Exhibit 10.1.2

AGREEMENT BETWEEN

CANYON RESOURCES CORPORATION

AND

JAMES K. B. HESKETH

MARCH 1, 2005

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

                      1.   Certain Definitions     1  
 
                        (a)   “Effective Date”     1  
 
                        (b)   “Change of Control Period”     1  
 
                    2.   Change of Control     1  
 
                    3.   Employment Period     2  
 
                    4.   Terms of Employment     2  
 
                        (a)   Position and Duties     2  
 
                        (b)   Compensation     2  
 
                   

      (i)   Base Salary     2  
 
                   

      (ii)   Incentive, Savings and Retirement Plans     2  
 
                   

      (iii)   Welfare Benefit Plans     2  
 
                   

      (iv)   Expenses     3  
 
                   

      (v)   Fringe Benefits     3  
 
                   

      (vi)   Vacation     3  
 
                    5.   Termination of Employment     3  
 
                        (a)   Death or Disability     3  
 
                        (b)   Cause     3  
 
                        (c)   Good Reason     3  
 
                        (d)   Notice of Termination     4  
 
                        (e)   Date of Termination     4  
 
                    6.   Obligations of the Company upon Termination     5  
 
                        (a)   Death     5  
 
                        (b)   Disability     5  
 
                        (c)   Cause; Other than for Good Reason     5  
 
                        (d)   Good Reason; Other than For Cause or Disability  
  5  
 
                    7.   Non-exclusivity of Rights     6  
 
                    8.   Full Settlement     6  
 
                    9.   Confidential Information     6  
 
                    10.   Successors     6  
 
                    11.   Miscellaneous     7  

 

--------------------------------------------------------------------------------

 

AGREEMENT

          AGREEMENT by and between Canyon Resources Corporation, a Delaware
corporation (the “Company”) and James K. B. Hesketh (the “Executive”), dated as
of the 1st day of March 2005.

          The Board of Directors of the Company (the “Board”), has determined
that it is in the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company. The Board believes it is imperative to diminish
the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control,
and to provide the Executive with compensation and benefits arrangements upon a
Change of Control which ensure that the compensation and benefits expectations
of the Executive will be satisfied and which are competitive with those of other
corporations. Therefore, in order to accomplish these objectives and to
adequately reward Executive, the Board has caused the Company to enter into this
Agreement.

          NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

          1. Certain Definitions. The “Effective Date” shall be the first date
upon which a “Change of Control” (as defined in Section 2) occurs.

          2. Change of Control. For the purpose of this Agreement, a “Change of
Control” shall mean:

               (a) The acquisition, whether by purchase, share exchange, merger,
amalgamation, etc., or other property exchange, 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”)] of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of 30% or more of
either (i) the then outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Company Voting Securities”), provided, however,
that any acquisition by the Company or any of its subsidiaries, or any employee
benefit plan (or related trust) sponsored or maintained by the Company or any of
its subsidiaries, shall not constitute a Change of Control; or

               (b) Individuals who, as of the date hereof, constitute the Board
(the Incumbent Board”) cease for any reason to constitute at least a majority of
the Board, provided 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 is in connection
with an actual or threatened election contest relating to the election of the
Directors of the Company (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act); or

               (c) (i) a complete liquidation or dissolution of the Company or
(ii) sale or other disposition of all or substantially all of the assets of the
Company other than to an Affiliated Company. As used herein, Affiliated Company
means any company controlled by, controlling or under common control with the
Company.

1

--------------------------------------------------------------------------------

 

          3. Employment Period. Prior to the Effective Date, this Agreement
shall be binding upon both parties, but shall not be effective, and Executive
and the Company shall not have any obligations to the other hereunder. After the
Effective Date, the Company hereby agrees to continue the Executive in its
employ, and the Executive hereby agrees to remain in the employ of the Company,
for a period of twelve (12) months commencing on the Effective Date during the
first two years of employment and eighteen (18) months thereafter (the
“Employment Period”). (The 18 months provision subject to further review by the
Board of Directors.)

          4. Terms of Employment.

               (a) Position and Duties.

