Exhibit 10.6

 

AMENDED AND RESTATED

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Amended and Restated Executive Employment Agreement (this “Agreement”) is
made this 28th day of February, 2012 (the “Effective Date”), by and between
MOLYCORP, INC., a Delaware corporation (the “Employer”) and JOHN BURBA (the
“Executive”). The Employer and the Executive are referred to below individually
as a “Party” and collectively as the “Parties.”

 

WITNESSETH:

 

WHEREAS, the Employer and the Executive are currently parties to an Executive
Employment Agreement, dated May 21, 2010 (the “Prior Agreement”);

 

WHEREAS, this Agreement will supersede and completely replace the Prior
Agreement as of the Effective Date;

 

WHEREAS, the Executive agrees to be employed by the Employer upon and subject to
the terms herein provided; and

 

WHEREAS, the Employer agrees to employ the Executive upon and subject to the
terms herein provided.

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual promises,
covenants and agreements contained herein, the legal sufficiency of which is
acknowledged by the Parties, and intending to be legally bound, the Parties
agree as follows:

 

1.                                       Employment.  The Employer shall employ
the Executive, and the Executive accepts continued employment with the Employer,
upon the terms and conditions set forth in this Agreement for a period of time
beginning on the date hereof and ending as provided in Section 4 (the
“Employment Period”). Notwithstanding anything in this Agreement to the
contrary, the Executive will be an at-will employee of the Employer and the
Executive or the Employer may terminate the Executive’s employment with the
Employer for any reason or no reason at any time.

 

2.                                       Office and Duties.  The Executive shall
serve as, and have the title of, Executive Vice President and Chief Technology
Officer and shall report to, and be subject to the power and authority of, the
Chief Executive Officer. The Executive shall manage the affairs of the Employer
and have the duties, responsibilities and authority of an Executive Vice
President Chief Technology Officer. The Executive shall perform such tasks
commensurate with this position as may from time to time be defined or assigned
by the Chief Executive Officer. The Executive shall devote all business time,
labor, skill, undivided attention and best ability to the performance of the
Executive’s duties hereunder in a manner which will faithfully and diligently
further the business and interests of the Employer. During the Employment
Period, the Executive shall not directly or indirectly pursue any other business
activity without the prior written consent of the Board of Directors of the
Employer (the “Board”), except as permitted under Section 7(f) of this
Agreement. The Executive further agrees to travel to whatever extent is
reasonably necessary in the conduct of the Employer’s business, at the
Employer’s expense.

 

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3.                                       Compensation and Benefits.

 

(a)                                  The Employer will pay the Executive a base
salary for services rendered under this Agreement at a rate of not less than
$400,000 per year, payable in accordance with Employer’s standard payroll
practices, subject to such payroll and withholding deductions as are required by
law or authorized by the Executive. The Executive shall be eligible for
increases in base salary at the sole discretion of the Employer.  The base
salary rate in effect for the Executive from time to time pursuant to this
Section 3(a) is referred to herein as the Executive’s “Base Salary”.

 

(b)                                 The Executive shall be entitled to
participate in the employee benefit plans (such as medical and dental insurance,
disability, life insurance, 401k and sick pay) offered to substantially all of
the employees of the Employer. In addition, the Executive will be eligible for
the Employer’s Amended and Restated Management Incentive Compensation Plan (the
“MICP”), which is a nonqualified deferred compensation plan to which the
Employer may make contributions and the Executive may elect to make deferral
contributions from his base salary and bonus, if any. Employer contributions to
the MICP are discretionary and subject to annual Board approval.

 

(c)                                  The Executive shall be eligible for such
bonus plans and long-term equity or cash incentive compensation plans for the
Employer’s officers and directors as the Board may establish from time to time,
which will be based on the achievement and satisfaction of goals and objectives
established by the Board.

 

(d)                                 The Employer shall reimburse the Executive
for all reasonable and actual out-of-pocket costs and expenses, including
reasonable travel and business entertainment expenses, incurred by him in the
course of performing his duties under this Agreement, subject in all instances
to the Employer’s reimbursement policies and requirements applicable to all
employees with respect to reporting and documentation of such expenses,
including, without limitation, the timely submittal of receipts, invoices and
documentation supporting all such costs and expenses.

 

(e)                                  The Executive shall be entitled to vacation
in accordance with the Company’s plans, policies, programs and practices as in
effect from time to time.  The Executive will keep the Board apprised of dates
for planned vacation.

