Third Quarter Report 10QSB
September 30, 2002
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U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to __________
Commission file 02-69494
GLOBAL GOLD CORPORATION
(Name of small business issuer in its charter)
DELAWARE 13-3025550
--------------------- -----------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
734 FRANKLIN AVENUE, #333, GARDEN CITY, NEW YORK 11530-4525
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (516) 627-2388
Issuer's fax number (516) 627-5067
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [ X ] No [ ______
].
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court. Yes [ _____ ] No [ _____ ]. Not
applicable.
As of September 30, 2002 there were 4,368,114 shares of the registrant's Common
Stock outstanding.
Transitional Small Business Disclosure Format (check one):Yes [ ] No [ X ]
GLOBAL GOLD CORPORATION
TABLE OF CONTENTS
PART I FINANACIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheet - as of September 30, 2002 1
Statements of Income and Loss for the three months and nine
months ended September 30, 2002 and September 30, 2001
and for the development stage period from January 1, 1995
through September 30, 2002 2
Statements of Cash Flows - for the nine months ended September
30, 2002 and September 30, 2001 and for the development stage
period from January 1, 1995 through September 30, 2002 3
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis or Plan of Operations 5-6
PART II OTHER INFORMATION
Item 1. Legal Proceedings 6
Item 2. Changes in Securities and Use of Proceeds 6
Item 3 Default Upon Senior Securities 6
Item 4 Controls and Procedures 6
Item 5 Other Information 6
Item 6. Exhibits and Reports on Form 8-K 6
SIGNATURE 7
Certification of Chairman and Chief Executive Officer and Treasurer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 8
Certification of President, COO and Interim Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 9
GLOBAL GOLD CORPORATION
(A Development Stage Enterprise)
BALANCE SHEET
SEPTEMBER 30, 2002
(Unaudited)
ASSETS
Cash $ 2,118
Investment in Sterlite Gold Ltd. 193,574
----------------
$ 195,692
================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 54,325
Due to related parties 35,719
----------------
90,044
----------------
STOCKHOLDERS' EQUITY:
Common stock $0.001 par, 100,000,000 shares authorized,
4,368,114 shares issued and outstanding 4,368
Additional paid-in capital 4,834,955
Deficit accumulated during the development stage (4,773,714)
Unrealized gain on investment 40,039
----------------
TOTAL STOCKHOLDERS' EQUITY 105,648
----------------
$ 195,692
================
See notes to financial statements.
1
GLOBAL GOLD CORPORATION
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three Months Ended Nine Months Ended January 1, 1995
September 30, September 30, through
---------------------- --------------------- September 30,
2002 2001 2002 2001 2002
---------- --------- --------- --------- -----------
REVENUES $ - $ - $ - $ - $ -
---------- --------- --------- --------- -----------
EXPENSES:
Selling, general and administrative 7,789 75 11,112 12,335 783,301
Legal fees 4,631 416 16,337 5,989 647,632
Compensation - - - - 550,834
Write-off investment in Georgia
mining interests - - - - 135,723
Gain on sale of interest in
Global Gold Armenia - - - - (268,874)
Gain on sale of interest in
Sterilite Gold Ltd. - - (1,207) - (1,207)
Miscellaneous other - (225) 100 (225) 18,657
---------- --------- --------- --------- -----------
TOTAL EXPENSES 12,420 266 26,342 18,099 1,866,066
---------- --------- --------- --------- -----------
NET INCOME (LOSS) $ (12,420) $ (266) $ (26,342) $ (18,099) $ (1,866,066)
---------- --------- --------- --------- -----------
NET INCOME (LOSS) PER SHARE-BASIC AND DILUTED (0.00) $ (0.00) $ (0.01) $ (0.00)
========== ========= ========= =========
WEIGHTED AVERAGE SHARES OUTSTANDING 4,368,114 4,368,114 4,368,114 4,368,114
========== ========= ========= =========
NET INCOME (LOSS) $ (12,420) $ (266) $ (26,342) $ (18,099)
OTHER COMPREHENSIVE INCOME (LOSS):
Unrealized gain (loss) on available-
for-sale securities (224,219) (33,000) 161,039 (33,000)
---------- --------- --------- ---------
COMPREHENSIVE INCOME (LOSS) $ (236,639)$ (33,266) $ 134,697 $ (51,099)
========== ========= ========= =========
See notes to financial statements.
2
GLOBAL GOLD CORPORATION
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended January 1, 1995
September 30, through
------------------------- September 30,
2002 2001 2002
----------- ----------- ---------------
CASH FLOWS FROM DEVELOPMENT STAGE
ACTIVITIES:
Net Loss $ (26,342) $ (18,099) $ (1,866,066)
Adjustments to reconcile net loss
to net cash used in operating activities:
Provision for bad debt - - 325,000
Gain on sale of Armenia mining interests - - (268,874)
Write-off of mining investment in Georgia - - 135,723
Gain on sale of Sterlite Gold Ltd. interest (1,207) - (1,207)
Changes in assets and liabilities:
Organization costs - - (9,601)
Accounts receivable and deposits - - (154)
Accounts payable and accrued expenses (27,885) 14,194 337,647
----------- ----------- ---------------
NET CASH USED IN OPERATING ACTIVITIES (55,434) (3,905) (1,347,532)
----------- ----------- ---------------
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from sale of Armenia mining interests - - 1,891,155
Proceeds from sale of Sterlite Gold Ltd. interests 43,672 43,672
Investment in certain mining
interests - net of financing - - (153,494)
Deferred costs - mining interests - - (878,858)
----------- ----------- ---------------
NET CASH PROVIDED BY INVESTING ACTIVITIES 43,672 - 902,475
----------- ----------- ---------------
CASH FLOW FROM FINANCING ACTIVITIES:
Net proceeds from private
placement offering - - 421,573
Due from related party - - 13,500
Sale of warrants - - 650
Warrants exercised - - 100
----------- ----------- ---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES - - 435,823
----------- ----------- ---------------
NET DECREASE IN CASH (11,762) (3,905) (9,234)
CASH - beginning of period 13,880 4,360 11,352
----------- ----------- ---------------
CASH - end of period $ 2,118 $ 455 $ 2,118
=========== =========== ===============
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for:
Income taxes paid $ - $ - $ 2,683
=========== =========== ===============
Interest paid $ - $ - $ 15,422
=========== =========== ===============
Non-cash financing and investing activities:
Settlement of accrued salary $ - $ - $ 162,500
=========== =========== ===============
Issusance of stock in connection with
settlement $ - $ - $ 2,000
=========== =========== ===============
See notes to financial statements.
3
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Notes to Financial Statements
September 30, 2002
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERIM FINANCIAL STATEMENTS:
The accompanying financial statements are unaudited. In the opinion of
management, all necessary adjustments (which include only normal
recurring adjustments) have been made to present fairly the financial
position, results of operations and cash flows for the periods
presented. Certain information and note disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these financial statements be read in conjunction with the
financial statements and notes thereto included in the December 31,
2001 annual report on Form 10-KSB. The results of operations for the
nine-month period ended September 30, 2002 are not necessarily
indicative of the operating results to be expected for the full year.
2. INVESTMENTS:
At September 30, 2002 investment in securities consisted of common
stock of Sterlite Gold Ltd. (formerly First Dynasty Mines, Ltd.)
classified as available for sale and stated at a quoted fair value of
$193,574. The cost of the securities was $153,535. The unrealized gain
as of September 30, 2002 was $40,039, which is shown as a separate
component of stockholders' equity.
4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
When used in this discussion, the words "expect(s)","feel(s)", "believe(s)",
"will", "may", "anticipate(s)" and similar expressions are intended to identify
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these
forward-looking statements, and are urged to carefully review and consider the
various disclosures elsewhere in this Form 10-QSB.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
During the three-months ended September 30, 2002, the Company's administrative
and other expenses were $12,420, which represented an increase from the amount
paid or accrued of $266 in the same period last year. The expense increase was
attributable to higher accounting and legal expenses.
NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
During the nine-months ended September 30, 2002, the Company's administrative
and other expenses were $26,342, which represented an increase from the amount
paid or accrued of $18,099 in the same period last year. The expense increase
was attributable to higher accounting and legal expenses.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2002, the Company's total assets were $195,692, of which
$2,118 consisted of cash or cash equivalents.
The Company's plan of operation for calendar year 2002 is:
a. to investigate opportunities, and possibly implement operations, in
the mineral development and production area; and
b. to investigate other investment opportunities in the mineral
development and production areas.
In October, 2002 the Company executed agreements on cooperation with two private
companies in Armenia to study the development of mining properties in Southern
Armenia.
5
The Company needs financing to meet its anticipated monthly administrative
expenses of $3,000 (exclusive of accrued officers' compensation), plus
additional amounts for legal and accounting costs. The Company anticipates that
it might obtain additional financing in 2002 from the holders of its Warrants to
purchase 330,000 shares of Common Stock of the Company at an exercise price of
$0.25 per share, which expire on October 31, 2003. If the Warrants were
exercised in full, the Company would receive $82,500 in gross proceeds. However,
the Company does not believe that the Warrants will be exercised under existing
circumstances, and thus it does not anticipate that any amount will be received
from such source, although there can be no assurance of such result. In the
event that no contemplated financing is obtained through the exercise of the
warrants (which the Company considers highly remote), the Company does not have
sufficient financial resources to meet its obligations.
The Company does not intend to engage in any research and development during
2002 and does not expect to purchase or sell any plant or significant equipment.
The Company does not expect to hire any additional full-time employees in 2002.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings: None
Item 2. Changes in Securities and Use of Proceeds: None
Item 3. Default Upon Senior Securities: None
Item 4. Controls and Procedures
Within the 90-day period prior to the filing of this report, an
evaluation was carried out under the supervision and with the participation of
the Company's Chief Executive Officer and Chief Financial Officer of the
effectiveness of our disclosure controls and procedures (as defined in the
Securities Exchange Act of 1934 Rules 13a-14 and 15d - 14). Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer have
concluded that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed by the Company in reports that
it files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms. ___ Subsequent to the date
of their evaluation, there were no significant changes in the Company's internal
controls or in other factors that could significantly affect the disclosure
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.
6
Item 5. Other Information: None
Item 6. Exhibits
(a) The following documents are filed as part of this
report. Financial Statement of the Company (unaudited),
including the balance sheet as of September 30, 2002, the
statements of income and loss for the three months and nine
months ended September 30, 2002 and September 30, 2001, the
statements of cash flows for the nine months ended September
30, 2002 and September 30, 2001 and for the development stage
period from January 1, 1995 through September 30, 2002 and the
Exhibits which are listed on the Exhibit index.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
10.53 Employment Agreement between the Registrant and Drury J. Gallagher
dated as of July 1, 2002.