                    (i) During the Employment Period, the Executive’s position,
authority, duties and responsibilities shall be at least commensurate in all
material respects with the most significant of those held, exercised and
assigned at any time during the 90-day period immediately preceding the
Effective Date.

                    (ii) During the Employment Period, but excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business hours to
the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive’s reasonable best efforts to perform faithfully and efficiently such
responsibilities.

               (b) Compensation.

                    (i) Base Salary. During the Employment Period, the Executive
shall receive an annual base salary (“Annual Base Salary”) (which shall be paid
in equal bi-monthly installments) at least equal to twelve times the highest
monthly base salary paid or payable to the Executive by the Company and its
affiliated companies in respect of the twelve-month period immediately preceding
the month in which the Effective Date occurs. As used in this Agreement, the
term “Affiliated Compan(ies)” includes any company controlled by, controlling or
under common control with the Company.

                    (ii) Incentive, Stock Option, Savings and Retirement Plans.
In addition to Annual Base Salary payable as hereinabove provided, the Executive
shall be entitled to participate during the Employment Period in all incentive
stock option, savings and retirement plans, practices, policies and programs
applicable generally to any other Executives of the Company and its Affiliated
Companies.

                    (iii) Welfare Benefit Plans. During the Employment Period,
the Executive and/or the Executive’s family, as the case may be, shall be
eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company and its
Affiliated Companies (including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life, group life, accidental
death and travel accident insurance plans and programs) to the extent generally
applicable to any other Executives of the Company and its Affiliated Companies.

                    (iv) Expenses. During the Employment Period, the Executive
shall

2

--------------------------------------------------------------------------------

 

be entitled to receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the policies, practices and procedures of
the Company and its Affiliated Companies in effect for the Executives at any
time during the 90-day period immediately preceding the Effective Date.

                    (v) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to fringe benefits in accordance with the plans,
practices, programs and policies of the Company and its Affiliated Companies in
effect for the Executive at any time during the 90-day period immediately
preceding the Effective Date.

                    (vi) Vacation. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its Affiliated Companies as
in effect at any time during the 90-day period immediately preceding the
Effective Date.

          5. Termination of Employment.

               (a) Death or Disability. The Executive’s employment hereunder and
the Employment Period shall terminate automatically upon the Executive’s death
during the Employment Period. If the Company’s Board determines in good faith
that the Disability of the Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), it may give to the
Executive written notice in accordance with Section 11(b) of this Agreement of
its intention to terminate the Executive’s employment. In such event, the
Executive’s employment with the Company and the Employment Period shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the “Disability Effective Date”), if, within the 30 days after such
receipt, the Executive shall not have returned to full-time performance of the
Executive’s duties. For purposes of this Agreement, “Disability” means the
absence of the Executive from the Executive’s duties with the Company on a
full-time basis for 180 consecutive business days as a result of incapacity due
to mental or physical illness which is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the
Executive or the Executive’s legal representative (such agreement as to
acceptability not to be withheld unreasonably).

               (b) Cause. The Company may terminate the Executive’s employment
and the Employment Period during the Employment Period for Cause. For purposes
of this Agreement, “Cause” means (i) an action taken by the Executive involving
willful and wanton misconduct or gross negligence, or (ii) the Executive being
convicted of a felony or other crime which the Board reasonably determines would
have an adverse impact on Executive’s ability to perform his duties.

               (c) Good Reason. The Executive’s employment and the Employment
Period may be terminated during the Employment Period by the Executive for Good
Reason. For purposes of this Agreement, “Good Reason” means:

                    (i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive’s position, authority, duties or
responsibilities as contemplated by Section 4(a) of this Agreement, or any other
action by the Company which results in a significant diminution in such
position, authority, duties or responsibilities, excluding for this purpose an
isolated, insubstantial and inadvertent action not taken in bad faith and which
is remedied by the Company promptly after receipt of notice thereof given by the
Executive;

3

--------------------------------------------------------------------------------

 

                    (ii) any failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;

                    (iii) the Company’s requiring the Executive to be based at
any office or location which is outside a 20-mile radius of the Company’s
principal office immediately prior to the Effective Date;

                    (iv) any purported termination by the Company of the
Executive’s employment otherwise than as expressly permitted by this Agreement;
or

                    (v) any failure by the Company to comply with and satisfy
Section 10(c) of this Agreement.

