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Exhibit 10.21
 
EMPLOYMENT AGREEMENT

BETWEEN:

 
David Deisley, Business person, of 2988 W. 2nd Avenue, Vancouver, BC, Canada,
V6K 1K4

 
(the “Executive”)

AND:

 
NovaGold USA, Inc., a company incorporated pursuant to the laws of Delaware, and
having its principle office in Salt Lake City, at One Utah Center, 201 South
Main Street, Suite 400, Salt Lake City, Utah,  84111

 
(the “Company”)

           WHEREAS:

A. The Company is a natural resource company currently engaged in the
acquisition and exploration of mineral properties;

B. The Company wishes to employ and the Executive wishes to supply his services
in the capacity of Executive Vice President & General Counsel, on the terms and
conditions set out in this Agreement;

C. The Company and the Executive desire that this employment relationship and
the terms thereof be formally embodied in this Agreement;

D. The Company is a wholly owned subsidiary of NovaGold Resources Inc., a
company formed under the laws of Nova Scotia (“NovaGold”);

E. NovaGold wishes to employ the Executive, and the Executive wishes to supply
his services, in the capacity of Executive Vice President & General Counsel of
NovaGold, on the terms and conditions set out in a separate employment agreement
executed contemporaneously with the execution of this Agreement and dated
September 4, 2012 (the “Canada Agreement”); and

F. The Company, NovaGold and the Executive intend that during the term of this
Agreement, the Executive will serve as Executive Vice President & General
Counsel of the Company and as Executive Vice President & General Counsel of
NovaGold, and that a breach or termination by either party of this Agreement
will be considered a breach or termination of the Canada Agreement, and vice
versa;
 
 
 

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           THEREFORE in consideration of the recitals, the following covenants
and the payment of one dollar made by each party to the other, the receipt and
sufficiency of which are acknowledged by each party, the parties agree on the
following terms:

1.  
ENGAGEMENT AND DURATION

 
1.1  
Engagement

 

 
The Company hereby employs the Executive as Executive Vice President & General
Counsel and the Executive accepts such employment. The Executive shall also
serve as Executive Vice President & General Counsel of NovaGold pursuant to the
“Canada Agreement”.

 
1.2  
Term

 

 
The Executive’s employment pursuant to the terms of this Agreement shall
commence effective November 1, 2012 and shall continue indefinitely, unless and
until terminated as set forth herein.

 
1.3  
At-Will Employment

 
The Executive’s employment is at-will, and either the Executive or the Company
may terminate the relationship at any time, with or without prior notice, except
as especially provided for in Articles 6 or 7 of this Agreement.
 
2.  
DUTIES

 
2.1  
Performance of Duties

 

 
The Executive shall act as Executive Vice President & General Counsel, and the
Executive shall perform such services and duties as are normally provided by an
Executive Vice President & General Counsel of a company in a business and of a
size similar to the Company’s, and such other services and duties as may
reasonably be assigned from time to time.

2.2  
Other Boards or Committees

 
The Executive’s performance of reasonable personal, civic or charitable
activities or the Executive’s service on any boards or committees of any private
or public companies shall not be deemed to interfere with the performance of the
Executive’s services and responsibilities to the Company pursuant to this
Agreement, so long as there is no conflict between the business of the Company
and the business of the private or public companies.  The Executive agrees to
inform the Board of Directors of the Company (the “Board”) forthwith upon the
Executive being appointed to any such board or committee.  The Executive’s right
to participate on such boards or committees shall be subject to approval of the
Board, which approval will not be unnecessarily withheld.  The Board
acknowledges that as of the date of this Agreement, the Executive is a director
of the companies set forth in Schedule A hereto, and approves the Executive’s
right to participate on such boards.
 
 
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2.3  
Principal Place of Work

 

 
The Executive shall perform his duties under this Agreement at the Company’s
principal executive offices which are currently located in Salt Lake City,
Utah.  The Executive acknowledges that his duties and responsibilities may
involve a reasonable amount of traveling, including travel which may be required
to perform his duties under the Canada Agreement.

2.4  
Reporting

 

 
The Executive shall report directly to the President and Chief Executive Officer
(“CEO”) of the Company.

2.5  
Instructions

 

 
The Executive will, subject to the terms of this Agreement, comply promptly and
faithfully with the reasonable and lawful instructions, directions, requests,
rules and regulations of the Board and the CEO.

3.  
REMUNERATION AND BENEFITS

 
3.1  
Salary

 

 
The Company shall pay to the Executive for his services under this Agreement an
annual salary of US$425,000, subject to all applicable statutory deductions and
payable in substantially equal installments on the dates that the Company has
established for paying wages to its employees.  Executive understands that his
position is classified as exempt under both state and federal wage and hour law.
The Executive's annual salary shall be allocated by the Company between this
Agreement and the Canada Agreement as appropriate.

3.2  
Annual Review

 

 
The annual salary referred to in section 3.1 shall be reviewed at least annually
by the CEO in consultation with the Executive.  The CEO shall make
recommendations to the Board or the compensation committee of the Board
(“Compensation Committee”) regarding appropriate salary adjustments.  The annual
salary referred to in section 3.1 shall be increased by such amount as is
determined by the Board or the Compensation Committee in its sole discretion
taking into consideration the recommendations of the CEO, the performance of the
Executive and the performance of the Company provided, however, that in no event
shall the annual salary be less than the annual salary payable in the previous
fiscal year.