10.54 Employment Agreement between the Registrant and Robert A. Garrison
dated as of July 1, 2002.
10.55 Stock Option Agreement between the Registrant and Drury J. Gallagher
dated as of July 1, 2002.
10.56 Stock Option Agreement between the Registrant and Robert A. Garrison
dated as of July 1, 2002.
99.1 Certification of Chief Executive Officer
99.2 Certification of Chief Financial Officer
(b) Reports on Form 8-K filed during the quarter ended September
30, 2002: None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
GLOBAL GOLD CORPORATION
By:/s/ Drury J. Gallagher November 19, 2002
--------------------------------
Drury J. Gallagher, Chairman,
Chief Executive Officer and Treasurer
7
CERTIFICATION
I, Drury J. Gallagher, the Chairman, Chief Executive Officer and Treasurer
of Global Gold Corporation (the "Company"), certify that:
1. I have reviewed this quarterly report on Form 10-QSB of the
Company;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d- 14) for the registrant and we
have:
(a) designed such disclosure controls and
procedures to ensure that material
information relating to the registrant,
including its consolidated subsidiaries, is
made known to us by others within those
entities, particularly during the period in
which this quarterly report is being
prepared;
(b) evaluated the effectiveness of the
registrant's disclosure controls and
procedures as of a date within 90 days prior
to the filing date of this quarterly report
(the "Evaluation Date"); and
(c) presented in this quarterly report our
conclusions about the effectiveness of the
disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing
the equivalent function):
(a) all significant deficiencies in the
design or operation of internal controls
which could adversely affect the
registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any
material weaknesses in internal controls;
and
(b) any fraud, whether or not material, that
involves management or other employees who
have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: November 19, 2002
Drury J. Gallagher
Chairman and Chief Executive Officer
8
CERTIFICATION
I, Robert A. Garrison, the President, ChiefOficer Financial and Chief
Operating Officer of Global Gold Corporation (the "Company"), certify that:
1. I have reviewed this quarterly report on Form 10-QSB of the
Company;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
(1) designed such disclosure controls and
procedures to ensure that material
information relating to the registrant,
including its consolidated subsidiaries, is
made known to us by others within those
entities, particularly during the period in
which this quarterly report is being
prepared;
(2) evaluated the effectiveness of the
registrant's disclosure controls and
procedures as of a date within 90 days prior
to the filing date of this quarterly report
(the "Evaluation Date"); and
(3) presented in this quarterly report our
conclusions about the effectiveness of the
disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons performing
the equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and (1) any fraud, whether or not material, that
involves management or other employees who have a
significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies
and material weaknesses.
Date: November 19, 2002
Robert A. Garrison
President, Chief Financial Officer
and Chief Operating Officer
EXHIBIT 10.53
EMPLOYMENT AGREEMENT
AGREEMENT dated as of the 1st day of July, 2002 between Global
Gold Corporation, a Delaware corporation (the "Corporation"), and Drury J.
Gallagher, an individual residing at 107 Eakins Road, Manhasset, New York 11030
(the "Employee") (the "Agreement").
W I T N E S S E T H :
WHEREAS, the Corporation and the Employee entered into a
three-year employment agreement effective as of July 1, 1997 and which
terminated on June 30, 2000;
WHEREAS, the Corporation needs the active service of the
Employee in light of the Corporation's renewed efforts to obtain and exploit
gold mining projects;
WHEREAS, the Corporation and the Employee desire to enter into
a new employment agreement on the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES.
(a) The Corporation hereby employs the Employee, and the
Employee hereby accepts and agrees to such employment, as Chairman and Chief
Executive Officer and, in such capacity, to be responsible for overseeing,
supervising and participating in the day-to-day activities of the Corporation.
The Employee shall, subject to the supervision and control of the Board of
Directors of the Corporation, perform such executive duties and exercise such
1
supervisory powers over and with regard to the business of the Corporation and
its present and future subsidiaries, consistent with such position, and such
additional duties as specified in the
Corporation's By-Laws or as may be assigned to him from time to time by the
Board of Directors of the Corporation.
(b) The Employee agrees to devote 50% of his available
business time to the performance of his duties hereunder. The Employee may
provide services to other organizations, on a compensation or pro bono basis,
provided that such services do not constitute more than 50% of his available
business time.
2. TERM. The term of this Agreement shall be for a period of
four years commencing on July 1, 2002 and ending on June 30, 2006, and shall be
automatically renewed for consecutive one-year periods thereafter unless (a)
terminated by the Employee on 120 days written notice prior to the expiration of
the initial term hereof, (b) terminated by either party on 120 days written
notice prior to the expiration of the fourth year hereof or any year thereafter
or (c) sooner terminated as otherwise provided herein.
3. COMPENSATION.
(a) Base Compensation. In consideration for the services
rendered by the Employee under this Agreement, the Corporation shall transfer
and deliver to the Employee as base compensation 100,000 shares of its common
stock each 12-month period during the term hereof, commencing on August 1, 2002
2
and thereafter on August 1, 2003, August 1, 2004 and August 1, 2005. Such then
base salary may be increased each year, on the first day after each anniversary
date of the date of this Agreement, (a) in an amount equal to the percentage
increase, if any, in the Federal Bureau of Labor Statistics Consumer Price Index
for Urban Consumers for the Northeastern Region of the United States ("CPI")
during the preceding 12-month period, or (b) in an amount up to 10%, in the sole
discretion of the Board of Directors of the Corporation, if it determines that
such action would be in the best interests of the Corporation.
(b) Bonus Compensation. In addition to the foregoing
compensation, the Employee shall be entitled to receive annual bonus
compensation in an amount determined in accordance with any bonus plan approved
by the Board of Directors, or any committee thereof duly authorized by the Board
to make such determination, based upon qualitative and quantitative goals
determined by the Board of Directors, or such committee thereof, in its sole
discretion, as the case may be; provided that no amount paid to any employee of
the Corporation shall exceed 50% of his then base compensation for such year.
Any bonus payment shall be subject to all applicable tax withholdings.
(c) In the event that the Employee voluntarily elects
not to work 50% for the Corporation as contemplated hereunder, both his base
compensation, and bonus compensation, if any, to which he would otherwise have
been entitled, set forth in Section 3(a) and (b) shall be reduced to the amount
computed by multiplying such base compensation and bonus entitlement by the
ratio of the number of hours worked during such 12 month period to 800 hours.
3
(d) Change of Control.
(i) If during the term of this Agreement, there
shall occur a Change of Control of the Corporation (as defined herein), the
Employee may terminate his employment hereunder at any time during the term of
this Agreement in which case he shall be entitled to receive a payment equal to
one times the Employee's average annual compensation paid by the Company
(including bonuses, if any) during the four- year period (or, if he has worked
less than four years hereunder, such shorter period) immediately preceding the
date of his termination of employment (the "Severance Payment"), provided,
however, that such Severance Payment shall be reduced if and only to the extent
necessary to avoid the imposition of an excise tax on such Severance Payment
under Section 4999 of the Internal Revenue Code of 1986, as amended. The
Severance Payment shall be payable to Employee as follows:
(A) on the date of
his termination of employment, an amount equal to three months base compensation
at the rate prevailing on the date of termination; and
(B) commencing with the fourth month after
such termination, the balance remaining after the payment set forth in Section
3(d)(i)(A) above shall be paid by the Corporation in nine equal installments in,
at the Corporation's sole discretion, cash or in unregistered shares of its
common stock, based on the fair market value of such stock at the time of each
such payment.
4
(ii) For purposes hereof, the term "Change of
Control" shall mean an event or series of events that would be required to be
described as a change in control of the Corporation in a proxy or information
statement distributed by the Corporation pursuant to Section 14 of the
Securities Exchange Act of 1934 in response to Item 6(e) of Schedule 14A
promulgated thereunder, or any substitute provision which may hereafter be
promulgated thereunder or otherwise adopted. The determination of whether and
when a change in control has occurred or is about to occur shall be made by the
Board of Directors in office immediately prior to the occurrence of the event or
series of events constituting such change in control.
4. WORKING FACILITIES. The Corporation shall not be required to
provide an office for the Employee for the performance of his services
hereunder, but will provide such other facilities and services commensurate with
his position as Chairman and Chief Executive Officer of the Corporation, as are
reasonably necessary for the performance of his duties hereunder, as determined
by the Board of Directors of the Corporation.
5. REIMBURSEMENT OF BUSINESS EXPENSES. The Employee is
authorized to incur reasonable expenses in connection with the conduct of the
Corporation's business, including, without limitation, expenses for the
Employee's travel, lodging and business entertainment in accordance with the
Corporation's customary practice and subject to the general limitations thereof
set forth in the annual or more frequent budgets adopted by the Corporation from
time to time. The Corporation will promptly reimburse the Employee for such
expenses upon the presentation by the Employee, from time to time, of an
itemized account of such expenditures together with vouchers or receipts in
substantiation thereof.
5
6. BENEFITS. During the term of this Agreement, any
benefits made available to officers or employees of the Corporation under any
pension plan, profit sharing plan, employee stock purchase plan, stock bonus
plan, incentive stock option plan, stock appreciation plan, deferred
compensation plan, insurance plan, health plan, welfare plan, long-term
disability plan or otherwise shall be made available to the Employee, taking
into account the Employee's level of compensation, past services, scope of
responsibility and such other factors as are customarily used to evaluate
executive performance and compensation under such plans.
7. VACATIONS. The Employee shall be entitled each year during
the term of this Agreement to a vacation period of four weeks during which
period all compensation, benefits, and other rights to which the Employee is
entitled hereunder shall be provided in full. Such vacation may be taken, in the
Employee's discretion, at such time or times as are not inconsistent with the
reasonable business needs of the Corporation. During the term of this Agreement,
the vacation time provided for herein shall not be cumulative to the extent not
taken by the Employee during a given year. In the event that the vacation time
provided hereunder has not been taken during the 12-month period prior to the
termination or expiration of this Agreement for any reason other than those set
forth in Section 8(a) hereof, the Corporation shall pay the Employee, in
addition to any other benefits due to the Employee hereunder, an amount equal to
the number of weeks (or fraction thereof) of vacation time not so taken during
such period multiplied by an amount equal to the result obtained by dividing (x)
the then base salary in effect on the Termination Date (as defined in Section
8(e) hereof) by (y) 52.
