Exhibit 10.1
EMPLOYMENT AGREEMENT
          THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into
as of the 15th day of September, 2008 (the “Effective Date”) by and between
Royal Gold, Inc., a Delaware corporation (the “Company”), and Tony Jensen (the
“Executive”).
Recitals
     A. The Company desires to continue to employ Executive as President and
Chief Executive Officer of the Company, and Executive desires to continue in
such employment with the Company in said capacity, subject to the at-will
employment relationship between the Company and Executive; and
     B. Each party desires to set forth in writing the terms and conditions of
their understandings and agreements.
     NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
obligations contained herein, and other good and valuable consideration, the
receipt and adequacy of which the Company and Executive hereby acknowledge, the
Company and Executive hereby agree as follows:
Agreement
     1. Position.
          (a) The Company agrees to employ Executive in the positions of
President and Chief Executive Officer. Executive shall serve and perform the
duties which may from time to time be assigned to him by the Board of Directors
of the Company (the “Board”). The Board may delegate its authority to take any
action under this Agreement to the Compensation, Nominating and Corporate
Governance Committee of the Board (the “Compensation Committee”).
          (b) Executive agrees to serve as President and Chief Executive Officer
and agrees that he will devote his best efforts and full business time and
attention to the Company. Executive agrees that he will faithfully and
diligently carry out the duties of President and Chief Executive Officer.
Executive further agrees to comply with all Company policies as in effect from
time to time and to comply with all laws, rules and regulations, including, but
not limited to, those applicable to the Company.
          (c) Executive agrees to travel as necessary to perform his duties
under this Agreement.
          (d) Nothing herein shall preclude Executive from (i) serving as a
member of the board of directors of up to two (2) for-profit businesses;
(ii) serving as a member of the board of directors of such other affiliated or
non-affiliated entities at the request of the Board; (iii) engaging in
charitable and community activities; (iv) participating in industry and trade

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organization activities; and (v) managing his and his family’s personal
investments and affairs; provided, that such activities do not (x) materially
interfere with the regular performance of his duties and responsibilities under
this Agreement or (y) constitute activities that compete with the business of
Company.
          (e) In addition, for so long as Executive remains President and Chief
Executive Officer of the Company, the Board shall nominate him as a member of
the Board and shall use its best efforts to cause his election as a member of
the Board.
     2. Term. The initial term of this Agreement shall be one (1) year from the
Effective Date (“Initial Term”), unless otherwise terminated pursuant to
Section 4 of this Agreement. This Agreement shall automatically renew for four
(4) successive one (1) year terms unless either party gives written notice of
its or his intent not to renew this Agreement at least sixty (60) days prior to
the expiration of the then-current term. Executive’s continued employment after
the expiration of the Initial Term shall be in accordance with and governed by
this Agreement, unless modified by the parties to this Agreement in writing.
References herein to the “Term” shall refer both to the Initial Term and any
successive term as the context requires.
     3. Compensation and Benefits.
          (a) Base Salary. The Company shall pay Executive a base salary of
$374,500 per year (“Base Salary”). The Base Salary may be increased annually by
an amount as may be approved by the Board or the Compensation Committee, and,
upon such increase, the increased amount shall thereafter be deemed to be the
Base Salary for purposes of this Agreement.
          (b) Bonus Opportunities. For each fiscal year during the Term,
Executive shall be eligible to be considered to receive incentive compensation
(an “Annual Bonus”) from the Company in an amount determined by the Board or the
Compensation Committee and in accordance with the Company’s compensation
policies and practices as in effect from time to time.
          (c) Long-Term Incentive Award Opportunities. Executive shall be
eligible to participate throughout the Term in the Company’s 2004 Omnibus
Long-Term Incentive Plan (the “LTIP”) or other equity incentive plans as may be
in effect from time to time (the “Equity Incentive Plans”), in accordance with
the Company’s compensation policies and practices as in effect from time to time
and the terms and provisions of the LTIP or other Equity Incentive Plan.
          (d) Payment. Payment of all compensation to Executive hereunder shall
be made in accordance with applicable law, the terms of this Agreement and
applicable Company policies and practices as in effect from time to time,
including normal payroll practices, and shall be subject to all applicable
withholdings and taxes.
          (e) Welfare Benefits and Retirement Plans. During the Term, Executive
shall be allowed to participate, on the same basis generally as other similarly
situated executive officers of the Company, in all general employee benefit
plans and programs, including improvements or modifications of the same, which
on the Effective Date or thereafter are made

