EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

BETWEEN

GOLDEN PHOENIX MINERALS, INC.

AND

DONALD R. PRAHL

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”), is dated as of August 14, 2006 (the
“Execution Date”) and is entered into by and between Golden Phoenix Minerals,
Inc., a Minnesota corporation (the “Company”) and Donald R. Prahl (the
“Executive”), collectively referred to herein as the “parties”.

 

WHEREAS, the Company wishes to employ Executive as of August 7, 2006 to serve as
its Vice President of Operations and Interim General Manager of the Ashdown Mine
as well as to perform other duties on behalf of the Company, as determined by
the Chairman of the Board (the “Chairman”) and/or Board of Directors (the
“Board”).

 

NOW, THEREFORE, for and in consideration of the mutual promises and conditions
made herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows.

 

ARTICLE I

EMPLOYMENT AND TERM OF EMPLOYMENT

 

1.1.        Employment and Term. The Company hereby employs Executive to render
full-time services to the Company, subject to Section 2.2 of the Agreement, and
except during vacation periods and reasonable periods of absence due to
sickness, personal injury or other disability, upon the terms and conditions set
forth below, from August 7, 2006 (the “Effective Date”) until the employment
relationship is terminated in accordance with the provisions of this Agreement
(the “Employment Term”).

1.2         Acceptance. Executive hereby accepts employment with the Company and
agrees to devote his full-time attention and best efforts to rendering the
services described below. Executive shall accept and follow the direction and
authority of the Board in the performance of his duties, and shall comply with
all existing and future regulations applicable to employees of the Company and
to the Company’s business.

 

ARTICLE II

DUTIES OF EMPLOYEE

 

2.1.       General Duties. Executive shall serve as the Vice President of
Operations and the Interim General Manager of the Ashdown Mine. In such
capacity, Executive shall do and perform all lawful services, acts, or other
things necessary or advisable to assist the Company. To the extent consistent
with the Company’s Articles of Incorporation, as amended (“Articles”) and
Bylaws, Executive shall have all powers, duties and responsibilities necessary
to carry out his duties, and such other powers and duties as the Chairman of the
Board and/or the Board may prescribe consistent with the Company’s Articles and
Bylaws.

 

2.2.        Exclusive Services. Except as set forth on Exhibit A hereto, it is
understood and agreed that Executive may not engage in any other business
activity during the Employment Term, whether or not for profit or other
remuneration, without the prior written consent of the Company; provided,
however, that Executive may (i) manage personal and family investments (ii)
engage in charitable, philanthropic, educational, religious, civic and similar
types of activities to the extent that such activities

 

 

 

do not materially hinder or otherwise interfere with the business of the Company
or any affiliate or subsidiary of the Company, or the performance of Executive’s
duties under this Agreement and (iii) subject to the approval of the Board,
serve as a director or as a member of an advisory board of another business
enterprise.

 

2.3.        Reporting Obligations. In connection with the performance of his
duties hereunder, Executive shall report directly to, and take direction from,
the Board.

 

ARTICLE III

COMPENSATION AND BENEFITS OF EMPLOYEE

 

 

3.1.

Annual Base Salary.

 

(a)          The Company shall pay Executive salary for the services to be
rendered by him during the Employment Term at the rate of One Hundred Thousand
and No/100 Dollars ($100,000) annually (prorated for any portion of a year),
subject to increases, if any, as the Board may determine in its sole discretion
after periodic review of Executive's performance of his duties hereunder not
less frequently than annually. Such base salary shall be payable in periodic
installments in accordance with the terms of the Company's regular payroll
practices in effect from the time during the term of this Agreement, but in no
event less frequently than once each month.

 

(b)         In the event that Executive achieves three (3) shipments of twelve
(12) superstacks, each carrying in excess of 3900 pounds of MoS2, within a
consecutive four (4) week period, the Company shall adjust the annual base
salary provided for in Section 3.1(a) to the rate of One Hundred Twenty Five
Thousand and No/100 Dollars ($125,000) annually (prorated for any portion of a
year).