 
 
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3.3  
Reimbursement of Expenses

 

 
The Company shall reimburse the Executive for all reasonable expenses incurred
by him in the performance of this Agreement provided that the Executive provides
the Company with written expense accounts with respect to each calendar month,
by no later than the end of the calendar month following the incurring of such
expenses.  The Company will provide the Executive with, or reimburse the
Executive for, services and fees necessary for the performance of the
Executive’s duties including, but not limited to, membership in the Executive’s
professional institute, stock information accounts and fax lines.

3.4  
Medical Benefits

 

 
The Company shall provide the Executive with group life, long-term disability,
extended medical and dental insurance coverage (“benefit coverage”) in
accordance with the terms of the benefit plans in effect from time to time and,
to the extent provided by such plans, the Company shall extend medical and
dental insurance coverage to the Executive’s spouse and child dependents.  The
Company may, in the Company’s discretion, change such benefit coverage or amend
such benefits from time to time, as long as such changes do not apply solely to
the Executive.

 
 

3.5  
Directors and Officers Liability Insurance

 

 
The Company shall provide the Executive with directors’ and officers’ liability
insurance appropriate to the nature of his responsibilities under this
Agreement.  The directors’ and officers’ liability insurance will be subject to
the terms and conditions of the insurance policy’s coverage.

3.6  
Vacation

 

 
The Executive shall be entitled to 5 weeks of paid vacation for each fiscal year
with the Company.  The Executive shall be entitled to a pro-rata portion of the
Executive’s vacation entitlement for any part year of employment.  The Executive
shall take such vacation only at times approved in advance by the CEO, which
approval shall not be unreasonably withheld.  The Executive shall be covered by
the Company’s vacation policy for banking and forfeiture of vacation days.  In
addition, the Executive shall be entitled to statutory holidays and the number
of paid holidays provided for under the policies and procedures of the Company,
as they exist from time to time.  For the avoidance of doubt, the Executive is
entitled to a total of 5 weeks of paid vacation from his responsibilities as
Executive Vice President & General Counsel of the Company and of NovaGold, and
the terms of this Agreement and of the Canada Agreement regarding paid vacation
will be interpreted accordingly.

3.7  
Other Benefits

 
In addition to any other compensation or benefits to be received by the
Executive pursuant to this Agreement, the Executive shall be eligible to
participate in all executive benefits which NovaGold may from time to time
provide to its senior executives.  For greater certainty, and among other
things, the Executive shall be eligible to participate in NovaGold's Stock Award
Plan (“Option Plan”) and Performance Share Unit Plan (“PSU Plan”), as amended
from time to time.  All stock option and performance share unit (“PSU”) grants
are at the discretion of NovaGold’s Board of Directors and are subject to, and
will be made in accordance with, the guidelines of the Toronto Stock Exchange
and the Option Plan or PSU Plan, as applicable.
 
 
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In recognition of your appointment, you will receive an initial grant of 500,000
options, to be issued and priced on the date of this agreement, in accordance
with the requirements of the Toronto Stock Exchange and applicable securities
laws.  One third of these options vest upon your start date of November 1, 2012
(the “Start Date”), with the second 1/3 to vest on the first anniversary of your
Start Date and the final 1/3 to vest on the second anniversary of your Start
Date.  The terms and conditions of the options, including the manner of
exercise, will be in accordance with the terms of the Plan and the requirements
of the Toronto Stock Exchange and applicable securities laws.  Any stock options
granted to the Executive shall have an exercise price that is not less than the
fair market value of the stock on the date of the grant and otherwise satisfies
the requirements specified in U.S. Treasury Regulation 1-409A-1(b)(5)(i)(A).

In further recognition of your appointment, you will receive an initial grant of
150,000 PSUs upon the commencement of your employment.  The PSUs will vest on
January 5, 2014 and will be subject to the vesting criteria determined by the
Board of Directors of NovaGold.  The terms and conditions of the PSUs will be in
accordance with the terms of the PSU Plan and the requirements of the Toronto
Stock Exchange, applicable securities laws, and U.S. federal income tax laws to
the extent they are applicable.

As an inducement to enter into this Agreement, the Company will, subject to
approval of the Toronto Stock Exchange and the NYSE-MKT and applicable
securities laws, arrange to issue the Executive 125,000 common shares of
NovaGold.  The entitlement to shares may be settled on a net withholding basis
in order to satisfy any tax obligations of the Executive arising out of the
grant of shares set out herein.  Any such withholding will be satisfied by the
Company on a cash basis at the then market price of the NovaGold’s shares, and
the Executive will be issued that number of shares equal to 125,000 multiplied
by (100% - the anticipated percentage withholding obligation).  The grant of the
shares shall be effective the later of: (i) November 1, 2012, (ii) the date of
his relocation to the United States and (iii) the date that TSX, and if
applicable, NYSE-MKT approve the grant.

3.8  
Equipment

 
The Company shall provide the Executive with such equipment as the Executive and
CEO agree is necessary for performance of the Executive’s duties which shall
include a computer, fax machine, personal digital assistant and a cell phone for
use in carrying out Company business.  This equipment will remain Company
property and will be subject to the applicable policies and procedures of the
Company regarding the Company’s equipment, including the obligation of each
employee to return such property upon termination of employment.
 