          For purposes of this Agreement, any dispute concerning the
determination of Good Reason shall be determined by arbitration according to the
provisions of the Colorado Uniform Arbitration Act (C.R.S. § 13-22-201 et seq.)

               (d) Notice of Termination. Any termination by the Company for
Cause or by the Executive for Good Reason shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 11(b) of
this Agreement. For purposes of this Agreement, a “Notice of Termination” means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive’s employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than
fifteen days after the giving of such notice). In the case of a termination of
the Executive’s employment for Cause, a Notice of Termination shall include a
copy of a resolution duly adopted by the affirmative vote of not less than a
majority of the entire membership of the Board at a meeting of the Board called
and held for the purpose (after reasonable notice to the Executive and
reasonable opportunity for the Executive, to be heard before the Board prior to
such vote), finding that in the good faith opinion of the Board the Executive
should be terminated for Cause. No purported termination of the Executive’s
employment for Cause shall be effective without a Notice of Termination. The
failure by the Executive to set forth n the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason shall not waive any
right of the Executive hereunder or preclude the Executive from asserting such
fact or circumstance in enforcing the Executive’s rights hereunder. A Notice of
Termination may be given at any time during the Employment Period.

               (e) Date of Termination. “Date of Termination” means the date of
receipt of the Notice of Termination or any later date specified therein, as the
case may be; provided, however, that (i) if the Executive’s employment is
terminated by the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies the Executive of
such termination and (ii) if

the Executive’s employment is terminated by reason of death or Disability, the
Date of Termination shall be the date of death of the Executive or the
Disability Effective Date, as the case may be.

4

--------------------------------------------------------------------------------

 

          6. Obligations of the Company upon Termination.

               (a) Death. If the Executive’s employment is terminated by reason
of the Executive’s death during the Employment Period, this Agreement and the
Employment Period shall terminate without further obligations to the Executive’s
legal representatives under this Agreement, other than the following
obligations: (i) payment of the Executive’s Annual Base Salary through the Date
of Termination to the extent not theretofore paid, (ii) payment of any accrued
bonus and (iii) payment of any compensation previously deferred by the Executive
(together with any accrued interest thereon) and not yet paid by the Company and
any accrued vacation pay not yet paid by the Company (the amounts described in
paragraphs (i), (ii) and (iii) are hereafter referred to as “Accrued
Obligations”). All Accrued Obligations shall be paid to the Executive’s estate
or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date
of Termination. Anything in this Agreement to the contrary notwithstanding, the
Executive’s estate and family shall be entitled to receive any insurance or
similar benefits (excluding stock options and stock bonuses) provided generally
by the Company and any of its Affiliated Companies to the estates and surviving
families of executives of the Company and such Affiliated Companies.

               (b) Disability. If the Executive’s employment is terminated by
reason of the Executive’s Disability during the Employment Period, this
Agreement and the Employment Period shall terminate without further obligations
to the Executive, other than for Accrued Obligations. All Accrued Obligations
shall be paid to the Executive in a lump sum in cash within 30 days of the Date
of Termination. Anything in this Agreement to the contrary notwithstanding, the
Executive shall be entitled after the Disability Effective Date to receive
disability benefits at least equal to those generally provided by the Company
and its Affiliated Companies to disabled executives and/or their families, if
any, as in effect generally with respect to any executives of the Company and
its Affiliated Companies.

               (c) Cause; Other than for Good Reason. If the Executive’s
employment shall be terminated for Cause during the Employment Period, this
Agreement and the Employment Period shall terminate without further obligations
to the Executive other than the obligation to pay to the Executive Annual Base
Salary through the Date of Termination plus the amount of any compensation
previously deferred by the Executive, in each case to the extent theretofore
unpaid. If the Executive terminates employment during the Employment Period
other than for Good Reason, this Agreement shall terminate without further
obligations to the Executive, other than for Accrued Obligations. In such case,
all Accrued obligations shall be paid to the Executive in a lump sum in cash
within 30 days of the Date of Termination.