 

(c)          In the event that Executive achieves six (6) shipments of twelve
(12) superstacks, each carrying in excess of 3,900 pounds MoS2, within a
consecutive four (4) week period, the Company shall adjust the annual base
salary provided for in Section 3.1(a) to the rate of One Hundred Fifty Thousand
and No/100 Dollars ($150,000) annually (prorated for any portion of a year).

 

3.2.        Bonuses. In addition to the Annual Base Salary provided for in
Section 3.1 of this Agreement, and other benefits provided to Executive
hereunder, the Company shall pay the Executive a performance bonus under an
Executive Bonus Plan to be approved by the Board.

 

3.3.        Expenses. The Company shall pay or reimburse Executive for all
reasonable, ordinary and necessary business expenses actually incurred or paid
by Executive in the performance of Executive’s services under this Agreement in
accordance with the expense reimbursement policies of the Company in effect from
time to time during the Employment Term, upon presentation of proper expense
statements or vouchers or such other written supporting documents as the Company
may reasonably require.

 

3.4.         Vacation. Executive shall be entitled to four (4) weeks paid
vacation for each calendar year (prorated for any portion of a year, as
applicable). Notwithstanding anything to the contrary in this Agreement,
vacation time shall cease to accrue beyond eight (8) weeks at any given time
during the Employment Term.

 

3.5.       General Employment Benefits. Except where expressly provided for
herein, Executive shall be entitled to participate in, and to receive the
benefits under, any pension, health, life, accident and disability insurance
plans or programs and any other employee benefit or fringe benefit plans that
the Company makes available generally to its employees, as the same may be in
effect from time to time during the Employment Term.

 

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3.6.         Location; Travel. In connection with his employment during the
Employment Term, unless otherwise agreed by Executive, Executive will be based
in Humboldt County, Nevada. Executive will undertake normal business travel on
behalf of the Company, the reasonable expenses of which will be paid by the
Company pursuant to Section 3.3 of this Agreement.

 

3.7.       Stock Grant. On the Effective Date, the Company hereby grants to
Executive, in the manner and subject to the conditions hereinafter provided, the
right, privilege and option to receive an aggregate of Two Hundred Thousand
(200,000) shares of the Company’s restricted common stock (the “Shares”). For
each pay period, until an aggregate 200,000 shares have been issued, the Company
shall distribute to the Executive a number of shares equal to $4,000, as valued
in US funds set at the closing share price as of the last trading day prior to
each distribution. Executive acknowledges that all of the Shares that have not
vested in accordance with the preceding sentence shall be forfeited and all
rights of Executive to such Shares shall terminate without further obligation on
the part of the Company. The Company agrees that it will use its best efforts to
register the Shares issued in connection with this Agreement pursuant to a
registration statement on Form S-8 under the Securities Act of 1933, as amended.

 

3.8.       Stock Options. On the Effective Date, Executive is herby granted
options to purchase Three Hundred Thousand (300,000) shares of the Company's
common stock (“Options”) pursuant to the terms and conditions of the Stock
Option Agreement to be agreed to by the parties. One third of the Options shall
vest immediately, and one third on the last day of each of the first and second
years of the Employment Term resulting in one hundred percent (100%) vesting on
the end of the second year of the Employment Term. The Options shall have a term
of no less than five (5) years from the date of each vesting within which they
must be exercised. The Options will be priced at $0.325, the closing price of
the Company’s common stock as traded on the OTC Bulletin Board on August 11,
2006. If the number of outstanding shares of Company stock are increased or
decreased, or such shares are exchanged for a different number or kind of shares
or securities of the Company through reorganization, merger, recapitalization,
reclassification, stock dividend, stock split, combination of shares, or other
similar transaction, the aggregate number of shares of Company stock subject to
any Options granted to Executive under this Agreement, or in any future grant of
options, shall be deemed proportionately adjusted. Such adjustment shall not
change the aggregate purchase price applicable to the unexercised portion of the
Options but shall have a proportionate adjustment in the price for each share
covered by the Option. The Company agrees that it will use its best efforts to
register the Options issued in connection with this Agreement pursuant to a
registration statement on Form S-8 under the Securities Act of 1933, as amended.

