Exhibit 10.20
AMENDING AGREEMENT
THIS AGREEMENT dated effective the 1st day of December, 1998,
BETWEEN:
ARCTIC PRECIOUS METALS, INC.
5501 Lakeview Drive, Kirkland, Washington, 98033
("Arctic")
- and -
MARGARET K. WITTE
530 Overlake Drive East, Medina, Washington 98039
(the "Employee")
- and -
ROYAL OAK MINES INC.
BCE Place, Suite 2500, 181 Bay Street, Toronto,
Ontario M5J 2T7
("Royal Oak")
WHEREAS:
A) Arctic, Royal Oak and the Employee entered into a written agreement
effective the 21st day of July, 1995 to record the terms and conditions
of their employment relationship (the "Employment Agreement);
B) Arctic and Royal Oak wish to amend the Employment Agreement on the
terms and conditions hereinafter set forth to entice the Employee to
continue her employment with Arctic throughout the restructuring of
Royal Oak, and to assist Royal Oak to avoid seeking the protection of
bankruptcy and insolvency legislation thereby protecting shareholder
value; and
C) Arctic and Royal Oak believe it is in their best interest to enter into
this Amending Agreement,
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the following
mutual provisions and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged by each party), the parties
covenant and agree as follows:
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ARTICLE 1
AMENDING PROVISIONS
1.1 The parties hereby covenant and agree to amend the Employment Agreement
as follows:
a) The period at the end of clause (iii) of subsection 6(d) of
the Employment Agreement be deleted and replaced with: ";or"
and clause (iv) be added as follows:
"(iv) one or more holders or former holders of Royal Oak's
Secured 12.75% Senior Subordinated Notes due 2006
(the "Noteholders") or any associate or affiliate
thereof and/or any person or persons acting jointly
or in concert with any one or more of the Noteholders
or the associates or affiliates of any one or more of
the Noteholders, whether directly or indirectly:
I. acquire(s) beneficial ownership or control
and direction over the securities of Royal
Oak which represent or which are convertible
or exchangeable into securities of Royal Oak
which represent or would, upon conversion or
exchange, represent, 50% or more of the
total number of votes attached to Royal
Oak's then outstanding securities entitled
to be voted on the election of directors of
Royal Oak;
II. acquire(s) or otherwise hold(s) the right to
elect, appoint or nominate for election as,
directors of Royal Oak, such number of
persons as is equal to or greater than 30%
of the number of directors of Royal Oak
holding office as directors of Royal Oak
immediately prior to such right being
acquired or held; or
III. cause the dismissal (including without
limitation, constructive dismissal) of the
Employee as Chairman or the Board of
Directors of Royal Oak."
b) Clause 6(d)(aa) be deleted in its entirety and replaced with
the following words:
"(aa)
(i) Within 10 days of delivery to Arctic of the
Terminating Notice, Arctic shall pay the
Employee an amount equal to three times the
aggregate of the Employee's then current
annual salary;
(ii) Within 10 days of delivery to Arctic of the
Terminating Notice, Arctic shall pay the
Employee a bonus to be calculated as the
average bonus paid by Arctic to the Employee
in the three full fiscal periods preceding
the Notice of Termination;
(iii) At the Employee's sole election, as set out
in the Terminating Notice, Arctic shall
either:
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(A) within 10 days of delivery to Arctic
of the Termination Notice, pay the
Employee a lump sum payment equal to
the then present cost to Arctic of
all fringe benefits as set out in
subparagraph 5(d) of the Employment
Agreement (the "Fringe Benefits")
which would have accrued to the
benefit of the Employee during the
period of 24 months immediately
following delivery to Arctic of the
Terminating Notice; or
(B) permit the Employee to continue to
participate, for the life of the
Employee, in Arctic's Fringe
Benefits in place for the Employee
and her family at the time of
delivery to Arctic of the
Terminating Notice.
In the event that the Employee chooses to
continue to participate in the Fringe
Benefits, Arctic shall pay the premiums
relating thereto for a period of 24 months
following delivery of the Termination Notice
such that there will be no discontinuation
of benefits thereunder. Thereafter, the
Employee agrees to continue paying the
Fringe Benefit premiums from the 25th month
forward. The Employee may, in her sole
discretion, elect to cancel any or all of
the Fringe Benefits for the Employee, her
family, or any one or more of them on
written notice to Arctic.
In the event that any or all Fringe Benefits
carriers do not permit the Employee and/or
her family to participate in any Fringe
Benefit following her termination from
Arctic, Arctic hereby covenants and agrees
to obtain substantially similar Fringe
Benefit plans at substantially the same cost
for the Employee and her family, in which
event Arctic's obligations for payment as
set out above will continue to the same
extent as if the Employee continued to
participate in Arctic's Fringe Benefits.
For the purposes of calculating the present
value of the Fringe Benefits, the value of
such benefits shall be deemed to be the cost
to Arctic of providing same.
(iv) Following delivery of the Termination
Notice, Arctic shall cause to be kept in
full force and effect, the Financial Life
Assurance Company of Canada Life Insurance
Policy Number W00631542 for the insured
amount of $2,000,000 Canadian Dollars and
the John Hancock Mutual Life Insurance
Company Life Insurance Policy Number UL
0250406 in the amount of $600,000 USA
Dollars owned by Arctic on the life of the
Employee (the "Insurance Policies"). Arctic
shall continue making payments as required
to pay each of the Insurance Policies out in
full. Forthwith on payment in full of such
Insurance Policies, Arctic shall assign its
ownership in both Insurance Policies to the
Employee at no cost to the Employee."
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1.2 Clause 6(d)(bb) be amended by adding the following sentence to the end
of this provision:
"Arctic hereby covenants and agrees to forthwith pay the
Employee a sum equal to the tax liability that the Employee
would be obligated to pay on the assignment by Arctic to the
Employee of the amounts set out herein, and Arctic will pay
any additional amounts levied on any subsequent reassessment
by the Internal Revenue Service or Revenue Canada."
1.3 Clause 6(d)(dd) shall be added to the Employment Agreement as follows:
"(dd) Arctic shall pay any additional amount required to provide the
Employee with payments and benefits under this Agreement that
are the same, after payment of all federal and state excise,
income and employment taxes, as the Employee would have
received, after payment of all federal and state income and
employment taxes, had no payments or benefits been subject to
excise taxes imposed by Section 4999 of the INTERNAL REVENUE
CODE or income taxes imposed by the INCOME TAX ACT (CANADA).
Any such additional payment shall be made no later than the
date of any payment under this Agreement that would be subject
to excise taxes imposed by Section 4999 of the INTERNAL
REVENUE CODE or the INCOME TAX ACT (CANADA), and shall be
subject to withholding of all applicable federal and state
excise, income and employment taxes."
1.4 Except to the extent specifically amended hereby, the parties confirm
the provision of the Employment Agreement.
IN WITNESS WHEREOF this Amending Agreement has been executed and delivered by
the parties effective the date first above written.
ARCTIC PRECIOUS METALS, INC. ROYAL OAK MINES INC.
c/s c/s
Per:_____________________________ Per:____________________________
Authorized Signatory Authorized Signatory
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF:
- --------------------------------- ----------------------------
Witness MARGARET K. WITTE