6
8. TERMINATION.
(a) Early Termination by Corporation for Cause. During
the term of this Agreement, the Employee's employment may be terminated by the
Corporation only by the affirmative vote of 100% of all of the members of the
Board of Directors of the Corporation then holding office (without counting any
vote of the Employee whose services are sought to be terminated, if the Employee
is then a member of the Board of Directors) on 30 days prior written notice by
means of a Notice of Termination, and an opportunity for the Employee,
accompanied by counsel of his choice, to address the full Board of Directors,
that one of the following conditions exists or one of the following events has
occurred:
(i) Willful act or acts on the part of the
Employee which caused material damage to the Corporation;
(ii) The conviction of the Employee for a felony;
(iii) The refusal by the Employee, continued for
at least 90 days, to perform such employment duties as may
reasonably be delegated or assigned to him under this
Agreement, consistent with his executive position, by the
Board of Directors of the Corporation;
(iv) Willful and unexcused neglect by the
Employee of his employment duties under this Agreement,
continued for at least 90 days; or
(v) Any other material breach by the Employee of
the provisions of this Agreement.
7
Subject only to a final determination by an arbitrator made
pursuant to the provisions of Section 11 of this Agreement, the Board of
Directors' determination, in good faith, in writing that cause exists for
termination of the Employee's employment shall be binding and conclusive for all
purposes under this Agreement. Upon such determination by the Board of
Directors, the Employee's compensation pursuant to Section 3 hereof and all
other benefits provided hereunder shall terminate on the Termination Date,
except that the Employee shall be entitled to be paid severance pay equal to his
then base compensation for a period of three months thereafter. In the event
that the Employee desires to take any matter with respect to such determination
to arbitration, he must commence an arbitration proceeding within 30 days after
receipt of written notice of the Board of Directors' determination. If the
Employee fails to take such action within such period, he will be deemed
conclusively to have waived his right to arbitration of the termination of his
employment hereunder.
(b) Termination by Employee. In the event that the
Corporation shall default in the performance of any of its obligations under
this Agreement in any material respect (other than by reason of its financial
inability to make payments as determined by the Board of Directors of the
Corporation in writing), and shall not cure such default within 10 days of
receipt by the Corporation of written notice of such default from the Employee,
the Employee may terminate this Agreement by delivery of a Notice of
Termination. Upon any termination pursuant to the provisions of this Section
8(b), the Employee shall be entitled to receive, as liquidated damages and not
as a penalty, one year's payments which would have been made to the Employee on
account of his base salary in effect at the date of the delivery of a Notice of
Termination. Upon fulfillment of the conditions set forth in Section 8(b) hereof
and subject to Section 8(f) hereof, all rights and obligations of the parties
8
under this Agreement shall thereupon be terminated. The Employee shall have no
obligation to mitigate damages, and amounts payable pursuant to the provisions
of this Section 8(b) shall not be reduced on account of any income earned by the
Employee from other employment or other sources.
(c) Termination by Reason of Disability. In the event
that Employee shall be prevented from rendering all of the services or
performing all of his duties hereunder by reason of illness, injury or
incapacity (whether physical or mental) for a period of six consecutive months,
determined by an independent physician selected by the Board of Directors of the
Corporation, the Corporation shall have the right to terminate this Agreement,
by giving 10 days prior written notice to the Employee, provided that the
Corporation shall continue to pay his then base compensation for a period of 12
months thereafter. Until terminated in the manner set forth in this Section
8(c), the Employee shall be entitled to receive his full compensation and
benefits provided hereunder through the Termination Date. Any payments to the
Employee under any disability insurance or plan maintained by the Corporation
shall be applied against and shall reduce the amount of the base compensation
payable by the Corporation under this Section 8(c).
(d) Termination by Reason of Death. In the event that
the Employee shall die during the term of this Agreement, this Agreement shall
terminate upon such death. The sole death benefit payable to the Employee shall
be the life insurance benefits provided to the Employee, if any.
(e) Certain Definitions.
9
(i) Any termination of the Employee's employment
by the Corporation or by the Employee shall be communicated by a Notice of
Termination to the other party hereto. For purposes hereof, a "Notice of
Termination" shall mean a notice which shall state the specific reasons, and
shall set forth in reasonable detail the facts and circumstances, for such
termination.
(ii) "Termination Date" shall mean the date
specified in the Notice of Termination as the last day of Employee's employment
by the Corporation.
(f) Continued Maintenance of Benefit Plans in Certain
Cases. Notwithstanding anything contained in this Agreement to the contrary, if
the Employee's employment is terminated pursuant to Sections 8(b) or 8(c)
hereof, the Corporation shall maintain in full force and effect, for the
continued benefit of the Employee for the number of years (including partial
years) remaining in the term of employment hereunder, all employee benefit plans
and programs in which the Employee was entitled to participate immediately prior
to the Termination Date, provided that the Employee's continued participation is
possible under the general terms and provisions of such plans and programs. In
the event that the Employee's participation in any such plan or program is
barred, the Corporation shall have no obligation to provide any substitute
benefits for the Employee.
9. CONFIDENTIALITY.
10
(a) During the term of this Agreement, and for a period
of two years thereafter, the Employee shall not, without the prior written
consent of the Board of Directors of the Corporation, disclose to any person,
other than an employee of the Corporation or a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by the
Employee of his duties hereunder, any of the Corporation's confidential
information obtained by the Employee during the term of this Agreement,
including, without limitation, trade secrets, products, designs, customers or
methods of distribution.
(b) The obligations of confidentiality contained in
this Section shall not extend to any matter which is in or becomes part of the
public domain otherwise than by reason of a breach by the Employee of his
obligations of confidentiality hereunder or which is disclosed by the Employee
pursuant to an order of a governmental body or court of competent jurisdiction
or as required pursuant to a legal proceeding in which the Employee or the
Corporation is a party.
10. CERTAIN REMEDIES IN EVENT OF BREACH. In the event that the
Employee commits a breach, or threatens to commit a breach, of any of the
restrictions on confidentiality contained in Section 9 of this Agreement, the
Corporation shall have the following rights and remedies:
(a) to obtain an injunction restraining any violation
or threatened violation of the provisions of Section 9 or any other appropriate
decree of specific performance by any court having equity jurisdiction, it being
acknowledged and agreed by the Employee that the services rendered, and to be
rendered to the Corporation by him as an Employee, are of a special, unique and
extraordinary character and that any such breach or threatened breach will cause
irreparable injury to the Corporation and that money damages will not provide an
adequate remedy to the Corporation; and
11
(b) to require the Employee to account for and pay over
to the Corporation all compensation, profits, monies, accruals, increments or
other benefits (collectively the "Benefits") derived or received by the Employee
as the result of any transactions constituting a breach of any of the provisions
of Section 9, and the Employee hereby agrees to account for and pay over the
Benefits to the Corporation.
Each of the rights and remedies enumerated in this Section 10
shall be independent of the other, and shall be severally enforceable, and such
rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Corporation at law or in equity.
11. ARBITRATION.
(a) Selection of Arbitrators. In the event of any
disagreement or controversy arising out of or relating to this Agreement, such
controversy or disagreement shall be settled by three arbitrators in the City of
New York in accordance with the rules of the American Arbitration Association
(the "AAA") in arbitrations administered by it (other than the AAA rules
relating to the appointment of arbitrators), and any award granted in such
arbitration shall finally determine such controversy or disagreement. The
arbitrators for any of the arbitral proceedings referred to in the preceding
sentence shall be chosen as follows: (x) one shall be chosen by the Employee,
(y) one shall be chosen by the Board of Directors of the Corporation, and (z)
one shall be chosen by the two arbitrators selected under Section 11(a)(x) and
(y) hereof. The arbitrators to be chosen by the parties shall be chosen within
30 days after the service of a demand for arbitration on any party hereto. If
the two arbitrators appointed above shall not agree to the appointment of the
third arbitrator to be appointed as provided in Section 11(a)(z), such
arbitrator shall be chosen by the then President of the Association of the Bar
of the City of New York, subject to challenge by any party only by reason of a
conflict of interest.
12
(b) Jurisdiction. Any judicial proceeding brought
against any of the parties to this Agreement in connection with compelling or
staying arbitration or enforcing any arbitral decision shall be brought in the
courts of the State of New York or in the United States District Court for the
Southern District of New York, and by the execution and delivery of this
Agreement, each of the parties to this Agreement accepts for himself or itself
the exclusive jurisdiction of such courts, and irrevocably agrees to be bound by
any judgment rendered thereby in connection with this Agreement. Such
consent shall not constitute a general appearance or be available to any other
person who is not a party to this Agreement. The parties agree that service of
process will be deemed sufficient if made upon each party hereto at the address
set forth herein.
12. MISCELLANEOUS.
(a) Notices. All notices or other communications
required or permitted to be given pursuant to this Agreement shall be in writing
and shall be considered as duly given on (a) the date of delivery, if delivered
in person, by nationally recognized overnight delivery service or by facsimile
or (b) three days after mailing if mailed from within the continental United
States by registered or certified mail, return receipt requested to the party
entitled to receive the same, if to the Corporation, Global Gold Corporation,
c/o Robert A. Garrison, 44 Lords Highway East, Weston, Connecticut 06883,
facsimile number (203) 222-9037, with a copy to Law Offices of Stephen R. Field,
240 Madison Avenue, New York, New York 10016, Attn: Stephen R. Field, Esq.,
13
facsimile number (212) 681-0845; and if to the Employee, Mr. Drury J. Gallagher,
107 Eakins Road, Manhasset, New York 11030, facsimile number (516) 627-5067. Any
party may change his or its address by giving notice to the other party stating
his or its new address. Commencing on the 10th day after the giving of such
notice, such newly designated address shall be such party's address for the
purpose of all notices or other communications required or permitted to be given
pursuant to this Agreement.
(b) Governing Law. This Agreement and the rights of the
parties hereunder shall be governed by and construed in accordance with the laws
of the State of New York determined without regard to conflicts of law
principles.
(c) Entire Agreement; Waiver of Breach. This Agreement
constitutes the entire agreement among the parties and supersedes any prior
agreement or understanding among them with respect to the subject matter hereof,
and it may not be modified or amended in any manner other than as provided
herein; and no waiver of any breach or condition of this Agreement shall be
deemed to have occurred unless such waiver is in writing, signed by the party
against whom enforcement is sought, and no waiver shall be claimed to be a
waiver of any subsequent breach or condition of a like or different nature.
(d) Binding Effect; Assignability. This Agreement and
all the terms and provision hereof shall be binding upon and shall inure to the
benefit of the parties and their respective heirs, successors and permitted
assigns. This Agreement and the rights of the parties hereunder shall not be
assigned except with the written consent of all parties hereto.