 

ARTICLE IV

TERMINATION OF EMPLOYMENT

 

4.1.        Termination. This Agreement may be terminated earlier as provided
for in this Article IV, or extended as set forth herein.

 

4.2.        Termination For Cause. The Company reserves the right to terminate
this Agreement for cause immediately upon: (a) Executive’s willful and continued
failure to substantially perform his duties with the Company (other than such
failure resulting from his incapacity due to physical or mental illness), (b)
Executive’s willful engagement in gross misconduct, as determined by the Board
in good faith, which is materially and demonstrably injurious to the Company;
(c) breach of this Agreement, or (d) Executive’s commission of a felony, or an
act of fraud against the Company or its affiliates; provided, however, the
Company may not terminate Executive’s employment for cause in the case of
Section 4.2(a), unless the Company has first provided Executive with written
notice, specifying in detail

 

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the act or acts alleged to constitute cause, and provided Executive with a
period of not less than fifteen (15) calendar days to cure the failure in the
manner specified in such notice. Executive shall not be entitled to any
severance benefits and all stock options of the Company granted to Executive,
which have not vested, shall be canceled upon termination for
cause.               

 

4.3.        Termination Without Cause. Notwithstanding anything to the contrary
in this Agreement, the Company reserves the right to terminate this Agreement at
any time upon thirty (30) days’ written notice to Executive, without cause,
subject to the express terms and provisions set forth in Sections 4.5 and 4.6.

 

4.4.       Voluntary Termination by Executive. Notwithstanding anything to the
contrary in this Agreement, Executive may terminate this Agreement at any time
upon thirty (30) days’ written notice to the Company, subject to the terms and
provisions below.

 

Except in the case of a termination for “good reason”, as set forth in Section
4.7 of this Agreement, the Company shall not be obligated to pay any severance
benefit to Executive if Executive terminates this Agreement pursuant to this
Section 4.4.

 

4.5.       Severance. In the event that during the Employment Term Executive is
terminated by the Company “without cause” (as set forth in Section 4.3), or
Executive terminates his employment for “good reason” (as set forth in Section
4.7) after February 10, 2007, Executive shall be provided or promptly be paid
(i) any accrued but unpaid salary, accrued but unused vacation time,
un-reimbursed expenses which otherwise would be reimbursed in the normal course
and vested benefits under any of the Company’s benefit plan in which Executive
is a participant, (ii) any bonus previously declared but not yet paid, and
(iii) a cash payment equal to twelve (12) months of Executive’s annual base
salary as provided for in Section 3.1 of this Agreement, paid in twelve (12)
equal monthly installments, less any taxes that must be withheld. In addition,
upon a termination under this Section 4.5, any portion of the Shares or Options
granted to Executive that have not vested shall be forfeited and Executive shall
have no rights thereunder.

 

4.6.        Change of Control. In the event that during the Employment Term
Executive is terminated by the Company or Executive terminates his employment
for “good reason,” as set forth in Section 4.7 of this Agreement, within twelve
(12) months following a “change of control” (as defined below) occurs after the
Effective Date (a “Change of Control Termination”), Executive shall promptly be
paid (i) any accrued but unpaid salary, accrued but unused vacation time,
un-reimbursed expenses which otherwise would be reimbursed in the normal course
and vested benefits under any of the Company’s benefit plan in which Executive
is a participant, (ii) any bonus previously declared but not yet paid, and
(iii) a cash payment equal to twenty four (24) months of Executive’s annual base
salary as provided for in Section 3.1 of this Agreement, paid in twenty four
(24) equal monthly installments, less any taxes that must be withheld. In
addition, upon a Change of Control Termination, any portion of any of the Shares
or Options granted but unvested shall be forfeited and Executive shall have no
rights thereunder. A “Change in Control Termination” will also include a
termination of Executive by the Company without cause or a termination by
Executive of his employment for “good reason,” as set forth in Section 4.7 of
this Agreement, in either case, following the commencement of any discussion
with a third person that ultimately results in a “change in control” (as defined
below).

