Contango Silver & Gold Inc 8-K, filed Jun 12, 2020
Contango Silver & Gold Inc. (CTGO)
8-K
2020-06-12
For: 2020-06-10
View Original
Added on
April 06, 2026
About this 8-K
Contango Silver & Gold Inc filed this 8-K on June 12, 2020, reporting on events of June 10, 2020.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
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): June 10, 2020
CONTANGO ORE, INC.
(Exact name of Registrant as specified in its charter)
|
|
Delaware
|
001-35770
|
27-3431051
|
|
|
|
(State or other jurisdiction of
|
(Commission
|
(I.R.S. Employer
|
|
|
|
incorporation or organization)
|
File Number)
|
Identification No.)
|
|
|
|
|
|
|
|
|
|
3700 Buffalo Speedway, Suite 925 Houston, Texas
|
|
77098
|
|
|
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
Registrant’s Telephone Number, including area code: (713) 877-1311
|
||||
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
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.):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
|
Common Stock, Par Value $0.01 per share
|
CTGO
|
OTCQB
|
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. ☐
|
Item 5.02.
|
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
Retention Agreement
On June 10, 2020, Contango ORE, Inc., a Delaware corporation (the “Company”), entered into a Retention Payment Agreement (the “Retention Agreement”) with Rick Van Nieuwenhuyse, the Company’s
President and Chief Executive Officer, providing for a payment in an amount of $350,000 upon the occurrence of certain conditions. The Retention Agreement is triggered upon a change of control (as defined in the Retention Agreement) which occurs on
or prior to August 6, 2025, provided that Mr. Van Nieuwenhuyse is employed by the Company when the change of control occurs.
The foregoing summary of the Retention Agreement does not purport to be complete and is subject to and qualified in its entirety by reference to the complete text of the Retention Agreement, a copy
of which is being filed as Exhibit 10.1 and is incorporated herein by reference.
Short Term Incentive Plan
In accordance with Mr. Van Nieuwenhuyse’s previously disclosed Offer Letter, dated January 6, 2020, the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”)
adopted a Short Term Incentive Plan (the “STIP”), effective as of June 10, 2020, for the benefit of Mr. Van Nieuwenhuyse. Pursuant to the terms of the STIP, the Compensation Committee will establish
performance goals each year and evaluate the extent to which, if any, Mr. Van Nieuwenhuyse meets such goals. The STIP provides for a payout equal to 25% of Mr. Van Nieuwenhuyse’s annual base salary if the minimum performance target established by
the Compensation Committee is met, 100% of his annual base salary if all performance goals are met, and up to 200% of his annual base salary if the maximum performance target is met. Amounts due under the STIP will be payable 50% in cash and 50% in
the form of restricted stock granted under the Contango ORE, Inc. Amended and Restated 2010 Equity Incentive Plan (as amended, the “Plan”), vesting in two equal annual installments on the first and second anniversaries of the grant date, and
subject to the terms of the Plan.
The foregoing summary of the STIP does not purport to be complete and is subject to and qualified in its entirety by reference to the complete text of the STIP, a copy of which is being filed as
Exhibit 10.2 and is incorporated herein by reference.
|
Item 9.01.
|
Financial Statements and Exhibits.
|
(d) Exhibits.
|
Exhibit No.
|
Description of Exhibit
|
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CONTANGO ORE, INC. | |||
|
By:
|
/s/ Leah Gaines |
||
| Leah Gaines |
|||
| Vice President and Chief Financial Officer | |||
Dated: June 12, 2020
|
|
Exhibit 10.1
|
RETENTION PAYMENT AGREEMENT
This Retention Payment Agreement (the “Agreement”) is entered into as of June 10, 2020 (the “Effective Date”) by and between Contango
ORE, Inc., a Delaware corporation (the “Company”), and Rick
Van Nieuwenhuyse (the “Executive”).
