Employment Agreement, dated October 13, 2014, between Midway Gold Corp. and [Name of Executive]

October 14, 2014

William M. Zisch

P.O. Box 1073

Indian Hills, Colorado 80454

Dear Bill,

1.

Employment. The Parties wish to enter into this Agreement for Executive to serve in the position of President & CEO of the following entities: the Company, a Nevada corporation, which is a wholly-owned subsidiary of Midway Gold US Inc., a Nevada corporation, which is a wholly-owned subsidiary of Midway Gold Corp., a British Colombia corporation. The Executive shall report to the Board of Directors of Midway Gold Corp. (hereinafter, the “Board of Directors”). The Executive accepts such employment on the terms and conditions set forth in this Agreement. The Executive shall perform the duties of President & CEO and any additional or other duties as directed by the Board of Directors as deemed appropriate.

2.	Compensation and Benefits. In consideration of the Executive’s execution of this Agreement, the Executive shall receive the following compensation and benefits:

a.	Base Salary. The Executive shall be paid a base salary not less $400,000 annually (“Base Salary”), less required and authorized deductions and withholding. The Executive shall be paid his Base Salary in the same manner and on the same payroll schedule in which the Company employees receive payment.

b.

Signing Bonus. The Company agrees to pay the Executive a $1,000,000 signing bonus, which will consist of $500,000 cash, less required and authorized deductions and withholding, plus a stock option grant with a fair market value (based upon the Black Scholes valuation method) equal to $500,000. The cash bonus shall be paid on the six-month anniversary of the Executive’s start date, if the Executive is still employed with the Company on that date. The stock option shall be granted in accordance with Section 2(c) below.

 

c.	Inducement Stock Options. Effective as of the Executive’s start date (the “grant date”), the Company shall make the following inducement grants:

i.	a stock option to purchase 1,000,000 shares of the Company’s common stock, and

ii.	the portion of the Signing Bonus paid as a stock option grant referenced in 2(b) above.

Each option shall carry a 10-year term, an exercise price equal to the closing price of the Company’s stock on the NYSE-MKT on the grant date and shall vest subject to the Executive’s continued employment according to the following schedule: 1/3 on the first anniversary of the grant date, and an additional 1/12 every three months thereafter. Each option shall be subject to and in conformity with the form of stock option notice and agreement attached hereto as Exhibit A.

d.

Annual Bonus Potential. For fiscal years 2015 and thereafter, provided that the Executive remains employed by the Company for the applicable entire fiscal year, the Executive shall be eligible to earn an annual bonus each fiscal year in accordance with the Company’s senior executive incentive plan as in effect and approved by the Board from time to time, except that unless otherwise agreed to by the Parties, the Executive’s payout shall range from 0% to 200% of Executive’s Base Salary, with a target bonus equal 100% of Base Salary.

e.

Long-Term Incentive Potential. The Executive shall be eligible to participate in all long-term incentive (“LTI”) programs available to other senior executives, with any such awards to be issued under the same standard forms applicable to other senior executives, subject to the following unless otherwise agreed to by the Parties:

i.	25% of the target value of any LTI granted to the Executive shall be comprised of restricted stock units subject to time-based vesting over a period not greater than three years,

ii.	75% of the target value of any LTI granted to the Executive shall be comprised of performance share units subject to performance conditions established by the Compensation Committee measured over a period not less than three years,

iii.	the payout under any LTI granted to the Executive shall range from 0% to 200% of the Executive’s Base Salary, with a target equal 150% of Base Salary, and

iv.	the Executive’s first LTI award shall be granted no sooner than one year following the Executive’s start date, in order to allow for sufficient time to establish performance goals.

f.	Executive Benefits. The Executive and his family, as the case may be, shall be eligible to participate in all employee benefit plans, policies, programs, or perquisites in which other Company executives or officers participate.

g.

PTO and Holiday. For the duration of the Executive’s employment hereunder, the Executive will be provided such holidays and paid time off under holiday and PTO programs as the Company makes available to its management level employees generally, except that the Executive shall be entitled to not less than four weeks of paid time off during the Executive’s first 12 months of employment.

