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2020-12-31
2020-12-31
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): December 31, 2020
GOLD RESOURCE CORPORATION
(Exact name of registrant as specified
in its charter)
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Colorado
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001-34857
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84-1473173
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(State or other jurisdiction
of
incorporation or organization)
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(Commission File
Number)
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(I.R.S. Employer
Identification
No.)
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2886
Carriage Manor Point, Colorado Springs, Colorado 80906
(Address of Principal Executive Offices) (Zip
Code)
(303) 320-7708
(Registrant’s telephone number
including area code)
Securities registered pursuant to Section 12(b) of
the Act:
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Title of each class
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Trading Symbol
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Name of each exchange where registered
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Common Stock
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GORO
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NYSE American
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Check the appropriate box below if the form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of
the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. ¨
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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
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On
December 31, 2020, Gold Resource Corporation (the “Company”) issued a press release announcing that effective as of
the completion of the spin-off of the Company’s wholly-owned subsidiary, Fortitude Gold Corporation (the “Spin-off”),
Jason Reid, has stepped down as the Company’s Chief Executive Officer, President and a member of the Board of Directors,
in order to continue in those same roles at Fortitude Gold Corporation. In connection with his separation from the Company, the
Board of Directors approved a severance payment of $500,000 and accelerated the vesting of all outstanding equity awards held by
Mr. Reid.
On
December 31, 2020, Gold Resource Canada Corporation, a wholly-owned subsidiary of the Company, entered into an employment
agreement with Allen Palmiere pursuant to which he will provide services as Chief Executive Officer of the Company effective
as of January 1, 2021. Mr. Palmiere has also been appointed to serve as a member of the Board of Directors to fill the
vacancy created by Mr. Reid’s departure. Mr. Palmiere, has more than 35 years of experience in the mining industry both from a
financial and operational perspective. His international experience includes South Africa, Central America, Guyana and
Brazil and 10 years of experience in China. Mr. Palmiere’s expertise includes operations, executive management
and financing, both debt and equity, and mergers and acquisitions. Since 2016, Mr. Palmiere has served as Chief Executive
Officer of Ferrox Holdings Ltd., a privately held company focused on a titanium dioxide project in Africa. Mr. Palmiere
previously served as Chief Executive Officer of Guyana Goldfields Ltd. (TSX:GUY), from August 2019 to December 2019 and also
served as a director of that company from May 2019 to August 2020. Since June 2019, Mr. Palmiere has served as a director of
Dundee Corporation (TSX:DC), a diversified holding company with investments in natural resource, mining and energy sectors.
Mr. Palmiere’s former executive positions also include Chief Executive Officer and Chairman of the Board of HudBay
Minerals Inc.; Executive Chairman of Barplats Investments Ltd.; Vice President and Chief Financial Officer of Zemex
Corporation; and President and Chief Executive Officer of Breakwater Resources Ltd. Mr. Palmiere is a Chartered
Accountant and holds a Bachelor’s degree from the University of British Columbia.
Pursuant
to the terms of Mr. Palmiere’s employment agreement, he will receive an annual base salary of $450,000, an annual performance
bonus target opportunity of up to 60% of his annual base salary (or higher upon exceptional performance), and up to $500,000 per
year in long term incentive awards. Mr. Palmiere will receive all other customary benefits payable to other executive officers.
If his employment is terminated, Mr. Palmiere will be eligible for severance benefits including up to 24 months’ salary
and pro-rated bonus for termination without cause or with good reason, and 24 months’ salary and bonus for termination within
12 months of a change in control. The foregoing description of Mr. Palmiere’s employment agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the agreement, a copy of which is attached hereto as
Exhibit 10.1 and incorporated by reference herein.
In
connection with the Spin-off, Bill Conrad, Chairman of the Board, is stepping down as Chairman and will continue to serve as
a director of the Company and Alex Morrison will serve as Chairman. One vacancy on the Board was created when Kimberly Perry
previously stepped down to serve as Chief Financial Officer of the Company. On December 31, 2020, the Board determined to
expand the size of the Board to five members and appointed two independent directors, Joseph Driscoll and Lila Manassa
Murphy, to fill the vacancies effective as of January 1, 2021. Each independent director is expected to also fill vacancies
on the various Board committees, which assignments will be determined at the next meeting of the Board. The new directors
will receive a monthly cash retainer fee, which is subject to adjustment for among other things, committee membership and
leadership, and are eligible for long-term equity incentive awards as determined by the Compensation Committee of the
Board.
Joseph
Driscoll has 33 years’ operational and progressive management experience in the mining industry. Since July 2020, Mr. Driscoll
is serving as the Vice President and Mining Director of Forte Dynamics and Analytical. From September 2016 to July 2020, he was
a senior partner and Mining Account Director at Environmental Resources Management. From October 2013 to September 2016, Mr. Driscoll
was the manager of the metals and mining division of AMEC Engineering and Consulting. Mr. Driscoll has also served in various positions
at Great Basin Gold Limited, Newmont, Barrick, Queenstake Resources, Stillwater Mining, Independence Mining, New Butte Mining and
Pegasus Gold. Mr. Driscoll currently serves as an advisory board member for the Colorado School of Mines and is a member of
the boards of directors of the professional organizations SME Foundation and the Global Underground Mining Guidelines Group, respectively.
He is a qualified mining engineer and holds a Bachelor of Science degree from Montana Tech.
Lila A. Manassa Murphy,
CFA, founded and has served as Principal of Intrinsic Value Partners, LLC since 2018, a provider of consulting services
to asset management firms and family offices. Since August 2018, she has served as an independent director and member of
the audit committee of Dundee Corporation (TSX:DC), a diversified holding company with investments in natural resource, mining
and energy sectors. Ms. Murphy has also served on the board of directors and finance committee of Sustainable Development
Strategies Group, a collaborative research and policy advisor organization focused on sustainable management of natural resources
since June 2019. From December 2008 to August 2018, she was Vice President and Portfolio Manager at Federated Hermes, Inc.