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available by the Company or its affiliates to all or substantially all of the
Company’s similarly situated executive officers. Such benefits, plans, and
programs may include, without limitation, health, vision care, dental care,
medical reimbursement, prescription drug, life insurance, disability protection,
and qualified and non-qualified retirement plans. Except as specifically
provided herein, nothing in this Agreement is to be construed or interpreted to
increase or alter in any way the rights, participation, coverage, or benefits
under such benefit plans or programs from those provided to similarly situated
executive officers pursuant to the terms and conditions of such benefit plans
and programs. The Company shall be permitted to modify such benefits from time
to time consistent with any modifications that impact other similarly situated
executive officers of the Company.
          (f) Fringe Benefits. During the Term, Executive shall be entitled to
fringe benefits of the kind and quality which are provided to similarly situated
executive officers of the Company in accordance with the Company’s policies and
practices as in effect from time to time.
          (g) Vacation. Executive shall be entitled to paid vacation for up to
four weeks during each calendar year, and such vacation shall be taken in
accordance with the Company’s policies and practices as in effect from time to
time.
          (h) Holidays. Executive shall be entitled to paid holidays, personal
days, and sick days consistent with the Company’s policies and practices as in
effect from time to time.
          (i) Reimbursement of Expenses. Promptly following presentation of
expense statements, receipts, vouchers, or such other information and
documentation as the Company may reasonably require, the Company shall reimburse
Executive for all business expenses that are reasonable and necessary and
incurred by Executive while performing his duties under this Agreement.
          (j) Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit Executive’s continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company and for which
Executive may qualify, nor shall anything herein limit or otherwise affect such
rights as Executive may have under any other agreement with the Company or any
of its affiliated companies. Except as otherwise provided herein, amounts which
are vested benefits or which Executive is otherwise entitled to receive under
any plan or program of the Company at or subsequent to the date of termination
of employment shall be payable in accordance with such plan or program.
     4. Termination of Employment.
          (a) Termination by Company without Cause. The Company may terminate
Executive’s employment and this Agreement for any reason immediately upon
transmittal of written notice to Executive in accordance with this Agreement.
          (b) Termination by Company for Cause. The Company may terminate
Executive’s employment and this Agreement at any time for Cause. For purposes of
this Agreement, “Cause” for termination of Executive’s employment by the Company
shall be

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deemed to exist if: (i) Executive is found guilty by a court of having committed
fraud, theft, embezzlement or misappropriation against the Company or any of its
affiliates and such conviction is affirmed on appeal or the time for appeal has
expired; (ii) Executive is found guilty by a court of having committed a felony
or any other crime involving moral turpitude and such conviction is affirmed on
appeal or the time for appeal has expired; (iii) in the reasonable judgment of
the Board, Executive has compromised Proprietary and Confidential Information
(as defined below) or has engaged in gross or willful misconduct that causes
substantial and material harm to the business and operations of the Company or
any of its affiliates, in each case the continuation of which will continue to
substantially and materially harm the business and operations of the Company or
any of its affiliates in the future; or (iv) Executive materially breaches this
Agreement and fails to cure such breach within ten (10) days of being informed
of such breach in writing by the Company.
          (c) Termination by Executive for Good Reason. Executive may terminate
his employment and this Agreement for Good Reason. For purposes of this
Agreement, “Good Reason” means, without Executive’s express written consent, the
occurrence of any of the following circumstances if Executive has given notice
of the circumstances within ninety (90) days of the occurrence and such
circumstances have not been fully corrected within thirty (30) days of the
notice given in respect thereof: (i) any material adverse change in Executive’s
title or responsibilities with the Company, (ii) any material reduction in
Executive’s Base Salary, (iii) receipt of notice that Executive’s principal
workplace will be relocated by more than fifty (50) miles from the job-site
immediately prior to the Effective Date, or (iv) if a Change of Control (as
defined below) has occurred, failure to provide for Executive’s participation in
bonus, stock option, restricted stock, incentive awards and other compensation
plans which provide opportunities to receive compensation that are not less than
(x) the opportunities provided by the Company to similarly situated executive
officers of the Company and (y) the opportunities under any such plans in which
the Executive was participating immediately prior to the date on which a Change
of Control occurs.
          (d) Termination by Executive without Good Reason. Executive may
terminate his employment and this Agreement for reasons other than Good Reason
upon transmittal of at least sixty (60) days’ written notice to the Company in
accordance with this Agreement.
          (e) Disability. The Company may terminate Executive’s employment and
this Agreement at any time Executive shall have sustained a Disability (as
defined below) as determined by the Board, by giving Executive written notice of
its intention to terminate Executive’s employment, and Executive’s employment
with the Company shall terminate effective on the ninetieth (90th) day after
receipt of such notice (the “Disability Effective Date”). For purposes of this
Agreement, “Disability” means Executive is unable due to a physical or mental
condition to perform the essential functions of his position with or without
reasonable accommodation for a period of three (3) consecutive months or based
on the written certification of a licensed physician selected by the Board and
approved by Executive (which approval shall not be unreasonably withheld,
delayed or conditioned) of the likely continuation of such condition for such
period.