               (d) Good Reason; Other than for Cause or Disability. If, during
the Employment Period, the Company shall terminate the Executive’s employment
other than for Cause or Disability, or if the Executive shall terminate
employment under this Agreement for Good Reason:

                    (i) the Company shall pay to the Executive in a lump sum in
cash within 30 days after the Date of Termination the aggregate of the following
amounts:

                         A. all Accrued Obligations; and

                         B. the product of (x) the remainder of the Employment
Period expressed as a decimal fraction (example: assume Effective Date is
October 19, 2005 and the Termination Date is January 31, 2006. The remainder of
the Employment Period would be 260 days or 0.7123) and (y) the Annual Base
Salary; and

                    (ii) for the remainder of the Employment Period, the Company
shall

5

--------------------------------------------------------------------------------

 

continue benefits to the Executive and/or the Executive’s family at least equal
to those which would have been provided to them in accordance with the plans,
programs, practices and policies described in Section 4(b)(iii) of this
Agreement if the Executive’s employment had not been terminated in accordance
with the plans, practices, programs or policies of the Company and it Affiliated
Companies. For purposes of determining eligibility of the Executive for retiree
benefits pursuant to such plans, practices, programs and policies, the Executive
shall be considered to have remained employed until the end of the Employment
Period and to have retired on the last day of such period.

          7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive’s continuing or future participation in any benefit,
bonus, incentive or other plans, programs, policies or practices, provided by
the Company or any of its Affiliated Companies and for which the Executive may
qualify, nor shall anything herein limit or otherwise affect such rights as the
Executive may have under any other agreements with the Company or any of its
Affiliated Companies. Amounts which are vested benefits or which the Executive
is otherwise entitled to receive under any plan, policy, practice or program of
the Company or any of its Affiliated Companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice or
program except as explicitly modified by this Agreement.

          8. Full Settlement. Executive shall not be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement. If Executive is
the prevailing party in any action hereunder, the Company agrees to pay, to the
full extent permitted by law, all legal fees and expenses which the Executive
may reasonably incur as a result of any contest by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest at the applicable Federal rate provided
for in Section 7872(f)(2) of the Internal Revenue Code of 1986, as amended (the
“Code”).

          9. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its Affiliated Companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive’s employment by the Company or any of its Affiliated
Companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive’s employment with the Company,
the Executive shall not, without the prior written consent of the Company,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it.

          10. Successors.

               (a) This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution as to certain
benefits hereunder. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s legal representatives. This Agreement may be
assigned by Company without restriction to any entity, which is financially
responsible for the performance of Company’s obligations hereunder.

               (b) This Agreement shall inure to the benefit of and be binding
upon the

6

--------------------------------------------------------------------------------

 

Company and its successors and assigns.

               (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, “Company” shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.

          11. Miscellaneous.

               (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.

               (b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, express mail, or a
commercially recognized letter or package delivery service, addressed as
follows:

     
 
  If to the Executive
 
   

  James K. B. Hesketh

  65 South Joyce Street

  Golden, CO 80401
 
   

  If to the Company
 
   

  Canyon Resources Corporation

  14142 Denver West Parkway, Suite 250

  Golden, CO 80401
 
   

  Attention: Chief Executive Officer

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

               (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

               (d) The Company may withhold from any amounts payable under this
Agreement such Federal , state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

               (e) The Executive’s failure to insist upon strict compliance with
any provision

7

--------------------------------------------------------------------------------

 

hereof or the failure to assert any right the Executive may have hereunder,
including, without limitation, the right to terminate employment for Good Reason
pursuant to Section 5(c)(i)-(v), shall not be deemed to be a waiver of such
provision or right or any other provision or right thereof.

     Executed this 3rd day of May 2005.

                  CANYON RESOURCES CORPORATION    
 
           

  By:   /s/ Richard H. De Voto    

           

      Richard H. De Voto    

      Chief Executive Officer    
 
           

      /s/ James K. B. Hesketh    

           

      James K. B. Hesketh    

8