14
(e) Captions. Captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or extend
the scope or intent of this Agreement or any provision hereof.
(f) Number and Gender. Wherever from the context it
appears appropriate, each term stated in either the singular or the plural shall
include the singular and the plural, and pronouns stated in either the
masculine, the feminine or the neuter gender shall include the masculine,
feminine and neuter.
(g) Severability. If any provision of this Agreement
shall be held invalid or unenforceable, such invalidity or unenforceability
shall attach only to such provision and shall not in any manner affect or render
invalid or unenforceable any other severable provision of this Agreement, and
this Agreement shall be carried out as if any such invalid or unenforceable
provision were not contained herein.
(h) Amendments. This Agreement may not be amended except
in a writing signed by all of the parties hereto.
(i) Counterparts. This Agreement may be executed
in several counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same instrument. In addition, this Agreement
may contain more than one counterpart of the signature page and this Agreement
may be executed by the affixing of such signature pages executed by the parties
to one copy of the Agreement; all of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.
15
IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first above written.
Global Gold Corporation
By:/s/ Robert A. Garrison
------------------------------
Robert A. Garrison
President
/s/ Drury J. Gallagher
-------------------------------
Drury J. Gallagher, Chairman and
Chief Executive Officer
16
EXHIBIT 10.54
EMPLOYMENT AGREEMENT
AGREEMENT dated as of the 1st day of July, 2002 between Global
Gold Corporation, a Delaware corporation (the "Corporation"), and Robert A.
Garrison, an individual residing at 44 Lords Highway East, Weston, Connecticut
06883 (the "Employee") (the "Agreement").
W I T N E S S E T H :
WHEREAS, the Corporation and the Employee entered into a
three-year employment agreement effective as of July 1, 1997 and which
terminated on June 30, 2000;
WHEREAS, the Corporation needs the active service of the
Employee in light of the Corporation's renewed efforts to obtain and exploit
gold mining projects;
WHEREAS, the Corporation and the Employee desire to enter into
a new employment agreement on the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES.
(a) The Corporation hereby employs the Employee,
and the Employee hereby accepts and agrees to
such employment, as Chairman and Chief Executive Officer and, in such capacity,
to be responsible for managing the day-to-day activities of the Corporation. The
Employee shall, subject to the supervision and control of the Board of Directors
of the Corporation, perform such executive duties and exercise such supervisory
powers over and with regard to the business of the Corporation and its present
and future subsidiaries, consistent with such position, and such additional
duties as specified in the Corporation's By-Laws or as may be assigned to him
from time to time by the Board of Directors of the Corporation.
(b) The Employee agrees to devote 50% of his available
business time to the performance of his duties hereunder. The Employee may
provide services to other organizations, on a compensation or pro bono basis,
provided that such services do not constitute more than 50% of his available
business time.
2. TERM. The term of this Agreement shall be for a period of
four years commencing on July 1, 2002 and ending on June 30, 2006, and shall be
automatically renewed for consecutive one-year periods thereafter unless (a)
terminated by the Employee on 120 days written notice prior to the expiration of
the initial term hereof, (b) terminated by either party on 120 days written
notice prior to the expiration of the fourth year hereof or any year thereafter
or (c) sooner terminated as otherwise provided herein.
3. COMPENSATION.
(a) Base Compensation. In consideration for the services
rendered by the Employee under this Agreement, the Corporation shall transfer
and deliver to the Employee as base compensation 100,000 shares of its common
stock each 12-month period during the term
2
hereof, commencing on August 1, 2002 and thereafter on August 1, 2003, August 1,
2004 and August 1, 2005. Such then base salary may be increased each year, on
the first day after each anniversary date of the date of this Agreement,
(a) in an amount equal to the percentage increase, if any, in the Federal Bureau
of Labor Statistics Consumer Price Index for Urban Consumers for the
Northeastern Region of the United States ("CPI") during the preceding 12-month
period, or (b) in an amount up to 10%, in the sole discretion of the Board of
Directors of the Corporation, if it determines that such action would be in the
best interests of the Corporation.
(b) Bonus Compensation. In addition to the foregoing
compensation, the Employee shall be entitled to receive annual bonus
compensation in an amount determined in accordance with any bonus plan approved
by the Board of Directors, or any committee thereof duly authorized by the Board
to make such determination, based upon qualitative and quantitative goals
determined by the Board of Directors, or such committee thereof, in its sole
discretion, as the case may be; provided that no amount paid to any employee of
the Corporation shall exceed 50% of his then base compensation for such year.
Any bonus payment shall be subject to all applicable tax withholdings.
(c) In the event that the Employee voluntarily elects
not to work 50% for the Corporation as contemplated hereunder, both his base
compensation, and bonus compensation, if any, to which he would otherwise have
3
been entitled, set forth in Section 3(a) and (b) shall be reduced to the amount
computed by multiplying such base compensation and bonus entitlement by the
ratio of the number of hours worked during such 12 month period to 800 hours.
(d) Change of Control.
(i) If during the term of this Agreement, there
shall occur a Change of Control of the Corporation (as defined herein), the
Employee may terminate his employment hereunder at any time during the term of
this Agreement in which case he shall be entitled to receive a payment equal to
one times the Employee's average annual compensation paid by the Company
(including bonuses, if any) during the four year period (or, if he has worked
less than four years hereunder, such shorter period) immediately preceding the
date of his termination of employment (the "Severance Payment"), provided,
however, that such Severance Payment shall be reduced if and only to the extent
necessary to avoid the imposition of an excise tax on such Severance Payment
under Section 4999 of the Internal Revenue Code of 1986, as amended. The
Severance Payment shall be payable to Employee as follows:
(A) on the date of his termination of
employment, an amount equal to three months base compensation at the rate
prevailing on the date of termination; and
(B) commencing with the fourth month
after such termination, the balance remaining after the payment set forth in
Section 3(d)(i)(A) above shall be paid by the Corporation in nine equal
4
installments in, at the Corporation's sole discretion, cash or in unregistered
shares of its common stock, based on the fair market value of such stock at the
time of each such payment.
(ii) For purposes hereof, the term "Change of
Control" shall mean an event or series of events that would be required to be
described as a change in control of the Corporation in a proxy or information
statement distributed by the Corporation pursuant to Section 14 of the
Securities Exchange Act of 1934 in response to Item 6(e) of Schedule 14A
promulgated thereunder, or any substitute provision which may hereafter be
promulgated thereunder or otherwise adopted. The determination of whether and
when a change in control has occurred or is about to occur shall be made by the
Board of Directors in office immediately prior to the occurrence of the event or
series of events constituting such change in control.
4. WORKING FACILITIES. The Corporation shall not be required to
provide an office for the Employee for the performance of his services
hereunder, but will provide such other facilities and services commensurate with
his position as Chairman and Chief Executive Officer of the Corporation, as are
reasonably necessary for the performance of his duties hereunder, as determined
by the Board of Directors of the Corporation.
5. REIMBURSEMENT OF BUSINESS EXPENSES. The Employee is
authorized to incur reasonable expenses in connection with the conduct of the
Corporation's business, including, without limitation, expenses for the
Employee's travel, lodging and business entertainment in accordance with the
Corporation's customary practice and subject to the general limitations thereof
set forth in the annual or more frequent budgets adopted by the Corporation from
time to time. The Corporation will promptly reimburse the Employee for such
5
expenses upon the presentation by the Employee, from time to time, of an
itemized account of such expenditures together with vouchers or receipts in
substantiation thereof.
6. BENEFITS. During the term of this Agreement, any
benefits made available to officers or employees of the Corporation under any
pension plan, profit sharing plan, employee stock purchase plan, stock bonus
plan, incentive stock option plan, stock appreciation plan, deferred
compensation plan, insurance plan, health plan, welfare plan, long-term
disability plan or otherwise shall be made available to the Employee, taking
into account the Employee's level of compensation, past services, scope of
responsibility and such other factors as are customarily used to evaluate
executive performance and compensation under such plans.
7. VACATIONS. The Employee shall be entitled each year during
the term of this Agreement to a vacation period of four weeks during which
period all compensation, benefits, and other rights to which the Employee is
entitled hereunder shall be provided in full. Such vacation may be taken, in the
Employee's discretion, at such time or times as are not inconsistent with the
reasonable business needs of the Corporation. During the term of this Agreement,
the vacation time provided for herein shall not be cumulative to the extent not
taken by the Employee during a given year. In the event that the vacation time
provided hereunder has not been taken during the 12-month period prior to the
termination or expiration of this Agreement for any reason other than those set
forth in Section 8(a) hereof, the Corporation shall pay the Employee, in
addition to any other benefits due to the Employee hereunder, an amount equal to
the number of weeks (or fraction thereof) of vacation time not so taken during
6
such period multiplied by an amount equal to the result obtained by dividing (x)
the then base salary in effect on the Termination Date (as defined in Section
8(e) hereof) by (y) 52.
8. TERMINATION.
(a) Early Termination by Corporation for Cause. During
the term of this Agreement, the Employee's employment may be terminated by the
Corporation only by the affirmative vote of 100% of all of the members of the
Board of Directors of the Corporation then holding office (without counting any
vote of the Employee whose services are sought to be terminated, if the Employee
is then a member of the Board of Directors) on 30 days prior written notice by
means of a Notice of Termination, and an opportunity for the Employee,
accompanied by counsel of his choice, to address the full Board of Directors,
that one of the following conditions exists or one of the following events has
occurred:
(i) Willful act or acts on the part of the
Employee which caused material damage to the Corporation;
(ii) The conviction of the Employee for a felony;
(iii) The refusal by the Employee, continued for
at least 90 days, to perform such employment duties as may
reasonably be delegated or assigned to him under this
Agreement, consistent with his executive position, by the
Board of Directors of the Corporation;
(iv) Willful and unexcused neglect by the
Employee of his employment duties under this Agreement,
continued for at least 90 days; or
(v) Any other material breach by the Employee of
the provisions of this Agreement.
7
Subject only to a final determination by an arbitrator made
pursuant to the provisions of Section 11 of this Agreement, the Board of
Directors' determination, in good faith, in writing that cause exists for
termination of the Employee's employment shall be binding and conclusive for all
purposes under this Agreement. Upon such determination by the Board of
Directors, the Employee's compensation pursuant to Section 3 hereof and all
other benefits provided hereunder shall terminate on the Termination Date,
except that the Employee shall be entitled to be paid severance pay equal to his
then base compensation for a period of three months thereafter. In the event
that the Employee desires to take any matter with respect to such determination
to arbitration, he must commence an arbitration proceeding within 30 days after
receipt of written notice of the Board of Directors' determination. If the
Employee fails to take such action within such period, he will be deemed
conclusively to have waived his right to arbitration of the termination of his
employment hereunder.