 

4.                                       Employment Period.  The Employment
Period shall be for the period beginning on the date of this Agreement and
ending on June 1, 2013.  On June 1, 2013, and on each succeeding anniversary of
such date, the Employment Period shall be extended for an additional year,
unless the Employer or the Executive shall have given the other ninety (90) days
written notice, prior to June 1, 2013 or any succeeding anniversary commencing
after June 1, 2013, that the Employment Period will not be extended. 
Notwithstanding the foregoing, (i) the Employment Period shall terminate prior
to any such date upon the Executive’s resignation, death or disability and
(ii) the Employment Period may be terminated by the Employer at any time prior
to any such date for Cause (as defined below) or without Cause.

 

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5.                                       Termination of Employment.

 

(a)                                  If the Employer terminates the Executive’s
employment as a result of the Executive’s death or the Executive’s disability or
for Cause (as defined below), the Employer will pay the Executive’s accrued
salary, benefits and vacation, including the then unused accrued vacation, up to
and including the date of termination (the “Accrued Benefits”), in a single lump
sum within thirty (30) days of such termination. Thereafter, the Employer will
have no further obligations to the Executive under this Agreement.

 

For purposes of this Agreement, “Cause” is defined as:  (1) the Executive’s
misconduct, malfeasance, or negligence relative to the Executive’s duties or the
Employer’s business; (2) the Executive’s failure or refusal to perform the
services required or as requested by the Board or the Chief Executive Officer,
or the Executive’s refusal to carry out or perform proper directions or
instructions from the Board or the Chief Executive Officer with respect to the
services rendered hereunder; (3) the Executive’s conviction of a crime that
either results in a sentence of imprisonment or involves theft, embezzlement,
dishonesty or breach of securities or financial laws or regulations;
(4) activities by the Executive that are injurious to the Employer, its
affiliates or its or their reputation; or (5) any conduct constituting “cause”
under applicable law. Whether Cause exists to justify the termination of this
Agreement shall be determined by the Employer in its sole discretion.

 

(b)                                 If the Employer terminates the Executive’s
employment without Cause or if the Executive terminates his employment for Good
Reason (as defined below), and such termination does not occur within the
twenty-four (24) month period following a Change of Control:

 

(i)                                     the Employer will pay to the Executive
the Accrued Benefits, in a single lump sum within thirty (30) days of such
termination;

 

(ii)                                  the Employer shall continue to pay the
Executive his Base Salary at the time of such termination for a period of one
(1) year following such termination pursuant to the Employer’s standard pay
periods and practices; provided, however, that Base Salary amounts due during
the 60-day period following such termination shall not be paid during such
60-day period but instead shall be paid on the first payroll date after such
60-day period;

 

(iii)                               the Employer shall pay to the Executive one
(1) times the Executive’s target bonus amount under the Employer’s annual
incentive plan (which, for the avoidance of doubt, shall include any portion of
such bonus amount that may be converted into and paid to the Executive in the
form of shares of restricted stock) for the year in which the termination
occurs, in a single lump sum on the first payroll date following the sixtieth
(60th) day following such termination; and

 

(iv)                              if the Executive elects continuation coverage
under the Employer’s medical plan pursuant to Part 6 of Subtitle B of Title I of
the Employee Retirement Income Security Act of 1974, as amended (“COBRA”), the
Employer shall reimburse the Executive for the Executive’s COBRA payments until
the earlier of (x) the Executive’s eligibility for any such coverage under
another employer’s or any other medical plan or (y) the date that is twelve (12)
months following the termination of the Executive’s employment.  The Employer
shall make any such reimbursement within thirty (30) days

 

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following receipt of evidence from the Executive of the Executive’s payment of
the COBRA premium, which evidence shall be provided by the Executive within
thirty (30) days of the Executive’s payment of such COBRA premium; provided,
however, that any amounts due during the 60-day period following such
termination shall not be paid during such 60-day period but instead shall be
paid on the first payroll date after such 60-day period.  The Executive agrees
that the period of coverage under such plan shall count against such plan’s
obligation to provide continuation coverage pursuant to COBRA.

 

It is expressly understood that the Employer’s obligations under this
Section 5(b) (other than payment of the Accrued Benefits) shall cease in the
event the Executive breaches any of the agreements in Sections 6 and 7 of this
Agreement.  Notwithstanding anything herein to the contrary, the Employer shall
not be obligated to make any payments or provide any benefit under this
Section 5(b) (other than payment of the Accrued Benefits) unless (x) prior to
the sixtieth (60th) day following the termination without Cause or termination
for Good Reason, the Executive executes a release of all current or future
claims, known or unknown, arising on or before the date of the release, against
the Employer and its subsidiaries and the directors, officers, employees and
affiliates of any of them, in a form approved by the Employer and (y) any
applicable revocation period has expired during such sixty-day period without
the Executive revoking such release.  Each payment under this Section 5(b) shall
be considered a separate payment and not one of a series of payments for
purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”).  All payments under Sections 5(b)(ii), (iii) and (iv) shall be deemed
severance pay and not wages.