RECITALS
WHEREAS, the Company is engaged in the highly competitive business of mineral exploration;
WHEREAS, the Board of Directors of the Company (the “Board”) is exploring options to increase shareholder value, including a possible sale of the Company;
WHEREAS, the Executive is an officer of the Company; and
WHEREAS, the Company desires to enter into this Agreement with the Executive to encourage retention of the
Executive during the period in which the Company may be sold.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement and other good
and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties agree to the following terms:
TERMS
1. Retention Payment. In lieu of any right to receive
annual grants of shares of restricted stock and stock options with respect to 2020 under a long-term incentive plan and any severance payments in accordance with the Executive’s offer letter dated December 31, 2019, the Executive shall be
entitled to the following:
a. Upon the consummation of a Change in Control (the “CIC Date”) during the period from the Effective Date until August 6, 2025 (the “CIC Period”), the
Company, or its successor, shall pay to the Executive a one-time bonus in a lump sum amount of $350,000 (the “Retention Payment”) within 30 days following the CIC Date; provided that either (i) the Executive
remains continuously employed by, or in the service of, the Company from the Effective Date until the CIC Date, or (ii) the Executive’s employment or service with the Company is terminated by the Company without Cause within 60 days prior to the
CIC Date. The Retention Payment shall be made in cash, in shares of common stock of the Company or a combination of both as determined by the Board in its sole and absolute discretion.
b. Notwithstanding Section 1.a. above, the Company shall have no obligation to pay the Retention Payment unless the Executive
properly executes and delivers to the Company, no later than 21 days after the CIC Date, a general release agreement in the form provided by the Company (the “General Release Agreement”) on the CIC Date and the Executive does not exercise any right he or she may have to revoke such General Release Agreement within the seven-day revocation period.
c. If the 30-day payment period (i.e., the 30-day period beginning on the CIC Date) begins in one calendar year and ends in the
subsequent calendar year, the Retention Payment shall be paid in the subsequent calendar year.
d. For the avoidance of doubt, in no event will a Retention Payment be due or payable to the Executive if, before the CIC Date,
the Company terminates the Executive’s employment or service for Cause, the Executive terminates his or her employment or service for any reason, the Executive’s employment or service is terminated due to death or Disability, or the Company
terminates the Executive’s employment or service without Cause more than 60 days prior to the CIC Date.
e. For purposes of this Agreement, “Cause” shall mean the Executive’s (i) act of fraud, embezzlement, or theft committed in connection with his or her duties or in the course of his or her employment or service with the Company; (ii) intentional or reckless
damage to the property of the Company; (iii) unauthorized disclosure or use of confidential information of the Company; (iv) conviction of, or plea of guilty to, a felony or other crime of moral turpitude while employed by or in the service of
the Company; (v) refusal to comply with the duties assigned by the Company; or (vi) material misconduct in the course and scope of employment or service for the Company, including, without limitation, insubordination, harassment of other
employees, abuse of alcohol or controlled substances, or other material violations of the policies, rules, or practices of the Company.
f. For purposes of this Agreement, “Disability” shall be deemed to occur when (i) the Executive receives benefits under the Company’s or any other applicable long-term-disability plan; or (ii) the Board, upon the written report of a qualified physician
designated by the Board, shall have determined (after a complete physical examination of the Executive at any time after he or she has been absent for a period of at least 90 consecutive calendar days or 90 total days in any 120-day period) that
the Executive has become physically or mentally incapable of performing his or her essential job functions with or without reasonable accommodation as required by law.
2. Change in Control. A “Change in Control” shall mean an event described below which, within the meaning of the regulations promulgated by the Secretary of the Treasury pursuant to Section
409A of the Internal Revenue Code (the “Code”) and its related rules, regulations, and other guidance and any successor statute or
statutes (“Code Section 409A”) constitutes a change in the ownership of the Company or in the ownership of all or substantially all of
the assets of the Company. For an event described below to constitute a Change in Control with respect to the Executive, the applicable event must relate to the entity for which the Executive is providing services, the entity that is liable for
payment of the Retention Payment (or all entities liable for payment if more than one) but only if there is a bona fide business purpose for such entity (or entities) to be liable for such payment, or an entity that is a majority owner of either
(taking into account chains of entities where each entity is a majority owner of another entity in the chain).
a. A “change in the ownership”
of the Company shall occur on the date on which any one person or entity, or more than one person or entity acting as a group, who are not Affiliates of the Company, acquires ownership of the equity interests of the Company that, together with
the equity interests held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the equity interests of the Company, as determined in accordance with Treas. Reg. §
1.409A-3(i)(5)(v). If a person, entity, or group is considered either to own more than fifty percent (50%) of the total fair market value or total voting power of the equity interests of the Company, and such person, entity, or group acquires
additional equity interests of the Company, the acquisition of additional equity interests by such person or group shall not be considered to cause a change in the ownership of the Company.