(NYSE:FHI), a Fortune 500, ESG focused investment firm with over $500 billion in assets under management, and was responsible for
portfolio management and fundamental analysis in the alternative equity investment area with a dedicated focus in natural resources
and hard assets. Previously, Ms. Murphy has worked as an analyst at David W. Tice & Associates Inc. with a dedicated
focus on natural resources investing for the Prudent Global Natural Resources Fund and the Prudent Global Gold Fund and an equity
research analyst at Lee Financial Corporation. She has more than 25 years of diverse investment management experience. She
earned the Chartered Financial Analyst designation in 2004. Ms. Murphy holds a Bachelor of Arts degree from New York University.
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Item 7.01
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Regulation FD Disclosure
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On
December 31, 2020, Gold Resource Corporation (the “Company”) issued a press release relating to the executive leadership
changes associated with the Spin-off and certain other matters. A copy of the press release is furnished herewith as Exhibit
99.1. The press release is furnished under this Item 7.01 and shall not be deemed filed with the U.S. Securities and Exchange Commission
(“SEC”) for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. The information contained in
the press release and investor presentation shall not be incorporated by reference into any filing of the Company regardless of
general incorporation language in such filing, unless expressly incorporated by reference in such filing.
Safe
Harbor for Forward-Looking Statements
Any
statements contained in this communication that do not describe historical facts may constitute forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of 1995. Such forward looking statements may include statements
with respect to the Company’s potential separation of Fortitude Gold Corporation from the Company and the distribution of
Fortitude Common Stock to the Company’s shareholders, the expected financial and operational results of the Company and Fortitude
Gold Corporation after the separation and distribution, and changes to GRC’s management. Any forward-looking statements
contained herein are based on Company management’s current beliefs and expectations, but are subject to a number of risks,
uncertainties and changes in circumstances, which may cause actual results or company actions to differ materially from what is
expressed or implied by these statements. Such risks, uncertainties and changes in circumstances include, but are not limited
to: uncertainties as to the timing of the spin-off or whether it will be completed, the failure to satisfy any conditions
to complete the spin-off, the expected tax treatment of the spin-off, and the impact of the spin-off on the businesses of the Company. Economic,
competitive, governmental, technological and other factors and risks that may affect the Company’s operations or financial
results are discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and in subsequent
filings with the U.S. Securities and Exchange Commission. The Company disclaims any obligation to update these forward-looking
statements other than as required by law.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The
following materials are furnished as exhibits to this Current Report on Form 8-K.
SIGNATURE
Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
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GOLD RESOURCE CORPORATION
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Date: December 31, 2020
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By:
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/s/ Kimberly C. Perry
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Name:
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Kimberly C. Perry
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Title:
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Chief Financial Officer
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Exhibit 10.1
EMPLOYMENT
AGREEMENT
THIS AGREEMENT is made effective the 31st
day of December, 2020.
BETWEEN:
GOLD RESOURCE CANADA CORPORATION,
a company incorporated under the laws of Canada
(the “Company”)
AND:
ALLEN PALMIERE, of RR#5, Georgetown,
Ontario, Canada L7G 4S8
(the “Executive”).
WHEREAS:
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A.
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The Company wishes to employ the Executive and the Executive wishes to accept such employment;
and
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B.
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The parties have agreed on the terms and conditions of employment set out below.
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NOW THEREFORE THIS AGREEMENT WITNESSES
that in consideration of the premises and the covenants and agreements herein contained, including, without limitation, the change
in control provisions herein, the parties agree as follows:
1. Employment
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1.1
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The Company agrees to employ the Executive as Chief Executive Officer (“CEO”) pursuant
to the terms and conditions of this Agreement.
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2. Effective Date and Term
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2.1
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Subject to the termination provisions set out in this Agreement, this Agreement will be for an
indefinite term (the “Term”) and commencing January 1, 2021 (the “Effective Date”).
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3. Employee Duties
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3.1
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The Executive will have all duties traditionally assigned to a CEO. The Executive’s principal
duties are set out in Schedule “A” hereto.
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3.2
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In addition, the Executive will provide CEO and other management services for Gold Resource Corporation
(“GORO”), a company incorporated under the laws of Colorado and having an office at 2000 South Colorado Boulevard,
Suite 10200, Denver, Colorado, 80222, pursuant to and in accordance with the terms of a Management Services Agreement between the
Compnay and GORO (the “Services Agreement”). In providing CEO and other management services to GORO, the Executive
will perform the duties agreed to by the parties in writing and set out in Schedule “A.”
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3.3
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The Executive will devote Executive’s full working time and attention to the business affairs
of Company and will not engage in any other employment, consulting or business activity without the express written consent of
the Board. Nothing in this Agreement shall be interpreted to prevent the Executive from providing CEO services, exclusively on
behalf of and through the Company, to GORO pursuant to the Services Agreement. During the Term, the Executive will not, directly
or indirectly, through any other person or entity, on his own account, or as an employee, independent contractor, agent, principal,
consultant, partner, owner, officer, director, manager or stockholder of any other person, partnership, corporation or other entity,
engage in services for any company other than GORO or engage in services on behalf of or through any person or entity other than
the Company.
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3.4
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In addition, the Company consents to the Executive continuing with the directorships set out in
Schedule “A” provided that such directorships do not conflict with the terms of this Agreement including section 7.
The Executive will use best efforts, skills and abilities to promote the best interests of the Company and perform the duties set
out herein honestly, in good faith and to the best of Executive’s abilities.
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3.5
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The Executive will, as a senior officer of the Company, owe a duty of good faith and honesty and
a fiduciary duty to the Company and will use best efforts to perform Executive’s duties competently and efficiently. By acting
on behalf of and through the Company in providing services to GORO, Executive’s good faith and fiduciary duties extend to
the Executive’s work for GORO.