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          (f) Death. This Agreement and Executive’s employment shall terminate
automatically upon Executive’s death.
     5. Obligations upon Termination. Other than as specifically set forth or
referenced in this Agreement, Executive shall not be entitled to any benefits on
or after termination of employment or this Agreement.
          (a) Termination by Company without Cause; by Executive for Good
Reason; or by Company for Failure to Renew. If (i) the Company terminates
Executive’s employment or this Agreement without Cause during the Term,
(ii) Executive terminates his employment or this Agreement for Good Reason
during the Term, or (iii) Executive’s employment is terminated upon the
Company’s election not to renew the term for one (1) of the four (4) successive
one (1) year renewal terms pursuant to Section 2 hereof, and any such
termination does not occur within two (2) years after the occurrence of a Change
of Control, then the Company shall, after receipt of an executed release
agreement between the Company and Executive, which will consist in substance of
the language attached as Exhibit A (the “Release Document”) pay to Executive,
and Executive shall be entitled to receive, the following:
               (i) the unpaid portion of Executive’s Base Salary as of the date
of termination of Executive’s employment, pro rated through the date of
termination, and a payment for any vacation Executive has accrued but not used
through the date of termination payable in accordance with Section 3(d);
               (ii) promptly following submission by Executive of supporting
documentation, any costs and expenses paid or incurred by Executive which would
have been payable under Section 3(i) if Executive’s employment had not
terminated; and
               (iii) one (1) times Executive’s Base Salary (the “Severance
Payment”), payable within thirty (30) business days of the date of termination
of Executive’s employment.
          (b) Termination by the Company for Cause; by Executive other than for
Good Reason; or by Executive for Failure to Renew. If (i) Executive’s employment
is terminated for Cause, (ii) Executive terminates his employment other than for
Good Reason or (iii) Executive terminates his employment upon his election not
to renew the term for one (1) of the four (4) successive one (1) year renewal
terms pursuant to Section 2 hereof, then this Agreement shall terminate without
further obligations by the Company to Executive under this Agreement, and the
Company shall pay Executive, and Executive shall be entitled to receive, the
following:
               (i) the unpaid portion of Executive’s Base Salary as of the date
of termination of Executive’s employment, pro rated through the date of
termination, and a payment for any vacation Executive has accrued but not used
through the date of termination payable in accordance with Section 3(d); and
               (ii) promptly following submission by Executive of supporting
documentation, any costs and expenses paid or incurred by Executive which would
have been payable under Section 3(i) if Executive’s employment had not
terminated.

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          (c) Death. If Executive’s employment is terminated by reason of
Executive’s death, then this Agreement shall terminate without further
obligations by the Company to Executive’s legal representatives under this
Agreement other than those obligations under the terms of a Company plan or
program that take effect at the date of Executive’s death, and the Company shall
pay Executive’s estate, and Executive’s estate shall be entitled to receive, the
following:
               (i) the unpaid portion of Executive’s Base Salary as of the date
of termination of Executive’s employment, pro rated through the date of
termination, and a payment for any vacation Executive has accrued but not used
through the date of termination payable in accordance with Section 3(d); and
               (ii) promptly following submission by Executive’s legal
representatives of supporting documentation, any costs and expenses paid or
incurred by Executive which would have been payable under Section 3(i) if
Executive’s employment had not terminated.
          (d) Disability. If Executive’s employment is terminated by reason of
Executive’s Disability, then this Agreement shall terminate without further
obligations by the Company to Executive under this Agreement except for
obligations which expressly continue after termination of employment due to
Disability, and the Company shall pay Executive, and Executive shall be entitled
to receive, the following:
               (i) the unpaid portion of Executive’s Base Salary as of the date
of termination of Executive’s employment, pro rated through the date of
termination, and a payment for any vacation Executive has accrued but not used
through the date of termination payable in accordance with Section 3(d);
               (ii) promptly upon submission by Executive of supporting
documentation, any costs and expenses paid or incurred by Executive which would
have been payable under Section 3(i) if Executive’s employment had not
terminated; and
               (iii) any disability benefits payable in accordance with the
Company’s plans, programs and policies as in effect from time to time.
          (e) Change of Control. If (i) the Company terminates Executive’s
employment or this Agreement without Cause during the Term, (ii) Executive
terminates his employment or this Agreement for Good Reason during the Term, or
(iii) Executive’s employment is terminated upon the Company’s election not to
renew the term for one (1) of the four (4) successive one (1) year renewal terms
pursuant to Section 2 hereof, and any such termination occurs within two
(2) years after the occurrence of a Change of Control, then after receipt of the
executed Release Document:

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               (i) the Company shall pay to Executive, and Executive shall be
entitled to receive, the following:
                    (A) the unpaid portion of Executive’s Base Salary as of the
date of termination of Executive’s employment, pro rated through the date of
termination, and a payment for any vacation Executive has accrued but not used
through the date of termination payable in accordance with Section 3(d);
                    (B) promptly following submission by Executive of supporting
documentation, any costs and expenses paid or incurred by Executive which would
have been payable under Section 3(i) if Executive’s employment had not
terminated;
                    (C) two and one-half (2.5) times Executive’s Base Salary,
payable within thirty (30) business days of the date of termination of
Executive’s employment; and
                    (D) two and one-half (2.5) times the average of the Annual
Bonuses paid to Executive for the three (3) full fiscal years ending immediately
prior to the date of termination of Executive’s employment, payable within
thirty (30) business days of the date of termination of Executive’s employment
(collectively, clauses (C) and (D) of this Section 5(e)(i) the “Change of
Control Severance Payment”);
               (ii) if Executive (and Executive’s eligible dependants) timely
elect participation in the Company’s group health insurance plan pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) or
any Colorado statute that provides for the continuation of benefits under such
plan (“Colorado Continuation Statute”), the Company will pay the normal monthly
employer’s cost of coverage under the Company’s group health insurance plan for
full-time employees toward such COBRA coverage or Colorado Continuation Statute
coverage for twelve (12) months following the date of termination of Executive’s
employment. Executive acknowledges and agrees that Executive is responsible for
paying the balance of any costs not paid by the Company under this Agreement
which are associated with Executive’s (and Executive’s eligible dependants’)
participation in the Company’s health insurance plan and that Executive’s
failure to pay such costs may result in the termination of Executive’s (and
Executive’s eligible dependants’) participation in such plan. The Company’s
obligations under this Section 5(e)(ii) will cease on the date on which
Executive becomes eligible for health insurance coverage under another
employer’s group health insurance plan, and, within five (5) business days of
Executive becoming eligible for health insurance coverage under another
employer’s group health insurance plan, Executive shall inform the Company of
such fact in writing; and
               (iii) the Company will arrange to provide for Executive (and
Executive’s eligible dependants) benefits provided under any vision care, dental
care, medical reimbursement, prescription drug, life insurance and disability
protection group insurance plans maintained by the Company for full-time
employees for twelve (12) months following the date of termination of
Executive’s employment. If and to the extent that the Company cannot provide