- 2 -
b. A “change in the ownership
of all or substantially all of the assets” of the Company shall occur on the date on which any one person or entity, or more than one person or entity acting as a group, acquires (or has acquired during the 12-month period ending
on the date of the most recent acquisition by such person or persons) assets from the Company or Peak Gold, LLC, a Delaware limited liability company (“Peak Gold”), that have a total gross fair market value of more than ninety percent (90%) of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions, as
determined in accordance with Treas. Reg. § 1.409A-3(i)(5)(vii). A transfer of assets by the Company or Peak Gold will not be treated as a change in the ownership of such assets if the assets are transferred to: (i) an owner of the Company
(immediately before the asset transfer) in exchange for or with respect to its equity interests; (ii) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company or any of
its Affiliates; (iii) a person or entity, or more than one person or entity acting as a group, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding equity interests of the
Company; or (iv) an entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a person, entity or group described in (iii) above.
3. Definition of Affiliate. For purposes of this
Agreement, with respect to any person or entity, an “Affiliate” of such person or entity shall mean all other persons or entities with which the person or entity would be aggregated and treated as a single employer under Code Section 414(b) (controlled group of corporations) and Code Section
414(c) (group of trades or businesses under common control), as applicable.
4. Taxes and Code Section 409A. The Retention Payment
shall be subject to applicable federal, state, and local tax withholding as required by law. The Retention Payment is intended to be compliant with or exempt from the tax imposed by Code Section 409A and any ambiguous provisions shall be
construed in a manner that is compliant with or exempt from the application of Code Section 409A. Notwithstanding any other provision of this Agreement, the Executive shall be solely responsible for any risk that the Retention Payment to be paid
under this Agreement may be subjected to the tax imposed by Code Section 409A and is therefore advised to consult with a tax advisor of his or her choosing before signing this Agreement.
5. Code Section 280G. Notwithstanding any contrary
provision in this Agreement, if the Executive is a “disqualified individual” (as defined in Section 280G of the Code), and any payments or benefits which the Executive has the right to receive from the Company, would constitute a “parachute
payment” (as defined in Section 280G of the Code), the Retention Payment provided under this Agreement shall be reduced (but not below zero) so that the aggregate present value of such payments and benefits received by the Executive from the
Company shall be $1.00 less than three times the Executive’s “base amount” (as defined in Section 280G of the Code) and so that no portion of such payments received by the Executive shall be subject to the excise tax imposed by Section 4999 of
the Code. The determination as to whether any such reduction in the amount of the Retention Payment is necessary shall be made by the Board in its sole discretion and such determination shall be conclusive and binding on the Executive. If a
reduced payment is made to the Executive pursuant to preceding sentence and through error or otherwise that payment, when aggregated with other payments from the Company used in determining if a parachute payment exists, exceeds $1.00 less than
three times the Executive’s base amount, the Executive shall immediately repay such excess to the Company upon notification that an overpayment has been made.
6. Funding. This Agreement represents an unfunded,
unsecured right to receive the Retention Payment in accordance with the terms of this Agreement, and the Company shall not be required to segregate any assets with respect to any payments due in connection with this Agreement.
7. Assignment of Agreement; Successors and Assigns.
The Executive’s rights and obligations under this Agreement are personal to the Executive and shall not be assigned to any person or entity. The Company may assign this Agreement without the Executive’s consent. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective heirs, legal representatives, successors, and permitted assigns.
- 3 -
8. Attorneys’ Fees and Other Costs. If any party
breaches this Agreement, or if a dispute arises between the parties based on or involving this Agreement, the party or parties that enforces its or their rights under this Agreement against the breaching party, or that prevail in the resolution
of such dispute, according to the court of competent jurisdiction overseeing such breach or dispute, is entitled to recover from the other party its or their reasonable attorneys’ fees, court costs, and expenses incurred in enforcing such rights
or resolving such dispute.