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3.6
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The Executive consents to act as a director of the Company during the Term and agrees to resign
forthwith from such directorship upon cessation of employment for any reason. While the Company will use reasonable efforts to
ensure the Executive is appointed and remains a director during the Term, Executive acknowledges that directors are elected by
shareholders. The Executive also agrees to serve as an officer and/or director of Company affiliates as the Company may require
from time to time without additional compensation unless otherwise agreed in writing.
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3.7
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The Executive acknowledges that the Company will maintain certain policies relating to the conduct
of employees and relating to other matters. The parties agree that the introduction, administration, amendment and deletion of
those policies is within the sole discretion of the Company, reasonably exercised, and that the Executive will comply with those
policies that are brought to Executive’s attention and as apply to senior management, including while Executive provides
CEO services to GORO through and on behalf of the Company.
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4. Remuneration
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4.1
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The Company will pay to the Executive an annual salary of US$450,000 (the “Salary”),
payable in arrears, subject to the normal statutory deductions and in accordance with the Company’s normal payroll schedule.
The Company will review the Executive’s Salary each year and may, at its discretion, increase the Salary.
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4.2
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In addition to the Salary, the Executive will be eligible to receive an annual bonus (the “Bonus”),
comprised of both STIP and LTIP as described below. The Board will establish, after consultation with Executive, within the first
2 months of each year, bonus terms under which the Executive shall have the opportunity to earn a bonus of 60% of Executive’s
then Salary (the “Target STIP”) if all bonus targets are met and potential to earn a higher amount if Executive
materially exceeds such targets. In addition, the Executive will be eligible for a discretionary long-term equity-based incentive
bonus of $500,000 per annum (the “Target LTIP”). The Target LTIP composition is of Stock Options, RSUs and any
other long-term equity performance instrument the Board decides to implement at a future date. The Board will discuss the performance
of the Executive with the Executive prior to determining the amount of the Bonus for each year. Bonus shall be payable not later
than three months following the end of the year. Except as expressly stated otherwise in this Agreement, effective on the
date the Executive receives or gives notice of termination of employment, Executive shall not be entitled to receive any further
Bonus, other than Bonus in respect of a year which has ended prior to the date such notice is delivered.
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4.3
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GORO has adopted compensation recoupment policy or policies (and related practices), including,
but not limited to, any policy or policies that may be adopted in response to applicable law (each, a “Clawback Policy”).
The Services Agreement requires the Company to assist GORO in complying with each Clawback Policy and the provisions of applicable
law. The Services Agreement further permits GORO to recover payments to the Company when the payment would be subject to return
under the Clawback Policies or applicable law if it had been paid directly to a CEO of GORO. By signing this Agreement, Executive
agrees to fully cooperate with the Company in assuring compliance with the Clawback Policies and the provisions of applicable law,
including, but not limited to, promptly returning any compensation subject to recovery by GORO pursuant to the Services Agreement.
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4.4
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GORO has established an Equity Incentive Plan (the “Equity Plan” or “Plan”)
for the issuance of stock option grants and other equity incentives. As an employee of the Company, which is a wholly-owned subsidiary
of GORO, the Executive shall receive an initial grant of 500,000 options on GORO shares at a price to be set as of the date of
grant (“Option”), being the Effective Date, in accordance with the Plan, which Option shall be exercisable for a 5-year
term. Such Option shall vest as follows:
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(a)
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1/3 at first anniversary of grant;
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(b)
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1/3 at second anniversary of grant; and,
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(c)
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1/3 at third anniversary of grant.
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Remaining terms
and conditions of the Option shall be as set forth in the Option Agreement to be issued in connection with the grant, subject at
all times to the terms and conditions of the Plan.
5. Benefits
and Vacation
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5.1
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During the Term, the Executive will be entitled to participate in such benefits as the Company
makes available to its employees, including any available only to senior executives (collectively, the “Benefits”),
subject to the terms of any insured Benefits and the conditions of any other Benefits. The Company reserves the right to replace,
change or discontinue Benefits, and to change the carrier of the Benefits, the cost-sharing of Benefits and/or the terms of such
Benefits from time to time without advance notice.
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5.2
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During the Term, the Company will reimburse the Executive for the premiums to purchase a reasonable
extended health insurance policy covering the Executive to supplement Executive’s provincial insurance coverage. In addition,
the Company will reimburse the Executive for the premiums to purchase a reasonable insurance policy providing health insurance
coverage when Executive travels outside of Canada for business.
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5.3
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The Executive will be entitled to four weeks of annual paid vacation for each calendar year of
the Term (pro-rated for part years) to be taken at times approved in advance by the Chair of the Board or his/her designate. The
Executive shall be entitled to carry forward no more than one year of annual vacation entitlement from year to year, subject to
taking statutory minimum vacation entitlements.
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5.4
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During the Term, the Company will reimburse the Executive for reasonable out-of-pocket expenses
actually incurred by Executive in connection with Executive’s duties, whether the expenses are for the Company or for GORO,
and in accordance with the Company’s expense policy, which may be amended from time to time without notice to the Executive.
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5.5
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During the Term, the Company will reimburse the Executive for purchasing the equipment and supplies
necessary to his work, including a cell phone, laptop computer, desktop computer, printer and scanner.
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5.6
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The Company will make reasonable efforts to obtain and maintain a policy of insurance with respect
to liability relating to its directors and officers, and the Company will use its reasonable best efforts to include the Executive
(in his capacity as a director and officer) as insured under such policy to the maximum extent reasonably possible effective on
the Effective Date and if obtained, will provide the Executive with a copy of such policy with the Executive being so included
as an insured. The Company shall be responsible for the payment of all premiums, deductibles and like payments under such policy.
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5.7
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Effective on the Effective Date, the Company will enter into a director and officer indemnification
agreement with the Executive in a form satisfactory to the Executive, acting reasonably. The indemnification agreement will provide
indemnification to the Executive for (a) Executive’s conduct as a director and officer of the Company and (b) the CEO services
that Executive provides to GORO on behalf of and through the Company. The Company will obtain an agreement from GORO to indemnify
the Company in the event that the Company is required to indemnify the Executive for CEO services he provides to GORO on behalf
of and through the Company.