 

For purposes of this Agreement, “Good Reason” is defined as: the Executive’s
termination of his employment with the Employer as a result of (i) any material
diminution in the Executive’s authority, duties or responsibilities, (ii) a
relocation of the Executive’s principal office to a location that is in excess
of fifty (50) miles from its location as of the Effective Date or (iii) any
material decrease in the amount of the Executive’s Base Salary.  Notwithstanding
the foregoing, no termination of employment by the Executive shall constitute a
termination for “Good Reason” unless (A) the Executive gives the Employer notice
of the existence of an event described in clause (i), (ii) or (iii) above within
sixty (60) days following the occurrence thereof, (B) the Employer does not
remedy such event within thirty (30) days of receiving the notice described in
the preceding clause (A), and (C) the Executive terminates employment within
five (5) days of the end of the cure period specified in clause (B), above.

 

(c)                                  If, during the twenty-four (24) month
period following a Change of Control, the Employer terminates the Executive’s
employment without Cause or the Executive terminates his employment for Good
Reason:

 

(i)                                     the Employer will pay to the Executive
the Accrued Benefits, in a single lump sum within thirty (30) days of such
termination;

 

(ii)                                  if (A) the Change of Control constitutes a
“change in the ownership or effective control of the Employer, or a change in
the ownership of a substantial portion of the assets of the Employer,” within
the meaning of Section 409A of the Code and the regulations thereunder (a “409A
Change in Control”), the Employer shall make a lump sum payment to the Executive
in an amount equal to two (2) times his Base Salary at the time of such
termination, paid in a lump sum on the first payroll date following the sixtieth
(60th) day following such termination; or (B) the Change of Control does not

 

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constitute a 409A Change in Control, the Employer shall (I) make a lump sum
payment to the Executive in an amount equal to one (1) times his Base Salary at
the time of such termination, paid in a lump sum on the first payroll date
following the sixtieth (60th) day following such termination, and (II) continue
to pay the Executive his Base Salary at the time of such termination for a
period of one (1) year following such termination pursuant to the Employer’s
standard pay periods and practices; provided, however, that Base Salary amounts
due during the 60-day period following such termination shall not be paid during
such 60-day period but instead shall be paid on the first payroll date after
such 60-day period;

 

(iii)                               the Employer shall make a lump sum payment
to the Executive in an amount equal to two (2) times the Executive’s target
bonus amount under the Employer’s annual incentive plan (which, for the
avoidance of doubt, shall include any portion of such bonus amount that may be
converted into and paid to the Executive in the form of shares of restricted
stock) for the year in which the termination occurs, paid in a lump sum on the
first payroll date following the sixtieth (60th) day following such termination;
and

 

(iv)                              if the Executive elects continuation coverage
under the Employer’s medical plan pursuant to COBRA, the Employer shall
reimburse the Executive for the Executive’s COBRA payments until the earlier of
(x) the Executive’s eligibility for any such coverage under another employer’s
or any other medical plan or (y) the date that is eighteen (18) months following
the termination of the Executive’s employment.  The Employer shall make any such
reimbursement within thirty (30) days following receipt of evidence from the
Executive of the Executive’s payment of the COBRA premium, which evidence shall
be provided by the Executive within thirty (30) days of the Executive’s payment
of such COBRA premium; provided, however, that any amounts due during the 60-day
period following such termination shall not be paid during such 60-day period
but instead shall be paid on the first payroll date after such 60-day period. 
The Executive agrees that the period of coverage under such plan shall count
against such plan’s obligation to provide continuation coverage pursuant to
COBRA.

 

It is expressly understood that the Employer’s obligations under this
Section 5(c) (other than payment of the Accrued Benefits) shall cease in the
event the Executive breaches any of the agreements in Sections 6 and 7 of this
Agreement.  Notwithstanding anything herein to the contrary, the Employer shall
not be obligated to make any payments or provide any benefits under this
Section 5(c) (other than payment of the Accrued Benefits) unless (x) prior to
the sixtieth (60th) day following the termination without Cause or termination
for Good Reason, the Executive executes a release of all current or future
claims, known or unknown, arising on or before the date of the release, against
the Employer and its subsidiaries and the directors, officers, employees and
affiliates of any of them, in a form approved by the Employer and (y) any
applicable revocation period has expired during such sixty-day period without
the Executive revoking such release.  Each payment under this Section 5(c) shall
be considered a separate payment and not one of a series of payments for
purposes of Section 409A of the Code.  All payments under Sections 5(c)(ii),
(iii) and (iv) shall be deemed severance pay and not wages.

 

(d)                                 If the Executive terminates his employment
for any reason other than Good Reason, the Employer will pay the Accrued
Benefits, in a single lump sum within thirty (30) days of such termination.
Thereafter, the Employer will have no further obligations to the

 

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Executive under this Agreement. The Executive may resign upon not less than
sixty (60) days prior written notice to the Employer, for any reason or no
reason.