(b) Termination by Employee. In the event that the
Corporation shall default in the performance of any of its obligations under
this Agreement in any material respect (other than by reason of its financial
inability to make payments as determined by the Board of Directors of the
Corporation in writing), and shall not cure such default within 10 days of
receipt by the Corporation of written notice of such default from the Employee,
the Employee may terminate this Agreement by delivery of a Notice of
Termination. Upon any termination pursuant to the provisions of this Section
8(b), the Employee shall be entitled to receive, as liquidated damages and not
as a penalty, one year's payments which would have been made to the Employee on
account of his base salary in effect at the date of the delivery of a Notice of
Termination. Upon fulfillment of the conditions set forth in Section 8(b) hereof
8
and subject to Section 8(f) hereof, all rights and obligations of the parties
under this Agreement shall thereupon be terminated. The Employee shall have no
obligation to mitigate damages, and amounts payable pursuant to the provisions
of this Section 8(b) shall not be reduced on account of any income earned by the
Employee from other employment or other sources.
(c) Termination by Reason of Disability. In the event
that Employee shall be prevented from rendering all of the services or
performing all of his duties hereunder by reason of illness, injury or
incapacity (whether physical or mental) for a period of six consecutive months,
determined by an independent physician selected by the Board of Directors of the
Corporation, the Corporation shall have the right to terminate this Agreement,
by giving 10 days prior written notice to the Employee, provided that the
Corporation shall continue to pay his then base compensation for a period of 12
months thereafter. Until terminated in the manner set forth in this Section
8(c), the Employee shall be entitled to receive his full compensation and
benefits provided hereunder through the Termination Date. Any payments to the
Employee under any disability insurance or plan maintained by the Corporation
shall be applied against and shall reduce the amount of the base compensation
payable by the Corporation under this Section 8(c).
(d) Termination by Reason of Death. In the event that
the Employee shall die during the term of this Agreement, this Agreement shall
terminate upon such death. The sole death benefit payable to the Employee shall
be the life insurance benefits provided to the Employee, if any.
9
(e) Certain Definitions.
(i) Any termination of the Employee's employment
by the Corporation or by the Employee shall be communicated by a Notice of
Termination to the other party hereto. For purposes hereof, a "Notice of
Termination" shall mean a notice which shall state the specific reasons, and
shall set forth in reasonable detail the facts and circumstances, for such
termination.
(ii) "Termination Date" shall mean the date
specified in the Notice of Termination as the last day of Employee's employment
by the Corporation.
(f) Continued Maintenance of Benefit Plans in Certain
Cases. Notwithstanding anything contained in this Agreement to the contrary, if
the Employee's employment is terminated pursuant to Sections 8(b) or 8(c)
hereof, the Corporation shall maintain in full force and effect, for the
continued benefit of the Employee for the number of years (including partial
years) remaining in the term of employment hereunder, all employee benefit plans
and programs in which the Employee was entitled to participate immediately prior
to the Termination Date, provided that the Employee's continued participation is
possible under the general terms and provisions of such plans and programs. In
the event that the Employee's participation in any such plan or program is
barred, the Corporation shall have no obligation to provide any substitute
benefits for the Employee.
9. CONFIDENTIALITY.
10
(a) During the term of this Agreement, and for a period
of two years thereafter, the Employee shall not, without the prior written
consent of the Board of Directors of the Corporation, disclose to any person,
other than an employee of the Corporation or a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by the
Employee of his duties hereunder, any of the Corporation's confidential
information obtained by the Employee during the term of this Agreement,
including, without limitation, trade secrets, products, designs, customers or
methods of distribution.
(b) The obligations of confidentiality contained in
this Section shall not extend to any matter which is in or becomes part of the
public domain otherwise than by reason of a breach by the Employee of his
obligations of confidentiality hereunder or which is disclosed by the Employee
pursuant to an order of a governmental body or court of competent jurisdiction
or as required pursuant to a legal proceeding in which the Employee or the
Corporation is a party.
10. CERTAIN REMEDIES IN EVENT OF BREACH. In the event that the
Employee commits a breach, or threatens to commit a breach, of any of the
restrictions on confidentiality contained in Section 9 of this
Agreement, the Corporation shall have the following rights and remedies:
(a) to obtain an injunction restraining any violation
or threatened violation of the provisions of Section 9 or any other appropriate
decree of specific performance by any court having equity jurisdiction, it being
acknowledged and agreed by the Employee that the services rendered, and to be
rendered to the Corporation by him as an Employee, are of a special, unique and
11
extraordinary character and that any such breach or threatened breach will cause
irreparable injury to the Corporation and that money damages will not provide an
adequate remedy to the Corporation; and
(b) to require the Employee to account for and pay over
to the Corporation all compensation, profits, monies, accruals, increments or
other benefits (collectively the "Benefits") derived or received by the Employee
as the result of any transactions constituting a breach of any of the provisions
of Section 9, and the Employee hereby agrees to account for and pay over the
Benefits to the Corporation.
Each of the rights and remedies enumerated in this Section 10
shall be independent of the other, and shall be severally enforceable, and such
rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Corporation at law or in equity.
11. ARBITRATION.
(a) Selection of Arbitrators. In the event of any
disagreement or controversy arising out of or relating to this Agreement, such
controversy or disagreement shall be settled by three arbitrators in the City of
New York in accordance with the rules of the American Arbitration Association
(the "AAA") in arbitrations administered by it (other than the AAA rules
relating to the appointment of arbitrators), and any award granted in such
arbitration shall finally determine such controversy or disagreement. The
arbitrators for any of the arbitral proceedings referred to in the preceding
sentence shall be chosen as follows: (x) one shall be chosen by the Employee,
(y) one shall be chosen by the Board of Directors of the Corporation, and (z)
one shall be chosen by the two arbitrators selected under Section 11(a)(x) and
(y) hereof. The arbitrators to be chosen by the parties shall be chosen within
30 days after the service of a demand for arbitration on any party hereto. If
the two arbitrators appointed above shall not agree to the appointment of the
third arbitrator to be appointed as provided in Section 11(a)(z), such
12
arbitrator shall be chosen by the then President of the Association of the Bar
of the City of New York, subject to challenge by any party only by reason of a
conflict of interest.
(b) Jurisdiction. Any judicial proceeding brought
against any of the parties to this Agreement in connection with compelling or
staying arbitration or enforcing any arbitral decision shall be brought in the
courts of the State of New York or in the United States District Court for the
Southern District of New York, and by the execution and delivery of this
Agreement, each of the parties to this Agreement accepts for himself or itself
the exclusive jurisdiction of such courts, and irrevocably agrees to be bound by
any judgment rendered thereby in connection with this Agreement. ___ Such
consent shall not constitute a general appearance or be available to any other
person who is not a party to this Agreement. The parties agree that service of
process will be deemed sufficient if made upon each party hereto at the address
set forth herein.
12. MISCELLANEOUS.
(a) Notices. All notices or other communications
required or permitted to be given pursuant to this Agreement shall be in writing
and shall be considered as duly given on (a) the date of delivery, if delivered
in person, by nationally recognized overnight delivery service or by facsimile
or (b) three days after mailing if mailed from within the continental United
States by registered or certified mail, return receipt requested to the party
13
entitled to receive the same, if to the Corporation, Global Gold Corporation,
c/o Drury J. Gallagher, 107 Eakins Road, Manhasset, New York 11030, facsimile
number (516) 627-5067, with a copy to Law Offices of Stephen R. Field, 240
Madison Avenue, New York, New York 10016, Attn: Stephen R. Field, Esq.,
facsimile number (212) 681-0845; and if to the Employee, Robert A. Garrison, 44
Lords Highway East, Weston, Connecticut 06883, facsimile number (203) 222-9037.
Any party may change his or its address by giving notice to the other party
stating his or its new address. Commencing on the 10th day after the giving of
such notice, such newly designated address shall be such party's address for the
purpose of all notices or other communications required or permitted to be given
pursuant to this Agreement.
(b) Governing Law. This Agreement and the rights of the
parties hereunder shall be governed by and construed in accordance with the laws
of the State of New York determined without regard to conflicts of law
principles.
(c) Entire Agreement; Waiver of Breach. This Agreement
constitutes the entire agreement among the parties and supersedes any prior
agreement or understanding among them with respect to the subject matter hereof,
and it may not be modified or amended in any manner other than as provided
herein; and no waiver of any breach or condition of this Agreement shall be
deemed to have occurred unless such waiver is in writing, signed by the party
against whom enforcement is sought, and no waiver shall be claimed to be a
waiver of any subsequent breach or condition of a like or different nature.
(d) Binding Effect; Assignability. This Agreement and
all the terms and provision hereof shall be binding upon and shall inure to the
benefit of the parties and their respective heirs, successors and permitted
assigns. This Agreement and the rights of the parties hereunder shall not be
assigned except with the written consent of all parties hereto.
(e) Captions. Captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or extend
the scope or intent of this Agreement or any provision hereof.
(f) Number and Gender. Wherever from the context it
appears appropriate, each term stated in either the singular or the plural shall
include the singular and the plural, and pronouns stated in either the
masculine, the feminine or the neuter gender shall include the masculine,
feminine and neuter.
(g) Severability. If any provision of this Agreement
shall be held invalid or unenforceable, such invalidity or unenforceability
shall attach only to such provision and shall not in any manner affect or render
invalid or unenforceable any other severable provision of this Agreement, and
this Agreement shall be carried out as if any such invalid or unenforceable
provision were not contained herein.
(h) Amendments. This Agreement may not be amended except
in a writing signed by all of the parties hereto.
(i) Counterparts. This Agreement may be executed
in several counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same instrument. In addition, this Agreement
may contain more than one counterpart of the signature page and this Agreement
may be executed by the affixing of such signature pages executed by the parties
to one copy of the Agreement; all of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first above written.
Global Gold Corporation
By:/s/ Drury J. Gallagher
-------------------------------
Drury J. Gallagher, Chairman and
Chief Executive Officer
/s/ Robert A. Garrison
------------------------------
Robert A. Garrison
16
1
EXHIBIT 10.55
GLOBAL GOLD CORPORATION
STOCK OPTION AGREEMENT
(INCENTIVE STOCK OPTION)
THIS AGREEMENT made as of this 1st day of July, 2002 between Global
Gold Corporation, a Delaware corporation, with offices at 107 Eakins Road,
Manhasset, New York 11030 (the "Company") and Drury J. Gallagher, 107 Eakins
Road, Manhasset, New York 11030 (the "Holder").