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6. Non-disclosure, Non-competition and Proprietary Information
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6.1
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The Executive acknowledges that in the course of carrying out, performing and fulfilling Executive’s
duties hereunder, Executive will have or has had access to detailed confidential information and trade secrets concerning the present
and contemplated mineral rights, explorations, projects, mines, ventures, investments, business activities, finances of the Company
or GORO, services and techniques evolved and used or to be evolved and used by the Company or GORO, geological and metallurgical
information and technical reports, information concerning the employees, investors and contractors of the Company and of GORO,
including their names, addresses and preferences, (“Confidential Information”), the disclosure of any of which
detailed confidential information or trade secrets to competitors of the Company or GORO or to the general public would be highly
detrimental to the interests of the Company or GORO. For the sake of clarity, Confidential Information shall not include information
that is: (a) publicly available without breach of this Agreement by the Executive; (b) already known to or in the possession of
the receiving party prior to receipt of such information from the disclosing party as evidenced by written records; (c) received
from a third party with a valid right to disclose it; or (d) independently developed by employees, agents or consultants of the
receiving party without access to, or use of, the Confidential Information.
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6.2
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The Executive further acknowledges and agrees that the right to maintain confidential such detailed
Confidential Information and trade secrets constitute a proprietary right, which the Company and GORO are entitled to protect.
Accordingly, the Executive covenants and agrees with the Company and for the express benefit of GORO that Executive will not either
during the Term or at any time thereafter, disclose any Confidential Information, trade secrets and other private affairs of the
Company or GORO or use the same for any purpose, other than as reasonably necessary to perform Executive’s duties for the
Company or as required to be disclosed by law or by the order of any judicial, administrative, or similar body with enforcement
powers.
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6.3
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All files, records and documents in whatever form relating in any manner whatsoever to the business
of the Company, whether prepared by the Executive or otherwise coming into the Executive’s possession, shall be the exclusive
property of the Company. In addition, all files, records and documents in whatever form relating in any matter whatsoever to the
business of GORO, whether prepared by the Executive or otherwise coming into the Executive’s possession, shall be the exclusive
property of GORO. On cessation of employment for any reason, all such files, records and documents, including, without limitation,
any containing Confidential Information, shall be immediately returned by the Executive to the rightful owner without copying such
materials in any manner and the Executive shall delete same from any personal electronic devices. At the Company’s or GORO’s
request, Executive will confirm compliance with this section in writing.
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6.4
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The Executive further agrees that all works or products which the Executive develops, prepares
or works on in the course of providing services to the Company, either individually or on a team, during the Term (“Work
Product”) belong exclusively to the Company. The Executive hereby irrevocably and unconditionally assigns and transfers
to the Company any and all right, title or interest Executive had, has or obtains in and/or to any and all mineral exploration
data and interpretations of the potential for discovery of economic mineral deposits of particular styles relating to the present
or proposed properties which the Company owns or in which the Company has an interest, including, without limitation, all technical
reports, software and documentation related thereto. Further, the Executive hereby irrevocably and unconditionally assigns and
transfers to the Company any and all right, title or interest Executive had, has or obtains in and/or to any Work Product, including
inventions, discoveries, works of authorship, designs, programs, documentation and other property (including, without limitation,
chemical formulas and processes, computer software and all source code and documentation related thereto) and all intellectual
property rights therein (including copyright) relating to the past, present or proposed business of the Company. Such Work Product
shall be the sole property of the Company, and Executive confirms having no further right or claim thereto, whether preceding,
during or following the term of the Executive’s contract with the Company. Further, the Executive hereby waives any moral
rights or rights of a similar nature Executive may have in such Work Product.
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6.5
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The Executive further agrees that all works or products which the Executive develops, prepares
or works on in the course of providing services to GORO, either individually or on a team, during the Term (“Work Product”)
belong exclusively to GORO. The Executive hereby irrevocably and unconditionally assigns and transfers to GORO any and all right,
title or interest Executive had, has or obtains in and/or to any and all mineral exploration data and interpretations of the potential
for discovery of economic mineral deposits of particular styles relating to the present or proposed properties which GORO owns
or in which GORO has an interest, including, without limitation, all technical reports, software and documentation related thereto.
Further, the Executive hereby irrevocably and unconditionally assigns and transfers to GORO any and all right, title or interest
Executive had, has or obtains in and/or to any Work Product, including inventions, discoveries, works of authorship, designs, programs,
documentation and other property (including, without limitation, chemical formulas and processes, computer software and all source
code and documentation related thereto) and all intellectual property rights therein (including copyright) relating to the past,
present or proposed business of GORO. Such Work Product shall be the sole property of GORO, and Executive confirms having no further
right or claim thereto, whether preceding, during or following the term of the Executive’s contract with GORO. Further, the
Executive hereby waives any moral rights or rights of a similar nature Executive may have in such Work Product
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6.6
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The Executive will do all acts necessary or required by the Company or GORO both during and after
the Term to give effect to assignments herein including, without limitation, the execution of any documentation required in order
to confirm the Company’s rights in and to any of the foregoing and will assist the Company or GORO, at Company’s or
GORO’s request and expense, with applications for trade-marks, copyrights, patent rights or other forms of intellectual property
protection for Work Product on which the Executive works and/or to which the Executive contributed during Executive’s employment
with the Company or GORO. The Executive will sign all documents reasonably requested for the purpose of the Company or GORO establishing
its right of ownership to such property without additional compensation to the Executive. If the Executive fails to execute such
documentation after written request, any officer of the Company and/or GORO shall be authorized as Executive’s attorney-in-fact
to execute same. The Executive agrees that all Work Product made or contributed to by Executive in the course of employment by
the Company constitute “work made in the course of employment” within the meaning of the Copyright Act (Canada)
and represents and warrants that all such Work Product, to the extent of Executive’s contribution, are original to Executive.
