First Quarter Report 10QSB
March 31, 2003
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UNITES STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 2003
[ ] 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.)
104 FIELD POINT ROAD,GREENWICH, CT 06830
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (203) 422-2300
Check whether the issuer (1) filed all reports required to be filed by Section13
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 June 30, 2003 there were 8,468,114 shares of the registrant's Common Stock
outstanding.
Transitional Small Business Disclosure Format (check one): Yes / / No /X/.
1
TABLE OF CONTENTS
PART I FINANACIAL INFORMATION
Item 1. Condensed Financial Statements (Unaudited)
Condensed Balance Sheet - as of March 31, 2003 (Restated).............3
Condensed Statements of Operations for the three months ended
March 31, 2003 (Restated) and March 31, 2002 and for the
development stage period from January 1, 1995 through
March 31,2003 (Restated).........................................4
Condensed Statements of Cash Flows for the three months
ended March 31, 2003 (Restated) and March 31, 2002 and for the
development stage period from January 1, 1995 through March 31,
2003(Restated)........................................................5
Notes to Condensed Financial Statements (Unaudited)................6-13
Item 2. Management's Discussion and Analysis or Plan of Operation ........14-16
Item 3. Controls and Procedures .............................................16
PART II OTHER INFORMATION
Item 1. Legal Proceedings ...................................................17
Item 2. Changes in Securities and Use of Proceeds ...........................17
Item 3 Default Upon Senior Securities ......................................17
Item 4 Submission of Matters to a Vote of Security Holders .................17
Item 5 Other Information ...................................................18
Item 6. Exhibits and Reports on Form 8-K ....................................19
SIGNATURE ....................................................................19
CERTIFICATIONS ............................................................20-23
2
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Unaudited Condensed Balance Sheet
(Restated)
March 31, 2003
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents ............................... $ 21,381
Investment in securities available for sale ............. 229,600
-----------
TOTAL CURRENT ASSETS ........................... 250,981
Mine acquisition costs .................................. 138,253
-----------
$ 389,234
===========
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued expenses .............. $ 140,758
Due to related parties ............................. 44,677
-----------
TOTAL CURRENT LIABILITIES ...................... 185,435
-----------
STOCKHOLDERS' EQUITY
Common stock $0.001 par, 100,000,000 shares authorized.. 6,868
6,868,114 shares issued and outstanding
Common stock subscribed, 350,000 shares.................. 350
Additional paid-in-capital .............................. 5,404,605
Unearned compensation (428,049)
Accumulated deficit (2,907,648)
Deficit accumulated during the development stage........ (1,954,935)
Accumulated other comprehensive income .................. 82,608
-----------
TOTAL STOCKHOLDERS' EQUITY ..................... 203,799
-----------
$ 389,234
===========
The accompanying notes are an integral part of these condensed financial statements.
3
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Unaudited Condensed Statements of Operations
Cumulative amounts
from
January 1, 2003 January 1, 2002 January 1, 1995
through through through
March 31, 2003 March 31, 2002 March 31, 2003
(Restated) (Restated)
-------------- -------------- --------------
REVENUES $ -0- $ -0- $ -0-
---------- ---------- ----------
EXPENSES:
Selling general and administrative 33,630 3,125 1,396,427
Legal fees 25,431 4,564 681,684
Write-off investment in Georgia
mining interests -- -- 135,723
Gain on sale of interest in
Global Gold Armenia -- -- (268,874)
(Gain) loss on sale of interest in
Sterlite Gold Ltd. (3,963) 9,289 (8,582)
Miscellaneous other - 100 18,557
---------- ---------- ----------
TOTAL EXPENSES 55,098 17,078 1,954,935
---------- ---------- ----------
NET LOSS $ (55,098) $ (17,078) $(1,954,935)
========== ========== ==========
NET LOSS PER SHARE-BASIC AND DILUTED $ (0.01) $ (0.004)
========== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING 5,775,892 4,368,114
========== ==========
The accompanying notes are an integral part of these condensed financial statements.
4
GLOBAL GOLD CORPORATION
(A Development Stage Enterprise)
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
January 1, 1995
January 1, 2003 January 1, 2002 cumulative amounts
through through through
March 31, 2003 March 31, 2002 March 31, 2003
(Restated) (Restated)
------------------ ------------------ ------------------
NET CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss ................................................... $ (55,098) $ (17,078) $ (1,954,935)
Adjustments to reconcile net loss
to net cash used in operating activities:
Provision for bad debts ................................ -0- -0- 325,000
Amortization of unearned compensation................... 21,951 -0- 21,951
Gain on sale of Armenia mining interests ............... -0- -0- (268,874)
Write-off of mining investment in Georgia .............. -0- -0- 135,723
(Gain) loss on sale of investment in common stock
of Sterlite Gold Ltd. ................................. (3,963) 9,289 (8,582)
Non-cash expenses related to issuance of common stock... -0- -0- 174,500
Changes in assets and liabilities:
Organization costs ..................................... -0- -0- (9,601)
Accounts receivable and deposits ....................... -0- (9,685) (154)
Accounts payable and accrued expenses ................. (12,255) (12,891) 212,350
--------- --------- ------------
NET CASH FLOWS USED IN OPERATING ACTIVITIES ............ (49,365) (30,365) (1,372,622)
--------- --------- ------------
NET CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of Armenia mining interests ......... -0- -0- 1,891,155
Proceeds from sale of investment
in common stock of Sterlite Gold Ltd. ................ 7,240 16,875 57,591
Investment in certain mining interests - net of
financing ............................................ -0- -0- (153,494)
Mine acquisition costs.................................. (37,522) -0- ( 969,882)
--------- --------- ------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES ....... (30,282) 16,875 825,370
--------- --------- ------------
NET CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from private placement offering ........... 87,500 -0- 509,073
Due to related parties ................................... 5,744 -0- 47,458
Sale of warrants ....................................... -0- -0- 650
Warrants exercised ..................................... -0- -0- 100
--------- --------- ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES .............. 93,244 -0- 557,281
--------- --------- ------------
NET INCREASE (DECREASE) IN CASH ............................ 13,597 (13,490) 10,029
CASH AND CASH EQUIVALENTS- beginning of period ............. 7,784 13,880 11,352
--------- --------- ------------
CASH AND CASH EQUIVALENTS- end of period ................... $ 21,381 $ 390 $ 21,381
========= ========= ============
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid ...................................... $ -0- $ -0- $ 2,683
========= ========= ============
Interest paid .......................................... $ -0- $ -0- $ 15,422
========= ========= ============
Noncash Transactions:
Stock issued for unearned compensation.................. $ 450,000 $ -0- $ 450,000
========= ========= ============
Mine acquisition costs in accounts payable.............. $ 47,229 $ -0- $ 47,229
========= ========= ============
Due from related party for stock issuance............... $ 25,000 $ -0- $ 25,000
========= ========= ============
The accompanying notes are an integral part of these condensed financial statements.