 

6.                                       Confidential Information; Discoveries
and Inventions; Work Made for Hire.

 

(a)                                  The Executive will keep in strict
confidence, and will not, directly or indirectly, at any time, during or after
the Executive’s employment with the Employer, disclose, furnish, disseminate,
make available or, except in the course of performing the Executive’s duties of
employment, use any trade secrets or confidential business and technical
information of the Employer or its customers or vendors, without limitation as
to when or how the Executive may have acquired such information. Such
confidential information shall include, without limitation, the Employer’s
unique selling, manufacturing and servicing methods and business techniques,
training, service and business manuals, promotional materials, training courses
and other training and instructional materials, vendor and product information,
customer and prospective customer lists, other customer and prospective customer
information and other business information. The Executive specifically
acknowledges that all such confidential information, whether reduced to writing,
maintained on any form of electronic media, or maintained in the mind or memory
of the Executive and whether compiled by the Employer, and/or the Executive,
derives independent economic value from not being readily known to or
ascertainable by proper means by others who can obtain economic value from its
disclosure or use, that reasonable efforts have been made by the Employer to
maintain the secrecy of such information, that such information is the sole
property of the Employer and that any retention and use of such information by
the Executive during the Executive’s employment with the Employer (except in the
course of performing the Executive’s duties and obligations to the Employer) or
after the termination of the Executive’s employment shall constitute a
misappropriation of the Employer’s trade secrets.

 

(b)                                 The Executive agrees that upon termination
of the Executive’s employment with the Employer, for any reason, the Executive
shall return to the Employer, in good condition, all property of the Employer,
including without limitation, the originals and all copies of any materials
which contain, reflect, summarize, describe, analyze or refer or relate to any
items of information listed in Section 6(a) of this Agreement. In the event that
such items are not so returned, the Employer will have the right to charge the
Executive for all reasonable damages, costs, attorneys’ fees and other expenses
incurred in searching for, taking, removing and/or recovering such property.

 

(c)                                  The Executive agrees that upon conception
and/or development of any idea, discovery, invention, improvement, software,
writing or other material or design that: (A) relates to the business of the
Employer, or (B) relates to the Employer’s actual or demonstrably anticipated
research or development, or (C) results from any work performed by the Executive
for the Employer, the Executive will assign to the Employer the entire right,
title and interest in and to any such idea, discovery, invention, improvement,
software, writing or other material or design. The Executive has no obligation
to assign any idea, discovery, invention, improvement, software, writing or
other material or design that the Executive conceives and/or develops entirely
on the Executive’s own time without using the Employer’s equipment, supplies,
facilities, or trade secret information unless the idea, discovery, invention,
improvement, software, writing or other material or design either: (x) relates
to the business of the Employer, or (y) relates to the Employer’s actual or
demonstrably anticipated research or development, or (z) results from any work
performed by the Executive for the Employer. The Executive agrees that any idea,
discovery, invention, improvement, software, writing or other material or design
that

 

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relates to the business of the Employer or relates to the Employer’s actual or
demonstrably anticipated research or development which is conceived or suggested
by the Executive, either solely or jointly with others, within one (1) year
following termination of the Executive’s employment under this Agreement or any
successor agreements shall be presumed to have been so made, conceived or
suggested in the course of such employment with the use of the Employer’s
equipment, supplies, facilities, and/or trade secrets.

 

(d)                                 In order to determine the rights of the
Executive and the Employer in any idea, discovery, invention, improvement,
software, writing or other material, and to insure the protection of the same,
the Executive agrees that during the Executive’s employment, and for one
(1) year after termination of the Executive’s employment under this Agreement or
any successor agreements the Executive will disclose immediately and fully to
the Employer any idea, discovery, invention, improvement, software, writing or
other material or design conceived, made or developed by the Executive solely or
jointly with others. The Employer agrees to keep any such disclosures
confidential. The Executive also agrees to record descriptions of all work in
the manner directed by the Employer and agrees that all such records and copies,
samples and experimental materials will be the exclusive property of the
Employer. The Executive agrees that at the request of and without charge to the
Employer, but at the Employer’s expense, the Executive will execute a written
assignment of the idea, discovery, invention, improvement, software, writing or
other material or design to the Employer and will assign to the Employer any
application for letters patent or for trademark registration made thereon, and
to any common law or statutory copyright therein; and that the Executive will do
whatever may be necessary or desirable to enable the Employer to secure any
patent, trademark, copyright, or other property right therein in the United
States and in any foreign country, and any division, renewal, continuation, or
continuation in part thereof, or for any reissue of any patent issued thereon. 
In the event the Employer is unable, after reasonable effort, and in any event
after ten business days, to secure the Executive’s signature on a written
assignment to the Employer of any application for letters patent or to any
common-law or statutory copyright or other property right therein, whether
because of the Executive’s physical or mental incapacity or for any other reason
whatsoever, the Executive irrevocably designates and appoints the General
Counsel or Corporate Secretary of the Employer as the Executive’s
attorney-in-fact to act on the Executive’s behalf to execute and file any such
application and to do all other lawfully permitted acts to further the
prosecution and issuance of such letters patent, copyright or trademark.