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coverage to Executive (and Executive’s eligible dependants) under any such
vision care, dental care, medical reimbursement, prescription drug, life
insurance and disability protection group insurance plans (i) solely due to the
fact that Executive is no longer an employee or officer of the Company or
(ii) as a result of the amendment or termination of any vision care, dental
care, medical reimbursement, prescription drug, life insurance and disability
protection group insurance plan, the Company will then pay or provide for the
payment of such vision care, dental care, medical reimbursement, prescription
drug, life insurance and disability protection group insurance plan during the
twelve (12) months following the date of termination of Executive’s employment.
Executive acknowledges and agrees that Executive is responsible for paying the
balance of any costs not paid by the Company under this Agreement which are
associated with Executive’s (and Executive’s eligible dependants’) participation
in any vision care, dental care, medical reimbursement, prescription drug, life
insurance and disability protection group insurance plan and that Executive’s
failure to pay such costs may result in the termination of Executive’s (and
Executive’s eligible dependants’) participation in such plan. The Company’s
obligations under this Section 5(e)(iii) will cease on the date on which
Executive becomes eligible for any vision care, dental care, medical
reimbursement, prescription drug, life insurance and disability protection group
insurance plan (but only with respect to the particular coverage(s) available),
and, within five (5) business days of Executive becoming eligible for any
insurance coverage(s) under another employer’s group insurance plan, Executive
shall inform the Company of such fact in writing.
For purposes of this Agreement, “Change of Control” means any of the following:
(i) the dissolution or liquidation of the Company or a merger, consolidation, or
reorganization of the Company with one (1) or more other entities in which the
Company is not the surviving entity, (ii) a sale of substantially all of the
assets of the Company to another person or entity, (iii) any transaction
(including without limitation a merger or reorganization in which the Company is
the surviving entity) which results in any person or entity (other than persons
who are stockholders or affiliates immediately prior to the transaction) owning
fifty percent (50%) or more of the combined voting power of all classes of stock
of the Company, or (iv) during any period of two (2) consecutive years, members
who at the beginning of such period constituted the Board shall have ceased for
any reason to constitute a majority thereof, unless the election, or nomination
for election by the Company’s equity holders, of each director shall have been
approved by the vote of at least a majority of the directors then still in
office and who were directors at the beginning of such period (so long as such
director was not nominated by a person who has expressed an intent to effect a
Change of Control or engage in a proxy or other control contest).
          (f) Resignation from Boards of Directors. If Executive is a director
of the Company or any of its affiliates and his employment is terminated for any
reason, Executive shall, if requested by the Company, immediately resign as a
director of the Company and/or any affiliate and any committees of such boards
of directors. If such resignation is not received within ten (10) business days
after Executive receives written notice from the Company requesting the
resignations, Executive shall forfeit any right to receive any payments pursuant
to this Agreement.
          (g) Release. Notwithstanding any other provision in this Agreement to
the contrary, as a condition precedent to receiving any Severance Payment or
Change of Control

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Severance Payment, Executive agrees to execute (and not revoke) the Release
Document on or before the thirtieth (30th) business day following the date of
termination of Executive’s Employment, which is when any Severance Payment or
Change of Control Severance Payment is otherwise payable in accordance with
Section 5(a)(iii) or Section 5(e)(i)(C), respectively. If Executive fails to
execute and deliver the Release Document, or revokes the Release Document,
Executive agrees that he shall not be entitled to receive the Severance Payment
or Change of Control Severance Payment, as applicable.
     6. Limitations Under Code Section 409A. Notwithstanding anything to the
contrary in this Agreement, in the event that, as a result of Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”) (and any related
regulations or other pronouncements), any of the payments that Executive is
entitled to under the terms of this Agreement or any other plan involving
deferred compensation (as defined under Section 409A of the Code) may not be
made at the time contemplated by the terms thereof without causing Executive to
be subject to constructive receipt at a date prior to actual payment and/or an
income tax penalty and interest and the timing of payment is the sole cause of
such adverse tax consequences, the Company will make such payment on the first
day permissible under Section 409A of the Code without Executive incurring such
adverse tax consequences. In particular, with respect to any lump sum payment
otherwise required hereunder, in the event of any delay in the payment date as a
result of Section 409A(a)(2)(A)(i) and (B)(i) of the Code, the Company will
adjust the payments to reflect the deferred payment date by crediting interest
thereon at the prime rate in effect at the time such amount first becomes
payable, as quoted by the Company’s principal bank. In addition, other
provisions of this Agreement or any other such plan notwithstanding, the Company
shall have no right to accelerate any such payment or to make any such payment
as the result of any specific event except to the extent permitted under
Section 409A of the Code. The Company shall not be obligated to reimburse
Executive for any tax penalty or interest or provide a gross-up in connection
with any tax liability of Executive under Section 409A of the Code.
     7. Excise Tax-Related Provisions.
          (a) Notwithstanding anything in this Agreement to the contrary, if any
payment or benefit Executive would receive from the Company pursuant to a Change
of Control or otherwise (“Payment”) would (i) constitute a “parachute payment”
within the meaning of Section 280G of the Code, and (ii) but for this
Section 7(a), be subject to the excise tax imposed by Section 4999 of the Code
(the "Excise Tax”), then such Payment shall be equal to the Reduced Amount (as
defined below). For the avoidance of doubt, a Payment shall not be considered a
parachute payment for purposes of this paragraph if such Payment is approved by
the shareholders of the Company in accordance with the procedures set forth in
Section 280G(b)(5)(A)(ii) and (B) of the Code and the regulations thereunder,
and at the time of such shareholder approval, no stock of the successor
corporation is readily tradable on an established securities market or otherwise
(within the meaning of Section 280G(b)(5)(A)(ii)(I) of the Code). The “Reduced
Amount” shall be either (x) the largest portion of the Payment that would result
in no portion of the Payment being subject to the Excise Tax, or (y) the Payment
or a portion thereof after payment of the applicable Excise Tax, whichever
amount after taking into account all applicable federal, state and local
employment taxes, income taxes, and the Excise Tax payable by Executive (all
computed at the highest applicable marginal rate), results in