5
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Notes to Condensed Financial Statements (Restated)
(Unaudited)
March 31, 2003
1. ORGANIZATION AND BUSINESS
Global Gold Corporation (the "Company") was incorporated as Triad Energy
Corporation in the State of Delaware on February 21, 1980 and, as further
described hereafter, had no operating or development stage history from its
inception until January 1, 1995. During 1995, the Company changed its name from
Triad Energy Corporation to Global Gold Corporation to pursue certain gold and
copper mining rights in the former Soviet Republics of Armenia and Georgia. As
part of the plan to acquire the mining interests and raise venture capital, the
Company increased the number of shares authorized to be issued from ten million
to one hundred million, and commenced a private placement offering to raise
$500,000.
The accompanying financial statements present the development stage activities
of the Company from January 1, 1995, the period commencing the Company's
operations as Global Gold Corporation, through March 31, 2003.
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
footnote disclosure normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted. These financial statements should be
read in conjunction with the financial statements and notes thereto included in
the December 31, 2002 annual report on Form 10-KSB. The results of operations
for the three-month period ended March 31, 2003 are not necessarily indicative
of the operating results to be expected for the full year ending December 31,
2003.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Presentation - These financial statements have been prepared
assuming that the Company will continue as a going concern. Since its
inception, the Company, a development stage enterprise, has yet to generate
revenues (other than interest income, proceeds from the sale of an interest
in an Armenian mining venture, and the sale of common stock of marketable
securities received as consideration, therewith) while incurring costs in
excess of $2,200,000. Management is currently pursuing additional investors
and lending institutions interested in financing the Company's projects.
However, there is no assurance that the Company will obtain the financing
that it requires or achieve profitable operations. The Company expects to
incur additional losses for the near term until such time as it derives
substantial revenues from the Chilean mining interest acquired by it or
other future projects or from its investment in marketable securities. The
accompanying financial statements do not include any adjustments that might
be necessary should there be substantial doubt about the Company's ability
to continue as a going concern.
b. Restatement - The Company has restated its condensed financial statements
for the three months ended March 31, 2003 and the cumulative amounts from
January 1, 1995 through March 31, 2003 on its 10-QSB as originally filed.
The effects of this restatement are to decrease selling, general and
administrative expenses by $10,773 for the three months and by $10,773 for
the cumulative period, with a corresponding decrease to net loss and
cumulative net loss as previously reported.
c. Reclassifications - Certain amounts in the March 31, 2002 unaudited
condensed cash flow statement have been reclassified to conform to the
current period presentation.
6
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Notes to Condensed Financial Statements (Restated)
(Unaudited)
March 31, 2003
d. Mine Costs and Depletion - Costs incurred to purchase, lease, or otherwise
acquire a property (whether unproved or proved) are capitalized when
incurred. These include the costs of lease bonuses and options to purchase
or lease properties, the portion of costs applicable to minerals when land
including mineral rights is purchased in fee, brokers' fees, recording
fees, legal costs, and other costs incurred in acquiring properties.
Capitalized acquisition cost of proved properties shall be amortized
(depleted) by the unit-of-production method so that each unit produced is
assigned a pro rata portion of the unamortized acquisition costs.
e. New Accounting Standards
- In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
133 on Derivative Instruments and Hedging Activities." The statement
amends and clarifies accounting for derivative instruments, including
certain derivatives instruments embedded in other contracts and for
hedging activities under SFAS 133. This Statement is effective for
contracts entered into or modified after June 30, 2003, except as
stated below and for hedging relationships designated after June 30,
2003 the guidance should be applied prospectively. The provisions of
this Statement that relate to SFAS 133 Implementation Issues that have
been effective for fiscal quarters that began prior to June 15, 2003,
should continue to be applied in accordance with respective effective
dates. In addition, certain provisions relating to forward purchases
or sales of when-issued securities or other securities that do not yet
exist, should be applied to existing contracts as well as new
contracts entered into after June 30, 2003. The adoption of SFAS No.
149 is not expected to have an impact on the Company's financial
position and results of operations.
- In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and
Equity". SFAS 150 establishes standards for how an issuer classifies
and measures certain financial instruments with characteristics of
both liabilities and equity. It requires that an issuer classify a
financial instrument that is within its scope as a liability (or an
asset in some circumstances). SFAS No. 150 affects the issuer's
accounting for three types of freestanding financial instruments: -
mandatorily redeemable shares, which the issuing company is obligated
to buy back in exchange for cash or other assets - instruments that do
or may require to buy back some of its shares in exchange for cash or
other assets includes put options and forward purchase contracts -
obligations that can be settled with shares, the monetary value of
which is fixed, tied solely or predominantly to a variable such as a
market index, or varies inversely with the value of the issuer's
shares.
SFAS No. 150 does not apply to features embedded in a financial
instrument that is not a derivative in its entirety. Most of the
guidance in SFAS 150 is effective for all financial instruments
entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the first interim period beginning after
June 15, 2003. The Company has not yet completed its analysis of SFAS
150; however, it believes that it is currently substantially in
compliance with the requirements of SFAS 150.