 

(e)                                  The Executive acknowledges that, to the
extent permitted by law, all work papers, reports, documentation, drawings,
photographs, negatives, tapes and masters therefor, prototypes and other
materials (hereinafter, “items”), including without limitation, any and all such
items generated and maintained on any form of electronic media, generated by the
Executive during the Executive’s employment with the Employer shall be
considered a “work made for hire” and that ownership of any and all copyrights
in any and all such items shall belong to the Employer.  The item will recognize
the Employer as the copyright owner, will contain all proper copyright notices,
e.g., “(creation date) Molycorp, Inc., All Rights Reserved,” and will be in
condition to be registered or otherwise placed in compliance with registration
or other statutory requirements throughout the world.

 

7.                                       Non-Competition, Non-Solicitation.

 

(a)                                  For the purposes of this Agreement,
“Competitive Conduct” shall be determined in good faith by the Employer and
shall include any of the following conduct whether direct or

 

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indirect, on the Executive’s own behalf or on behalf of, or in conjunction with,
any person, partnership, corporation, company or other entity:

 

(i)                                     owning, managing, operating,
controlling, being employed by, participating in, engaging in, rendering any
services for, assisting, having any financial interest in, permitting the
Executive’s name to be used in connection with, or being connected in any manner
with the ownership, management, operation, or control of any Competitor of the
Employer or its affiliates. For the purposes of this Agreement, a “Competitor”
is any person or entity that engages in the production of rare earth products,
including, without limitation, rare earth oxides, metals, alloys and magnets;

 

(ii)                                  consulting with, acting as an agent for,
or otherwise assisting any Competitor to compete or prepare to compete with the
Employer or its affiliates in any of the Employer’s or its affiliate’s existing
or prospective businesses or activities;

 

(iii)                               interfering with the relationship between
the Employer and any current or former employee or consultant of the Employer,
including, without limitation, soliciting, inducing, enticing, hiring,
employing, or attempting to solicit, induce, entice, hire, or employ any current
or former employee or consultant of the Employer;

 

(iv)                              interfering or attempting to interfere with
any transaction in which the Employer or any of its affiliates is involved or
which was pending during the term of the Executive’s engagement with the
Employer or at the date on which the Executive’s engagement with the Employer
ends;

 

(v)                                 soliciting any of the Employer’s customers
or prospective customers; and/or

 

(vi)                              soliciting, inducing, or attempting to induce
any current or prospective customer, supplier or other business relation of the
Employer or any of its affiliates to cease doing business with the Employer (or
any subsidiary, member, parent or other affiliate of the Employer) or in any way
interfering with the relationship between any such customer, supplier or
business relation of the Employer or its affiliates.

 

(b)                                 The Executive shall not engage in
Competitive Conduct for a period of two (2) years after termination (whether
voluntary or involuntary) of the Executive’s employment with the Employer.

 

(c)                                  The Executive shall not engage in
Competitive Conduct anywhere in China, Japan, the United States, the European
Union or Australia.

 

(d)                                 The Executive acknowledges and agrees that
the restrictive covenants in this Agreement are designed and intended to protect
the Employer’s trade secrets. The Executive further agrees that the Employer
operates in a world-wide, and not a local or regional, market, and the
restrictive covenants in this Agreement are reasonable in duration and
geographic scope and are reasonably necessary to protect the Employer’s
legitimate business interests.

 

(e)                                  The Executive may serve as a non-executive
director of another business or company if, and only if, the Executive concludes
that such service will not interfere with his

 

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duties hereunder, the Executive refers such proposed service to the Board for
approval, the Board determines that such service as a director is in the best
interest of the Employer and the Board authorizes the Executive’s service as a
director for such business or company.

 

(f)                                    The Employer acknowledges and agrees that
the restrictions set forth in this Section 7 shall not limit or prohibit the
Executive (i) from serving as an officer, director or consultant of another
company, which may or may not be an affiliate of the Employer, as long as such
service is at the request or direction of the Employer or the Board or (ii) from
engaging in passive investment activities and business-related, community
service, charitable and social activities that do not interfere with the
Executive’s performance of his duties or his obligations hereunder.