 

 

3.	Provisions Relating to Termination of Employment. The Executive’s employment with the Company may be terminated in accordance with any of the following provisions:

a.	Employment Is At-Will. The Executive’s employment with the Company is “at will” and is terminable by the Company or by the Executive at any time and for any reason or no reason, with our without Cause.

b.	Voluntary Resignation by the Executive. The Executive may resign from the Company at any time and without notice (except as may be required to establish Good Reason as defined in Section 4(f) below).

c.	Termination by the Company. The Company may terminate the Executive’s employment at any time with or without notice (except as may be required to establish Cause as defined in Section 4(f) below).

d.

Compensation and Benefits Payable At or After Termination of Employment. Except as otherwise provided in Section 4(e) below, the Executive’s entitlement to compensation and benefits after his termination of employment shall be limited to accrued but unpaid wages and any amounts payable in accordance with the Company benefit plans and programs in which the Executive was participating in at the time of termination of employment.

e.

Severance. In addition to the foregoing compensation and benefits, if the Company terminates the employment of the Executive for reasons other than for Cause, the Executive shall receive his Base Salary payable as salary continuation payments on Company’s regular paydays through the date that is 12 months from the termination date (contingent upon the Executive’s execution of a general release agreement, in a form generally acceptable to the Company).

In lieu of the foregoing, the Executive shall be entitled to the following severance benefits (contingent upon the Executive’s execution of a general release agreement, in a form generally acceptable to the Company) if within 12 months following a Change in Control either (1) the Company terminates the employment of the Executive for reasons other than for Cause or (2) the Executive terminates his employment for Good Reason (each being a “qualifying termination”):

i.

The Executive shall receive a lump sum payment equal to the sum of the following: (A) two times the Executive’s highest rate of annual Base Salary in effect in the 12 months preceding the Executive’s termination of employment; and (B) two times the Executive’s target performance bonus awarded for the fiscal year in which the Executive’s termination of employment occurs (or the immediately preceding fiscal year, if greater).

 

 

ii.

In addition to the lump sum payment under (i) above, the Executive’s stock options, performance share units and restricted stock units then outstanding shall become immediately vested and exercisable in full on the date of the qualifying termination. In addition, if a Change in Control occurs during a performance period applicable to any LTI or other equity award, the performance-measurement period shall end as of the date of the Change in Control and performance shall be measured through the date of the Change in Control; provided, that vesting of the award shall remain subject to the Executive’s continued employment through the end of the full performance period, or the date of a qualifying termination, if earlier.

Payments under this section 4(e) are intended to qualify to the maximum extent possible as exempt from the application of Section 409A of the Internal Revenue Code (and all rights to payments or a series of payments hereunder shall be treated as rights to receive separate payments to the fullest extent allowed by Section 409A). Notwithstanding the foregoing, with respect to the timing of any amounts that constitute deferred compensation subject to Section 409A that depend on termination of employment, termination of employment shall mean a “separation from service” within the meaning of Section 409A and any payments in connection with the Executive’s separation from service that constitute deferred compensation subject to Section 409A shall commence on the sixtieth (60th) day following separation from service. Furthermore, if the Executive is a “specified employee” and Employer’s stock is “publicly traded” for purposes of Section 409A at such time, any payments in connection with the Executive’s separation from service that constitute deferred compensation subject to Section 409A shall not be made until the earlier of (i) the Executive’s death or (ii) six months plus one day after the Executive’s separation from service (the “409A Deferral Period”) as required by Section 409A. Payments of any such deferred compensation otherwise due to be made in installments or periodically during the 409A Deferral Period shall be accumulated and paid in a lump sum as soon as the 409A Deferral Period ends, and the balance of the payment shall be made as otherwise scheduled. If any other payments of money or other benefits due hereunder could cause the application of an accelerated or additional tax under Section 409A, such payments or benefits shall be deferred if deferral will make such payments or other benefits compliant under Section 409A, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Company, that does not cause such an accelerated or additional tax.

f.	Definitions. For the purposes of this Agreement, the following terms shall have the meanings indicated:

i.

“Cause” means a (i) willful and repeated failure to perform duties or contravention in any material respect of specific written lawful directions related to a material duty or responsibility which is directed to be undertaken by the Board of Directors (other than due to physical or mental illness); (ii) conviction of guilty or nolo contendere plea to, a misdemeanor which is materially and demonstrably injurious to the Company or any felony; (iii) commission of an act, or a failure to act, that constitutes fraud, gross negligence or willful misconduct (including without limitation, embezzlement, misappropriation or breach of fiduciary duty resulting or intending to result in personal gain at the expense of the Company); and (iv) violation of any applicable laws, rules or regulations or failure to comply with applicable confidentiality, non-solicitation and non-competition obligations to the Company, corporate code of business conduct or other material policies of the Company in connection with or during performance of the Executive’s duties to the Company that could, in the Board’s opinion, cause material injury to the Company, which violation, if curable, is not cured within thirty (30) days after notice thereof to the Executive.

ii.