 
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3.9  
Annual Incentive Program

 
The Executive shall be entitled to participate in the Company’s Annual Incentive
Program (the “Annual Incentive Program”) according to the terms of the Annual
Incentive Program which Annual Incentive Program the Company may, in the
Company’s discretion, change, abolish or amend from time to time, with or
without notice.  Any payments made to the Executive by affiliates of the
Company, including NovaGold, shall be taken into consideration when assessing
payments made pursuant to the Annual Incentive Plan.

3.10  
Payroll

 
 
The Company may at its election provide remuneration and benefits set out in
Article 3 of this Agreement through an affiliate of the Company.

4.  
CONFIDENTIALITY AND NON-DISCLOSURE

 
4.1  
“Confidential Information”

 
The term “Confidential Information” means any and all information concerning any
aspect of the Company or any of its affiliates not publicly disclosed, which the
Executive may receive or develop as a result of his engagement by or involvement
with the Company, and including all technical data, concepts, reports, programs,
processes, technical information, trade secrets, systems, business strategies,
financial information and other information unique to the Company.  All
Confidential Information, including notes, diagrams, maps, reports, notebook
pages, memoranda, sample materials and any excerpts thereof that include
Confidential Information are the property of the Company or parties for whom the
Company acts as agent or who are customers of the Company, as the case may be,
and are strictly confidential to the Company and/or such parties.  The Executive
shall not make any unauthorized disclosure or use of and shall use his best
efforts to prevent unauthorized disclosure or use of such Confidential
Information.
 
4.2  
Equitable Remedies

 
The Executive acknowledges that any unauthorized disclosure or use of such
Confidential Information by the Executive may result in material damages to the
Company and that the Company shall be entitled to seek injunctive relief or any
other legal or equitable remedy to prohibit, prevent or enjoin unauthorized
disclosure or use of Confidential Information by the Executive.  Executive
hereby waives the need for the Company to post any bond or security in
connection therewith.  The Executive acknowledges and agrees that his
unauthorized disclosure or use of Confidential Information will cause
irreparable harm to the Company that could not be adequately compensated by
damages.  This section 4.2 shall not affect any damages or other remedies to
which the Company may be entitled under this Agreement, at law or in equity,
arising from any breaches of such liabilities or obligations by Executive,
including but not limited to all remedies at law.
 
 
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4.3  
Use of Confidential Information

 
Except as authorized by the Company, the Executive will not:
 
(a)  
duplicate, transfer or disclose nor allow any other person to duplicate,
transfer or disclose any of the Company’s Confidential Information; or

 
(b)  
use the Company’s Confidential Information without the prior written consent of
the Company.

 
4.4  
Protection of Confidential Information

 
The Executive will safeguard all Confidential Information at all times so that
it is not exposed to or used by unauthorized persons, and will exercise at least
the same degree of care used to protect the Executive’s own Confidential
Information.
 
4.5  
Exception

 
The restrictive obligations set forth above shall not apply to the disclosure or
use of any information which:
 
(a)  
is or later becomes publicly known under circumstances involving no breach of
this Agreement by the Executive;

 
(b)  
is already known to the Executive at the time of receipt of the Confidential
Information;

 
(c)  
is lawfully made available to the Executive by a third party;

 
(d)  
is disclosed by the Executive pursuant to a requirement of a governmental
department or agency or disclosure is otherwise required by operation of law,
provided that the Executive gives notice in writing to the Company of the
required disclosure immediately upon his becoming advised of such required
disclosure and provided also that the Executive delays such disclosure so long
as it is reasonably possible in order to permit the Company to appeal or
otherwise oppose such required disclosure and provides the Company with such
assistance as the Company may reasonably require in connection with such appeal
or other opposition;

 
(e)  
is disclosed to a third party under an approved confidentiality agreement; or

 
(f)  
is disclosed in the course of the Executive’s proper performance of the
Executive’s duties under this Agreement.

 
 
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4.6  
Removal of Information

 
The Executive will not, without the written consent of the CEO, remove any
information relating to the Company, or any third party with which the Company
is conducting business, from the premises where the Executive is working, unless
required in the normal course of his duties.
 
4.7  
New Discoveries

 
Any inventions, discoveries or improvements in systems, methods and processes
made by the Executive in the course of his employment and any mineral
discoveries and opportunities to acquire mineral assets or interests therein
which come to the Executive in the course of his employment will be disclosed to
the Company forthwith in writing, and shall belong to and be the absolute
property of the Company if so designated by the Company in writing within a
reasonable time following the Executive’s disclosure.
 
4.8  
Survival

 
The provisions of this Article 4 shall survive the termination of this
Agreement.
 
4.9  
Non-Solicitation

 
The Executive shall not, for a period of six (6) months following the
termination of the Executive’s employment for any reason, without the prior
written consent of the CEO, either directly or indirectly, for or on behalf of
himself/herself or any individual, partnership, corporation or other legal
entity, as principal, agent, employee or otherwise, solicit, influence,
entice, induce or attempt to solicit, influence, entice or induce:
 
(a)  
any person who is employed by the Company or any affiliated company to leave
such employment; or

 
(b)  
any person, firm or corporation whatsoever, who or which has at any time in the
last two (2) years of the Executive’s employment with the Company or any
predecessor of the Company, been a customer of the Company, an affiliate
company, or of any of their respective related companies to cease its
relationship with the Company or any related company, provided that this
subsection shall not prohibit the Executive from soliciting business from any
such customer where such solicitation is unrelated to the business carried on by
the Company or any related company.

