Exhibit 10.32
SEVERANCE
AGREEMENT
THIS
AGREEMENT is dated as of August 9, 2006.
BETWEEN:
WESTERN
GOLDFIELDS (CANADA) INC., a corporation incorporated under the laws of the
Province of Ontario (hereinafter called the
“Corporation”)
OF THE FIRST PART
- and -
WESLEY C.
HANSON (hereinafter
called the “Executive”)
OF THE SECOND PART
WHEREAS the Executive is an employee of the Corporation
and is considered by the Board of Directors of the Corporation to
be a valued employee that has devoted his ability, time, effort and
energy to the affairs of the Corporation;
AND WHEREAS the Corporation considers the continuance of a
sound and vital management to be essential to protecting and
enhancing the best interests of the Corporation and its
shareholders;
AND WHEREAS the Corporation desires to assure itself of
retaining the services of the Executive (including his services
without distraction by uncertainties and risks in the event of a
proposed change of control of the Corporation) and to reward the
Executive for his valuable, dedicated service to the Corporation,
should his service terminate under the circumstances hereinafter
described;
NOW THEREFORE THIS AGREEMENT
WITNESSETH that in
consideration of the mutual covenants herein contained and in
consideration of the Executive remaining in the employment of the
Corporation at the present time, it is hereby agreed as
follows:
|
|
“Agreement” means this Agreement as amended from time to
time;
|
|
|
“Annual Compensation”
shall mean an amount equal to
Executive’s annual base salary at the annual rate in effect
at his Date of Termination, the Target Bonus plus all benefits,
quantified as 10% of the Executive’s annual base salary, paid
or payable.
|
- 2 -
|
|
“Board
of Directors” means
the board of directors of the Corporation as at the date of this
Agreement.
|
|
|
“Cause” shall mean termination of Executive’s
employment by the Corporation or any subsidiary thereof or
successor thereto, by reason of Executive’s:
|
|
|
gross
negligence in the performance of his duties;
|
|
|
wilful and
continued failure to substantially perform his duties determined on
a historic basis prior to a Change of Control with the
Corporation;
|
|
|
wilful
engagement in conduct which is materially injurious to the
Corporation or its subsidiaries (monetarily or otherwise);
or
|
|
|
conviction of a
criminal offence involving moral turpitude.
|
For purposes of
this subparagraph 1(d) no act, or failure to act, on
Executive’s part shall be considered “wilful”
unless done intentionally, or intentionally omitted by Executive
not in good faith and without reasonable belief that his action or
omission was in the best interests of the Corporation.
|
|
“Change of Control”
means the occurrence of any one or
more of the following events:
|
|
|
the Corporation
shall not be the surviving entity in a merger, amalgamation or
other reorganization (or survives only as a subsidiary of an entity
other than a previously wholly-owned subsidiary of the
Corporation);
|
|
|
the Corporation
sells, leases or exchanges greater than 35% of its assets to any
other person or entity (other than a wholly-owned subsidiary of the
Corporation);
|
|
|
the Corporation
is to be dissolved and liquidated;
|
|
|
any person,
entity or group of persons or entities acting jointly or in concert
acquires or gains ownership or control (including, without
limitation, the power to vote) more than 35% of the
Corporation’s outstanding voting securities; or
|
|
|
as a result of
or in connection with: (A) the contested election of directors, or;
(B) a transaction referred to in subparagraph 1(e)(i) above, the
persons who were directors of the Corporation before such election
shall cease to constitute a majority of the Board of
Directors.
|
|
|
“Date
of Termination” means:
|
|
|
if
Executive’s employment is terminated by the Executive
following a Triggering Event, the date specified in the Notice of
Termination provided by the Executive to the Corporation;
and
|
|
|
if
Executive’s employment is terminated for any other reason,
the date specified in the Notice of Termination provided by the
Corporation to the Executive, and shall mean termination from
active employment, and shall not include any notice
period.
|
|
|
“Disability” means incapacity due to physical or mental
illness, which shall have caused Executive to have been absent
from, or unable to perform, the Executive’s duties with the
Corporation on a full-time basis for six consecutive
months.
|
|
|
“Notice of Termination”
shall mean notice which shall
indicate the specific termination provisions in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
Executive’s employment under the provisions so
indicated.
|
|
|
“Severance Amount”
shall mean an amount equal to 2
times the Executive’s Annual Compensation.
|
|
|
“Target Bonus”
shall mean an amount equal to the
previous year’s bonus granted to the Executive, but shall not
exceed 25% of the Executive’s annual base salary.
|
|
|
“Triggering Event”
means any one of the following
events which occurs without the express agreement in writing of the
Executive:
|
|
|
a material
adverse change in the salary or benefits of the Executive as they
exist immediately prior to the Change of Control;
|
|
|
a removal of
the designation of Vice President, Mine Development in the title of
the Executive immediately prior to the Change of Control or a
material adverse change in the responsibilities, duties, powers,
rights and discretion associated with such title;
|
|
|
a change in the
person or body to whom the Executive reports immediately prior to
the Change of Control, except if such person or body is of
equivalent rank or stature or such change is as a result of the
resignation or removal of such person or the persons comprising
such body, as the case may be, provided that this shall not include
a change resulting from a promotion in the normal course of
business; or
|
|
|
a change in the
location at which the Executive is regularly required immediately
prior to the Change of Control to carry out the terms of his
employment with the Corporation, which is of a distance greater
than 50 kilometers from the City of Toronto, unless the terms of
employment of the Executive include the obligation to receive
geographic transfers from time to time in the normal course of
business, or unless the Executive consents to the
change.
|
- 4 -
The term of this Agreement shall commence on the
date hereof and continue for an indefinite term.
|
|
Termination of Employment
|
|
|
Termination
by the Corporation Without Cause. The Corporation shall be entitled to terminate
Executive’s employment at any time without Cause by giving
the Executive a one-time payment equal to the Executive’s
Annual Compensation, plus an additional one months’ worth of
Annual Compensation for each completed year of employment to a
maximum of 18 months Annual Compensation. Such lump sum cash
payment is
|
|
