Exhibit 10.50

 

CHANGE OF CONTROL SEVERANCE AGREEMENT

 

This Change of Control Severance Agreement is entered into between GENERAL MOLY,
INC., a Delaware corporation (the “Company”) and Lee M. Shumway (“Employee”) to
be effective as of March 16, 2009 (the “Effective Date”).  Certain capitalized
terms used in this Agreement are defined in Section 4 below.

 

RECITALS

 

A.            The Company has retained Employee to perform services that are
important to the long-term success of the Company.

 

B.            The Board of Directors of the Company believes that it is in the
best interests of the Company and its shareholders to provide Employee with
enhanced financial security and sufficient encouragement to remain with the
Company during this stage of the Company’s operations notwithstanding the
employment uncertainties related to a possible Change of Control of the Company.

 

C.            By execution of this Agreement, Employee and the Company agree
that this Agreement contains the entire agreement between the parties hereto and
supersedes all prior agreements (oral or written), negotiations and discussions
between the Company and Employee regarding the obligations of the Company upon a
Change of Control of the Company.

 

AGREEMENT

 

In consideration of the foregoing and the mutual promises and covenants set
forth below, the parties agree as follows:

 

1.             TERM OF AGREEMENT.  THE TERM OF THIS AGREEMENT SHALL COMMENCE AS
OF THE EFFECTIVE DATE AND SHALL TERMINATE AUTOMATICALLY ON THE EARLIER OF
(A) DECEMBER 31, 2011 OR (B) THE DATE EMPLOYEE TERMINATES EMPLOYMENT WITH THE
COMPANY (THE “TERM”) UNLESS THE PARTIES, PRIOR TO THE END OF THE TERM, ENTER
INTO A WRITTEN AGREEMENT RENEWING OR EXTENDING THIS AGREEMENT.

 

2.             SEVERANCE PAY.  IF A CHANGE OF CONTROL EVENT OCCURS, AND AS A
RESULT OF THE CLOSING OF THE CHANGE OF CONTROL, OR DURING THE ONE-YEAR PERIOD
FOLLOWING THE CLOSING OF THE CHANGE OF CONTROL (I) THE COMPANY (OR ITS
SUCCESSOR) TERMINATES EMPLOYEE’S EMPLOYMENT WITHOUT CAUSE OR (II) EMPLOYEE
TERMINATES EMPLOYMENT FOR GOOD REASON DURING SUCH ONE YEAR PERIOD, EMPLOYEE WILL
BE ENTITLED TO SEVERANCE PAY.  TO BE ENTITLED TO SEVERANCE PAY, EMPLOYEE MUST
FIRST EXECUTE A BINDING TERMINATION RELEASE AGREEMENT IN A FORM SPECIFIED BY THE
COMPANY.  SEVERANCE PAY WILL BE IN ADDITION TO ANY ACCRUED BUT UNPAID SALARY OR
VACATION EARNED THROUGH THE DATE OF EMPLOYEE’S TERMINATION.

 

The amount of Employee’s Severance Pay will be determined as the sum of (a) an
amount equal to two (2) times Employee’s annual base salary (as in effect
immediately prior to the closing of the Change of Control), plus (b) an amount
equal to 100% of Employee’s target annual bonus for one year (as in effect
immediately prior to the closing of the Change of Control), if

 

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any, less applicable withholdings. In addition, all outstanding stock-based
awards granted to Employee prior to the Change of Control shall have their
vesting and exercisability accelerated in full upon the effective date of the
closing of the Change of Control regardless of whether Employee has terminated
employment.

 

3.                                       TIME AND FORM OF PAYMENT.  THE
SEVERANCE PAY SHALL BE PAID IN A LUMP SUM, ON A DATE DETERMINED BY THE COMPANY
(OR ITS SUCCESSOR), PROVIDED THE RELEASE HAS BEEN EXECUTED AND IS EFFECTIVE AND
NON-REVOCABLE, WITHIN 60 DAYS FOLLOWING EMPLOYEE’S SEPARATION FROM SERVICE,
EXCEPT AS REQUIRED BY SECTION 5(A).