 
The Executive agrees that all restrictions contained in this Agreement are
reasonable and valid and all defenses to the strict enforcement thereof by the
Company are waived by the Executive.
 
4.10  
Equitable Relief

 
The Executive agrees that, in the event he/she violates any of the restrictions
referred to in this Article 4 the Company shall suffer irreparable harm and
shall be entitled to preliminary and permanent injunctive relief and any other
remedies in law or in equity which the court deems fit.  Executive hereby waives
the need for the Company to post any bond or security in connection
therewith.  This section 4.10 shall not affect any damages or other remedies to
which the Company may be entitled under this Agreement, at law or in equity,
arising from any breaches of such liabilities or obligations by Executive,
including but not limited to all remedies at law.
 
 
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5.  
DELIVERY OF RECORDS

 
Upon the termination of the employment of the Executive by the Company, or at
any time the Company requests, the Executive will deliver to the Company all
books, records, lists, brochures and other property belonging to the Company or
developed in connection with the business of the Company, including any
Confidential Information, and will execute such transfer documentation as is
necessary to transfer such property or intellectual property to the Company.
 
6.  
TERMINATION

 
6.1  
The Executive’s Right to Terminate

 
The Executive may terminate his obligations under this Agreement:
 
(a)  
at any time upon providing three months’ notice in writing to the Company; or

 
(b)  
upon a material breach or default of any term of this Agreement by the Company
provided that if such material breach or default is capable of being remedied by
the Company, it has not been remedied within 30 days after written notice of the
material breach or default has been delivered by the Executive to the Company.

 
The Company may waive the notice requirements set out in paragraph (a) above in
whole or in part and if it does so, the Executive's entitlement to remuneration
and benefits as set out in sections 6.3 and 6.4 as applicable will apply as of
the date the Company waives such notice.
 
6.2  
Company’s Right to Terminate

 
The Company may terminate the Executive’s employment under this Agreement at any
time:
 
(a)  
for just cause which shall include, without limitation, any of the following
events:

 
(i)  
theft, dishonesty or fraud by the Executive with respect to the business of the
Company;

 
 
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(ii)  
the conviction of the Executive for a criminal offence that gives rise or is
likely to give rise to the Company’s stock becoming ineligible for listing on
any stock exchange or market or the Company’s stock being subject to a
cease-trade order by a Canadian or US securities regulatory authority; or

 
(iii)  
any and all other omissions, commissions or other conduct which would constitute
just cause at law; or

 
(b)  
upon the Executive dying or becoming permanently disabled or disabled for a
period exceeding 180 consecutive days or 180 non-consecutive days calculated on
a cumulative basis over any two year period during the term of this
Agreement.  The Executive shall be deemed to have become disabled if, because of
ill health, physical, mental disability or for other causes beyond the control
of the Executive, the Executive has been unable or unwilling or has failed to
perform the essential functions of Executive’s position under this Agreement,
with or without reasonable accommodation (provided that no accommodation that
imposes undue hardship on the Company will be required); or

 
 
(c)
at any time upon making the severance payment contemplated in section 6.3 to the
Executive subject to the terms of this Agreement, including Article 8.

 
6.3  
Severance Payment

 
In the event of the termination of the Executive’s employment:
 
(a)  
by the Executive pursuant to subsection 6.1(b) of this Agreement; or

 
(b)  
by the Company pursuant to subsection 6.2(c) or by the Company in breach of this
Agreement;

 
the Company shall pay to the Executive a lump sum severance payment within 10
days after Executive executes a release without revocation as described in
Article 8 equal to:
 
(c)  
an amount equal to the Executive’s annual salary at the time of termination of
the Executive’s employment plus the Executive’s annual incentive target for the
fiscal year pursuant to the Annual Incentive Program, multiplied by two in the
event that such termination occurs before the first anniversary of this
Agreement; or

 
(d)  
an amount equal to the Executive’s annual salary at the time of termination of
the Executive’s employment plus the Executive’s annual incentive earned in the
previous fiscal year pursuant to the Annual Incentive Program, multiplied by two
in the event that such termination occurs on or after the first anniversary of
this Agreement.

 
 
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Further, the Company will pay to the Executive, as soon as practical following
the Executive’s termination of employment but in all events no later than March
15 of the year following the year of termination, a lump sum payment equal to
the Company’s cost of providing group life and long term disability insurance
coverage to the Executive for a period of 12 months.  In addition, unless the
Company is prohibited or restricted by applicable law as it may apply at the
time of Executive’s termination, in the event of termination of the Executive’s
employment pursuant to either 6.1(b) or 6.2(c), and subject to Article 8, the
Company shall continue the Executive’s group health and dental insurance
benefits, if any, under section 3.4 for a maximum period of 12 months or until
such time as the Executive subsequently becomes covered by another group health
plan or otherwise loses eligibility for COBRA coverage, whichever is earlier, in
accordance with COBRA.  The Executive agrees to notify the Company immediately
if he becomes covered by another group health plan.  The Executive is
responsible for electing COBRA coverage and remitting all premium payments
directly to the plan administrator for such coverage, within deadlines set forth
by the plan.  The Company will reimburse the Executive on tax-free basis for
such COBRA premium payments.  If, at the time of Executive’s termination of
employment, the Company is unable to continue any such benefits, or to provide
them to the Executive on a tax-favored basis, the Company will instead pay to
the Executive an amount equal to the present value of the Company’s cost of
providing such benefits, such amount to be paid as soon as possible following
Executive’s termination, but in all cases by March 15th of the year following
Executive’s termination of employment.
 