7
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Notes to Condensed Financial Statements (Restated)
(Unaudited)
March 31, 2003
f. Stock Options and Awards
The Company adopted the 1995 Stock Option Plan under which a maximum of 500,000
shares of Common Stock may be issued (subject to adjustment for stock splits,
dividends and the like). In July 2002, the Company granted options to buy
150,000 shares of common stock, at $0.11 per share, to each of the Chairman and
President of the Company. Of these options issued, 75,000 vest on the first
anniversary of the date of issuance, and the remaining 75,000 vest on the second
anniversary of the date of issuance. A total of 200,000 shares remain to be
issued under the 1995 Stock Option Plan as of March 31, 2003.
The following is additional information with respect to the Company's options
and warrants as of March 31, 2003:
WARRANTS OUTSTANDING WARRANTS EXERCISABLE
-------------------- --------------------
Number of Weighted Number of
Outstanding Average Weighted Exercisable
Shares Remaining Average Shares Weighted
Exercise Underlying Contractual Exercise Underlying Average
Price Warrants Life Price Warrants Exercise Price
-------------- --------------- --------------- ------------ -------------- ---------------
$ 0.25 330,000 2.58 years $ 0.25 330,000 $ 0.25
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------- -------------------
Number of Weighted Number of
Outstanding Average Weighted Exercisable
Shares Remaining Average Shares Weighted
Exercise Underlying Contractual Exercise Underlying Average
Price Options Life Price Options Exercise Price
-------------- --------------- --------------- ------------ -------------- ---------------
$ 0.11 300,000 4.25 years $ 0.11 - $ -
At March 31, 2003, the Company had two stock-based employee compensation plans.
As permitted under SFAS No. 148, "Accounting for Stock-Based
Compensation--Transition and Disclosure", which amended SFAS No. 123 ("SFAS
123"), "Accounting for Stock-Based Compensation", the Company has elected to
continue to follow the intrinsic value method in accounting for its stock-based
employee compensation arrangements as defined by Accounting Principles Board
Opinion ("APB") No. 25, "Accounting for Stock Issued to Employees", and related
interpretations including Financial Accounting Standards Board Interpretation
No. 44, "Accounting for Certain Transactions Involving Stock Compensation", an
interpretation of APB No. 25. No stock-based employee compensation cost is
reflected in net loss, as all options granted under those plans had an exercise
price equal to the market value, as determined by the Board of Directors, of the
underlying common stock on the date of grant. The following table illustrates
the effect on net loss and loss per share as if the Company had applied the fair
value recognition provisions of SFAS 123 to stock-based employee compensation:
8
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Notes to Condensed Financial Statements (Restated)
(Unaudited)
March 31, 2003
Three
Months Ended
March 31,
2003 2002
----------- -----------
Net Loss as Reported $(55,098) $(17,078)
Deduct: Total stock-based employee compensation
expense determined under fair value-based method
for all awards, net of related tax effect 1,636 -
------- --------
Pro Forma Net Loss (56,734) (17,078
======== ========
Basic Net Loss Per Share as Reported $ (.01) $ (.004)
======== ========
Basic Pro Forma Net Loss Per Share $ (.01) $ (.004)
======== ========
Diluted Net Loss Per Share as Reported $ (.01) $ (.004)
======== ========
Diluted Pro Forma Net Loss Per Share $ (.01) $ (.004)
======== ========
The fair value of options at date of grant was estimated using the Black-Scholes
fair value based method with the following weighted average assumptions:
2003 2002
----------- -----------
Expected Life (Years) 3 2.5
Interest Rate 5.70% 5.70%
Annual Rate of Dividends 0% 0%
Volatility 100% 100%
3. MINE ACQUISITION COSTS
The Company has incurred fees in connection with their acquisition of mining
properties. Costs incurred to purchase, lease, or otherwise acquire a property
(whether unproved or proved) are capitalized when incurred. These include the
costs of lease bonuses and options to purchase or lease properties, the portion
of costs applicable to minerals when land including mineral rights is purchased
in fee, brokers' fees, recording fees, legal costs, and other costs incurred in
acquiring properties.
9
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Notes to Condensed Financial Statements (Restated)
(Unaudited)
March 31, 2003
4. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Officers
The Company entered into four-year Employment Agreements with each of Messrs.
Gallagher (its Chairman and Chief Executive Officer) and Garrison (its President
and Chief Financial Officer) as of July 1, 2002. Pursuant to these agreements,
the Company agreed to deliver to each of these officers 100,000 shares of its
Common Stock as base compensation for each year during the four-year term,
subject to an adjustment each year, as determined by the Board of Directors (i)
in an amount equal to the increase in the consumer price index or (ii) up to 10%
of the then base compensation. In addition, each officer was entitled to annual
bonus compensation under a bonus plan as determined by the Board of Directors.
On October 31, 2002, the Company issued 100,000 shares of its Common Stock as
compensation to each officer for the year ended December 31, 2002.
The Company entered into Amended and Restated Employment Agreements with Messrs.
Gallagher and Garrison dated as of February 1, 2003 for a term through June 30,
2006 that modified the existing four-year Employment Agreements. Each Amended
and Restated Employment Agreement provides for base compensation of $100,000 for
each twelve-month period beginning July 1, 2003 (subject to payment as cash flow
permits), and the granting of 900,000 shares as a restricted stock award subject
to a substantial risk of forfeiture if either terminates his employment with the
Company (other than by death or disability) over the 41-month term of the
agreement, and which is to be earned, and vest ratably, during such period, plus
any bonus determined in accordance with any bonus plan approved by the Board of
Directors. On February 21, 2003, the Company issued the 900,000 shares to such
officers at their fair market value of $0.25 as determined by the Board of
Directors. Such amounts have been reflected as unearned compensation and are
being amortized into compensation expense on a straight-line basis over the term
of the agreements. Compensation expense for the three-months ended March 31,
2003 is $21,951.
The agreements also call for severance payments if there is a change of control,
as defined. Such payments will equal 2.95 times the employee's average annual
compensation, as defined, during the term of the agreement. The severance
payment shall be payable to the employee within 30 days of the change of
control.
The agreements shall be automatically renewed for consecutive one-year terms
unless terminated by either the Company or the employee by rendering 120 days
written notice.