 

(g)                                 For purposes of Section 6 of this Agreement
and this Section 7, the Employer shall include any and all direct and indirect
subsidiary, parent, affiliated, or related companies of the Employer for which
the Executive worked or had responsibility at the time of termination of his
employment and at any time during the two (2) year period prior to such
termination.

 

(h)                                 If it shall be judicially determined that
the Executive has violated Section 7(b) of this Agreement, then the period
applicable to each obligation that the Executive shall have been determined to
have violated shall automatically be extended by a period of time equal in
length to the period during which such violation(s) occurred.

 

8.                                       Communication of Contents of
Agreement.  While employed by the Employer and for two (2) years thereafter, the
Executive will communicate the contents of Sections 6 and 7 of this Agreement to
any person, firm, association, partnership, corporation or other entity that the
Executive intends to be employed by, associated with, or represent.

 

9.                                       No Conflicts.  The Executive represents
and warrants that the Executive is not presently subject to any agreement with a
Competitor or potential Competitor of the Employer, or to any other contract,
oral or written, that could restrict or prevent the Executive from entering into
this Agreement or performing his duties in full accord with this Agreement.

 

10.                                 Executive Representations and Warranties. 
The Executive hereby represents and warrants to the Employer that:

 

(a)                                  the execution, delivery and performance of
this Agreement by the Executive does not and will not conflict with, breach,
violate or cause a default under any agreement, contract or instrument to which
the Executive is a party, or any judgment, order or decree to which the
Executive is subject;

 

(b)                                 the Executive is not a party to or bound by
any employment agreement, other than the Prior Agreement, consulting agreement,
non-compete agreement, confidentiality agreement, non-disclosure agreement or
similar agreement with any other person or entity;

 

(c)                                  the Executive has read through the entirety
of this Agreement, and prior to signing it, the Executive has been advised by
independent legal counsel;

 

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(d)                                 upon the execution and delivery of this
Agreement by the Employer and the Executive, this Agreement will be a valid and
binding obligation of the Executive, enforceable in accordance with its terms;
and

 

(e)                                  the Executive has been paid or provided all
wages, compensation, bonuses, stock, stock options, vacation, or other benefits
due to the Executive under the terms of the Prior Agreement.

 

11.                                 Acknowledgments.  The Executive acknowledges
that the covenants contained in Sections 6 and 7, including those related to
duration, geographic scope, and the scope of prohibited conduct, are reasonable
and necessary to protect the legitimate interests of the Employer.  The
Executive acknowledges that the Executive is an executive and management level
employee as referenced in, and governed by, C.R.S. 8-2-113(2)(d).  The Executive
further acknowledges that the covenants contained in Sections 6 and 7 are
necessary to protect, and reasonably related to the protection of, the
Employer’s trade secrets, to which the Executive will be exposed and with which
the Executive will be entrusted.

 

12.                                 Equitable Remedies. The services to be
rendered by the Executive and the Confidential Information entrusted to the
Executive as a result of the Executive’s employment by the Employer are of a
unique and special character, and any breach of Sections 6 and 7 will cause the
Employer immediate and irreparable injury and damage, for which monetary relief
would be inadequate or difficult to quantify. The Employer will be entitled to,
in addition to all other remedies available to it, injunctive relief and
specific performance to prevent a breach and to secure the enforcement of
Sections 6 and 7. Injunctive relief may be granted immediately upon the
commencement of any such action.

 

13.                                 Taxes.  The Employer may withhold from any
amounts payable under this Agreement all federal, state, city or other taxes as
the Employer is required to withhold pursuant to any applicable law, regulation
or ruling.  Notwithstanding any other provision of this Agreement, the Employer
shall not be obligated to guarantee any particular tax result for the Executive
with respect to any payment provided to the Executive hereunder, and the
Executive shall be responsible for any taxes imposed on the Executive with
respect to any such payment.

 

14.                                 Section 280G.  Notwithstanding any provision
of this Agreement to the contrary, if any payment or benefit to be paid or
provided hereunder would be a “Parachute Payment”, within the meaning of
Section 280G of the Code, but for the application of this sentence, then the
payments and benefits to be paid or provided hereunder shall be reduced to the
minimum extent necessary (but in no event to less than zero) so that no portion
of any such payment or benefit, as so reduced, constitutes a Parachute Payment;
provided, however, that the foregoing reduction shall be made only if and to the
extent that such reduction would result in an increase in the aggregate payments
and benefits to be provided to the Executive, determined on an after-tax basis
(taking into account the excise tax imposed pursuant to Section 4999 of the
Code, or any successor provision thereto, any tax imposed by any comparable
provision of state law, and any applicable federal, state and local income
taxes).  Any determinations required to be made under this Section 14 shall be
made by the Employer’s independent accountants, which shall provide detailed
supporting calculations both to the Employer and the Executive within 15
business days of the date of termination or such earlier time as is requested by
the Employer, and shall be made at the expense of the Employer.  The fact that
the Executive’s right to payments or benefits may be reduced by reason of the
limitations contained in this Section 14 shall not of itself limit or