In addition, the Company shall reimburse the Executive within 10 days of such
termination for all expenses as contemplated by section 3.3.
 
6.4  
Compensation Otherwise Due to the Executive on Termination

 
In the event of the termination of the Executive’s employment under this
Agreement in circumstances other than those set out in section 6.3 of this
Agreement, the Company shall pay the following amounts to the Executive:
 
(a)  
if terminated pursuant to subsections 6.1(a) or 6.2(a) of this Agreement, the
Company shall pay to the Executive within 10 days of the termination unless
otherwise required by law his then-current annual salary accrued pursuant to
section 3.1 of this Agreement as of the date of termination or effective date of
resignation, as applicable; or

 
(b)  
if terminated pursuant to subsection 6.2(b) of this Agreement, the Company shall
pay to the Executive:

 
(i)  
his then-current annual salary accrued pursuant to this Agreement as of the date
of termination, within 10 days of the termination unless otherwise required by
law; and

 
(ii)  
a lump sum equal to the Executive’s annual salary at the time of termination of
the Executive’s employment within 10 days after Executive executes a release
without revocation as described in Article 8.  Such payment will be made no
later than March 15 of the year following the year of such termination.

 
 
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6.5  
Property Interests

 
If the Executive’s employment with the Company is terminated, and within three
years of such termination, the Executive acquires for his account, directly or
indirectly, other than from the Company or its subsidiaries any present or
future interest in any mining claims or properties or mineral interests within
10 kilometers of the external boundaries of any mineral property held by the
Company during the time the Executive was employed by the Company, the Executive
will offer the Company, in writing the right to acquire such interest in
exchange for reimbursement of his direct and indirect acquisition costs.  The
Company shall have 30 days after receipt of such offer to accept the offer and
90 days after receipt of such offer to reimburse such costs. For further
clarity, the requirements of the Section 6.5 shall not preclude a company that
employs the Executive subsequent to the termination of the Executive’s
employment with the Company from acquiring, directly or indirectly, any present
or future interest in any mining claims or properties or mineral interests
wherever situated for the account of such company.
 
6.6  
Resignations

 
Upon termination of the Executive for whatever reason the Executive shall
forthwith execute and deliver to the Company his written resignation from any
and all offices of the Company and its affiliates, without claim for
compensation for loss of office.
 
6.7  
Payments in Full Settlement

 
The Executive acknowledges and agrees that the payments pursuant to this Article
6 shall be in full satisfaction of all claims, losses, costs, damages or
expenses in connection with his employment and the termination of his
employment.  Except as provided in this Article, the Executive shall not be
entitled to any further termination payments, damages or compensation whatsoever
in connection with the employment of the Executive and the termination
thereof.  As a condition precedent to any severance payment pursuant to this
Article, the Executive agrees to deliver to the Company, without revocation,
prior to any such payment, a full and final release from all actions and claims
in connection with his employment and the termination of his employment or any
losses, costs, damages or expenses resulting there from in favor of the Company,
its affiliates, subsidiaries, directors, officers, employees and agents in a
form satisfactory to the Company, as more fully described in Article 8
below.  Should the Executive choose not to execute such a release, the Company
is released from any obligation under this Article 6 to provide any severance or
termination pay other than those payments required by law.
 
 
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7.  
CHANGE OF CONTROL

 
7.1  
Termination By Company.

 
In the event that within the twelve (12) month period immediately following a
Change of Control (as defined in section 7.2 of this Agreement), any of the
following occur:
 
(a)  
a material change (other than a change that is clearly and exclusively
consistent with a promotion) in the Executive’s position, duties,
responsibilities, title or office in effect immediately prior to any Change of
Control;

 
(b)  
a material reduction in the Executive’s Base Salary in effect immediately prior
to any Change of Control; or

 
(c)  
any material breach by the Company of any material provision of this Agreement;

 
(d)  
any action or event that would constitute a constructive dismissal of Executive
at common law,

 
then, if the Executive advises the Company in writing of the condition set forth
above within ninety (90) days of the date the Executive has become aware (or
reasonably should have become aware) of the condition, and the Company has not
cured the condition within thirty (30) days from the receipt of written notice,
the Executive’s employment shall be deemed to have been terminated by the
Company and the Company will, immediately upon such termination, and in all
cases on or before March 15th of the year following the year in which such
termination occurs, and subject to Article 8, pay to the Executive a lump sum
payment of an amount equal to the Executive’s annual salary at the time of
termination of the Executive’s employment plus the Executive’s annual incentive
earned in the previous fiscal year pursuant to the Annual Incentive Program,
multiplied by two, provided that if such termination occurs during the first
year of employment, the amount will be equal to the Executive’s annual salary at
the time of termination of the Executive’s employment plus the Executive’s
annual incentive target pursuant to the Annual Incentive Program, multiplied by
two.
 