In January 2003, Drury Gallagher agreed to pay $25,000 on behalf of Sukhmohan
Athwal as nominee for the issuance of 500,000 shares of common stock at $0.05
per share, plus performance obligations of Sukhmohan Athwal valued at $100,000,
pursuant to a special incentive financing arrangement (which has not been
consummated as of the date hereof). This amount is included as an offset to due
to related parties.
5. INVESTMENTS IN SECURITIES AVAILABLE FOR SALE:
At March 31, 2003, investment in securities consisted of 2,250,000 shares of
common stock of Sterlite Gold Ltd. classified as available for sale and stated
at a quoted fair value of $229,600. The cost of the securities was $146,992. The
cumulative unrealized gain as of March 31, 2003 was $82,608 which is shown as a
separate component of stockholders' equity.
During the three months ended March 31, 2003, the Company sold 50,000 shares for
net proceeds of $7,240 resulting in a gain on the sale of $3,963.
10
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Notes to Condensed Financial Statements (Restated)
(Unaudited)
March 31, 2003
During the three months ended March 31, 2002, the Company had sold 400,500
shares for net proceeds of $16,875 resulting in a gain of $9,289.
6. EQUITY TRANSACTIONS
(a) The following transactions are a part of a Private Placement Memorandum
("PPM"). No additional shares are to be issued under the PPM.
- As of January 3, 2003, the Company subscribed 25,000 shares of its common
stock to Thomas G. Davey at $0.25 per share for a total purchase price of
$6,250.
- As of January 31, 2003, the Company subscribed 50,000 shares of its common
stock to Donald Galine at $0.25 per share for a total purchase price of
$12,500.
- On February 12, 2003, the Company subscribed 50,000 shares of its common
stock to Frank Gallagher, Jr. at $0.25 per share for a total purchase price
of $12,500.
- As of February 13, 2003, the Company subscribed 25,000 shares of its common
stock to Thomas G. Davey at $0.25 per share for a total purchase price of
$6,250.
- As of February 18, 2003, the Company subscribed 200,000 shares of its
common stock to Kang Chan at $0.25 per share for a total purchase price of
$50,000.
The Company issued the above shares in May 2003.
(b) In January, 2003, the Company sold 100,000 shares of its common stock to
Linda Sam, through Sukhmohan Athwal as nominee, at $0.25 per share (fair
market value). The value of the shares includes the total cash price of
$5,000 plus performance obligations by Sukhmohan Athwal valued at $20,000,
pursuant to a special incentive financing arrangement (which has not yet
been consummated as of the date hereof).
(c) In January, 2003, the Company sold 200,000 shares of its common stock to
EM&P Investments, through Sukhmohan Athwal as nominee at $0.25 per share
(fair market value). The value of the shares includes the total cash price
of $10,000 plus performance obligations by Sukhmohan Athwal valued at
$40,000, pursuant to a special incentive financing arrangement (which has
not yet been consummated as of the date hereof).
(d) In January, 2003, the Company sold 200,000 shares of its common stock to
Bank Sat Oppenheim Jr. & CIE, through Sukhmohan Athwal as nominee, at a per
share price of $0.25 per share (fair market value). The value of the shares
includes the total cash price of $10,000 plus performance obligations by
Sukhmohan Athwal valued at $40,000, pursuant to a special incentive
financing arrangement (which has not yet been consummated as of the date
hereof).
(e) On February 21, 2003, the Company transferred 900,000 shares of its common
stock at $0.25 per share (fair market value) to Drury J. Gallagher as a
stock award subject to a substantial risk of forfeiture if he terminates
his employment with the Company (other than by death or disability) over
the 41-month term of his Amended and Restated Employment Agreement, and
which is to be earned, and vest ratably, during the 41-month period ending
June 30, 2006. Compensation for the three-months ended March 31, 2003 is
$10,976.
11
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Notes to Condensed Financial Statements (Restated)
(Unaudited)
March 31, 2003
(f) On February 21, 2003, the Company transferred 900,000 shares of its common
stock at $0.25 per share (fair market value) to Robert A. Garrison as a
stock award subject to a substantial risk of forfeiture if he terminates
his employment with the Company (other than by death or disability) over
the 41-month term of his Amended and Restated Employment Agreement, and
which is to be earned, and vest ratably, during the 41-month period ending
June 30, 2006. Compensation expense for the three-months ended March 31,
2003 is $10,976.
The above transactions have been recorded at the fair market value of the stock
issued or services rendered.
7. COMPREHENSIVE LOSS
The following table summarizes the computations reconciling net loss to
comprehensive loss for the three months ended March 31, 2003 and 2002:
2003 2002
---- ----
Net loss
$(55,098) $(17,078)
Other comprehensive income:
Unrealized gain (loss) on available-for-sale of securities (39,835) 14,453
Less: reclassification adjustment for gains included in net loss (3,963) (9,289)
------ ------
Comprehensive loss $(98,896) $(11,914)
======= =======
8. AGREEMENTS
a.) On January 15, 2003, the Company entered into an option/purchase/lease
agreement with Alfred Soto Torino and Adrian Soto Torino for the purchase
of copper and gold properties in Chile for a total purchase price of
$400,000 US$ payable over four years at $25,000 US$ per quarter for four
years, commencing on March 31, 2003, of which payment was made. In addition
to the purchase price, a royalty of $1 US$ per ounce is to be paid
quarterly on all ounces of gold produced in excess of 500,000 ounces up to
1,000,000 ounces, provided that the average price of gold per quarter
exceeds U.S. $310 per ounce as measured by the London Metal Exchange. Under
such agreement, the Company has the right to develop the property under the
lease thereof. Upon expiration of four years from the date of such
agreement, or sooner at the Company's option, the Company can exercise its
option to acquire the title to the property, subject to the above royalty
obligation.