For purposes of this Section 4.6, a “change of control” shall mean an event
involving one transaction or a series of related transactions in which (i) the
Company issues securities representing more than fifty percent (50%) of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended (“the “Exchange Act”), or any
successor provision) of the outstanding voting power of the then outstanding
securities entitled to vote generally in

 

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the election of directors (“Voting Stock”) of the Company to any individual,
firm, partnership, or other entity, including a “group” within the meaning of
Section 13(d)(3) of the Exchange Act (ii) the Company issues securities
representing more than fifty percent (50%) voting stock of the Company in
connection with a merger, consolidation or other business combination (other
than for purposes of reincorporation), (iii) the Company is acquired in a merger
or other business combination transaction in which the Company is not the
surviving corporation (other than a reincorporation), (iv) more than fifty
percent (50%) of the Company’s consolidated assets or earning power are sold or
transferred, or (v) the Board of the Company determines, in its sole and
absolute discretion, that there has been a change in control of the Company;
provided, however, that clauses (ii), (iii) and (iv), above, will constitute a
“change in control” only if all or substantially all of the individuals and
entities who were the beneficial owners of Voting Stock of the Company
immediately prior to such merger, consolidation or other business combination or
sale or transfer of earning power or assets (each, a “Business Combination”)
beneficially own less than 50% of the combined voting power of the then
outstanding shares of Voting Stock of the entity resulting from such Business
Combination (including, without limitation, an entity which as a result of such
transaction owns the Company or all or substantially all of the Company’s
earning power or assets either directly or through one or more subsidiaries).

 

4.7.       Good Reason. Executive may terminate his employment for “good reason”
after giving the Company detailed written notice thereof, if the Company shall
have failed to cure the event or circumstance constituting “good reason” within
ten business days after receiving such notice. Good reason shall mean the
occurrence of any of the following without the written consent of Executive: (i)
the assignment to Executive of duties inconsistent with this Agreement or a
change in his reporting obligations, positions, titles or authority; (ii) any
failure by the Company to comply with Article III hereof in any material way;
(iii) the failure of the Company to comply with and satisfy Section 6.2 of this
Agreement; (iv) the relocation of the principal place where Executive regularly
performs services for the Company outside of the Humbolt County, Nevada area; or
(v) any material breach of this Agreement by the Company. Executive’s continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any act or failure to act constituting “good reason” hereunder.

 

4.8.        Disability. If Executive becomes permanently and totally disabled,
this Agreement shall be terminated. Executive shall be deemed permanently and
totally disabled if he is unable to engage in the activities required by this
Agreement by reason of any medically determinable physical or mental impairment,
as confirmed by three independent physicians, which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months. Upon termination due to disability, Executive
shall promptly be paid (i) any accrued but unpaid salary, accrued but unused
vacation time, unreimbursed expenses which otherwise would be reimbursed in the
normal course and vested benefits under any of the Company’s benefit plans in
which Executive is a participant, (ii) any bonus previously declared but not yet
paid, and (iii) a lump sum payment equal to his annual base salary, as contained
in Section 3.1 of this Agreement, or Executive’s then current rate of
compensation, whichever is greater. In addition, upon termination due to
disability, any portion of any of the Shares or Options granted to Executive
that are not then vested shall vest and all Shares and Options shall be
exercisable until ninety (90) days after the termination. This Section 4.8 will
not limit the entitlement of Executive to any other benefits then available to
Executive under any plan or program of the Company.

4.9.        Death. If Executive dies during the term of this Agreement, this
Agreement shall be terminated on the last day of the calendar month of his death
subject to the express terms and provisions below. Upon termination due to
death, the designated beneficiary, as provided in Section 6.8 below, or the
estate or representative of Executive, shall promptly be paid (i) any accrued
but unpaid salary, accrued

 

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but unused vacation time, unreimbursed expenses which otherwise would be
reimbursed in the normal course and vested benefits under any of the Company’s
benefit plans in which Executive is a participant, (ii) any bonus previously
declared but not yet paid, and (iii) a lump sum payment equal to Executive’s
annual base salary, as contained in Section 3.1 of this Agreement, or
Executive’s then current rate of compensation, whichever is greater. In
addition, upon termination due to death, any portion of any of the Shares or
Options granted to Executive that are not then vested shall become vested and
all Shares and Options shall be exercisable until ninety (90) days after death.
This Section 4.9 will not limit the entitlement of Executive’s estate or
beneficiaries to any death or other benefits then available to Executive under
any life insurance, stock ownership, stock options, or other benefit plan or
policy that is maintained by the Company for Executive’s benefit.