Further, the Company will pay to the Executive, as soon as practical following
the Executive’s termination of employment under this section 7.1 but in all
events no later than March 15 of the year following the year of termination, a
lump sum payment equal to the Company’s cost of providing group life and long
term disability insurance coverage to the Executive for a period of 12
months.  In addition, unless the Company is prohibited or restricted by
applicable law as it may apply at the time of Executive’s termination, and
subject to Article 8, the Company shall continue the Executive’s group health
and dental insurance benefits, if any, under section 3.4 for a maximum period of
12 months or until such time as the Executive subsequently becomes covered by
another group health plan or otherwise loses eligibility for COBRA coverage,
whichever is earlier, in accordance with COBRA.  The Executive agrees to notify
the Company immediately if he becomes covered by another group health plan.  The
Executive is responsible for electing COBRA coverage and remitting all premium
payments directly to the plan administrator for such coverage, within deadlines
set forth by the plan.  The Company will reimburse the Executive on tax-free
basis for such COBRA premium payments.  If, at the time of Executive’s
termination of employment, the Company is unable to continue any such benefits,
or to provide them to the Executive on a tax-favored basis, the Company will
instead pay to the Executive an amount equal to the present value of the
Company’s cost of providing such benefits, such amount to be paid as soon as
possible following Executive’s termination, but in all cases by March 15th of
the year following Executive’s termination of employment.
 
 
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The Executive further agrees that compensation payable pursuant to this section
7.1 is in lieu of the severance package payable under section 6 of this
Agreement and shall be the maximum compensation which the Executive is entitled
to receive, including compensation in lieu of reasonable notice, and the Company
will have no further obligations to the Executive with respect to the
termination of this Agreement, his employment or the termination of his
employment, including, without limitation, further severance pay.  As a
condition precedent to any payment pursuant to this Article, the Executive
agrees to deliver to the Company, without revocation, prior to any such payment,
a full and final release from all actions and claims in connection with his
employment and the termination of his employment or any losses, costs, damages
or expenses resulting therefrom in favor of the Company, its affiliates,
subsidiaries, directors, officers, employees and agents in a form satisfactory
to the Company, as more fully described in Article 8 below.  Should the
Executive choose not to execute such a release, the Company is released from any
obligation under this Article to provide any severance or termination pay other
than those payments required by law.
 
7.2  
Change of Control.

 
For the purposes of this agreement, a “Change of Control” means any of the
following:
 
(a)  
at least 50% in fair-market value of all the assets of NovaGold are sold to a
party or parties acting jointly or in concert (as determined pursuant to the
Ontario Securities Act, R.S.O. 1990, c.S.5, as amended (the “OSA”), mutatis
mutandis) in one or more transactions occurring within a period of two (2)
years; or

 
(b)  
there is a direct or indirect acquisition by a person or group of persons acting
jointly or in concert of voting shares of NovaGold that when taken together with
any voting shares owned directly or indirectly by such person or group of
persons at the time of the acquisition, constitutes 40% or more of the
outstanding voting shares of NovaGold, provided that the direct or indirect
acquisition by Electrum Strategic Resources LLC (“Electrum”) of voting shares of
NovaGold shall not constitute a “Change of Control” unless the acquisition of
such additional voting shares when taken together with any voting shares or
securities convertible into voting shares (“Convertible Securities”) held
directly or indirectly by Electrum at the time of acquisition constitutes 50% or
more of the outstanding voting shares of NovaGold.  For purposes of this
paragraph (b), all Convertible Securities owned by Electrum will be deemed to be
fully converted or exercised and the number of outstanding voting shares of
NovaGold will be adjusted to reflect such conversion or exercise and Electrum
includes all persons acting jointly or in concert with Electrum;

 
 
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(a)  
a majority of the then-incumbent Board of Directors’ nominees for election to
the Board of Directors of NovaGold are not elected at any annual or special
meeting of shareholders of NovaGold; or

 
(b)  
NovaGold is merged, amalgamated, consolidated or reorganized into or with
another body corporate or other legal person and, as a result of such business
combination, more than 40% of the voting shares of such body corporate or legal
person immediately after such transaction are beneficially held in the aggregate
by a person or body corporate (or persons or bodies corporate acting jointly or
in concert) and such person or body corporate (or persons or bodies corporate
acting jointly or in concert) beneficially held less than 40% of the voting
shares of NovaGold immediately prior to such transaction.

 
Notwithstanding the foregoing provisions of paragraphs 7.2(a), (b) and (d),
unless otherwise determined in a specific case by majority vote of the Board of
Directors of NovaGold, a “Change of Control” shall not be deemed to have
occurred for the purposes of paragraphs (a), (b), and (d) solely because
NovaGold, an entity in which NovaGold directly or indirectly beneficially owns
50% or more of the outstanding voting shares (a “Subsidiary”), or any NovaGold
sponsored employee stock ownership plan or any other employee benefit plan of
NovaGold or any Subsidiary either files or becomes obligated to file a report or
a proxy statement under National Instruments NI 51-102 (Continuous Disclosure),
NI 62-103 (Early Warning) or NI 81-102 (Mutual Funds) (or any successor
schedule, form or report or item therein) under the OSA, or in any other fashion
authorized by a regulatory authority having due jurisdiction, disclosing
beneficial ownership by it of voting shares of NovaGold, whether in excess of
forty percent (40%) or otherwise, or because NovaGold reports that a change in
control of NovaGold has occurred or will occur in the future by reason of such
beneficial ownership; nor if NovaGold is a party to any amalgamation, merger or
similar transaction involving only NovaGold and its Subsidiaries and which does
not result in any change of beneficial ownership of any shares of NovaGold or of
the shares received by former shareholders of NovaGold in any new entity
resulting from that transaction.
 