“Good Reason” means any of the following actions taken by the Company or its parent (or a successor corporation or entity) without the Executive’s prior express consent: (a) a material diminution in the Executive’s position, authority, duties, or responsibilities; (b) a material reduction in the Executive’s base salary, annual bonus, or incentive opportunity; (c) a relocation of the Executive’s principal office more than thirty (30) miles from the Executive’s principal office as of the date hereof; and (d) a material breach by the Company of its obligations to the Executive under this Agreement or similar agreement with the Executive, including the failure by the Company to require any successor to assume this Agreement; provided that for Good Reason to exist under subsections (a) through (d) above, the Executive must give the Company written notice of one of the events or conditions described in this Section giving rise to Good Reason and the Company must fail to correct such events(s) within thirty (30) days of the date such notice is given. The Executive shall also notify the Company of such event or condition within ninety (90) days of the initial existence of the event or condition, and if not timely cured, the Executive shall terminate within thirty (30) days after failure to cure. It is the intent of the Company that a termination for Good Reason under this subparagraph shall meet the definition of “involuntary separation” set forth in Treasury Regulation Section 1.409A-1(n), and this Agreement shall be interpreted accordingly.

 

iii.	“Change in Control” means shall mean, unless the Board of Directors provides otherwise, the occurrence of any of the following events:

1.

The acquisition by any individual, entity or group (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either (i) the then outstanding Shares (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of Midway Gold Corp. entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions will not constitute a Change in Control: (A) any acquisition directly from Midway Gold Corp., (B) any acquisition by Midway Gold Corp. or (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Midway Gold Corp. or any corporation controlled by Midway Gold Corp.;

 

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2.

In any 12-month period, the individuals who, as of the beginning of the 12-month period, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by Midway Gold Corp.’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will 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 occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors.

3.

Consummation of a reorganization, merger, statutory share exchange, consolidation, sale or other disposition of all or substantially all of the assets of Midway Gold Corp. (including an entity that, as a result of such transaction, owns Midway Gold Corp. or all or substantially all of Midway Gold Corp.’s assets either directly or through one of more affiliates) or similar corporate transaction involving the Company or any of its subsidiaries (in each case, not related to an insolvency proceeding, bankruptcy or liquidation of Midway Gold Corp.) unless, following any of the foregoing business combinations in above, all or substantially all of the Persons that were the beneficial owners of Midway Gold Corp.’s outstanding voting securities immediately prior to such business combination beneficially own immediately after the transaction or transactions, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities (or comparable equity interests) of the entity resulting from such business combination in substantially the same proportions as their ownership of Midway Gold Corp.’s voting securities immediately prior to such business combination.

4.	General Provisions.

a.

Confidentiality and Nondisclosure. The Executive agrees that at all times during the Executive’s employment and following the conclusion of the Executive’s employment, whether voluntary or involuntary, the Executive shall hold in strictest confidence and not disclose Confidential Information (as described in the Corporate Governance Policies) to anyone who is not also an employee of the Company or to any employee of the Company who does not also have access to such Confidential Information, without express written authorization of the Board of Directors. The Company and the Executive agree that the nature of the Executive’s responsibilities under this Agreement require the Executive to have access to confidential information which is valuable and confidential to the Company and its affiliates. “Confidential Information” shall mean any trade secrets or proprietary and confidential information, including but not limited to mining techniques, processes, formulas, inventions, experimental developments, research projects, operating methods, cost, pricing, financial data, business plans and proposals, information pertaining to health and safety, including matters involving MSHA, data and information the Company and its affiliates receive in confidence from any other party, or any other secret or confidential matters of the Company and its affiliates. Additionally, the Executive shall not use any Confidential Information for the Executive’s own benefit or to the detriment of the Company and its affiliates during the Executive’s employment or thereafter. The Executive also certifies that employment with the Company does not and shall not breach any agreement or duty that the Executive has to anyone concerning confidential information belonging to others. The obligations set forth in this paragraph shall survive the Executive’s termination of employment for any reason.