9. Entire Agreement. This Agreement constitutes the
entire agreement between the parties concerning this subject matter and shall supersede all prior and contemporaneous agreements and understandings, both written and oral, between the parties with respect to their subject matters. Executive
agrees that the Company has not made any promise or representation to him concerning this Agreement not expressed in this Agreement, and that, in signing this Agreement, he or she is not relying on any prior oral or written statement or
representation by the Company outside of this Agreement but is instead relying solely on his or her own judgment and his or her legal and tax advisors, if any.
10. Termination and Amendment. This Agreement shall
automatically terminate upon the expiration of the CIC Period if the CIC Date does not occur within the CIC Period. This Agreement shall not be amended except by an instrument in writing signed by the party against whom such amendment is sought
to be enforced.
11. Waiver. The waiver by either party of a breach of
any term of this Agreement shall not operate or be construed as a waiver of a subsequent breach of the same provision by either party or of the breach of any other term or provision of this Agreement.
12. Severability. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable, (a) this Agreement shall be considered divisible, (b) such provision shall be deemed inoperative to the extent it is deemed illegal, invalid, or unenforceable, and (c) in all other respects this
Agreement shall remain in full force and effect; provided, however, that if any such provision may be made enforceable by limitation, then such provision
shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by applicable law.
13. Waiver of Right to Jury Trial. NOTWITHSTANDING ANY
OTHER PROVISION IN THIS AGREEMENT, EACH PARTY SHALL, AND HEREBY DOES, IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY DISPUTE, CONTROVERSY, CLAIM, OR CAUSE OF ACTION AGAINST THE OTHER PARTY OR ITS OR HIS OR HER AFFILIATES ARISING
OUT OF OR RELATING TO THIS AGREEMENT (EITHER ALLEGED BREACH OR ENFORCEMENT).
14. Governing Law; Venue. This Agreement shall be
governed by the laws of the State of Texas, without regard to its conflict-of-laws principles. Exclusive venue for any dispute, controversy, claim, or cause of action between the parties arising out of or related to this Agreement is in any
state or federal court of competent jurisdiction that regularly conducts proceedings in Harris County, Texas. Nothing in this Agreement, however, precludes the Company from seeking to remove a civil action from any state court to federal court.
15. Counterparts. 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 but one and the same instrument.
[Signature Page Follows]
- 4 -
AGREED as of the date set forth above.
| EXECUTIVE: | |||
|
By:
|
/s/ Rick Van Nieuwenhuyse | ||
| Rick Van Nieuwenhuyse | |||
| Title | |||
| COMPANY: | |||
| Contango ORE, Inc. | |||
| /s/ Leah Gaines | |||
| Name: Leah Gaines | |||
| Title: Vice President & CFO | |||
- 5 -
|
|
Exhibit 10.2
|
CONTANGO ORE, INC.
SHORT TERM INCENTIVE PLAN
Contango Ore, Inc. (the “Company”)
hereby adopts the Contango Ore, Inc. Short Term Incentive Plan, effective as of June 10, 2020 (the “STIP”), for the benefit of Rick Van
Nieuwenhuyse (the “Executive”) on the terms and conditions set forth below.
1. Administration. The STIP shall be administered by the Compensation
Committee of the Board of Directors of the Company (the “Committee”) in its sole discretion. The Committee shall have full and exclusive
authority with respect to all matters under the STIP, including without limitation, the construction of the terms of the STIP, the establishment of performance goals, the certification of performance goals, the determination of the level of
performance, the amount of the Annual STIP Payment and the terms of any Restricted Stock Award. The decisions of the Committee and its actions with respect to the STIP shall be final, conclusive and binding on the Executive.
2. Establishment of Performance Goals. During January of each calendar
year during the term of the STIP beginning in 2021, the Committee, after consulting with the Executive in good faith, shall establish performance goals for such calendar year which the Committee considers to be reasonably attainable. The
performance goals for 2020 are set forth in Exhibit A attached hereto.