The Company has adopted the 1995 Stock Option Plan (the "Plan"). The
Plan, as it may hereafter be amended and continued, is incorporated herein by
reference and made part of this Agreement.
The Committee, which is charged with the administration of the Plan
pursuant to Section 3 thereof, has determined that it would be to the advantage
and interest of the Company to grant the option provided for herein to the
Holder as a reward for prior services to the Company and as an inducement to
remain in the service of the Company or one of its subsidiaries, and as an
incentive for increased efforts during such service.
NOW, THEREFORE, the parties agree as follows:
1. Pursuant to the Plan, the Company with the approval of the
Committee hereby grants to the Holder as of the date hereof an option to
purchase all or any part of 150,000 shares of Common Stock of the Company (the
"Option") at a price per share of $0.11, and upon the terms and conditions set
forth herein.
2. (a) The Option shall continue in force
through June 30, 2007 (the "Expiration Date"), unless sooner terminated as
provided herein and in the Plan. Subject to the provisions of the Plan, and
except as otherwise provided in Section 2(e) hereof, the Option shall become
fully exercisable as follows:
(i) 75,000 shares on June 30, 2003; and
(ii) 75,000 shares on June 30, 2004.
Such installments shall be cumulative.
(b) Except as provided hereinbelow, the Option may not
be exercised unless the Holder is then an employee (including any officer who is
an employee), consultant, employee of a consultant, advisor, agent or
independent representative of the Company or any subsidiary of the Company or
any combination thereof and unless the Holder has remained in the continuous
employ or service thereof from the date of this grant.
7
(c) The Option is designated as incentive stock option
pursuant to the Internal Revenue Code of 1986, as amended (the "Code") and the
regulations promulgated thereunder.
(d) Notwithstanding anything contained in this
Agreement to the contrary after the exercise of the Option, no sale or transfer
of the shares purchased thereunder may be effected without an effective
registration statement or an opinion of counsel for the Company that such
registration is not required under the Securities Act of 1933, as amended, and
any applicable state securities law.
(5) Notwithstanding anything contained in this Agreement to
the contrary:
(i) If, during the term of his Agreement, there
shall occur a Change of Control of the Company (as defined in Section 14(b) of
the Plan and Section 2(e)(ii) hereof), the Holder may, at such time, in the
exercise of the Holder's sole discretion, surrender the Option for cash equal to
the excess of the fair market value of the Common Stock of the Company that he
would have received upon the exercise of the previously unexercised shares of
Common Stock of the Company subject to the Option over the exercise price
thereof; and
(2) the Option shall become immediately exercisable
in full upon the occurrence of a Change in Control (as defined in Section 14(b)
of the Plan), which shall occur upon
(A) (x) the sale of all or substantially
all of the Company's assets or (y) a merger (including a merger in which the
Company is the surviving corporation) or consolidation of the Company with one
or more corporations or entities, as a result of which in each such case the
Company's voting securities outstanding immediately before such sale, merger or
consolidation represent less than 50% of the combined voting power of voting
securities of the Company or the surviving entity outstanding immediately after
such sale, merger or consolidation; or
(B) any "person," as such term is used
in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") or persons acting in concert (other than Drury J.
Gallagher, Robert A. Garrison or any of their affiliates) become the "beneficial
owner" or "beneficial owners" (as defined in Rule 13d-3 under the Exchange Act,
or any successor rule or regulation thereto as in effect from time to time),
directly or indirectly, of the Company's securities representing more than 50%
of the combined voting power of the Company's then outstanding securities,
pursuant to a plan of such person or persons to acquire such a controlling
interest in the Company, whether pursuant to a merger (including a merger in
which the Company is the surviving corporation), an acquisition of securities or
otherwise, except that this Section Section 2(e)(ii)(b) shall not apply to any
person who provides financing to the Company or any of their affiliates,
pursuant to a private placement transaction or otherwise; and
(iii) a transaction shall not constitute a Change
2
of Control if its sole purpose is to change the state of the Company's
incorporation or to create a holding company that will be owned in substantially
the same proportions by the persons who held the Company's securities
immediately before such transaction.
3. In the event that the employment or service of the Holder
shall be terminated prior to the Expiration Date (otherwise than by reason of
death or disability), the Option may, subject to the provisions of the Plan, be
exercised (to the extent that the Holder was entitled to do so at the
termination of his employment or service) at any time within three months after
such termination, but not after the Expiration Date, provided, however, that if
such termination shall have been for cause or voluntarily by the Holder and
without the consent of the Company or any subsidiary corporation thereof, the
Option and all rights of the Holder hereunder, to the extent not theretofore
exercised, shall forthwith terminate immediately upon such termination. Nothing
in this Agreement shall confer upon the Holder any right to continue in the
employ or service of the Company or any consultant of the Company or affect the
right of the Company or any subsidiary to terminate his employment or service at
any time.
4. If the Holder shall (a) die while he is employed by or
serving the Company or a corporation which is a subsidiary thereof or within
three months after the termination of such employment (other than termination
for cause, or voluntarily on his part and without the consent of the Company or
subsidiary corporation thereof) or (b) become permanently and totally disabled
within the meaning of Section 22 (e)(3) of the Code while employed by or serving
the Company or such subsidiary, then, notwithstanding anything contained in this
Agreement to the contrary, such Option shall become fully exercisable upon the
occurrence of any such event, and the Option may be exercised as set forth
herein by the Holder or by the person or persons to whom the Holder's rights
under the Option pass by will or applicable law, or if no such person has such
right, by his executors or administrators, at any time within one year after the
date of death of the original Holder, or one year after the date of permanent or
total disability, but in either case, not later than the Expiration Date.
5. (a) This Option may be exercised by the Holder
hereof, in whole or in part, at any time or from time to time prior to the
expiration date, by returning this Option to the Company at its principal office
for endorsement of exercise, with the form of Exercise of Option attached hereto
(or a reasonable facsimile thereof) duly executed by the Holder and accompanied
by payment of the purchase price for the number of shares of common stock
specified in such form.
3
(b) Payment of the purchase price may be made as
follows (or by any combination of the following): (i) in United States currency
by cash or delivery of a certified check or bank draft payable to the order of
the Company or by wire transfer to the Company, (ii) by cancellation of such
number of the shares of common stock otherwise issuable to the Holder upon such
exercise as shall be specified in such Exercise of Option, such that the excess
of the aggregate Current Market Price of such specified number of shares on the
date of exercise over the portion of the purchase price attributable to such
shares shall equal the purchase price attributable to the shares of common stock
to be issued upon such exercise, in which case such amount shall be deemed to
have been paid to the Company and the number of shares issuable upon such
exercise shall be reduced by such specified number, or (iii) by surrender to the
Company for cancellation certificates representing shares of common stock of the
Company owned by the Holder (properly endorsed for transfer in blank) having a
Current Market Price on the date of the exercise hereof equal to the purchase
price.
(c) Each exercise of this Option shall be deemed to
have been effected immediately prior to the close of business on the business
day on which the Holder's Exercise of Option, and the purchase price shall have
been received by, the Company as provided in Section 5.
As used herein, unless the context otherwise requires, the
following terms shall have the meanings as set forth below:
(A) "Current Market Price" shall mean, on any
date specified herein, the average of the daily Market Price during the 10
consecutive trading days commencing 15 trading days before such date, except
that, if on any such date the shares of common stock are not listed or admitted
for trading on any national securities exchange or quoted in the
over-the-counter market, the Current Market Price shall be the Market Price on
such date.
(2) "Market Price" shall mean, on any date specified
herein, the amount per share of the common stock, equal to (a) the last reported
sale price of such common stock, regular way, on such date or, in case no such
sale takes place on such date, the average of the closing bid and asked prices
thereof, regular way, on such date, in either case as officially reported on the
principal national securities exchange on which such common stock is then listed
or admitted for trading, or (b) if such common stock is not then listed or
admitted for trading on any national securities exchange but is designated as a
national market system security by the National Association of Securities
Dealers, Inc. ("NASD"), the last reported trading price of the common stock on
such date, or (c) if there shall have been no trading on such date or if the
common stock is not so designated, the average of the closing bid and asked
prices of the common stock on such date as shown by the NASD automated quotation
system, or (d) if such common stock is not then listed or admitted for trading
on any national exchange or quoted in the over-the-counter market, the fair
value thereof (as of a date which is within 20 days of the date as of which the
determination is to be made) determined in good faith by the Board of Directors
of the Company.
(5) Prior to or concurrently with delivery by the Company
to the Holder of a certificate representing such shares, the Holder shall, upon
notification of the amount due, pay promptly any amount necessary to satisfy
applicable Federal, state or local income tax requirements. In the event such
amount is not paid promptly, the Company shall have the right to apply from the
purchase price paid any taxes required by law to be withheld by the Company with
respect to such payment and the number of shares to be issued by the Company
will be reduced accordingly.
4
6. If all of any portion of the Option shall be exercised
subsequent to any stock dividend, split-up, recapitalization, merger,
consolidation, combination or exchange of shares, separation, reorganization, or
liquidation of the Company occurring after the date hereof, as a result of which
shares of any class shall be issued in respect to outstanding common stock of
the Company or such common stock shall be changed into the same or a different
number of shares of the same or another class or classes, the Holder, upon
exercise of the Option, or portion thereof, shall receive, for the aggregate
price upon such exercise of the Option, the aggregate number and class of shares
which, if common stock as authorized at the date hereof had been purchased or
awarded at the date hereof for the same aggregate price (on the basis of the per
share exercise price of the Option set forth herein) and had not been disposed
of, such person or persons would be holding, at the time of such exercise, as a
result of such stock dividend, split up, recapitalization, merger,
consolidation, combination, or exchange of shares, separation, reorganization,
or liquidation; provided, however, that no fractional shares shall be issued
upon any such exercise and the aggregate price paid shall be appropriately
reduced for any fractional share not issued. This Section does not give Holder
any right to receive an additional option as a result of the issuance of
additional shares of the Company or the increase in the authorized capital of
the Company.
7. Upon each exercise of the Option, or portion thereof, the
Company as promptly as practicable shall mail or deliver to the Holder a stock
certificate or certificates representing the shares then purchased or awarded,
and shall pay all stamp taxes payable in connection therewith. The issuance of
such shares and delivery of the certificate or certificates therefor shall,
however, be subject to any delay necessary to complete (a) the listing of such
shares on any stock exchange upon which shares of the same class are then listed
and (b) such registration or qualification of such shares under any state or
federal law, rule or regulation as the Company may determine to be necessary or
advisable.