 

Excluded from “Confidential Information” is information that (a) was lawfully in the Executive’s possession before they received it from the Company; (b) is in the public domain other than through a violation of this Agreement; or (c) learned from a third party not under an obligation of confidentiality to the Company or any of its affiliates. Information licensed by the Company or any of its affiliates under a confidentiality restriction is not considered to be in the public domain.

b.	Non-Solicitation. During the Executive’s employment by the Company, and also for a period expiring 12 months after the termination of the Executive’s employment, the Executive covenants and agrees that the Executive will not, without the prior written approval of the Company:

i.	Solicit, induce, recruit, encourage, take away or in any other manner persuade or attempt to persuade any officer, employee or agent of the Company or any of its affiliates to alter or discontinue a relationship with the Company or its affiliates; or

ii.	directly or indirectly solicit, divert, or in any other manner persuade or attempt to persuade any supplier of the Company or any of its affiliates to alter or discontinue its relationship with the Company or any of its affiliates.

The Company and the Executive agree that: this provision does not impose an undue hardship on the Executive and is not injurious to the public; that this provision is necessary to protect the business of the Company and its affiliates; the scope of this covenant is reasonable in terms of length of time and geographic scope; and adequate severance and other consideration supports this covenant, including consideration herein.

c.

Other Terms and Conditions of Employment. The terms and conditions of the Executive’s employment shall, to the extent not addressed or described in this Agreement, be governed by the Company’s Employee Handbook(s) and other existing policies and practices including Corporate Governance policies, as amended from time to time. In the event of a conflict between this Agreement and the Employee Handbook(s) or other existing policies and practices, the terms of this Agreement shall govern.

d.	Successors and Assigns. The rights and obligations of the Parties hereunder are not assignable to another person by the Executive. The Company, without obtaining the Executive’s consent, may assign its rights and obligations to any person or entity.

 

 

c.

Severability; Provisions Subject to Applicable Law. If any provision of this Agreement or compliance by any of the Parties with any provision of this Agreement constitutes a violation of any law, or is or becomes unenforceable or void, then such provision, to the extent only that it is in violation of law, unenforceable or void, shall be deemed modified to the extent necessary so that it is no longer in violation of law, unenforceable or void, and such provision will be enforced to the fullest extent permitted by law.

d.

Execution. This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute but one and the same instrument. Photographic or facsimile copies of such signed counterparts may be used in lieu of the originals for any purpose.

e.

Governing Laws and Forum. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Colorado. The Parties hereto further agree that any action brought to enforce any right or obligation under this Agreement shall be subject to the exclusive jurisdiction of the state and federal courts of the State of Colorado. Both Parties irrevocably submit to the jurisdiction of the state and federal courts of the State of Colorado.

f.

Injunctive Relief. The Executive acknowledges that a breach by the Executive of any of the covenants in this Section 4 will inflict irreparable harm on the Company and its affiliates; and that, in the event of such breach, the Company and its affiliates shall therefore be entitled to any and all equitable relief, including, but not limited to, injunctive relief, and to any other remedy that may be available under any applicable law or agreement between the parties.

 

IN WITNESS WHEREOF, Midway Services Company and the Executive have executed and delivered this Agreement as of the date written below.

 

 

 

 

You have been granted the following option to purchase Common Stock of MIDWAY GOLD CORP. (the “Company”):

 

 

By your signature and the signature of the Company’s representative below, you and the Company agree that this option is subject to vesting and certain other restrictions as provided in the Agreement.

 

                                                                                                                                          

 

SECTION 1. GRANT OF OPTION.

 

 

SECTION 2. RIGHT TO EXERCISE.

 

 

SECTION 3. NO TRANSFER OR ASSIGNMENT OF OPTION.

 

 

 

SECTION 5. PAYMENT FOR STOCK.

 

 

SECTION 6. TERM AND EXPIRATION.

 

 

(i) The expiration date determined pursuant to Subsection (a) above;

 

(ii) The date three months after the termination of the Optionee’s service for any reason other than Cause; or

 

(iii) The date of termination of the Optionee’s service for Cause.

 

 

 

(i) The expiration date determined pursuant to Subsection (a) above; or

 

(ii) The date 12 months after the Optionee’s death.