3. Certification of Performance Goals. Following the end of each calendar
year in the term of the STIP, including 2020, the Committee, in its sole discretion, shall certify the extent to which, if any, the Executive met or exceeded each of the applicable performance goals for such calendar year by March 1 of the
subsequent calendar year. The Committee shall rank the Executive’s level of performance based on the following table:
|
Performance Level
|
Description of Performance
|
Target Percentage
|
|
Level 0
|
Failed to satisfy minimum performance target
|
0%
|
|
Level 1
|
Satisfied minimum performance target
|
25%
|
|
Level 2
|
50%
|
|
|
Level 3
|
75%
|
|
|
Level 4
|
Satisfied all performance goals
|
100%
|
|
Level 5
|
125%
|
|
|
Level 6
|
150%
|
|
|
Level 7
|
175%
|
|
|
Level 8
|
Satisfied maximum performance target
|
200%
|
4. Annual STIP Payment. For each calendar year during the term of the STIP
for which the Executive met or exceeded the minimum performance target, the Executive shall be entitled to a payment under the STIP (the “Annual STIP
Payment”) equal to the product of his annual base salary for such calendar year multiplied by the Target Percentage. One-half of the amount of the Annual STIP Payment shall be made in cash (the “Cash Payment”), and one-half of the amount of the Annual STIP Payment shall be made in restricted stock (the “Restricted Stock Award”) under the Contango Ore, Inc. 2010 Equity Incentive Plan, as amended and restated effective September 15, 2017 and as subsequently amended (the “Plan”), based on the fair market value of the Company’s common stock as of the date of grant of the Restricted Stock Award; provided, however, that a greater portion of
the Annual STIP Payment may be made as a Cash Payment if the Committee determines that not enough shares of common stock are available under the Plan for grant of the full Restricted Stock Award. The Cash Payment shall be paid, and the
Restricted Stock Award shall be granted, not later than March 15 of the subsequent calendar year, provided that the Executive remains employed by the Company as of the date of payment or grant, as applicable. For the avoidance of doubt, any
earned but unpaid portion of the Annual STIP Payment shall be forfeited upon the Executive’s termination of employment for any reason prior to the date of payment or grant, as applicable.
5. Terms of Restricted Stock Award. Any Restricted Stock Award granted
pursuant to Section 4 above shall vest one-half on the first anniversary of the grant date and one-half on the second anniversary of the grant date, with full vesting occurring sooner in the event of a change of control, provided the Executive
remains employed by the Company as of such vesting date or event. The Restricted Stock Award shall be subject to the terms of the Plan and such other terms and conditions as the Committee may include in a Restricted Stock Award Agreement.
6. Tax Withholding. The Company shall withhold from any Cash Payment made
under the STIP the amount of all applicable income and employment taxes required by law to be withheld with respect to such payment. Tax withholding with respect to any Restricted Stock Award shall be made in accordance with the Restricted Stock
Award Agreement.
7. Amendment, Suspension or Termination. The Committee, in its sole
discretion, may amend, suspend or terminate the STIP at any time for any reason. Unless terminated sooner by the Committee, the STIP shall automatically terminate immediately upon the Executive’s termination of employment for any reason and the
Executive shall have no further rights hereunder.
8. No Contract of Employment. Nothing in the STIP constitutes a contract
or agreement of employment for any specific term, nor does it alter the nature of the employment relationship between the Company and the Executive, and either the Company or the Executive may terminate the employment relationship as freely and
with the same effect as if this STIP had not been adopted.
9. Funding. Any obligation of the Company to make an Annual STIP Payment
hereunder shall be an unfunded and unsecured promise to pay cash or property in the future.
10. Code Section 409A. The STIP and any Annual STIP Payment made hereunder
are intended to be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and shall be interpreted and administered in a manner consistent with that intent.
2
11. Nonalienation. The Executive shall have no right or ability to pledge,
hypothecate, anticipate, assign or otherwise transfer any right to payment under the STIP.
12. Governing Law; Venue. The STIP shall be governed by and construed in
accordance with the internal laws (and not the principles relating to conflicts of laws) of the State of Texas except as superseded by applicable federal law. Any action, suit or proceeding arising out of or in connection with the STIP must be
brought, if at all, in any state district court in Harris County, Texas or federal district court in the Southern District of Texas, Houston Division. The Company and the Executive, by acceptance of benefits under the STIP, agrees to submit to
the jurisdiction of said courts in connection with any such action, suit or proceeding.
IN WITNESS WHEREOF, the STIP has been adopted by the Company as of the date set forth above.
CONTANGO ORE, INC.
By: /s/ Brad Juneau
_____________________________
Name: Brad Juneau
Title: Executive Chairman
3