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6.7
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During the Term and for a period of 12 months following the cessation of the Executive’s
employment for any reason, the Executive will not, without the written consent of the Company, directly or indirectly:
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(a)
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own or have any interest in; or
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(b)
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act as an officer, director, agent, consultant, partner, investor or employee of,
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any person,
firm, partnership, corporation or other entity which:
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(i)
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is engaged in mining or mineral exploration on; or
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(ii)
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or has an interest in,
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any mineral property located
within 50 kilometres of the mineral claims that represent the Aguila Property or [Oaxaca Mining Unit] in Oaxaca, Mexico or any
other Material Property as defined in the Company’s disclosure record.
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6.8
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The Executive will promptly notify the Board of any suit, proceeding or other action commenced
or taken against the Company or of any fact or circumstances of which the Executive is aware which may reasonably form the basis
of any suit, proceeding or action against the Company.
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7. Termination
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7.1
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The Executive may terminate employment at any time on 8 weeks’ advance written notice
to the Company. The Company may waive all or a portion of such resignation notice, in which case the Company shall only be liable
to pay the Executive a lump sum equal to Executive’s Salary over such waived period and to continue those Benefits that the
Company is able to continue to a terminated former employee over such waived period as compensation in lieu of such notice.
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7.2
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The Company may terminate the Executive’s employment hereunder, without notice or pay in
lieu of notice, at any time for just cause. Just cause will include, but not be limited to:
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(a)
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a material breach of this Agreement or gross negligence or incompetence of the Executive in the
discharge of Executive’s duties under this Agreement;
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(b)
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material acts of fraud or dishonesty, or the conviction of a crime reasonably related to the Company’s
business;
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(c)
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failure of the Executive to disclose any material facts concerning Executive’s business interests
or employment outside of Executive’s employment with the Company;
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(d)
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breach of the Executive’s fiduciary duty to the Company or to GORO; or
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(e)
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any act or omission of the Executive which, at common law, would in law permit an employer to,
without notice or payment in lieu of notice, terminate the employment of an employee.
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In the event
that Executive is terminated with just cause, the Company shall pay him for Salary and Benefits up to the day of termination.
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7.3
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The Company may, at any time, terminate the Executive’s employment without cause by providing
the Executive with a lump sum severance payment equal to the total amount of the Executive’s Salary and Prorated Bonus for
the Severance Period (the “Lump Sum Severance Payment”). The Company shall pay the Executive the Lump Sum Severance
Payment within five days of the date of termination. For the purpose of calculating the Lump Sum Severance Payment:
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(a)
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The Salary is the Executive’s most recent annual Salary described above in section
4.1;
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(b)
|
The “Prorated Bonus” shall be calculated by dividing the amount of Bonus paid
to the Executive for the previous bonus year by twelve and multiplying such amount by the number of months in the applicable Severance
Period. If termination occurs before any Bonus award has been made, the Executive’s Target Bonus shall be used to calculate
the Prorated Bonus; and
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(c)
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The “Severance Period” is as follows:
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(i)
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during the first twelve (12) months of employment, the Severance Period is twelve (12) months;
and
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(ii)
|
thereafter, the Severance Period shall be twelve (12) months plus another month for each completed
year of service from the Effective Date to an overall maximum of twenty four (24) months
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The Company
will continue Benefits for the Severance Period, provided that, for any insured Benefits that cannot be continued over the Severance
Period, compensation in lieu of such Benefit continuance equal to the premium paid by the Company for these benefits shall be paid
to the Executive.
(The Lump Sum
Severance Package and the continuation of benefits shall be referred to collectively as the “Severance”).
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7.4
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The Executive shall be entitled to resign for “Good Reason” (as defined below) and
receive the Severance if the Company has not substantially remedied such Good Reason within 14 days of delivery by the Executive
to the Company of written notice stating that Executive intends to resign based on such Good Reason. Such notice shall specify
the facts relied upon as Good Reason. “Good Reason” means the occurrence of any of the following events without
the Executive’s written consent:
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(a)
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a material breach of this Agreement by the Company;
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(b)
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a material reduction in the Executive’s responsibilities, title or reporting, except as a
result of the Executive’s disability;
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(c)
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any reduction by the Company in the Executive’s Salary, Target STIP, or Target LTIP, other
than as part of a general reduction of compensation for all executive and senior managers due to the Company’s financial
condition and provided such reduction is in the same proportion as for such other affected employees;
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(d)
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relocation of the Executive’s principal office location more than 25 kilometres; and
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(e)
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any other reason that would be considered to constitute constructive dismissal at common law.
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7.5
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If the Company terminates the Executive’s employment without cause or the Executive terminates
employment for Good Reason (other than within 12 months of a Change in Control, or in connection with an impending Change in Control),
the Executive’s stock options, RSUs and Benefits will be governed by the terms of the Company’s stock option plan,
the related grant agreement(s), RSU and Benefits plan as amended from time to time.
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7.6
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This Agreement shall terminate in the event of the Executive’s death, in which case the Company
shall pay the Executive’s Estate all unpaid amounts due to the Executive (including Salary, Bonus, accrued vacation pay),
and the Executive’s stock options, RSUs and Benefits will be governed by the terms of the Company’s stock option plan,
RSU and Benefits plan as amended from time to time.