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Executive’s receipt, on an after-tax basis, of the greatest amount of the
Payment to Executive. If a reduction in payments or benefits constituting
“parachute payments” is necessary so that the Payment equals the Reduced Amount,
reduction shall occur in the following order unless Executive elects in writing
a different order (provided, however, that such election shall be subject to
Company approval if made on or after the date on which the event that triggers
the Payment occurs): by first reducing or eliminating the portion of the
Payments which are not payable in cash and then by reducing or eliminating cash
payments, in each case in reverse order beginning with payments or benefits
which are to be paid the farthest in time from the Change of Control or other
event.
          (b) All determinations under this Section 7 shall be made by a
nationally recognized public accounting or consulting firm selected by the
Company and subject to the approval of Executive, which approval shall not be
unreasonably withheld, conditioned or delayed. Such determination shall be
binding upon Executive and the Company. The Company shall bear all expenses with
respect to the determinations by such accounting or consulting firm required to
be made hereunder.
          (c) The accounting or consulting firm engaged to make the
determinations hereunder shall provide its calculations, together with detailed
supporting documentation, to the Company and Executive within fifteen
(15) calendar days after the date on which Executive’s right to a Payment is
triggered (if requested at that time by the Company or Executive) or such other
time as requested by the Company or Executive.
     8. Ownership and Protection of Intellectual Property and Confidential
Information.
          (a) All information, ideas, concepts, improvements, discoveries, and
inventions, whether patentable or not, which are conceived, made, developed or
acquired by Executive, individually or in conjunction with others, during
Executive’s employment by the Company or any of its affiliates (whether during
business hours or otherwise and whether on the Company’s premises or otherwise)
which relate to the business, products or services of the Company or its
affiliates (including, without limitation, all such information relating to
corporate opportunities; geological, metallurgical, and other technical data and
information, including operations, reserve information and exploration data;
research, financial and sales data; pricing and trading terms; evaluations;
opinions; interpretations; acquisition prospects; the identity of customers or
their requirements; the identity of key contacts within the customer’s
organizations or within the organization of acquisition prospects; or marketing
and merchandising techniques, prospective names, and marks), and all
correspondence, memoranda, notes, records, data or information, analyses, or
other documents (including, without limitation, any computer-generated,
computer-stored or electronically-stored materials) of any type embodying any of
such items, shall be the sole and exclusive property of the Company or its
affiliates, as the case may be.
          (b) Executive acknowledges that the Company’s business is highly
competitive and that the Company has developed and owns valuable information
which is confidential, unique and specific to the Company and its affiliates
(“Proprietary and Confidential Information”) and which includes, without
limitation, financial information;