 

4.                                       CERTAIN DEFINITIONS.  FOR PURPOSES OF
THIS AGREEMENT THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:

 

(A)           “CAUSE” MEANS, UNLESS OTHERWISE EXPRESSLY DEFINED IN AN EMPLOYMENT
OR OTHER AGREEMENT BETWEEN THE COMPANY AND EMPLOYEE, A WILLFUL FAILURE TO
PERFORM EMPLOYEE’S DUTIES, INSUBORDINATION, THEFT, DISHONESTY (AS SUCH TERMS ARE
DEFINED BY THE COMPANY IN GOOD FAITH), CONVICTION OF A FELONY OR ANY OTHER
WILLFUL CONDUCT THAT IS MATERIALLY DETRIMENTAL TO THE COMPANY OR SUCH OTHER
CAUSE AS THE COMPANY IN GOOD FAITH REASONABLY DETERMINES PROVIDES CAUSE FOR THE
DISCHARGE OF EMPLOYEE.

 

(B)                                 “CHANGE OF CONTROL” MEANS:

 

(1)           THE ACQUISITION BY ANY INDIVIDUAL, ENTITY OR GROUP (WITHIN THE
MEANING OF SECTION 13(D)(3) OR 14(D)(2) OF THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED (THE “EXCHANGE ACT”)) (A “PERSON”) OF BENEFICIAL OWNERSHIP (WITHIN
THE MEANING OF RULE 13D-3 PROMULGATED UNDER THE EXCHANGE ACT) OF 50% OR MORE OF
EITHER (A) THE THEN-OUTSTANDING SHARES OF COMMON STOCK OF THE COMPANY (THE
“OUTSTANDING COMPANY COMMON STOCK”) OR (B) THE COMBINED VOTING POWER OF THE
THEN-OUTSTANDING VOTING SECURITIES OF THE COMPANY ENTITLED TO VOTE GENERALLY IN
THE ELECTION OF DIRECTORS (THE “OUTSTANDING COMPANY VOTING SECURITIES”);
PROVIDED, HOWEVER, THAT, FOR PURPOSES OF THIS PARAGRAPH (1), THE FOLLOWING
ACQUISITIONS SHALL NOT CONSTITUTE A CHANGE OF CONTROL: (I) ANY ACQUISITION
DIRECTLY FROM THE COMPANY, (II) ANY ACQUISITION BY THE COMPANY, OR (III) ANY
ACQUISITION BY ANY EMPLOYEE BENEFIT PLAN (OR RELATED TRUST) SPONSORED OR
MAINTAINED BY THE COMPANY OR ANY AFFILIATED COMPANY; OR

 

(2)           CONSUMMATION OF A REORGANIZATION, MERGER, STATUTORY SHARE EXCHANGE
OR CONSOLIDATION OR SIMILAR CORPORATE TRANSACTION INVOLVING THE COMPANY OR THE
ACQUISITION OF ASSETS OR STOCK OF ANOTHER ENTITY BY THE COMPANY (EACH, A
“BUSINESS COMBINATION”), IN EACH CASE UNLESS, FOLLOWING SUCH BUSINESS
COMBINATION, (A) ALL OR SUBSTANTIALLY ALL OF THE INDIVIDUALS AND ENTITIES THAT
WERE THE BENEFICIAL OWNERS OF THE OUTSTANDING COMPANY COMMON STOCK AND THE
OUTSTANDING COMPANY VOTING SECURITIES IMMEDIATELY PRIOR TO SUCH BUSINESS
COMBINATION BENEFICIALLY OWN, DIRECTLY OR INDIRECTLY, MORE THAN 50% OF 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 CORPORATION RESULTING FROM SUCH BUSINESS
COMBINATION (INCLUDING, WITHOUT LIMITATION, A CORPORATION THAT, AS A RESULT OF
SUCH TRANSACTION, OWNS THE COMPANY OR ALL OR SUBSTANTIALLY ALL OF THE COMPANY’S
ASSETS EITHER DIRECTLY OR THROUGH ONE OR MORE SUBSIDIARIES) IN SUBSTANTIALLY THE
SAME PROPORTIONS AS THEIR OWNERSHIP IMMEDIATELY PRIOR TO SUCH BUSINESS
COMBINATION OF THE OUTSTANDING COMPANY

 