 

4.10.     Effect of Termination. Except as expressly provided for in this
Agreement, the termination of employment shall not impair any obligation that
accrued prior to termination, nor shall it excuse the performance of any
obligation which is required or contemplated hereunder to be performed after
termination, and any such obligation shall survive the termination of employment
and this Agreement.

 

ARTICLE V

COVENANTS AND REPRESENTATIONS OF EMPLOYEE

 

5.1.        Unfair and Non-Competition. Executive acknowledges that he will have
access at the highest level to, and the opportunity to acquire knowledge of, the
Company’s business plans, trade secrets and other confidential and proprietary
information from which the Company may derive economic or competitive advantage,
and that he is entering into the covenants and representations in this Article V
in order to preserve the goodwill and going concern value of the Company, and to
induce the Company to enter into this Agreement. Executive agrees not to compete
with the Company or to engage in any unfair competition with the Company during
the Employment Term. For purposes of this Agreement, the phrase “compete with
the Company,” or the substantial equivalent thereof, means that Executive,
either alone or as a partner, member, director, employee, shareholder or agent
of any other business, or in any other individual or representative capacity,
directly or indirectly owns, manages, operates, controls, or participates in the
ownership, management, operation or control of, or works for or provides
consulting services to, or permits the use of his name by, or lends money to,
any business or activity which is or which becomes, at the time of the acts or
conduct in question, directly or indirectly competitive with the development,
financing and/or marketing of the products, proposed products or services of the
Company. During the Employment Term, Executive shall not directly or indirectly
acquire any stock or interest in any corporation, partnership, or other business
entity that competes, directly or indirectly, with the business of the Company
without obtaining the prior written consent of the Company. Notwithstanding the
foregoing, this Section 5.1 shall not apply to the ownership or acquisition of
stock or an interest representing less than a 5% beneficial interest in a
corporation that is obligated to file reports with the Securities and Exchange
Commission pursuant to the Exchange Act.

 

In addition, Executive agrees to treat the Company respectfully and
professionally and not disparage the Company (or the Company’s party’s officers
or directors) in any manner likely to be harmful to the Company or its business,
business reputation or personal reputation. Furthermore, Executive agrees not to
interfere with any of the Company’s contractual obligations.

 

5.2.        Confidential Information. During the Employment Term and thereafter,
Executive agrees to keep secret and to retain in the strictest confidence all
material confidential matters which relate to the Company or its “affiliate” (as
that term is defined in the Exchange Act), including, without limitation, trade
secrets, business plans, financial projections and reports, business strategies,
internal

 

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operating procedures, and other confidential business information from which the
Company derives an economic or competitive advantage, or from which the Company
might derive such advantage in its business, whether or not it is labeled
“secret” or “confidential” or some similar term, and not to intentionally
disclose any such information to anyone outside of the Company, whether during
or after the Employment Term, except in connection with pursuing in good faith
the interests and business of the Company. The foregoing restrictions and
obligations under this Section 5.2 will not apply (i) to any confidential
information that is or becomes generally available to the public or generally
known to persons engaged in businesses similar to or related to that of the
Company, other than as a result of a disclosure by Executive, (ii) if Executive
is required by law to make disclosure, or (iii) to disclosure to any director of
the Company. The Company may waive application of the foregoing restrictions and
obligations in its sole discretion from time to time. Executive will use only
such confidential information for purposes of performing its duties under this
Agreement.

