual one month notice
requirement to terminate the contemplated
at-will employment.
NOW, THEREFORE,
in consideration of the foregoing Recitals, which shall be
considered an integral part of this
Agreement, and the mutual covenants and
agreements set forth below, the parties
hereby agree as follows:
COVENANTS
1) Termination of Employment
Agreement and Stock Option Agreement.
---------------------------------------------------------------
a) The Employment Agreement is
terminated effective immediately and
Employee shall have no further rights thereunder. All payment
or
<PAGE>
compensation to which Employee is entitled from Employer from
this
time forward is set forth in this Agreement.
b) Notwithstanding the
termination of the Employment Agreement, W. Reid
will continue in the employ of U.S. Gold subsequent to this date as
an
at-will employee with a mutual one month notice requirement to
terminate the at-will employment. As such, his employment may
be
terminated for no reason or any reason not prohibited by law.
c) That certain Stock Option
Agreement between the Employer and Employee
dated November 6, 2003 is terminated as of the date of this
Agreement
for the consideration as set forth only in this Agreement.
d) In connection with the
termination of the Employment Agreement,
Employee agrees, by way of example, and not by way of
limitation,
that:
i) Employee is
no longer entitled to monthly compensation under
Section 3.1 of the Employment Agreement;
ii) Employee is not
entitled to any severance payment under Section
4.1.4 of the Employment Agreement;
iii) Employee is no longer entitled to any employment benefits
as
described under Section 3.2 of the Employment Agreement; and
iv) Employee is not
entitled to payment for any other past, present
or future obligations that the Employer may have had under the
Employment Agreement.
2) Consideration to
Employee.
--------------------------
a) In consideration of the
cancellation of the Employment Agreement,
Employer agrees to pay Employee Four Hundred Sixty Nine Thousand
Nine
Hundred Thirty Six Dollars ($469,936.00) as a cash payment
simultaneous with the execution of this Agreement. Payment may be
made
by electronic wire transfer, check, or any other cash
arrangement
acceptable to both parties.
b) Employer agrees to grant and
issue to Employee Five Hundred Thirty
Four Thousand Nine Hundred Sixty Eight (534,968) shares of
common
stock of U.S. Gold issued under and pursuant to Employer's
Non-Qualified Stock Option and Stock Grant Plan valued at Forty
Cents
($0.39) per share simultaneous with the execution of this
agreement.
c) Employer agrees to transfer
2,439,606 shares of Gold Resource
Corporation ("GRC") stock (presently owned by Employer; the
"GRC
2
<PAGE>
Shares") to Employee simultaneous with the execution of this
Agreement. For purposes of this Agreement, the Shares shall be
valued
at fair market value, as determined by Behre Dolbear & Company,
Inc.,
in that certain fairness opinion prepared for Employer and dated
July
25, 2005, and as discussed with tax counsel, the tax basis of
the
portion of the consideration related to the GRC Shares reported
by
Employer to the Internal Revenue Service shall be $143,936.76.
d) In connection with the
transfer of the GRC Shares to Employee,
Employee represents and warrants as follows:
i) Employee is
acquiring the stock for its own account for the
purpose of investment, and not with a view toward, or for sale
in
connection with, any distribution thereof.
ii) Employee (i) has
such knowledge and experience in financial and
bu