8. No options granted hereunder shall be transferable other
than by will or by the laws of descent and distribution. Options may be
exercised, during the lifetime of the Holder, only by the Holder, or by his
guardian or legal representative. In the event of any attempt by the Holder to
transfer, assign, pledge, hypothecate or otherwise dispose of the Option or of
any right hereunder, except as provided for herein, or in the event of the levy
or any attachment, execution or similar process upon the rights or interest
hereby conferred, the Company may terminate the Option by notice to the Holder,
and it shall thereupon become null and void.
9. Neither the Holder nor, in the event of his death, any
person entitled to exercise his rights, shall have any of the rights of a
stockholder with respect to the shares subject to the Option until share
certificates have been issued and registered in the name of the Holder or his
estate, as the case may be.
10. All notices or other communications required or permitted to
be given pursuant to this Agreement shall be in writing and shall be considered
as duly given on (a) the date of delivery, if delivered in person, by nationally
recognized overnight delivery service or by facsimile or (b) three days after
mailing if mailed from within the continental United States by registered or
5
certified mail, return receipt requested, to the party entitled to receive the
same, if to the Company, Global Gold Corporation, 107 Eakins Road, Manhasset,
New York 11030, facsimile number (516) 627-5067, with a copy to Law Offices of
Stephen R. Field, 240 Madison Avenue, New York, New York 10016, facsimile number
(212) 681-0845, and if to the Holder, Drury J. Gallagher, 107 Eakins Road,
Manhasset, New York 11030, facsimile number (516) 627-5067. Any party may change
its or his address by giving notice to the other party stating its or his new
address. Commencing on the 10th day after the giving of such notice, such newly
designated address shall be such party's address for the purpose of all notices
or other communications required or permitted to be given pursuant to this
Agreement.
11. This Agreement and the rights of the parties hereunder shall
be governed by and construed in accordance with the laws of the State of New
York, determined without regard to its conflicts of law principles. All parties
hereto (i) agree that any legal suit, action or proceeding arising out of or
relating to this Agreement shall be instituted only in a federal or state court
in the City of New York, (ii) waive any objection which they may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding, and (iii) irrevocably submit to the jurisdiction of any federal or
state court in the City of New York, in any such suit, action or proceeding, but
such consent shall not constitute a general appearance or be available to any
other person who is not a party to this Agreement. All parties hereto agree that
the mailing of any process in any suit, action or proceeding in accordance with
the notice provisions of this Agreement shall constitute personal service
thereof. Notwithstanding anything contained in this Agreement to the contrary,
this Agreement shall be interpreted so as to comply with the applicable
provisions of Sections 422 and 424 of the Code.
12. In the event that any question or controversy shall arise
with respect to the nature, scope or extent of any one or more rights conferred
by this Agreement, the determination by the Committee (as constituted at the
time of such determination) of the rights of the Holder shall be conclusive,
final and binding upon the Holder and upon any other person who shall assert any
right pursuant to this Agreement.
GLOBAL GOLD CORPORATION
By: /s/ Robert A. Garrison
---------------------
Robert A. Garrison
President
ACCEPTED AND AGREED:
/s/ Drury J. Gallagher
-------------------
Drury J. Gallagher
6
FORM OF NOTICE OF EXERCISE OF OPTION
TO: Global Gold Corporation
107 Eakins Road
Manhasset, New York 11030
The undersigned hereby irrevocably elects to exercise the Option to
purchase ____ shares of common stock, par value $.01 per share ("Common Stock"),
of Global Gold Corporation as provided in the Option Agreement dated as of July
1, 2002 and hereby [makes payment of $________ therefor [or] [makes payment
therefor by reduction pursuant to Section 5(b)(ii) of the Option of the number
of shares of Common Stock otherwise issuable to the Holder upon Option exercise
by _____ shares] [or] [makes payment therefor by delivery of the following
Common Stock certificates of the Company (properly endorsed for transfer in
blank) for cancellation by the Company pursuant to Section 5(b)(iii) of the
Option, certificates of which are attached hereto for cancellation [list
certificates by number and amount]].
A stock certificate or certificate for the shares shall be delivered in
person or mailed to the undersigned at the address shown below.
The undersigned hereby represents and warrants that it is his present
intention to acquire and hold the aforesaid shares of Common Stock of the
Company for his own account for investment, and not with a view to the
distribution of any thereof, and agrees that he will make no sale thereof except
in compliance with the applicable provisions of the Securities Act of 1933, as
amended.
Signature
----------------------------------
Print Name
----------------------------------
Street Address
----------------------------------
City, State and Zip Code
----------------------------------
Social Security Number
Dated:
7
EXHIBIT 10.56
GLOBAL GOLD CORPORATION
STOCK OPTION AGREEMENT
(INCENTIVE STOCK OPTION)
THIS AGREEMENT made as of this 1st day of July, 2002 between Global
Gold Corporation, a Delaware corporation, with offices at 107 Eakins Road,
Manhasset, New York 11030 (the "Company") and Robert A. Garrison, 44 Lords
Highway East, Weston, Connecticut 06883 (the "Holder").
The Company has adopted the 1995 Stock Option Plan (the "Plan"). The
Plan, as it may hereafter be amended and continued, is incorporated herein by
reference and made part of this Agreement.
The Committee, which is charged with the administration of the Plan
pursuant to Section 3 thereof, has determined that it would be to the advantage
and interest of the Company to grant the option provided for herein to the
Holder as a reward for prior services to the Company and as an inducement to
remain in the service of the Company or one of its subsidiaries, and as an
incentive for increased efforts during such service.
NOW, THEREFORE, the parties agree as follows:
1. Pursuant to the Plan, the Company with the approval of the
Committee hereby grants to the Holder as of the date hereof an option to
purchase all or any part of 150,000 shares of Common Stock of the Company (the
"Option") at a price per share of $0.11, and upon the terms and conditions set
forth herein.
2. (a) The Option shall continue in force
through June 30, 2007 (the "Expiration Date"), unless sooner terminated as
provided herein and in the Plan. Subject to the provisions of the Plan, and
except as otherwise provided in Section 2(e) hereof, the Option shall become
fully exercisable as follows:
(i) 75,000 shares on June 30, 2003; and
(ii) 75,000 shares on June 30, 2004.
Such installments shall be cumulative.
(b) Except as provided hereinbelow, the Option may not
be exercised unless the Holder is then an employee (including any officer who is
an employee), consultant, employee of a consultant, advisor, agent or
independent representative of the Company or any subsidiary of the Company or
any combination thereof and unless the Holder has remained in the continuous
employ or service thereof from the date of this grant.
1
(c) The Option is designated as incentive stock option
pursuant to the Internal Revenue Code of 1986, as amended (the "Code") and the
regulations promulgated thereunder.
(d) Notwithstanding anything contained in this
Agreement to the contrary after the exercise of the Option, no sale or transfer
of the shares purchased thereunder may be effected without an effective
registration statement or an opinion of counsel for the Company that such
registration is not required under the Securities Act of 1933, as amended, and
any applicable state securities law.
(5) Notwithstanding anything contained in this Agreement to
the contrary:
(i) If, during the term of his Agreement, there
shall occur a Change of Control of the Company (as defined in Section 14(b) of
the Plan and Section 2(e)(ii) hereof), the Holder may, at such time, in the
exercise of the Holder's sole discretion, surrender the Option for cash equal to
the excess of the fair market value of the Common Stock of the Company that he
would have received upon the exercise of the previously unexercised shares of
Common Stock of the Company subject to the Option over the exercise price
thereof; and
(2) the Option shall become immediately exercisable
in full upon the occurrence of a Change in Control (as defined in Section 14(b)
of the Plan), which shall occur upon
(A) (x) the sale of all or substantially
all of the Company's assets or (y) a merger (including a merger in which the
Company is the surviving corporation) or consolidation of the Company with one
or more corporations or entities, as a result of which in each such case the
Company's voting securities outstanding immediately before such sale, merger or
consolidation represent less than 50% of the combined voting power of voting
securities of the Company or the surviving entity outstanding immediately after
such sale, merger or consolidation; or
(B) any "person," as such term is used
in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") or persons acting in concert (other than Drury J.
Gallagher, Robert A. Garrison or any of their affiliates) become the "beneficial
owner" or "beneficial owners" (as defined in Rule 13d-3 under the Exchange Act,
or any successor rule or regulation thereto as in effect from time to time),
directly or indirectly, of the Company's securities representing more than 50%
of the combined voting power of the Company's then outstanding securities,
pursuant to a plan of such person or persons to acquire such a controlling
interest in the Company, whether pursuant to a merger (including a merger in
which the Company is the surviving corporation), an acquisition of securities or
otherwise, except that this Section Section 2(e)(ii)(b) shall not apply to any
person who provides financing to the Company or any of their affiliates,
pursuant to a private placement transaction or otherwise; and
(iii) a transaction shall not constitute a Change
2
of Control if its sole purpose is to change the state of the Company's
incorporation or to create a holding company that will be owned in substantially
the same proportions by the persons who held the Company's securities
immediately before such transaction.
3. In the event that the employment or service of the Holder
shall be terminated prior to the Expiration Date (otherwise than by reason of
death or disability), the Option may, subject to the provisions of the Plan, be
exercised (to the extent that the Holder was entitled to do so at the
termination of his employment or service) at any time within three months after
such termination, but not after the Expiration Date, provided, however, that if
such termination shall have been for cause or voluntarily by the Holder and
without the consent of the Company or any subsidiary corporation thereof, the
Option and all rights of the Holder hereunder, to the extent not theretofore
exercised, shall forthwith terminate immediately upon such termination. Nothing
in this Agreement shall confer upon the Holder any right to continue in the
employ or service of the Company or any consultant of the Company or affect the
right of the Company or any subsidiary to terminate his employment or service at
any time.
4. If the Holder shall (a) die while he is employed by or
serving the Company or a corporation which is a subsidiary thereof or within
three months after the termination of such employment (other than termination
for cause, or voluntarily on his part and without the consent of the Company or
subsidiary corporation thereof) or (b) become permanently and totally disabled
within the meaning of Section 22 (e)(3) of the Code while employed by or serving
the Company or such subsidiary, then, notwithstanding anything contained in this
Agreement to the contrary, such Option shall become fully exercisable upon the
occurrence of any such event, and the Option may be exercised as set forth
herein by the Holder or by the person or persons to whom the Holder's rights
under the Option pass by will or applicable law, or if no such person has such
right, by his executors or administrators, at any time within one year after the
date of death of the original Holder, or one year after the date of permanent or
total disability, but in either case, not later than the Expiration Date.