7.3  
Limitation on Benefits

 
Notwithstanding anything to the contrary in this Agreement, to the extent
Executive receives any payments and benefits, whether payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (including,
but not limited to, any payments and benefits subject to any plan, program,
arrangement, agreement, or award) in connection with a Change of Control (“Total
Payments”), which would be subject to the excise tax under U.S. Code section
4999 but for the operation of this Section 7.3, then the aggregated amount of
the Total Payments shall be reduced to the extent necessary so that no portion
of the Total Payments is subject to the Excise Tax, but only if (A) the net
amount of such Total Payments, as so reduced (and after subtracting the net
amount of federal, state and local income taxes on such reduced Total Payments
and after taking into account the phase out of itemized deductions and personal
exemptions attributable to such reduced Total Payments) is greater than or equal
to (B) the net amount of such Total Payments without such reduction (but after
subtracting the net amount of federal, state and local income taxes on such
Total Payments and the amount of Excise Tax to which the Executive would be
subject in respect of such unreduced Total Payments and after taking into
account the phase out of itemized deductions and personal exemptions
attributable to such unreduced Total Payments).
 
 
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Subject to the provisions of this Section 7.3, all determinations required to be
made under this Section 7.3, including whether and the extent to which the Total
Payments will be subject to the Excise Tax and the assumptions to be utilized in
arriving at such determination, shall be made by a nationally recognized
accounting firm selected by the Executive.  Such firm shall not be a firm then
serving as accountant or auditor for the individual, entity or group effecting
the Change in Control (the “Auditor”).  Such firm will provide detailed
supporting calculations both to the Company and the Executive within fifteen
(15) business days of the receipt of notice from the Executive that there has
been a payment as a result of a Change of Control, or such earlier time as is
requested by the Company.  All fees and expenses of the Auditor shall be borne
solely by the Company.
 
8.  
EMPLOYEE RELEASE

 
In order for the Executive to receive the severance payment and the payments
with respect to group health, dental, life and disability coverage under Section
6.3, the severance payment under section 6.4(b)(ii) or the payments under
Section 7.1 of this Agreement (“Severance Payments”), the Executive must sign a
“Separation Agreement and Release” in a form agreeable to the Company, including
a release of claims in the form provided by the Company, on or prior to the date
of the expiration of any consideration period under applicable law.  The Company
agrees to provide the Executive with a release acceptable to the Company within
10 days of the date of termination of Executive’s employment, and in all cases
no later than a date such that the last day of any revocation period set forth
in the release will occur on or before February 28 of the year following the
year in which the termination of employment occurs.  Severance Payments will be
paid after the execution of the release and the expiration of any revocation
period set forth in the release, and, except for the reimbursement of COBRA
premiums for group health and dental coverage, all Severance Payments will be
paid no later than March 15 of the year following the year in which termination
of employment occurs.  If the Executive fails to sign the release within the
time frame provided under this Article 8, the Executive will forfeit any right
to Severance Payments and he shall not be entitled to Severance Payments or to
any payments replacing the Severance Payments.
 
 
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9.  
CANADA AGREEMENT

 
Subject to Article 8 of this Agreement, in the event NovaGold breaches the
Canada Agreement, such breach shall also be considered a fundamental breach by
the Company of this Agreement and the Executive shall be entitled to all the
rights and remedies provided for herein upon such a breach.  Subject to Article
8 of this Agreement, in the event the Executive’s employment under the Canada
Agreement is terminated, Executive’s employment under this Agreement also will
be deemed terminated in the same manner and the Executive shall be entitled to
all the rights and remedies provided for herein upon such termination.

10.  
TAX EQUALIZATION

 
The Executive acknowledges and agrees that he may be subject to Canadian taxes
as a result of his employment activities in Canada with the Company and
NovaGold.  The Company will provide the Executive with tax equalization to
ensure that he will pay neither more nor less taxes than he would have had he
remained in his home location in the United States.  This is his Hypothetical
Tax Liability.  Upon completion of the Executive’s annual Canadian and U.S.
income tax returns, an accounting firm retained by the Company will prepare a
tax equalization settlement calculation to determine the Executive’s
Hypothetical Tax Liability and corresponding settlement between the Executive
and the Company.  All tax equalization payments and reimbursements under this
Article 10 will be paid no later than the end of the Executive’s second taxable
year beginning after the taxable year in which the Executive’s U.S. federal
income tax return is required to be filed (including any extensions), or, if
later, the end of the second taxable year beginning after the latest year in
which the Canadian tax return is required to be filed.  For the purposes of this
Agreement “Hypothetical Tax Liability” means what the Executive’s U.S. Federal
and home state income taxes would have been on his taxable compensation had the
Executive remained in his home location in the United States.  The Executive’s
taxable compensation for Hypothetical Tax Liability purposes includes all
taxable compensation components included in this Agreement, the Canada
Agreement, and other taxable benefits including, but not limited to, vehicle
allowances and personal and spouse travel reimbursements under current U.S. tax
regulations.