The Chilean properties consists of approximately 1100 acres in total,
including the Candelaria 1 to 3, Santa Candelaria 1 to 8 and the Torino I
mining claims 1 to 7 and the Torino II mining claims 1 to 11. The Company
has not yet developed a feasibility report for the development of these
properties, and has not yet ascertained the amount of the proven or
probable reserves of gold, copper and other minerals on the property, if
any. The Company refers to these properties collectively as the Santa
Candelaria mine
Due to the fact that the lease terms are cancelable at the sole option of
the Company, the Company is recording payments as they come due. In 2003
the Company made its first $25,000 payment. Such amount is reflected in
mine acquisition costs at March 31, 2003.
b.) On March 17, 2003, the Company entered into an agreement with SHA, LLC, an
Armenian limited liability company, for the acquisition of the Hankavan
mine, a gold and copper mine located in Armenia, for a total purchase price
of $150,000 US$ (or $175,000 if an additional mining property is also
transferred) payable in installments. Under such agreement, the Company has
the option, exercisable within 45 days from March 17,
12
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Notes to Condensed Financial Statements (Restated)
(Unaudited)
March 31, 2003
2003, to acquire either (i) the exclusive license, permits, and all rights
related to such mine, or (ii) all of the ownership shares of SHA and any
other entity which may hold rights to such mine.
The Hankavan mine deposit is located in central Armenia between Vanadzor
and Meghradzor north of the Marmarik River. The Company has not yet
developed a feasibility report for the development of the properties, and
has not yet determined the amount of proven or probable reserves of gold,
copper and other minerals on the property, if any.
Due to the fact that the purchase terms are cancelable at the sole option
of the Company, the Company is recording payments as they come due.
9. SUBSEQUENT EVENTS
On April 3, 2003, the Company issued 250,000 shares of its common stock at a per
share price of $0.25 to Sukhmohan Athwal as a finder's fee related to the
Chilean property as part of a special incentive financing arrangement (which has
not yet been consummated as of the date hereof).
In May 2003, the Company issued the 350,000 shares which had been subscribed to
as of March 31, 3002.
In May 2003, the Company issued 100,000 shares of its common stock at $0.25 per
share for payment of a prior payable of $25,000 for legal services.
Effective June 1, 2003, the Company entered into an Employment Agreement with
Van Krikorian as Vice President and General Counsel of the Company through June
30, 2006. The agreement provides for base compensation of $100,000 for each
twelve-month period beginning July 1, 2003 (subject to payment as cash flow
permits), and the granting of 900,000 shares as a restricted stock award subject
to a substantial risk of forfeiture if Mr. Krikorian terminates his employment
with the Company (other than by death or disability) over the 37-month term of
the agreement, and which is to be earned, and vest ratably, during such period,
plus any bonus determined in accordance with any bonus plan approved by the
Board of Directors. In June 2003 such shares were issued in at their fair market
value of $0.25 as determined by the Board of Directors.
The agreement also calls for severance payments if there is a change of control,
as defined. Such payments will equal 2.95 times the employee's average annual
compensation, as defined, during the term of the agreement. The severance
payment shall be payable to the employee within 30 days of the change of
control.
The agreement shall be automatically renewed for consecutive one-year terms
unless terminated by either the Company or the employee by rendering 120 days
written notice.
13
9. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 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/A.
1. AGREEMENTS
a.) On January 15, 2003, the Company entered into an option/purchase/lease
agreement with Alfred Soto Torino and Adrian Soto Torino for the purchase
of copper and gold properties in Chile for a total purchase price of
$400,000 US$ payable over four years at $25,000 US$ per quarter for four
years, commencing on March 31, 2003, of which payment was made. In addition
to the purchase price, a royalty of $1 US$ per ounce is to be paid
quarterly on all ounces of gold produced in excess of 500,000 ounces,
provided that the average price of gold per quarter exceeds U.S. $310 per
ounce as measured by the London Metal Exchange. Under such agreement, the
Company has the right to develop the property under the lease thereof. Upon
expiration of four years from the date of such agreement, or sooner at the
Company's option, the Company can exercise its option to acquire the title
to the property, subject to the above royalty obligation.
The Chilean properties consists of approximately 1100 acres in total,
including the Candelaria 1 to 3, Santa Candelaria 1 to 8 and the Torino I
mining claims 1 to 7 and the Torino II mining claims 1 to 11. The Company
has not yet developed a feasibility report for the development of these
properties, and has not yet ascertained the amount of the proven or
probable reserves of gold, copper and other minerals on the property, if
any.
Due to the fact that the lease terms are cancelable at the sole option of
the Company, the Company is recording payments as they come due. In 2003
the Company made its first $25,000 payment. Such amount is reflected in
mine acquisition costs at March 31, 2003.
b.) On March 17, 2003, the Company entered into an agreement with SHA, LLC, an
Armenian limited liability company, for the acquisition of the Hankavan
mine, a gold and copper mine located in Armenia, for a total purchase price
of $150,000 US$ (or $175,000 if an additional mining property is also
transferred) payable in installments. Under such agreement, the Company has
the option, exercisable within 45 days from March 17, 2003, to acquire
either (i) the exclusive license, permits, and all rights related to such
mine, or (ii) all of the ownership shares of SHA and any other entity which
may hold rights to such mine.
The Hankavan mine deposit is located in central Armenia between Vanadzor
and Meghradzor north of the Marmarik River. The Company has not yet
developed a feasibility report for the development of the properties, and
has not yet determined the amount of proven or probable reserves of gold,
copper and other minerals on the property, if any.
Due to the fact that the purchase terms are cancelable at the sole option
of the Company, the Company is recording payments as they come due.
14
2. RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2003 (RESTATED) AND
THREE MONTHS ENDED MARCH 31, 2002
During the three-month period January 1, 2003 through March 31, 2003, the
Company's administrative and other expenses were $59,061 which represented an
increase from $7,789 in the same period last year. The expense increase was
primarily attributable to higher legal fees of $20,866, increased accounting of
$7,760 and travel expenses of $3,320 due to project development.
The Company has restated its condensed financial statements for the three months
ended March 31, 2003 and the cumulative amounts from January 1, 1995 through
March 31, 2003 on its 10-QSB as originally filed. The effects of this
restatement are to decrease selling, general and administrative expenses by
$10,772 for the three months and by $10,772 for the cumulative period, with a
corresponding decrease to net loss and cumulative net loss as previously
reported.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2003, the Company's total assets were $389,234, of which $21,381
consisted of cash or cash equivalents.
