In the interest of further clarity, the information below is taken from pages 10 & 11 of the Information Circular sent out by Mr Morrison and outlines the costs that would be involved if the company's current CEO was to be removed from the company without cause. Could the current share price and lack of forward progress over most of the last few years be considered "without cause"?
[Dragon]
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Termination and Change of Control Benefits Employment Agreements
Other than as described below, there are no agreements, compensation plans, contracts or arrangements whereby a NEO is entitled to receive payments from the Corporation in the event of the resignation, retirement or other termination of the NEO’s employment with the Corporation, change of control of the Corporation or a change in the NEO’s responsibilities following a change in control.
Aubrey Eveleigh
Pursuant to the executive employment agreement between the Corporation and Aubrey Eveleigh dated August 1, 2010, in the event of (i) a Change of Control (as defined below); or (ii) in the event that Mr. Eveleigh’s employment is terminated by the Corporation other than for cause, the Corporation shall pay Mr. Eveleigh within 10 business days following the date of employment termination a lump sum in the amount equal to the greater of 24 months of salary or six months of salary for each year or partial year of service, the term “salary” including the per annum salary in effect at the time of such termination, and any bonus paid in the year of or year prior to the year in which the employment is terminated.
In the event of a Change of Control, following the receipt by the Corporation of written notice from Mr. Eveleigh, the Corporation shall pay the above amount for a 12 month period following the date of the Change of Control or, at the Corporation’s option, a lump sum amount equal to the aggregate amount that Mr. Eveleigh would have received during such period.
Change of Control Provisions
A “Change of Control” is defined in Mr. Eveleigh’s employment agreement with the Corporation as any of the following events:
(a) the purchase or acquisition of Common Shares and/or securities (the “Convertible Securities”) convertible into Common Shares of Corporation or carrying rights to acquire Common Shares as a result of which a person, group of persons or persons acting jointly or in concert (collectively, the “Holders”) beneficially own or exercise control or direction over the Common Shares and/or Convertible Securities such that, assuming only the conversion of the Convertible Securities beneficially owned by the Holders, entitle them to cast more than fifty percent (50%) of the votes attaching to all of the Common Shares which may be cast at a meeting of Shareholders to elect directors;
or (b) approval by the Shareholders of (i) an amalgamation, arrangement, merger or other combination of the Corporation with another corporation(s) pursuant to which the Shareholders will not immediately thereafter own shares of the successor or continuing corporation entitling them to cast more than fifty percent (50%) of the votes attaching to all of the common shares in the capital of the successor or continuing corporation which may be cast at a meeting of shareholders to elect directors of that corporation, or (ii) a sale of all or substantially all of the assets of the Corporation.
Estimated Incremental Payment on Change of Control or Termination
The following table summarizes the estimated incremental payments that would be provided by the Corporation to Mr. Eveleigh, following, or in connection with one of the termination scenarios below. The actual amount Mr. Eveleigh would receive on a termination of employment can only be determined at that time as it will depend on a number of variables, including the Common Share price. The amounts noted below assume that the termination event took place on March 31, 2018.
Name Triggering Event Base Salary/Total Cost Remuneration Package
($) Bonus ($) Options ($)(1) Other Benefits ($) Total ($)
Aubrey Eveleigh Change of Control Termination without Cause 900,000 Nil 0 Nil 900,000
Note: (1) This amount represents the value of the outstanding options on March 31, 2018, which would vest on that date, valued by multiplying (a) the difference between $0.68 (the closing price of the Common Shares on the TSX Venture Exchange on March 29, 2018) and the options’ exercise prices, by (b) the number of options whose restrictions lapsed because of the termination and using the March 29, 2018 closing price. |