 

5.3.        Non-Solicitation of Employees. Executive and any entity controlled
by him or with which he is associated (as the terms “control” and “associate”
are defined in the Exchange Act) shall not, during the Employment Term and for a
term of two (2) years thereafter, directly or indirectly solicit, interfere
with, offer to hire or induce any person who is or was an officer or employee of
the Company or any affiliate (as the term “affiliate” is defined in the Exchange
Act) (other than secretarial personnel) to discontinue his or her relationship
with the Company or an affiliate of the Company, in order to accept employment
by, or enter into a business relationship with, any other entity or person.
(These acts are hereinafter referred to as the “prohibited acts of
solicitation.”) The foregoing restriction, however, shall not apply to any
business with which Executive may become associated after the Employment Term.

 

5.4.        Return of Property. Upon termination of employment, and at the
request of the Company, Executive agrees to promptly deliver to the Company all
Company or affiliate memoranda, notes, records, reports, manuals, drawings,
designs, computer files in any media, and any other documents (including
extracts and copies thereof) relating to the Company or its affiliates, and all
other property of the Company. Upon termination, Executive shall cease to use
all such materials and information set forth under Section 5.2.

 

5.5.        Inventions. All processes, inventions, patents, copyrights,
trademarks, and other intangible rights that may be conceived or developed by
Executive, either alone or with others, during the Employment Term, whether or
not conceived or developed during Executive’s working hours, and with respect to
which the equipment, supplies, facilities or trade secret information of the
Company was used, or that relate at the time of conception or reduction to
practice of the invention to the business of the Company, or to the Company’s
actual or demonstrably anticipated research or development, or that result from
any work performed by Executive for the Company, shall be the sole property of
the Company. Upon the request of the Company, Executive shall disclose to the
Company all inventions or ideas conceived during the Employment Term, whether or
not the property of the Company under the terms of this provision, provided that
such disclosure shall be received by the Company in confidence. Upon the request
of the Company, Executive shall execute all documents, including patent
applications and assignments, required by the Company to establish the Company’s
rights under this provision.

 

5.6.        Representations. Executive represents and warrants to the Company
that he has full power to enter into this Agreement and perform his duties
hereunder, and that his execution and delivery of this Agreement, he has no
outstanding agreement, whether oral or written or any obligation that is or may
be in conflict with any of the provisions of this Agreement or that would
preclude Executive from complying with the provisions of this Agreement, and the
performance of his duties shall not result in a breach of, or constitute a
default under, any agreement or understanding, whether oral or written,
including, without limitation, any restrictive covenant or confidentiality
agreement, to which he is a party or by which he may be bound. Executive further
represents and warrants that he has not misappropriated

 

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any confidential information and/or trade secrets of any third party that he
intends to use in the performance of his duties under this Agreement. Executive
further agrees that he will not enter into any conflicting agreement.

 

5.7.        Non-Payment Upon Non-Compliance. Should Executive breach any one of
the covenants set forth in this Article V, the Company shall have no obligation
to make the payments or to provide Executive the benefits described in Sections
4.5 and 4.6 above, in addition to all other rights and remedies the Company may
have available at law or in equity. The Company shall provide written notice to
Executive, ten (10) days prior to an expected payment, of the breach of a
covenant and the ensuing non-payment thereof; provided, however, that if the
Company learns of the breach without sufficient time to provide ten (10) days
notice, the Company shall provide written notice as soon thereafter as
practicable.

 

Notwithstanding the foregoing, Executive shall indemnify and hold harmless the
Company to the fullest extent from and against any losses, claims, damages or
liabilities which arise out of any breach of the representations and warranties
set forth in Section 5.6., and any matter relating to Executive’s prior
employer(s). Executive shall reimburse the Company for the amounts provided for
herein on demand as such expenses are incurred by the Company.

 

ARTICLE VI

MISCELLANEOUS PROVISIONS

 

6.1.        Notices. All notices to be given by either party to the other shall
be in writing and may be transmitted by personal delivery, facsimile
transmission, overnight courier or mail, registered or certified, postage
prepaid with return receipt requested; provided, however, that notices of change
of address or telex or facsimile number shall be effective only upon actual
receipt by the other party. Notices shall be delivered at the following
addresses, unless changed as provided for herein.