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COMMON STOCK AND THE OUTSTANDING COMPANY VOTING SECURITIES, AS THE CASE MAY BE,
AND (B) NO PERSON (EXCLUDING ANY CORPORATION RESULTING FROM SUCH BUSINESS
COMBINATION OR ANY EMPLOYEE BENEFIT PLAN (OR RELATED TRUST) OF THE COMPANY OR
SUCH CORPORATION RESULTING FROM SUCH BUSINESS COMBINATION) BENEFICIALLY OWNS,
DIRECTLY OR INDIRECTLY, 50% OR MORE OF, RESPECTIVELY, THE THEN-OUTSTANDING
SHARES OF COMMON STOCK OF THE CORPORATION RESULTING FROM SUCH BUSINESS
COMBINATION OR THE COMBINED VOTING POWER OF THE THEN-OUTSTANDING VOTING
SECURITIES OF SUCH CORPORATION, EXCEPT TO THE EXTENT THAT SUCH OWNERSHIP EXISTED
PRIOR TO THE BUSINESS COMBINATION; OR

 

(3)           INDIVIDUALS WHO, AS OF THE DATE HEREOF, CONSTITUTE THE BOARD OF
DIRECTORS OF THE COMPANY (THE “INCUMBENT BOARD”) CEASE FOR ANY REASON TO
CONSTITUTE AT LEAST A MAJORITY OF THE BOARD; PROVIDED, HOWEVER, THAT ANY
INDIVIDUAL BECOMING A DIRECTOR SUBSEQUENT TO THE DATE HEREOF WHOSE ELECTION, OR
NOMINATION FOR ELECTION BY THE COMPANY’S SHAREHOLDERS, WAS APPROVED BY A VOTE OF
AT LEAST A MAJORITY OF THE DIRECTORS THEN COMPRISING THE INCUMBENT BOARD 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; OR

 

(4)           A SALE OR DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE OPERATING
ASSETS OF THE COMPANY TO AN UNRELATED PARTY; OR

 

(5)           APPROVAL BY THE SHAREHOLDERS OF THE COMPANY OF A COMPLETE
LIQUIDATION OR DISSOLUTION OF THE COMPANY.

 

(C)                                  “GOOD REASON” MEANS A MATERIAL NEGATIVE
CHANGE IN THE SERVICE RELATIONSHIP AS DETERMINED IN GOOD FAITH BY EMPLOYEE OF
THE OCCURRENCE OF ANY OF THE FOLLOWING CONDITIONS, WITHOUT EMPLOYEE’S EXPRESS
WRITTEN CONSENT (I) A MATERIAL DIMINUTION IN EMPLOYEE’S BASE COMPENSATION;
(II) A MATERIAL DIMINUTION IN EMPLOYEE’S AUTHORITY, DUTIES, OR RESPONSIBILITIES;
(III) A MATERIAL CHANGE OF MORE THAN 50 MILES IN THE GEOGRAPHIC LOCATION AT
WHICH EMPLOYEE IS REQUIRED TO PERFORM THE SERVICES; OR (IV) ANY ACTION OR
INACTION THAT CONSTITUTES A MATERIAL BREACH BY THE COMPANY (OR ITS SUCCESSOR) OF
ANY AGREEMENT UNDER WHICH EMPLOYEE PROVIDES SERVICES TO THE COMPANY (OR ITS
SUCCESSOR).  EMPLOYEE SHALL PROVIDE WRITTEN NOTICE OF GOOD REASON TO THE COMPANY
(OR ITS SUCCESSOR) WITHIN 30 DAYS OF THE INITIAL OCCURRENCE OF THE CONDITION.

 

5.                                      SECTION 409A; DEFERRED COMPENSATION.

 

(A)                                  DELAY IN PAYMENT.  NOTWITHSTANDING ANYTHING
IN THIS AGREEMENT TO THE CONTRARY, IF EMPLOYEE IS DEEMED BY THE COMPANY (OR ITS
SUCCESSOR) BE A “SPECIFIED EMPLOYEE,” THE SEVERANCE PAY SHALL NOT BE PAID UNTIL
THE DATE WHICH IS THE FIRST BUSINESS DAY FOLLOWING THE SIX-MONTH PERIOD AFTER
EMPLOYEE’S SEPARATION FROM SERVICE (OR IF EARLIER, EMPLOYEE’S DEATH).  SUCH
DELAY IN PAYMENT SHALL ONLY BE EFFECTED TO THE EXTENT REQUIRED TO AVOID ADVERSE
TAX TREATMENT TO EMPLOYEE UNDER SECTION 409A OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (“SECTION 409A”).  ANY PAYMENT NOT SUBJECT TO SUCH DELAY, SHALL
BE PAID PURSUANT TO THE TIME AND FORM OF PAYMENT SPECIFIED ABOVE.  ANY
COMPENSATION WHICH WOULD HAVE OTHERWISE BEEN PAID

 

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DURING THE DELAY PERIOD SHALL BE PAID TO EMPLOYEE (OR EMPLOYEE’S BENEFICIARY OR
ESTATE) IN A LUMP SUM PAYMENT ON THE FIRST BUSINESS DAY FOLLOWING THE EXPIRATION
OF THE DELAY PERIOD.