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7.7
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For the purpose of this Agreement, “Change in Control” shall be defined as:
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(a)
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the acquisition, beneficially, directly or indirectly, by any person or group of persons acting
jointly or in concert, of common shares of the Company which, when added to all other common shares of the Company at the time
held beneficially, directly or indirectly by such person or persons acting jointly or in concert, totals for the first time more
than 50% of the outstanding common shares of the Company; or
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(b)
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the removal, by extraordinary resolution of the shareholders of the Company, of more than 51% of
the then incumbent directors of the Company, or the election of a majority of directors to the Company’s board who were not
nominees of the Company’s incumbent board at the time immediately preceding such election; or
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(c)
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the consummation of a sale of all or substantially all of the assets of the Company, or the consummation
of a reorganization, merger or other transaction which has substantially the same effect; or
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(d)
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a merger, consolidation, plan of arrangement or reorganization of the Company that results in the
beneficial, direct or indirect transfer of more than 50% of the total voting power of the resulting entity’s outstanding
securities to a person, or group of persons acting jointly and in concert, who are different from the person that have, beneficially,
directly or indirectly, more than 50% of the total voting power prior to such transaction; or
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(e)
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the sale of 50% or more of the outstanding voting securities of GORO in a single transaction or
a series of transaction occurring during a 12-month period; or
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(f)
|
a majority of the members of the GORO Board of Directors is replaced during any 12-month period
by directors whose appointment or election is not endorsed by a majority of GORO’s Board of Directors prior to the date of
the appointment or election; or
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(g)
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GORO is merged or consolidated with another corporation and as a result of such merger or consolidation
less than 50% of the outstanding securities of the surviving or resulting corporation is owned in the aggregate by the shareholders
of GORO that existed immediately prior the merger or consolidation; or
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(h)
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GORO sells more than 40% of the fair market value of its assets to another corporation that is
not a wholly owned subsidiary of the Company during a 12-month period.
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(i)
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the removal, by extraordinary resolution of the shareholders of GORO, of more than 51% of the then
incumbent directors of GORO, or the election of a majority of directors to GORO’s board who were not nominees of GORO’s
incumbent board at the time immediately preceding such election; or provided, however,
that a Change in Control shall not be deemed to have occurred if such Change in Control results from:
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(j)
|
the issuance, in connection with a bona fide financing or series of financings by GORO or the Company
or any of its Affiliates, of voting securities of GORO or the Company or any of its Affiliates or any rights to acquire voting
securities of GORO or the Company or any of its Affiliates which are convertible into voting securities; or
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(k)
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a transaction or series of transactions involving GORO or the Company or any of its Affiliates
whereby the holders of the voting securities of GORO or the Company continue to hold voting securities in the capital of the surviving
or successor entity in substantially the same proportion as such holders held voting securities in GORO or the Company immediately
prior to the commencement of such transaction or series of transactions.
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7.8
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In the event that: the Company terminates Executive’s employment without cause or Executive
terminates employment for Good Reason within twelve months of a Change in Control, or in connection with an impending Change in
Control, the Executive shall be entitled to receive:
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(a)
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A Lump Sum Severance Payment based on a Severance Period of twenty-four (24) months;
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(b)
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Continuation of all Benefits (except that, for any insured Benefits that cannot be continued over
the Severance Period after termination of employment, compensation in lieu of such Benefit continuance equal to the premium paid
by the Company for these benefits will be provided) and other perquisites set out in section 5 until the earlier of the end of
the twenty four (24) month Severance Period or the Executive commencing alternate employment or otherwise securing alternate coverage
(of which Executive must give prompt written notice);
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(c)
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All unvested Stock Options shall become fully vested on the date of termination, and all outstanding
Stock Options will remain exercisable until the earlier of: (i) the expiry date(s) of such option(s), or (ii) twenty-four months
from the date of termination; and
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(d)
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All unvested RSUs shall become fully vested on the date of termination
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7.9
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The parties confirm that the provisions contained in this Article are fair and reasonable, and
the parties agree that upon termination of this Agreement pursuant to any of the provisions hereof, the Executive shall have no
action, cause of action, claim or demand against the Company or any other person as a consequence of such termination, so long
as the Company fulfills its obligations hereunder. In consideration of the terms of this Article, the Executive hereby waives any
entitlement which a Court of competent jurisdiction might otherwise grant to the Executive in respect of the termination of Executive’s
employment. In return for payment of pay in lieu of notice in excess of the Executive’s statutory entitlements, the Executive
will sign and deliver a full and final Release of all claims arising from such termination.
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7.10
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On the termination of the Executive’s employment for any reason, the Executive will immediately
return to the Company all property of the Company then in Executive’s possession, including any office equipment, automobiles,
correspondence, documents, computer disks, notebooks, telecommunications, video and audio equipment and tapes, files and other
tangible property. In addition, the Executive will return to GORO all property of GORO then in the Executive’s possession.
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8. Additional Covenants of the Executive
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8.1
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During the Term and for a period of 12 months following the cessation of the Executive’s
employment for any reason, the Executive will not, without the written consent of the Company, directly or indirectly, hire or
assist another party to hire any employee or consultant of the Company or encourage any such employee or consultant to cease or
reduce providing services to the Company.
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8.2
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During the Term and for a period of 12 months following the cessation of the Executive’s
employment for any reason, the Executive will not, without the written consent of the GORO, directly or indirectly, hire or assist
another party to hire any employee or consultant of GORO or encourage any such employee or consultant to cease or reduce providing
services to GORO.
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8.3
|
The Executive represents and warrants that Executive’s employment with the Company does not
constitute a breach of any other contractual arrangements between the Executive and any other party, nor is this employment in
any way restricted by any such arrangements, written or oral. Further, the Executive covenants that throughout the Term, the Executive
will conduct him/herself in a manner that does not breach any agreement or legal obligation to the Executive’s former employers
or any other party. The Executive agrees to indemnify and hold the Company harmless for breach of such representation, warranty
and covenant. Without limiting the generality of the foregoing, the Executive’s performance of this Agreement and serving
as an executive of the Company does not and will not breach any agreement to keep in confidence proprietary information, knowledge
or data acquired by the Executive prior to Executive’s employment with the Company. The Executive will not disclose to the
Company, or induce the Company to use, any confidential or proprietary information or material belonging to any previous employer
or other person or entity.
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9. General
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9.1
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This Agreement will be governed by and construed in accordance with the law of Colorado and the
parties agree to attorn to the exclusive jurisdiction of the courts of Denver, Colorado, except that the Company may, at its option,
enforce Executive’s obligations under this Agreement in any other court of competent jurisdiction.