 

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otherwise affect any other rights of the Executive under this Agreement.  The
reduction of the payments and benefits shall occur in the following order:
(a) the payments that are payable in cash that are valued at full value under
Treasury Regulation Section 1.280G-1, Q&A 24(a) shall be reduced (if necessary,
to zero), with amounts that are payable last reduced first; (b) the payments
that are payable in cash that are valued at less than full value under Treasury
Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced
first, shall next be reduced; and (c) all non-cash benefits shall be next
reduced pro-rata.

 

15.                                 Section 409A.

 

(a)                                  To the extent applicable, it is intended
that this Agreement comply with the provisions of Section 409A of the Code, so
that the income inclusion provisions of Section 409A(a)(1) of the Code do not
apply to the Executive.  This Agreement shall be administered and interpreted in
a manner consistent with this intent.  Consistent with that intent, and to the
extent required under Section 409A of the Code, for benefits that are to be paid
in connection with a termination of employment, “termination of employment”
shall be limited to such a termination that constitutes a “separation from
service” under Section 409A of the Code.

 

(b)                                 Notwithstanding any provision of this
Agreement to the contrary, if the Executive is a “specified employee” determined
pursuant to procedures adopted by the Employer in compliance with Section 409A
of the Code, on the date of his separation from service (within the meaning of
Treasury Regulation section 1.409A-1(h)) and if any portion of the payments or
benefits to be received by the Executive upon his termination of employment
would constitute a “deferral of compensation” subject to Section 409A of the
Code, then to the extent necessary to comply with Section 409A of the Code,
amounts that would otherwise be payable pursuant to this Agreement during the
six-month period immediately following the Executive’s termination of employment
will instead be paid or made available on the earlier of (i) the first business
day of the seventh month after the date of the Executive’s termination of
employment, or (ii) the Executive’s death.  For purposes of application of
Section 409A of the Code, to the extent applicable, each payment made under this
Agreement shall be treated as a separate payment.

 

(c)                                  Notwithstanding any provision of this
Agreement to the contrary, to the extent any reimbursement or in-kind benefit
provided under this Agreement is nonqualified deferred compensation within the
meaning of Section 409A of the Code: (i) the amount of expenses eligible for
reimbursement, or in-kind benefits provided, during a calendar year may not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year; (ii) the reimbursement of an eligible
expense must be made on or before the last day of the calendar year following
the calendar year in which the expense was incurred; and (iii) the right to
reimbursement or in-kind benefits is not subject to liquidation or exchange for
another benefit.

 

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16.                                 Prevailing Party’s Litigation Expenses.  In
the event of litigation between the Employer and the Executive related to this
Agreement, the non-prevailing party shall reimburse the prevailing party for any
costs and expenses (including, without limitation, attorneys’ fees) reasonably
incurred by the prevailing party in connection therewith.

 

17.                                 Entire Agreement; Amendments.  This
Agreement constitutes the entire understanding between the Parties with respect
to the subject matter and supersedes, terminates, and replaces any prior or
contemporaneous understandings or agreements, including but not limited to, the
Prior Agreement, which is superseded by this Agreement and is of no further
force or effect. This Agreement may be amended, supplemented, waived, or
terminated only by a written instrument duly executed by the Parties.

 

18.                                 Headings.  The headings in this Agreement
are for convenience of reference only and shall not affect its interpretation.

 

19.                                 Severability.  The covenants in this
Agreement shall be construed as independent of one another, and as obligations
distinct from one another and any other contract between the Executive and the
Employer. If any provision of this Agreement is held illegal, invalid, or
unenforceable, such illegality, invalidity, or unenforceability shall not affect
any other provisions hereof. It is the intention of the Parties that in the
event any provision is held illegal, invalid or unenforceable, that such
provision be limited so as to effect the intent of the Parties to the fullest
extent permitted by applicable law. Any claim by the Executive against the
Employer shall not constitute a defense to enforcement by the Employer of this
Agreement.

 

20.                                 Survival.  The provisions of Sections 6 and
7 are independent of, and survive after the termination of, the other portions
of this Agreement.

 

21.                                 Notices.  All notices, demands, waivers,
consents, approvals, or other communications required hereunder shall be in
writing and shall be deemed to have been given if delivered personally, if sent
by telegram, telex or facsimile with confirmation of receipt, if sent by
certified or registered mail, postage prepaid, return receipt requested, or if
sent by same day or overnight courier service to the following addresses:

 

If to the Employer, to:

 

Molycorp, Inc.