The Company's plan of operation for calendar year 2003 is:
(a) To commence activities with regard to the Chilean mining properties
acquired in January 2003;
(b) To pursue and consummate the acquisition of the Armenia mining properties
and to possibly acquire additional mineral-bearing properties; and
(c) To sell the 2,250,000 shares of Sterlite common stock, and use the sales
proceeds for working capital purposes
The Company retains the right until December 31, 2009 to elect to participate at
a level of up to twenty percent with Sterlite Gold Ltd. or any of its affiliates
in any exploration project undertaken in Armenia.
The Company needs financing to meet its anticipated monthly administrative
expenses of about $7,500 (exclusive of accrued officers' compensation), plus
additional amounts for legal and accounting costs. The Company anticipates that
it might obtain additional financing in 2003 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 thereof will be
exercised, 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
2003 and does not expect to purchase or sell any plant or significant equipment.
The Company expects to hire one additional full-time employee in 2003.
15
GOING CONCERN CONSIDERATION
We have continued losses in each of our years of operation, negative cash flow
and liquidity problems. These conditions raise substantial doubt about our
ability to continue as a going concern. The accompanying condensed financial
statements do not include any adjustments relating to the recoverability of
reported assets or liabilities should we be unable to continue as a going
concern.
We have been able to continue based upon our receipt of funds from the issuance
of equity securities and shareholder loans, and by acquiring assets or paying
expenses by issuing stock. Our continued existence is dependent upon our
continued ability to raise funds through the issuance of our securities or
borrowings, and our ability to acquire assets or satisfy liabilities by the
issuance of stock. Management's plans in this regard are to obtain other debt
and equity financing until profitable operation and positive cash flow are
achieved and maintained. Although management believes that it will be able to
secure suitable additional financing for the Company's operations, there can be
no guarantee that such financing will continue to be available on reasonable
terms, or at all.
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 of 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 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.
SUBSEQUENT EVENTS
On April 3, 2003, the Company issued 250,000 shares of its common stock at a per
share price of $0.25 to Sukhmohan Athwal as a finder's fee related to the
Chilean property as part of a special incentive financing arrangement (which has
not yet been consummated as of the date hereof).
In May 2003, the Company issued the 350,000 shares which had been subscribed to
as of March 31, 2003.
In May 2003, the Company issued 100,000 shares of its common stock at $0.25 per
share for payment of a prior payable of $25,000 for legal services.
Effective June 1, 2003, the Company entered into an Employment Agreement with
Van Krikorian as Vice President and General Counsel of the Company through June
30, 2006. The agreement provides for base compensation of $100,000 for each
twelve-month period beginning July 1, 2003 (subject to payment as cash flow
permits), and the granting of 900,000 shares as a restricted stock award subject
to a substantial risk of forfeiture if Mr. Krikorian terminates his employment
with the Company (other than by death or disability) over the 37-month term of
the agreement, and which is to be earned, and vest ratably, during such period,
plus any bonus determined in accordance with any bonus plan approved by the
Board of Directors. In June 2003 such shares were issued in at their fair market
value of $0.25 as determined by the Board of Directors.
The agreement also calls for severance payments if there is a change of control,
as defined. Such payments will equal 2.95 times the employee's average annual
compensation, as defined, during the term of the agreement. The severance
payment shall be payable to the employee within 30 days of the change of
control.
16
The agreement shall be automatically renewed for consecutive one-year terms
unless terminated by either the Company or the employee by rendering 120 days
written notice.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes In Securities and use of proceeds
The Company made sales of shares of its common stock during the first quarter of
2003, each of which is exempt from registration under the Securities Act of
1933, as amended (the "Act"), as set forth below:
(a) As of January 3, 2003, the Company subscribed 25,000 shares of its common
stock to Thomas G. Davey at $0.25 per share for a total purchase price of
$6,250. The Company believes that Mr. Davey is an accredited investor
within the meaning of Regulation D issued under the Act. The Company issued
such securities in reliance upon Section 4(2) of the Act.
(b) As of January 31, 2003, the Company subscribed 50,000 shares of its common
stock to Donald Galine at $0.25 per share for a total purchase price of
$12,500. The Company believes that Donald Galine is an accredited investor
within the meaning of Regulation D issued under the Act. The Company issued
such securities in reliance upon Section 4(2) of the Act.
(c) On February 12, 2003, the Company subscribed 50,000 shares of its common
stock to Frank Gallagher, Jr. at $0.25 per share for a total purchase price
of $12,500. The Company believes that Frank Gallagher, Jr. is an accredited
investor within the meaning of Regulation D issued under the Act. The
Company issued such securities in reliance upon Section 4(2) of the Act.
(d) As of February 13, 2003, the Company subscribed 25,000 shares of its common
stock to Thomas G. Davey at $0.25 per share for a total purchase price of
$6,250. The Company believes that Mr. Davey is an accredited investor
within the meaning of Regulation D issued under the Act. The Company issued
such securities in reliance upon Section 4(2) of the Act.
(e) As of February 18, 2003, the Company subscribed 200,000 shares of its
common stock to Kang Chan at $0.25 per share for a total purchase price of
$50,000. The Company believes that Kang Chan is an accredited investor
within the meaning of Regulation D issued under the Act. The Company issued
such securities in reliance upon Section 4(2) of the Act.
The Company used such proceeds in connection with its Chilean and Armenian
projects.
Item 3. Default Upon Senior Securities
None
Item 4. Submission of Matters to a vote of Security Holders
None
17
Item 5. Other Information
The Company made additional sales or transfers of shares of its common stock
during the first quarter of 2003, each of which is exempt from registration
under the Act, as set forth below:
(a) In January, 2003, the Company sold 100,000 shares of its common stock to
Linda Sam, through Sukhmohan Athwal as nominee, at $0.25 per share (fair
market value). The value of the shares includes the total cash price of
$5,000 plus performance obligations by Sukhmohan Athwal valued at $20,000,
pursuant to a special incentive financing arrangement (which has not yet
been consummated as of the date hereof). The Company believes that Linda
Sam is an accredited investor within the meaning of Regulation D issued
under the Act. The Company issued such securities in reliance upon Section
4(2) of the Act.