 

(B)           KEY DEFINITIONS.  FOR PURPOSES OF THE AGREEMENT, THE TERM
“TERMINATION OF EMPLOYMENT” SHALL MEAN “SEPARATION FROM SERVICE” AS DEFINED IN
SECTION 409A.

 

(C)           INTERPRETATION.  THE PARTIES INTEND THAT ALL PAYMENTS PAYABLE
UNDER THIS AGREEMENT WILL NOT BE SUBJECT TO THE ADDITIONAL TAX IMPOSED BY
SECTION 409A, AND THE PROVISIONS OF THIS AGREEMENT SHALL BE CONSTRUED AND
ADMINISTERED CONSISTENT WITH SUCH INTENT.  TO THE EXTENT SUCH POTENTIAL PAYMENTS
COULD BECOME SUBJECT TO SECTION 409A, THE COMPANY (OR ITS SUCCESSOR) AND
EMPLOYEE AGREE TO WORK TOGETHER TO MODIFY THE AGREEMENT TO THE MINIMUM EXTENT
NECESSARY TO REASONABLY COMPLY WITH THE REQUIREMENTS OF SECTION 409A, PROVIDED
THAT THE COMPANY (OR ITS SUCCESSOR) SHALL NOT BE REQUIRED TO PAY EMPLOYEE’S
TAXES OR ADDITIONAL COMPENSATION.

 

6.             AT-WILL EMPLOYMENT.  THIS AGREEMENT DOES NOT MODIFY EMPLOYEE’S
STATUS AS AN EMPLOYEE-AT-WILL. THE PARTIES ACKNOWLEDGE THAT EMPLOYEE IS AN
EMPLOYEE-AT-WILL AND THAT EMPLOYEE’S SERVICES MAY BE TERMINATED BY THE COMPANY
AT ANY TIME WITH OR WITHOUT CAUSE.

 

7.             RIGHTS NOT ALIENABLE.  ANY RIGHTS PROVIDED TO EMPLOYEE UNDER THE
TERMS OF THIS AGREEMENT SHALL NOT BE ASSIGNED, TRANSFERRED OR ALIENATED, EXCEPT
BY WILL OR PURSUANT TO THE LAWS OF DESCENT AND DISTRIBUTION.

 

8.             ENTIRE AGREEMENT.  THIS AGREEMENT CONTAINS THE ENTIRE AGREEMENT
BETWEEN THE PARTIES HERETO AND SUPERSEDES ALL PRIOR AGREEMENTS (ORAL OR
WRITTEN), NEGOTIATIONS AND DISCUSSIONS BETWEEN THE COMPANY AND EMPLOYEE.

 

9.             AMENDMENT.  THIS AGREEMENT MAY ONLY BE AMENDED BY WRITTEN
AGREEMENT OF THE COMPANY AND EMPLOYEE.

 

10.           GOVERNING LAW.  THIS AGREEMENT SHALL BE ADMINISTERED, INTERPRETED
AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF COLORADO,
WITHOUT REGARD TO ITS PROVISIONS ON CONFLICT OF LAWS.

 

[REMAINDER OF PAGE INTENTIONALLY BLANK — SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set
forth below to be effective as of the Effective Date.

 

 

 

GENERAL MOLY, INC.

 

 

The Company

 

 

 

 

 

 

 

 

By:

/s/ David Chaput

 

 

 

 

 

 

Date:

 

 

 

 

 

EMPLOYEE

 

 

 

 

 

 

 

 

 

 

By:

/s/ Lee M. Shumway

 

 

 

Lee M. Shumway

 

 

 

 

 

 

Date:

3/16/09

 

 

[Signature Page to Change Of Control Severance Agreement]

 

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