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geological, metallurgical, and other technical data and information, including
operations, reserve information and exploration data; marketing plans; business
and implementation plans; engineering plans and processes; models and templates;
prospect lists; technical information concerning products, services and
processes; names and other information (such as credit and financial data)
concerning customers and business affiliates; and other trade secrets, concepts,
ideas, plans, strategies, analyses, surveys and proprietary information related
to the past, present or anticipated business of the Company and its affiliates.
Executive further acknowledges that protection of such Proprietary and
Confidential Information against unauthorized disclosure and use is of critical
importance to the Company and its affiliates in maintaining their competitive
position. Executive hereby agrees that he shall not, at any time during or after
his employment by the Company, disclose to others, permit to be disclosed, use,
permit to be used, copy or permit to be copied, any such Proprietary and
Confidential Information (whether or not developed by Executive and whether or
not received as an employee) without the prior written consent of the General
Counsel of the Company. Executive further agrees to maintain in confidence any
proprietary and confidential information of third parties received or of which
he has knowledge as a result of his employment. The prohibitions of this Section
8(b) shall not apply, however, to information in the public domain (but only if
the same becomes part of the public domain through means other than a disclosure
prohibited hereunder). The above notwithstanding, a disclosure shall not be
unauthorized if (i) it is required by law or by a court of competent
jurisdiction or (ii) it is in connection with any judicial, arbitration, dispute
resolution or other legal proceeding in which Executive’s legal rights and
obligations as an employee or under this Agreement are at issue; provided,
however, that Executive shall, to the extent practicable and lawful in any such
events, give prior notice to the Company of his intent to disclose any such
Proprietary and Confidential Information in such context so as to allow the
Company or its affiliates an opportunity (which Executive shall not oppose) to
obtain such protective orders or similar relief with respect thereto as may be
deemed appropriate.
          (c) All written materials, records, data and information, analyses,
and other documents (including, without limitation, any computer-generated,
computer-stored or electronically-stored data and other materials), and all
copies thereof, made, composed or received by Executive solely or jointly with
others, and which are in Executive’s possession, custody or control and which
are related in any manner to the past, present or anticipated business of the
Company or any of its affiliates (collectively, the “Company Documents”) shall
be and remain the property of the Company, or its affiliates, as the case may
be. Upon termination of Executive’s employment with the Company, for any reason,
Executive promptly shall deliver the Company Documents, and all copies thereof,
to the Company.
     9. Covenant Not to Compete and Other Restrictive Covenants.
          (a) For a period of twelve (12) months after the date of termination
of employment, Executive shall restrict his activities as follows:
               (i) Executive shall not, directly or indirectly, for himself or
others, own, manage, operate, control, be employed by (whether in an executive,
managerial, supervisory or other capacity), consult with, assist or otherwise
engage or participate in or allow his skill, knowledge, experience or reputation
to be used in connection with, the ownership,

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management, operation or control of, any company or other business enterprise
engaged in the Subject Business (as defined below) within any of the Subject
Areas (as defined below); provided, however, that nothing contained herein shall
prohibit Executive from making passive investments as long as Executive does not
beneficially own more than one percent (1%) of the equity interests of a
business enterprise listed on a national securities exchange or publicly traded
on a nationally recognized over-the-counter market engaged in the Subject
Business within any of the Subject Areas. For purposes of this paragraph,
“beneficially own” shall have the same meaning ascribed to that term in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended;
               (ii) Executive shall not call upon any customer of the Company or
its affiliates for the purpose of soliciting, diverting or enticing away the
business of such person or entity, or otherwise disrupting any previously
established relationship existing between such person or entity and the Company
or its affiliates;
               (iii) Executive shall not solicit, induce, influence or attempt
to influence any supplier, lessor, lessee, licensor, partner, joint venturer,
potential acquiree or any other person who has a business relationship with the
Company or its affiliates, or who on the date of termination of Executive’s
employment is engaged in discussions or negotiations to enter into a business
relationship with the Company or its affiliates, to discontinue or reduce or
limit the extent of such relationship with the Company or its affiliates; and
               (iv) Without the consent of the Company, Executive shall not make
contact with any of the employees or consultants of the Company or its
affiliates with whom he had contact during the course of his employment with the
Company for the purpose of soliciting such employee or consultant for hire,
whether as an employee or independent contractor, or otherwise disrupting such
employee’s or consultant’s relationship with the Company or its affiliates.
For purpose of this Agreement, (x) “Subject Areas” mean (A) the continents of
North America, Central and South America, Africa, Europe and Australia and
(B) the nation of Russia, and (y) “Subject Business” means the business of
creating, financing, or acquiring and managing royalties involving mineral
properties.
          (b) Acknowledgements.
               (i) Executive acknowledges that (x) the compensation provided to
Executive during the Term, (y) the agreement to provide the Severance Payment or
Change of Control Severance Payment to Executive in connection with certain
terminations of Executive’s employment, and (z) the specialized training and the
Proprietary and Confidential Information provided to Executive pursuant to his
employment with the Company give rise to the Company’s interest in restraining
Executive from competing with the Company, that the noncompetition and
nonsolicitation covenants are designed to enforce such consideration, that the
Company’s royalty business is worldwide in geographic scope and that any
limitations as to time, geographic scope and scope of activity to be restrained
as defined herein are reasonable and do not impose a greater restraint than is
necessary to protect the goodwill or other business interest of the