(b) In January, 2003, the Company sold 200,000 shares of its common stock to
EM&P Investments, through Sukhmohan Athwal as nominee at $0.25 per share
(fair market value). The value of the shares includes the total cash price
of $10,000 plus performance obligations by Sukhmohan Athwal valued at
$40,000, pursuant to a special incentive financing arrangement (which has
not yet been consummated as of the date hereof). The Company believes that
EM&P Investments is an accredited investor within the meaning of Regulation
D issued under the Act. The Company issued such securities in reliance upon
Section 4(2) of the Act.
(c) In January, 2003, the Company sold 200,000 shares of its common stock to
Bank Sat Oppenheim Jr. & CIE, through Sukhmohan Athwal as nominee, at a per
share price of $0.25 per share (fair market value). The value of the shares
includes the total cash price of $10,000 plus performance obligations by
Sukhmohan Athwal valued at $40,000, pursuant to a special incentive
financing arrangement (which has not yet been consummated as of the date
hereof). The Company believes that Bank Sat Oppenheim Jr. & CIE is an
accredited investor within the meaning of Regulation D issued under the
Act. The Company issued such securities in reliance upon Section 4(2) of
the Act.
(d) On February 21, 2003, the Company transferred 900,000 shares of its common
stock at $0.25 per share (fair market value) to Drury J. Gallagher as a
stock award subject to a substantial risk of forfeiture if he terminates
his employment with the Company (other than by death or disability) over
the 41-month term of his Amended and Restated Employment Agreement, and
which is to be earned, and vest ratably, during the 41-month period ending
June 30, 2006.
(e) On February 21, 2003, the Company transferred 900,000 shares of its common
stock at $0.25 per share (fair market value) to Robert A. Garrison as a
stock award subject to a substantial risk of forfeiture if he terminates
his employment with the Company (other than by death or disability) over
the 41-month term of his Amended and Restated Employment Agreement, and
which is to be earned, and vest ratably, during the 41-month period ending
June 30, 2006.
18
Item 6. Exhibits and Reports on Form 8-K
(a) The following documents are filed as part of this report. Unaudited
Condensed Financial Statements of the Company, including Balance Sheet as
of March 31, 2003(Restated), Statements of Operations and Statements of
Cash Flows for the three months ended March 31, 2003(Restated)and March 31,
2002, and for the development stage period from January 1, 1995 through
March 31, 2003 (Restated) and the Exhibits which are listed on the Exhibit
index:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
10.63 Employment Agreement between the Registrant and Van K. Krikorian
dated as of February 1, 2003.
99.1 Certificate of Chief Executive Officer
99.2 Certificate of Chief Financial Officer
(b) Reports on Form 8-K filed during the quarter ended March 31, 2003
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 July 11, 2003
-------------------------
Drury J. Gallagher, Chairman,
Chief Executive Officer and Treasurer
19
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/A 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: July 11, 2003 /s/ Drury J. Gallagher
------------------------------
Drury J. Gallagher, Chairman,
Chief Executive Officer and Treasurer
20
CERTIFICATION
I, Robert A. Garrison, the President, Chief Financial Officer and Chief
Operating Officer of Global Gold Corporation (the "Company"), certify that:
1. I have reviewed this quarterly report on Form 10-QSB/A 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: July 11, 2003 /s/ Robert A. Garrison
------------------------------
Robert A. Garrison, President,
Chief Financial Officer and
Chief Operating Officer
21
EXHIBIT 10.63
EMPLOYMENT AGREEMENT
AGREEMENT dated as of the 1st day of February, 2003 between Global Gold
Corporation, a Delaware corporation (the "Corporation"), and Van Z. Krikorian,
an individual residing at 5 Frederick Court, Harrison, New York 10528 (the
"Employee") (the "Agreement").
W I T N E S S E T H :
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 an
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 Vice President and General
Counsel and, in such capacity, to be responsible for negotiation of
contracts, acquisition of properties in foreign countries, review of
legal work and participation in governmental relations. 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 60% of his available business time to
the performance of his duties hereunder, or 1,200 hours per each
12-month period. The Employee may provide services to other
organizations, on a compensation or pro bono basis, provided that such
services do not constitute more than 40% of his available business
time.
2. TERM. The term of this Agreement shall be for a period of three years
and one month commencing on June 1, 2003 (or such other date as mutually agreed
by the parties) 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 for the term of this
Agreement a total of 900,000 shares of its common stock pursuant to
the terms of the Restricted Stock Award attached hereto as Exhibit A,
which have a fair market value of $0.05 per share as determined by the
Corporation as of the date hereof (the "Restricted Stock Award"). In
addition to the foregoing, the Corporation shall pay to the Employee,
as base compensation, the sum of $100,000 for each 12-month period
commencing on and after June 1, 2003 during the term of this
Agreement, payable in equal monthly installments of $8,333.33 on the
15th day of each month, provided that the Corporation shall not be
required to make such payment if the Corporation lacks the financial
resources or adequate cash flow to do so, as determined by the Board
of Directors of the Corporation pursuant to a unanimous written
consent. If such sum of $100,000 or portion thereof is not paid when
due, such sum in question shall accrue without interest, but any sum
accrued during the 12-month period ended June 30, 2004 shall become
due and payable on June 30, 2005, and any sum due accrued during the
period ended June 30, 2005 or June 30, 2006 shall become due and
payable on June 30, 2006.
(b) Bonus Compensation. In addition to the foregoing compensation, the
Employee shall be entitled to receive annual bonus compensation
("Annual Bonus") 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. Any Annual Bonus shall be subject to all applicable tax
withholdings.
(c) In the event that the Employee voluntarily elects not to work 60% 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 1,200 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 2.95 times the Employee's average
annual compensation paid by the Company within the meaning of
Section 280(G)(d)(1) of the Internal Revenue Code of 1986, as
amended, 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
within 30 days after the occurrence of a Change of Control.
(ii) (A) 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.