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9.2
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This Agreement is personal to the Executive and may not be assigned by the Executive. This Agreement
may be assigned by the Company to any Affiliate by notice in writing. This Agreement will inure to the benefit of and be binding
upon the Company and its successors and permitted assigns and any such successor or assignee will be deemed substituted for the
Company under the terms of this Agreement for all purposes.
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9.3
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All notices, demands and payments required or permitted to be given hereunder will be in writing
and may be delivered personally, by registered mail or by courier, in the case of the Executive, to the last address provided by
the Executive to the Company, and in the case of the Company, to its corporate head office. Any notice delivered will be deemed
to have been given and received at the time of delivery. Any notice given by registered mail shall be deemed delivered 5 business
days after being sent.
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9.4
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This Agreement and all agreements and plans referred to in this Agreement contains the entire understanding
of the parties relating to the subject matter hereof, and supersedes any prior statements, agreements, representations, promises
or commitments relating to the Executive’s employment. The Executive confirms not relying on any representations, understandings
or collateral agreements which are not recorded herein in entering into this Agreement.
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9.5
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This Agreement may not be amended, altered or modified except by written agreement of the parties.
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9.6
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If any part or provision of this Agreement or its application to any circumstance is restricted,
prohibited or unenforceable, such part or provision will be ineffective only to the extent of such restriction, prohibition or
unenforceability, and the remainder of this Agreement will remain in full force and effect.
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9.7
|
Each of the parties covenants and agrees to execute such further and other documents and instruments
and to do such further and other things as may be necessary to implement and carry out the intent of this Agreement.
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9.8
|
No condoning, excusing or waiver by any party of any default, breach or non-observance by any party
at any time or times in respect of any covenant, proviso or condition herein contained will operate as a waiver of that party’s
rights hereunder in respect of any continuing or subsequent default, breach or non-observance, or so as to defeat or affect in
any way the rights of that party in respect of any such continuing or subsequent default, breach or non-observance, and no waiver
will be inferred from or implied by anything done or omitted to be done by the party having those rights.
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9.9
|
The provisions of this Agreement shall be binding upon and to the benefit of each of the parties
and their respective successors and assigns. Each of the parties acknowledges that they have had full opportunity to seek independent
legal advice in respect of the contents of this Agreement and that they sign this Agreement freely, voluntarily and without duress
after having been offered such opportunity.
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9.10
|
Time is of the essence in this Agreement.
|
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9.11
|
Headings where used in this Agreement are inserted for convenience of reference only and will not
be used to interpret this Agreement.
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9.12
|
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same instrument.
|
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|
9.13
|
The recitals hereto are incorporated into and form part of this Agreement.
|
IN WITNESS WHEREOF the parties have set
their hands and seals as at the date first above written
|
SIGNED,
SEALED and DELIVERED by
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)
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ALLEN PALMIERE
in the presence of:
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)
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)
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)
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)
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Name
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)
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)
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)
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Witness Name (print)
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)
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/s/
Allen Palmiere
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)
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ALLEN PALMIERE
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)
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Address
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)
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)
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)
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)
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)
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Occupation
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)
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)
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GOLD RESOURCE
CANADA CORPORATION
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)
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)
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)
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)
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)
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Per:
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)
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)
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/s/
Alex Morrison
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)
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Authorized signatory
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)
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)
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)
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)
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Schedule “A”
Section 3.1, Principal Duties
Subject to the overall direction of the
Board:
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|
a)
|
Managing the business of the Company;
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b)
|
Directing the exploration and operation of the Company’s current properties;
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c)
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Securing and maintaining all necessary permits and financing necessary for such development;
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d)
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Identifying and developing strategic partnerships and acquisitions or other transactions;
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e)
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Managing relationships with partners, governments and local groups; and
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f)
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Such other duties as are assigned by the Board from time to time and as are customarily performed
by a CEO.
|
Section 3.2
Existing Directorships: Dundee Corporation
Exhibit 99.1
|
FOR IMMEDIATE RELEASE
|
NEWS
|
|
December 31, 2020
|
NYSE American: GORO
|
GOLD RESOURCE CORPORATION APPOINTS NEW
LEADERSHIP
IN CONJUNCTION WITH NEVADA SPIN-OFF
Denver, Colorado – December 31, 2020
– Gold Resource Corporation (NYSE American: GORO) (the “Company”) announces new leadership in conjunction with
the spin-off of its Nevada Mining Unit to shareholders as Fortitude Gold Corporation (“Fortitude Gold”).
Gold Resource Corporation’s Board
of Directors announced leadership changes include:
|
|
·
|
Gold Resource Corporation Chairman Mr.
Bill Conrad has stepped down as Chairman and will continue to serve as an independent director on the Company’s board.
|
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·
|
Current Gold Resource Corporation director
Mr. Alex Morrison has been appointed to serve as Chairman.
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·
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Outgoing Gold Resource Corporation CEO,
President and director Mr. Jason Reid has stepped down from all Company positions to lead Fortitude Gold.
|
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·
|
Mr. Allen Palmiere has been appointed
CEO and a director of Gold Resource Corporation.
|
|
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·
|
Ms. Lila A. Manassa Murphy and Mr. Joseph
Driscoll have been appointed as independent directors to Gold Resource Corporation’s Board.
|
Gold Resource Corporation has completed
the spin-off of the Company’s Nevada Mining Unit into a separate, stand-alone public company, Fortitude Gold Corporation
on December 31, 2020. Mr. Bill Conrad serves as Fortitude Gold’s Board Chairman, while Mr. Jason Reid serves as Fortitude
Gold’s CEO, President and director.