5619 Denver Tech Center Parkway

Suite 1000

Greenwood Village, Colorado 80111

Tel: 303-843-8040

Fax: 303-843-8082

 

If to the Executive, to:

 

John L. Burba

c/o Molycorp, Inc.

5619 Denver Tech Center Parkway

 

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Suite 1000

Greenwood Village, Colorado 80111

Tel: 303-843-8040

Fax: 303-843-8082

 

Notice of any change in any such address shall also be given in the manner set
forth above.  Whenever the giving of notice is required, the giving of such
notice may be waived by the Party entitled to receive such notice.

 

22.                                 Waiver.  The failure of any Party to insist
upon strict performance of any of the terms or conditions of this Agreement
shall not constitute a waiver of any of such Party’s rights hereunder.

 

23.                                 Assignment.  Other than as provided below,
neither Party may assign any rights or delegate any of obligations hereunder
without the prior written consent of the other Party, and such purported
assignment or delegation shall be void; provided that the Employer may assign
the Agreement to any entity that purchases the stock or assets of the Employer
or any affiliate. This Agreement binds, inures to the benefit of, and is
enforceable by the successors and permitted assigns of the Parties and does not
confer any rights on any other persons or entities.

 

24.                                 Governing Law.  This agreement shall be
construed and enforced in accordance with Colorado law, except for any Colorado
conflict-of-law principle that might require the application of the laws of
another jurisdiction.

 

25.                                 Choice of Forum.  Any dispute arising from
or relating to this Agreement shall be resolved in the District Court for the
City and County of Denver or in the United States District Court for the
District of Colorado.

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the dates below:

 

EMPLOYER:

EXECUTIVE:

 

 

 

MOLYCORP, INC.

 

 

 

 

 

 

By:

/s/ Mark A. Smith

 

/s/ John L. Burba

Name:

 Mark A. Smith

Name:

John L. Burba

Title:

Chief Executive Officer

Title:

Executive Vice President/CTO

Date:

February 28, 2012

Date:

February 28, 2012

 

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Exhibit A

 

For purposes of this Agreement:

 

1.                                       “Change of Control” means the
occurrence of any of the following events:

 

i)                 the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of voting securities of the Employer where such acquisition causes
such Person to own more than 50% of the combined voting power of the then
outstanding voting securities of the Employer entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this subsection (i), the following acquisitions
shall not be deemed to result in a Change of Control: (A) any acquisition
directly from the Employer that is approved by the Incumbent Board (as defined
in subsection (ii) below), (B) any acquisition by the Employer, (C) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Employer or any corporation controlled by the Employer or
(D) any acquisition by any corporation pursuant to a transaction that complies
with clauses (A), (B) and (C) of subsection (iii) below; provided, further, that
if any Person’s beneficial ownership of the Outstanding Company Voting
Securities exceeds 50% as a result of a transaction described in clause (A) or
(B) above, and such Person subsequently acquires beneficial ownership of
additional voting securities of the Employer, such subsequent acquisition shall
be treated as an acquisition that causes such Person to own more than 50% of the
Outstanding Company Voting Securities; and provided, further, that if at least a
majority of the members of the Incumbent Board determines in good faith that a
Person has acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than 50% of the Outstanding Company
Voting Securities inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares so that such Person beneficially owns
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) less than
or equal to 50% of the Outstanding Company Voting Securities, then no Change of
Control shall have occurred as a result of such Person’s acquisition;

 

ii)              individuals who, as of September 30, 2010, constituted the
Board (the “Incumbent Board” as modified by this subsection (ii)) cease for any
reason to constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to September 30, 2010 whose
election, or nomination for election by the Employer’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (either by specific vote or by approval of the proxy statement
of the Employer in which such person is named as a nominee for

 

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director, without objection to such nomination) shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;

 

iii)           the consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Employer or the acquisition of assets of another corporation or other
transaction (“Business Combination”) excluding, however, such a Business
Combination pursuant to which (A) the individuals and entities who were the
beneficial owners of the Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or indirectly, more than
50% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the entity
resulting from such Business Combination (including, without limitation, an
entity that as a result of such transaction owns the Employer or all or
substantially all of the Employer’s assets either directly or through one or
more subsidiaries), (B) no Person (excluding any employee benefit plan (or
related trust) of the Employer, the Employer or such entity resulting from such
Business Combination) beneficially owns, directly or indirectly, more than 50%
of the combined voting power of the then outstanding securities entitled to vote
generally in the election of directors of the entity resulting from such
Business Combination and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

 

iv)          approval by the stockholders of the Employer of a complete
liquidation or dissolution of the Employer except pursuant to a Business
Combination that complies with clauses (A), (B) and (C) of subsection
(iii) above.

 

2.                                       “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended and in effect from time to time, and
any successor statute.

 

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