 

 

To Executive:

Donald R. Prahl

 

 

5301 Williams Road

Silver Bay, MN 55614

 

Facsimile: 360.653.9838

 

 

To the Company:

Board of Directors

 

 

Golden Phoenix Minerals, Inc.

 

 

1675 East Prater Way, Suite 102

 

Sparks, NV 89434

 

 

Facsimile: (775) 853-5010

 

 

 

With a copy to:

Scott E. Bartel

 

 

Bullivant Houser Bailey PC

 

1415 L Street, Suite 1000

 

 

Sacramento, CA 95814

 

 

Facsimile (916) 930-2501

 

 

6.2.        No Assignment, In General. Except as provided below, this Agreement,
and the rights and obligations of the parties, may not be assigned by either
party without the prior written consent of the other party.

 

6.3.        Entire Agreement. This Agreement and the documents delivered
pursuant hereto supersedes any and all other agreements or understandings of the
parties, either oral or written, with

 

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respect to the employment of Executive by the Company, and contains the complete
and final agreement and understanding of the parties with respect thereto.
Executive acknowledges that no representation, inducements, promises, or
agreements, oral or otherwise, have been made by the Company or any of its
officers, directors, employees or agents, which are not expressed herein, and
that no other agreement shall be valid or binding on the Company.

 

6.4.        Amendments and Modifications. This Agreement may be amended or
modified only by a writing signed by both parties hereto.

 

6.5.       Withholding Taxes. All amounts payable under this Agreement, whether
such payment is to be made in cash or other property, including without
limitation stock of the Company, shall be subject to withholding for Federal,
state and local income taxes, employment and payroll taxes, and other legally
required withholding taxes and contributions to the extent appropriate in the
determination of the Company, and Executive agrees to report all such amounts as
ordinary income on his personal income tax returns and for all other purposes,
as called for.

 

6.6         Severability. If any provision of this Agreement is held to be
invalid or unenforceable by any judgment of a tribunal of competent
jurisdiction, the remaining provisions and terms of this Agreement shall not be
affected by such judgment, and this Agreement shall be carried out as nearly as
possible according to its original terms and intent and, to the full extent
permitted by law, any provision or restrictions found to be invalid shall be
amended with such modifications as may be necessary to cure such invalidity, and
such restrictions shall apply as so modified, or if such provisions cannot be
amended, they shall be deemed severable from the remaining provisions and the
remaining provisions shall be fully enforceable in accordance with law.

 

6.7.        Effect of Waiver. The failure of either party to insist on strict
compliance with any provision of this Agreement by the other party shall not be
deemed a waiver of such provision, or a relinquishment of any right thereunder,
or to affect either the validity of this Agreement, and shall not prevent
enforcement of such provision, or any similar provision, at any time.

 

6.8.        Designation of Beneficiary. If Executive shall die before receipt of
all payments and benefits to which he is entitled under this Agreement, payment
of such amounts or benefits in the manner provided herein shall be made to such
beneficiary as he shall have designated in writing filed with the Secretary of
the Company or, in the absence of such designation, to his estate or personal
representative.

 

6.9.        Attorneys Fees. In any proceeding brought to enforce any provision
of this Agreement, or to seek damages for a breach of any provision hereof, or
when any provision hereof is validly asserted as a defense, the prevailing party
will be entitled to receive from the other party all reasonable attorney’s fees
and costs in connection therewith.

 

6.10.     Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Nevada, without regard to its conflict
of laws principles.

 

6.11.     Counterparts.                This Agreement may be executed in one or
more counterparts, each of which, shall be deemed to be an original, but all of
which together shall constitute one and the same instrument. For the purpose of
proving the authenticity of this Agreement, facsimile signature shall be treated
the same as original signatures.

 

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9

 

 

 

                IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.

 

COMPANY:

GOLDEN PHOENIX MINERALS, INC.

 

 

By: _____________________________                      

Name: David A. Caldwell

Title: President and COO

 

 

EXECUTIVE:                                                     

_____________________________                      

Donald R. Prahl

 

 

 

 

 

 

Exhibit A

List of boards of directors on which Executive currently serves.