(B) (1) Notwithstanding anything contained in this Section 3(d)
to the contrary, a "Change of Control" shall be deemed to
occur upon
(a) (i) the sale of all or substantially all of the Corporation's
assets or (y) a merger (including a merger in which the
Corporation is the surviving corporation) or consolidation of the
Corporation with one or more corporations or entities, as a
result of which in each such case the Corporation'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 Corporation or the surviving
entity outstanding immediately after such sale, merger or
consolidation; or
(ii) 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, Van Z. Krikorian 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 Corporation's securities
representing more than 50% of the combined voting power of the
Corporation'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 Corporation is the surviving corporation), an
acquisition of securities or otherwise, except that this Section
3(d)(ii)(B)(1)(a)(ii) shall not apply to any person who provides
financing to the Corporation or any of their affiliates, pursuant
to a private placement transaction or otherwise; and
(b) a transaction shall not constitute a Change of Control if its
sole purpose is to change the state of the Corporation's
incorporation or to create a holding company that will be owned
in substantially the same proportions by the persons who held the
Corporation's securities immediately before such transaction.
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
Vice President and General Counsel 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.
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.
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 for Cause (as defined herein) 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 (each of which is defined as
"Cause"):
(i) Wrongful 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 involving the
Corporation or moral turpitude;
(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. 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 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 (exclusive of
any benefit under the Restricted Stock Award). 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 death benefit payable to the
Employee under this Agreement (exclusive of any benefit under the
Restricted Stock Award) shall be the life insurance benefits
provided to the Employee, if any.
(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.
(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
(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) within 15 days
after their appointment, 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.
(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 in the City 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., facsimile
number (212)-681-0845; and if to the Employee, Mr. Van Z.
Krikorian, 5 Frederick Court, Harrison, New York, facsimile
number (914) 835-5080. 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.
By: /s/ Robert A. Garrison
--------------------------
Robert A. Garrison, President and
Chief Financial Officer
/s/ Van Z. Krikorian
--------------------
Van Z. Krikorian
EXHIBIT A
Global Gold Corporation
734 Franklin Avenue, No. 333
Garden City, New York 11530-4525
June 1, 2003
Mr. Van Z. Krikorian
5 Frederick Court
Harrison, New York 10528
Re: Restricted Stock Award
Dear Mr. Krikorian:
As an inducement for your rendering of services to the Company, we hereby
grant you 900,000 shares of the Common Stock of the Company, evidenced by a
certificate of shares of our common stock, $.001 par value per share (the
"Shares"), subject to applicable securities law restrictions and the terms and
conditions set forth herein:
1. You shall be required to spend at least 60% of your business time (1,200
hours for each 12-month period) in connection with the responsibility assigned
to you (or to be assigned to you) by the Board of Directors of the Company in
promoting the business of the Company pursuant to your employment agreement with
the Company.
2. For the first seven-month period commencing with the date hereof within
which you render the services provided herein, you shall become fully vested in
18.92% of the total Shares granted hereunder. For each six-month period
thereafter commencing on January 1, 2004 through June 30, 2006, you shall become
fully vested in 16.216% of the total Shares granted hereunder. Thus, if you
complete 19 and 37 months of service as provided hereunder, you shall be 51.35%
and 100% vested, respectively, in the Shares granted hereunder.
3. In the event of your termination of your employment on or before the
expiration of the initial seven-month period commencing with the date hereof or
any subsequent six-month period thereafter during the 37-month period commencing
with June 1, 2003 for any reason, you shall forfeit all right, title and
interest in and to any of the Shares granted hereunder which have not become
vested in you, without any payment by the Company therefore.
4. (a) Any Shares granted hereunder are not transferable and cannot be
assigned, pledged, hypothecated or disposed of in any way until they become
vested, and may be transferred thereafter in accordance with applicable
securities law restrictions. Any attempted transfer in violation of the Section
shall be null and void.
(b) Notwithstanding anything contained in this Agreement to the contrary,
after you become vested in any of the Shares granted hereunder, no sale,
transfer or pledge thereof 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 laws.
5. During the period commencing with the date hereof and prior to your
forfeiture of any of the Shares granted hereunder, you shall have all right,
title and interest in and to the Shares granted hereunder, including the right
to vote the Shares and receive dividends or other distributions with respect
thereto.
6. You shall be solely responsible for any and all Federal, state and local
income taxes arising out of your receipt of the Shares and your future sale of
other disposition of them.
7. 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, 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 in
the State 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 exclusive jurisdiction of any Federal or state
court in the City of New York in the State 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
at the addresses of the parties shown herein shall constitute personal service
thereof.
8. 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.
9. This Agreement and all the terms and provisions hereof shall be binding
upon and shall inure to the benefit of the parties and their respective heirs
and successors and, in the case of the Company, its assigns.
10. This Agreement may not be amended except in a writing signed by all of
the parties hereto.
11. Nothing contained herein shall be construed to create an employment
agreement between the Company and you or require the Company to employ or retain
you under such a contract or otherwise.
12. Notwithstanding anything contained this in Agreement to the contrary:
(a) the Shares shall become fully vested upon the occurrence of a Change of
Control (as defined in this Section 12), which shall occur upon
(i) (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
(ii) 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, Van Z. Krikorian 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 12(a)(ii) 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
(b) a transaction shall not constitute a Change 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.
(c) the Shares shall become fully vested upon your death or upon your
becoming disabled, which shall mean you shall have been unable to render all of
your duties 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 Company.
13. In the event of any conflict between the terms of this Agreement and of
the Amended and Restated Employment Agreement, the provisions contained in this
Agreement shall control.
If this letter accurately reflects our understanding, please sign the
enclosed copy of this letter at the bottom and return it to us.
Very truly yours,
Global Gold Corporation
By:/s/ Drury J. Gallagher
-------------------------
Drury J. Gallagher, Chairman and
Chief Executive Officer
Agreed:
/s/ Van Z. Krikorian
--------------------
Van Z. Krikorian
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/A for the period ending March 31, 2003 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: July 11, 2003 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/A for the period ending March 31, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Robert A. Garrison, the 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: July 11, 2003 GLOBAL GOLD CORPORATION
By: /s/ Robert A. Garrison
----------------------
Robert A. Garrison
President, Chief Financial Officer
and Chief Operating Officer