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Company. Executive further acknowledges that as an executive of a publicly
traded company he falls within the exception to C.R.S 8-2-113(2)(d), which
exempts executive and management personnel, officers and employees who
constitute professional staff to executive and management personnel from the
prohibitions of non-compete provisions under Colorado law.
               (ii) Executive and the Company hereby agree to reasonably
allocate an amount of the Change of Control Severance Payment to the
non-competition covenant set forth in this Section 9, which amount will be
established by the parties in good faith negotiations, relying upon third party
advisers to the extent reasonably determined by the parties, at the time a
Change of Control transaction is reasonably likely or at such earlier time as is
determined by the parties in good faith.
          (c) Survival of Covenants. Sections 8 and 9 shall survive the
expiration or termination of this Agreement for any reason. Executive agrees not
to challenge the enforceability or scope of Sections 8 and 9. Executive further
agrees to notify all future persons or businesses with which he becomes
affiliated or employed, of the restrictions set forth in Sections 8 and 9, prior
to the commencement of any such affiliation or employment.
     10. Severability and Reformation. If any one or more of the terms,
provisions, covenants or restrictions of this Agreement shall be determined by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions shall remain in
full force and effect, and the invalid, void or unenforceable provisions shall
be deemed severable. Moreover, if any one or more of the provisions contained in
this Agreement shall for any reason be held to be excessively broad as to
duration, geographical scope, activity or subject, it shall be reformed by
limiting and reducing it to the minimum extent necessary, so as to be
enforceable to the extent compatible with the applicable law as it shall then
appear.
     11. Indemnification. The Company and Executive have executed and delivered
an Indemnification Agreement dated November 13, 2006 (the “Indemnification
Agreement”). To the extent any provision set forth in the Indemnification
Agreement is in conflict with any provision set forth in this Agreement, the
provision set forth in the Indemnification Agreement shall govern. Further,
Executive shall be entitled to coverage under the Directors and Officers
Liability Insurance program to the same extent as other similarly situated
executive officers of the Company.
     12. Miscellaneous.
          (a) Entire Agreement. This Agreement sets forth the entire agreement
between the parties hereto and fully supersedes any and all prior agreements or
understandings, written or oral, between the parties hereto pertaining to the
subject matter hereof.
          (b) Notices. Whenever under this Agreement it becomes necessary to
give notice, such notice shall be in writing, signed by the party or parties
giving or making the same, and shall be served on the person or persons for whom
it is intended or who should be advised or notified, by (i) personal delivery,
(ii) Federal Express or other similar overnight service or

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(iii) certified or registered mail, return receipt requested, postage prepaid
and addressed to such party at the address set forth below or at such other
address as may be designated by such party by like notice:
If to the Company:
Royal Gold, Inc.
1660 Wynkoop Street, Suite 1000
Denver, CO 80202
Attention: General Counsel
If to Executive:
Tony Jensen
620 E. Heartstrong Drive
Superior, CO 80027
In the case of personal delivery, such notice or advice shall be effective on
the date of delivery, in the case of Federal Express or other similar overnight
service, such notice or advice shall be effective on the next business day, and,
in the cases of certified or registered mail, such notice or advice shall be
effective three (3) business days after deposit into the mails for delivery by
the U.S. Post Office.
          (c) Governing Law and Venue. This Agreement is governed by and is to
be construed, administered, and enforced in accordance with the laws of the
State of Colorado, without regard to conflicts of law principles. If under the
governing law, any portion of this Agreement is at any time deemed to be in
conflict with any applicable statute, rule, regulation, ordinance, or other
principle of law, such portion shall be deemed to be modified or altered to the
extent necessary to conform thereto or, if that is not possible, to be omitted
from this Agreement. Any action or arbitration in regard to this Agreement or
arising out of its terms and conditions, pursuant to Sections 12(n) and 12(o),
shall be instituted and litigated only in the City and County of Denver,
Colorado.
          (d) Assignment. This Agreement and Executive’s rights and obligations
hereunder may not be assigned by Executive. Any purported assignment or
delegation by Executive in violation of the foregoing shall be null and void ab
initio and of no force and effect. The Company may assign this Agreement and its
rights, together with its obligations hereunder, to an affiliate of the Company
or to a person or entity which is a successor in interest to substantially all
of the business operations of the Company. Upon such assignment, the rights and
obligations of the Company hereunder shall become the rights and obligations of
such affiliate, successor, person or entity.
          (e) Counterparts. This Agreement may be executed in counterparts, each
of which shall take effect as an original, and all of which shall evidence one
and the same Agreement.

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          (f) Amendment. This Agreement may be amended only in writing signed by
Executive and by a duly authorized representative of the Company (other than
Executive).
          (g) Construction. The headings and captions of this Agreement are
provided for convenience only and are intended to have no effect in construing
or interpreting this Agreement. The language in all parts of this Agreement
shall be in all cases construed in accordance to its fair meaning and not
strictly for or against the Company or Executive.
          (h) Non-Waiver. The failure by either party to insist upon the
performance of any one or more terms, covenants or conditions of this Agreement
shall not be construed as a waiver or relinquishment of any right granted
hereunder or of any future performance of any such term, covenant or condition,
and the obligation of either party with respect hereto shall continue in full
force and effect, unless such waiver shall be in writing signed by the Company
(other than by Executive) and Executive.
          (i) Use of Name, Likeness and Biography. The Company shall have the
right (but not the obligation) to use, publish and broadcast, and to authorize
others to do so, the name, approved likeness and approved biographical material
of Executive to advertise, publicize and promote the business of Company and its
affiliates, but not for the purposes of direct endorsement without Executive’s
consent. This right shall terminate upon the termination of this Agreement. An
“approved likeness” and “approved biographical material” shall be, respectively,
any photograph or other depiction of Executive, or any biographical information
or life story concerning the professional career of Executive, as approved by
Executive from time to time.
          (j) Right to Insure. The Company shall have the right to secure, in
its own name or otherwise, and at its own expense, life, health, accident or
other insurance covering Executive, and Executive shall have no right, title or
interest in and to such insurance. Executive shall assist Company in procuring
such insurance by submitting to reasonable examinations and by signing such
applications and other reasonable instruments as may be required by the
insurance carriers to which application is made for any such insurance.
          (k) Assistance in Litigation. Executive shall reasonably cooperate
with the Company in the defense or prosecution of any claims or actions now in
existence or that may be brought in the future against or on behalf of the
Company that relate to events or occurrences that transpired while Executive was
employed by the Company. Executive’s cooperation in connection with such claims
or actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf of
the Company at mutually convenient times. Executive also shall cooperate fully
with the Company in connection with any investigation or review by any federal,
state, or local regulatory authority as any such investigation or review relates
to events or occurrences that transpired while Executive was employed by the
Company. The Company shall pay Executive a reasonable hourly rate for
Executive’s cooperation pursuant to this Section 12(k).
          (l) No Inconsistent Obligations. Executive represents and warrants
that to his knowledge he has no obligations, legal, in contract, or otherwise,
inconsistent with the terms of this Agreement or with his continued employment
with the Company to perform the duties