Mr. Alex Morrison (new Gold Resource
Corporation Board Chairman)
“With the completion of the Nevada
spin-off, we are excited to now focus our strategy in Mexico on redeploying more cashflow back into the ground for accelerated
growth,” stated Mr. Alex Morrison, newly appointed Chairman of Gold Resource Corporation. “We thank Mr. Jason Reid
for his years of service to the Company as he now leads Fortitude Gold forward for the benefit of all Company shareholders. We
also thank Mr. Bill Conrad for his years of service as Chairman and look forward to continuing to work with him as a member of
the Company’s board.”
Mr. Morrison continued, “I would
like to welcome Mr. Allen Palmiere as Gold Resource Corporation’s CEO and director. Mr. Palmiere brings a strong track record
of mining industry experience and success over his thirty-five year career. Having previously served as CEO of several mining companies,
we look forward to working with Mr. Palmiere to continue to build on Gold Resource Corporation’s success.”
“I would also like to welcome Ms
Lila A. Manassa Murphy and Mr. Joseph Driscoll to Gold Resource Corporation’s board of directors. Their collective expertise
will assist in the development of the Company’s objectives of best in class Governance and operational excellence,”
stated Mr. Morrison.
Mr. Allen Palmiere (new Gold Resource
Corporation CEO, President & Board Member)
Mr. Palmiere, a CA-CPA by training, has
more than 35 years of experience in the mining industry both from a financial and operational perspective. His international experience
includes South Africa, Central America, Guyana and Brazil and 10 years of experience in China. Mr. Palmiere’s expertise includes
operations, executive management and financing, both debt and equity. Additionally, Mr. Palmiere has extensive experience in mergers
and acquisitions. Mr. Palmiere’s former executive positions include CEO and Chairman of the Board, HudBay Minerals Inc.,
Executive Chairman, Barplats Investments Ltd., Vice President, CFO, Zemex Corporation, and
President and CEO, Breakwater Resources Ltd. Mr. Palmiere has also served as a director of numerous public companies. Mr. Palmiere
will be responsible the development and execution of a new strategic plan and direction for the Company.
CEO Comment
“I am very excited to join the Gold
Resource Corporation team,” stated Mr. Allen Palmiere. “My immediate priorities will be to continue building on cost
and operating efficiencies in preparation for future growth. I see tremendous potential in the Company’s large, unexplored
land position and am looking forward to leading the Company through this period of operational improvement and a new focus on exploration."
Ms. Lila A. Manassa Murphy (new independent
Director)
Ms. Lila A. Manassa Murphy
CFA joins the Company as an independent director. Ms. Murphy founded Intrinsic Value Partners, LLC in 2018, a provider of
consulting services to asset management firms and family offices. She is an Independent Director and member of the Audit
Committee of Dundee Corporation. Previously she was Vice President and Portfolio Manager at Federated Hermes, Inc., a Fortune
500, ESG focused investment firm. Previously, Ms. Murphy worked as an Analyst at David W. Tice & Associates Inc. with
a dedicated focus on natural resources investing. Prior to that, she was an Equity Research Analyst at Lee Financial Corporation.
She has more than 25 years of diverse investment management experience. She sits on the board and finance committee of Sustainable
Development Strategies Group, a US based independent non-profit research institute advancing best practices for sustainable management
of natural resources.
Mr. Joseph Driscoll (new independent
Director)
Mr. Joseph Driscoll joins the Company as
an independent director. Mr. Driscoll is a qualified Mining Engineer and alumnus of Montana Tech from which he holds a Bachelor
of Science degree. Mr. Driscoll has held numerous operational roles over his thirty-three year mining career with Forte Dynamics,
Environmental Resources Management, Amec Engineering and Consulting, Great Basin Gold Limited, Newmont, Barrick, Queenstake Resources,
Stillwater Mining, Independence Mining, New Butte Mining and Pegasus Gold. Mr. Driscoll brings a wealth of operational experience
with both underground and open-pit mining operations expertise.
About GRC:
Gold Resource Corporation is a gold and silver producer, developer
and explorer with operations in Oaxaca, Mexico. The Company’s focus is on unlocking the value of the mine and large property
position. Operational efficiency and exploration will be the short to medium term priorities. For more information, please visit
GRC’s website, located at www.goldresourcecorp.com and read the Company’s 10-K for an understanding of the risk factors
involved.
About Fortitude Gold Corporation:
Fortitude Gold is a U.S. based gold producer targeting projects
with low operating costs, strong returns on capital and high margins. The Company strategy is to grow organically, remain debt-free
and distribute substantial future dividends. The Company’s Nevada Mining Unit consists of five high-grade gold properties
located in the Walker Lane Mineral Belt, with the Isabella Pearl gold mine in current production. Nevada, U.S.A. is among the world’s
premier mining friendly jurisdictions.
Cautionary Statements:
This press release contains forward-looking statements that
involve risks and uncertainties. The statements contained in this press release that are not purely historical are forward-looking
statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. When used in this press
release, the words “plan”, “target”, "anticipate," "believe," "estimate,"
"intend" and "expect" and similar expressions are intended to identify such forward-looking statements. Such
forward-looking statements include, without limitation, the statements regarding Gold Resource Corporation’s strategy, future
plans for production, future expenses and costs, future liquidity and capital resources, and estimates of mineralized material.
All forward-looking statements in this press release are based upon information available to Gold Resource Corporation on the date
of this press release, and the Company assumes no obligation to update any such forward-looking statements. Forward looking statements
involve a number of risks and uncertainties, and there can be no assurance that such statements will prove to be accurate. The
Company's actual results could differ materially from those discussed in this press release. In particular, the scope, duration,
and impact of the COVID-19 pandemic on mining operations, Company employees, and supply chains as well as the scope, duration and
impact of government action aimed at mitigating the pandemic may cause the actual results and future events to differ materially
from those expressed or implied by such forward-looking information. Also, there can be no assurance that production will continue
at any specific rate. Factors that could cause or contribute to such differences include, but are not limited to, those discussed
in the Company’s 10-K filed with the SEC.
Contacts:
Corporate Development
Greg Patterson
303-320-7708
www.Goldresourcecorp.com