5. (a) This Option may be exercised by the Holder
hereof, in whole or in part, at any time or from time to time prior to the
expiration date, by returning this Option to the Company at its principal office
for endorsement of exercise, with the form of Exercise of Option attached hereto
(or a reasonable facsimile thereof) duly executed by the Holder and accompanied
by payment of the purchase price for the number of shares of common stock
specified in such form.
(b) Payment of the purchase price may be made as
follows (or by any combination of the following): (i) in United States currency
by cash or delivery of a certified check or bank draft payable to the order of
the Company or by wire transfer to the Company, (ii) by cancellation of such
number of the shares of common stock otherwise issuable to the Holder upon such
exercise as shall be specified in such Exercise of Option, such that the excess
of the aggregate Current Market Price of such specified number of shares on the
date of exercise over the portion of the purchase price attributable to such
shares shall equal the purchase price attributable to the shares of common stock
to be issued upon such exercise, in which case such amount shall be deemed to
3
have been paid to the Company and the number of shares issuable upon such
exercise shall be reduced by such specified number, or (iii) by surrender to the
Company for cancellation certificates representing shares of common stock of the
Company owned by the Holder (properly endorsed for transfer in blank) having a
Current Market Price on the date of the exercise hereof equal to the purchase
price.
(c) Each exercise of this Option shall be deemed to
have been effected immediately prior to the close of business on the business
day on which the Holder's Exercise of Option, and the purchase price shall have
been received by, the Company as provided in Section 5.
As used herein, unless the context otherwise requires, the
following terms shall have the meanings as set forth below:
(A) "Current Market Price" shall mean, on any
date specified herein, the average of the daily Market Price during the 10
consecutive trading days commencing 15 trading days before such date, except
that, if on any such date the shares of common stock are not listed or admitted
for trading on any national securities exchange or quoted in the
over-the-counter market, the Current Market Price shall be the Market Price on
such date.
(2) "Market Price" shall mean, on any date specified
herein, the amount per share of the common stock, equal to (a) the last reported
sale price of such common stock, regular way, on such date or, in case no such
sale takes place on such date, the average of the closing bid and asked prices
thereof, regular way, on such date, in either case as officially reported on the
principal national securities exchange on which such common stock is then listed
or admitted for trading, or (b) if such common stock is not then listed or
admitted for trading on any national securities exchange but is designated as a
national market system security by the National Association of Securities
Dealers, Inc. ("NASD"), the last reported trading price of the common stock on
such date, or (c) if there shall have been no trading on such date or if the
common stock is not so designated, the average of the closing bid and asked
prices of the common stock on such date as shown by the NASD automated quotation
system, or (d) if such common stock is not then listed or admitted for trading
on any national exchange or quoted in the over-the-counter market, the fair
value thereof (as of a date which is within 20 days of the date as of which the
determination is to be made) determined in good faith by the Board of Directors
of the Company.
(5) Prior to or concurrently with delivery by the Company to the
Holder of a certificate representing such shares, the Holder shall, upon
notification of the amount due, pay promptly any amount necessary to satisfy
applicable Federal, state or local income tax requirements. In the event such
amount is not paid promptly, the Company shall have the right to apply from the
purchase price paid any taxes required by law to be withheld by the Company with
respect to such payment and the number of shares to be issued by the Company
will be reduced accordingly.
6. If all of any portion of the Option shall be exercised
subsequent to any stock dividend, split-up, recapitalization, merger,
consolidation, combination or exchange of shares, separation, reorganization, or
liquidation of the Company occurring after the date hereof, as a result of which
shares of any class shall be issued in respect to outstanding common stock of
the Company or such common stock shall be changed into the same or a different
number of shares of the same or another class or classes, the Holder, upon
exercise of the Option, or portion thereof, shall receive, for the aggregate
price upon such exercise of the Option, the aggregate number and class of shares
which, if common stock as authorized at the date hereof had been purchased or
awarded at the date hereof for the same aggregate price (on the basis of the per
share exercise price of the Option set forth herein) and had not been disposed
of, such person or persons would be holding, at the time of such exercise, as a
result of such stock dividend, split up, recapitalization, merger,
consolidation, combination, or exchange of shares, separation, reorganization,
or liquidation; provided, however, that no fractional shares shall be issued
upon any such exercise and the aggregate price paid shall be appropriately
reduced for any fractional share not issued. This Section does not give Holder
any right to receive an additional option as a result of the issuance of
additional shares of the Company or the increase in the authorized capital of
the Company.
7. Upon each exercise of the Option, or portion thereof, the
Company as promptly as practicable shall mail or deliver to the Holder a stock
certificate or certificates representing the shares then purchased or awarded,
and shall pay all stamp taxes payable in connection therewith. The issuance of
such shares and delivery of the certificate or certificates therefor shall,
however, be subject to any delay necessary to complete (a) the listing of such
shares on any stock exchange upon which shares of the same class are then listed
and (b) such registration or qualification of such shares under any state or
federal law, rule or regulation as the Company may determine to be necessary or
advisable.
8. No options granted hereunder shall be transferable other
than by will or by the laws of descent and distribution. Options may be
exercised, during the lifetime of the Holder, only by the Holder, or by his
guardian or legal representative. In the event of any attempt by the Holder to
transfer, assign, pledge, hypothecate or otherwise dispose of the Option or of
any right hereunder, except as provided for herein, or in the event of the levy
or any attachment, execution or similar process upon the rights or interest
hereby conferred, the Company may terminate the Option by notice to the Holder,
and it shall thereupon become null and void.
9. Neither the Holder nor, in the event of his death, any
person entitled to exercise his rights, shall have any of the rights of a
stockholder with respect to the shares subject to the Option until share
certificates have been issued and registered in the name of the Holder or his
estate, as the case may be.
10. All notices or other communications required or permitted to
be given pursuant to this Agreement shall be in writing and shall be considered
as duly given on (a) the date of delivery, if delivered in person, by nationally
recognized overnight delivery service or by facsimile or (b) three days after
mailing if mailed from within the continental United States by registered or
5
certified mail, return receipt requested, to the party entitled to receive the
same, if to the Company, Global Gold Corporation, 107 Eakins Road, Manhasset,
New York 11030, facsimile number (516) 627-5067, with a copy to Law Offices of
Stephen R. Field, 240 Madison Avenue, New York, New York 10016, facsimile number
(212) 681-0845, and if to the Holder, Robert A. Garrison, 44 Lords Highway East,
Weston, Connecticut 06883, facsimile number (203) 222-9037. Any party may change
its or his address by giving notice to the other party stating its or his new
address. Commencing on the 10th day after the giving of such notice, such newly
designated address shall be such party's address for the purpose of all notices
or other communications required or permitted to be given pursuant to this
Agreement.
11. This Agreement and the rights of the parties hereunder shall
be governed by and construed in accordance with the laws of the State of New
York, determined without regard to its conflicts of law principles. All parties
hereto (i) agree that any legal suit, action or proceeding arising out of or
relating to this Agreement shall be instituted only in a federal or state court
in the City of New York, (ii) waive any objection which they may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding, and (iii) irrevocably submit to the jurisdiction of any federal or
state court in the City of New York, in any such suit, action or proceeding, but
such consent shall not constitute a general appearance or be available to any
other person who is not a party to this Agreement. All parties hereto agree that
the mailing of any process in any suit, action or proceeding in accordance with
the notice provisions of this Agreement shall constitute personal service
thereof. Notwithstanding anything contained in this Agreement to the contrary,
this Agreement shall be interpreted so as to comply with the applicable
provisions of Sections 422 and 424 of the Code.
12. In the event that any question or controversy shall arise
with respect to the nature, scope or extent of any one or more rights conferred
by this Agreement, the determination by the Committee (as constituted at the
time of such determination) of the rights of the Holder shall be conclusive,
final and binding upon the Holder and upon any other person who shall assert any
right pursuant to this Agreement.
GLOBAL GOLD CORPORATION
By: /s/ Drury J. Gallagher
-------------------------------
Drury J. Gallagher
Chairman and Chief Executive Officer
ACCEPTED AND AGREED:
/s/ Robert A. Garrison
-------------------------------
Robert A. Garrison
FORM OF NOTICE OF EXERCISE OF OPTION
TO: Global Gold Corporation
107 Eakins Road
Manhasset, New York 11030
The undersigned hereby irrevocably elects to exercise the Option to
purchase ____ shares of common stock, par value $.01 per share ("Common Stock"),
of Global Gold Corporation as provided in the Option Agreement dated as of July
1, 2002 and hereby [makes payment of $________ therefor [or] [makes payment
therefor by reduction pursuant to Section 5(b)(ii) of the Option of the number
of shares of Common Stock otherwise issuable to the Holder upon Option exercise
by _____ shares] [or] [makes payment therefor by delivery of the following
Common Stock certificates of the Company (properly endorsed for transfer in
blank) for cancellation by the Company pursuant to Section 5(b)(iii) of the
Option, certificates of which are attached hereto for cancellation [list
certificates by number and amount]].
A stock certificate or certificate for the shares shall be delivered in
person or mailed to the undersigned at the address shown below.
The undersigned hereby represents and warrants that it is his present
intention to acquire and hold the aforesaid shares of Common Stock of the
Company for his own account for investment, and not with a view to the
distribution of any thereof, and agrees that he will make no sale thereof except
in compliance with the applicable provisions of the Securities Act of 1933, as
amended.
----------------------------------
Signature
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Print Name
----------------------------------
Street Address
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City, State and Zip Code
----------------------------------
Social Security Number
Dated:
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SETION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Global Gold Corporation (the
"Company") on Form 10-QSB for the period ending September 30, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Drury J. Gallagher, the Chairman, Chief Executive Officer and Treasurer of the
Company, certify pursuant to 18 U.S. C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, following due inquiry, that I
believe that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
Dated: November 19, 2002 GLOBAL GOLD CORPORATION
By: /s/ Drury J. Gallagher
-------------------------------
Drury J. Gallagher
Chairman, Chief Executive Officer and
Treasurer
Exhibit 99.2
CERTIFICATION PURSUANT TO
18 U.S.C. SETION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Global Gold Corporation (the
"Company") on Form 10-QSB for the period ending September 30, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Robert A. Garrison, President, Chief Financial Officer and Chief Operating
Officer of the Company, certify pursuant to 18 U.S. C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, following due
inquiry, that I believe that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
Dated: November 19, 2002 GLOBAL GOLD CORPORATION
By: /s/ Robert A. Garrison
---------------------------------
Robert A. Garrison
President, Chief Financial Officer
and Chief Operating Officer