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described herein. Executive shall not disclose to the Company, or use, or induce
the Company to use, any confidential, proprietary, or trade secret information
of others. Executive represents and warrants that to his knowledge he has
returned all property and confidential information belonging to all prior
employers, if he is obligated to do so.
          (m) Binding Agreement. This Agreement shall inure to the benefit of
and be binding upon Executive, his heirs and personal representatives, and the
Company and its successors.
          (n) Remedies. The parties recognize and affirm that in the event of a
breach of Sections 8 and 9 of this Agreement, money damages would be inadequate
and the Company would not have an adequate remedy at law. Accordingly, the
parties agree that in the event of a breach or a threatened breach of Sections 8
and 9, the Company may, in addition and supplementary to other rights and
remedies existing in its favor, apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive or other relief in order
to enforce or prevent any violations of the provisions hereof (without posting a
bond or other security). In addition, Executive agrees that in the event a court
of competent jurisdiction or an arbitrator finds that Executive violated
Section 9, the time periods set forth in Section 9 shall be tolled until such
breach or violation has been cured. Executive further agrees that the Company
shall have the right to offset the amount of any damages awarded to the Company
resulting from a breach by Executive of Sections 8 or 9 against any payments due
Executive under this Agreement.
          (o) Arbitration. Other than as stated in Section 12(n), the parties
agree that any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be resolved by arbitration in accordance
with the Employment Dispute Resolution Rules of the American Arbitration
Association. The arbitration shall take place in Denver, Colorado. All disputes
shall be resolved by one (1) arbitrator chosen by agreement of the parties in
accordance with the National Rules for the Resolution of Employment Disputes.
The arbitrator shall have the authority to award the same remedies, damages, and
costs that a court could award. The arbitrator shall issue a reasoned award
explaining the decision, the reasons for the decision, and any damages awarded.
The arbitrator’s decision shall be final and binding. The judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The arbitration proceedings, any record of the same, and the award
shall be considered Proprietary and Confidential Information under this
Agreement. This provision and any decision and award hereunder can be enforced
under the Federal Arbitration Act.
          (p) Voluntary Agreement. Each party to this Agreement has read and
fully understands the terms and provisions hereof, has had an opportunity to
review this Agreement with legal counsel, has executed this Agreement based upon
such party’s own judgment and advice of counsel (if any), and knowingly,
voluntarily, and without duress, agrees to all of the terms set forth in this
Agreement. The parties have participated jointly in the negotiation and drafting
of this Agreement. If an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
and no presumption or burden of proof shall arise favoring or disfavoring any
party because of authorship of any provision of this Agreement. Except as
expressly set forth in this Agreement, neither the parties nor their

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affiliates, advisors and/or their attorneys have made any representation or
warranty, express or implied, at law or in equity with respect to the subject
matter contained herein. Without limiting the generality of the previous
sentence, the Company, its affiliates, advisors, and/or attorneys have made no
representation or warranty to Executive concerning the state or federal tax
consequences to Executive regarding the transactions contemplated by this
Agreement, other than any determination that may be made pursuant to
Section 7(b).
          (q) Jury Trial Waiver. THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING TO WHICH THEY ARE PARTIES INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT.
          (r) Survival. The rights and obligations of the Company and Executive
contained in Sections 8, 9 and 12(s) of this Agreement shall survive the
termination of the Agreement. Following termination of Executive’s employment
and this Agreement, each party shall have the right to enforce all rights, and
shall be bound by all obligations, of such party that are continuing rights and
obligations under this Agreement.
          (s) Non-disparagement. Executive shall not make any disparaging,
derogatory or detrimental comments about the Company or any of its affiliates or
any of their directors, officers, employees, partners, members, managers or
shareholders, or any investor or other person or entity having a business
relationship with the Company or any of its affiliates. The Company, each of its
affiliates and the directors and officers of the Company and its affiliates
shall not make any disparaging, derogatory or detrimental comments about
Executive.
          (t) Certain Definitions. For purposes of this Agreement:
               (i) an “affiliate” of any person means another person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person, and includes
subsidiaries;
               (ii) a “business day” means the period from 9:00 am to 5:00 pm on
any weekday that is not a banking holiday in the State of Colorado; and
               (iii) a “subsidiary” of any person means another person, an
amount of the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its board of
directors or other governing body (or, if there are no such voting interests or
no board of directors or other governing body, fifty percent (50%) or more of
the equity interests of which) is owned directly or indirectly by such first
person.
[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the Company and Executive have executed this Agreement,
effective as of the day and year first above written.

            ROYAL GOLD, INC.
      By:   /s/ Stanley Dempsey       Name:   Stanley Dempsey      Title:  
Executive Chairman              /s/ Tony Jensen       TONY JENSEN         

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