11.  
 TAX RETURN PREPARATION ASSISTANCE

 
The Company will provide the Executive with both Canadian and U.S. income tax
return preparation assistance for any tax year during which the Executive has a
Canadian tax return filing requirement as a result of his employment activities
with the Company and NovaGold.  This service will be paid for by the Company and
provided by an accounting firm retained by the Company.

12.  
INDEMNIFICATION

 
The Company and the Executive agree to execute the attached Indemnity Agreement.
 
 
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13.  
PERSONAL NATURE

 
The obligations and rights of the Executive under this Agreement are personal in
nature, based upon the singular skill, qualifications and experience of the
Executive.

14.  
RIGHT TO USE EXECUTIVE’S NAME AND LIKENESS

 
During the term of this Agreement, the Executive hereby grants to the Company
the right to use the Executive’s name, likeness and/or biography in connection
with the services performed by the Executive under this Agreement and in
connection with the advertising or exploitation of any project with respect to
which the Executive performs services for the Company.

15.  
LEGAL ADVICE

 
The Executive hereby represents, warrants, and acknowledges to the Company that
he has had the opportunity to receive independent legal advice prior to the
execution and delivery of this Agreement.

16.  
WAIVER

 
No consent or waiver, express or implied, by any party to this Agreement of any
breach or default by any other party in the performance of its obligations under
this Agreement or of any of the terms, covenants or conditions of this Agreement
shall be deemed or construed to be a consent or waiver of any subsequent or
continuing breach or default in such party’s performance or in the terms,
covenants and conditions of this Agreement.  The failure of any party to this
Agreement to assert any claim in a timely fashion for any of its rights or
remedies under this Agreement shall not be construed as a waiver of any such
claim and shall not serve to modify, alter or restrict any such party’s right to
assert such claim at any time thereafter.

17.  
NOTICES

 
17.1  
Delivery of Notices

 

 
Any notice relating to this Agreement or required or permitted to be given in
accordance with this Agreement shall be in writing and shall be personally
delivered or mailed by registered mail, postage prepaid to the address of the
parties set out on the first page of this Agreement.  Any notice shall be deemed
to have been received if delivered, when delivered, and if mailed, on the fifth
day (excluding Saturdays, Sundays and holidays) after the mailing thereof.  If
normal mail service is interrupted by strike, slowdown, force majeure or other
cause, a notice sent by registered mail will not be deemed to be received until
actually received and the party sending the notice shall utilize any other
services which have not been so interrupted or shall deliver such notice in
order to ensure prompt receipt thereof.

 
 
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17.2  
Change of Address

 

 
Each party to this Agreement may change its address for the purpose of this
Article 17 by giving written notice of such change in the manner provided for in
section 17.1.

18.  
APPLICABLE LAW

 
This Agreement shall be governed by and construed in accordance with the laws of
the state of Utah and the federal laws of the United States applicable therein,
which shall be deemed to be the proper law hereof.  The parties hereto hereby
submit to the jurisdiction of the courts of Utah, venued in Salt Lake.  The
Executive agrees that the aforementioned courts shall have exclusive
jurisdiction of a lawsuit arising from or relating to Executive’s employment
with, or termination from, the Company or its affiliates.  All obligations of
the parties under this Agreement are subject to receipt of all necessary
approvals of the applicable securities regulatory authorities.  This Agreement
is intended to fall within the exception in U.S. Treasury Regulation
1-409A-1(b)(4) for short term deferrals or other applicable exceptions and will
be interpreted and administered accordingly.

19.  
SEVERABILITY

 
If any provision of this Agreement for any reason be declared invalid, such
declaration shall not affect the validity of any remaining portion of the
Agreement, which remaining portion shall remain in full force and effect as if
this Agreement had been executed with the invalid portion thereof eliminated,
and it is hereby declared the intention of the parties that they would have
executed the remaining portions of this Agreement without including therein any
such part, parts or portion which may, for any reason, be hereafter declared
invalid.

20.  
ENTIRE AGREEMENT

 
This Agreement constitutes the entire agreement between the parties hereto and
there are no representations or warranties, express or implied, statutory or
otherwise other than set forth in this Agreement and there are no agreements
collateral hereto other than as are expressly set forth or referred to
herein.  This Agreement cannot be amended or supplemented except by a written
agreement executed by all parties hereto.

21.  
NON-ASSIGNABILITY

 
This Agreement shall not be assigned by any party to this Agreement without the
prior written consent of the other parties to this Agreement.

22.  
BURDEN AND BENEFIT

 
This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
permitted assigns.
 
 
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23.  
TIME

 
Time is of the essence of this Agreement.

24.  
WITHHOLDING

 
The Company shall withhold from any amounts payable under this Agreement such
taxes and other amounts as may be required to be withheld pursuant to any
applicable law or regulation.

25.  
COUNTERPARTS

 
This Agreement may be executed in counterparts and such counterparts together
shall constitute one and the same instrument.

IN WITNESS WHEREOF the parties hereto have executed this Agreement effective as
of the 4th day of September, 2012.

NOVAGOLD USA, INC.
By: /s/ Gregory A. Lang  
Gregory A. Lang
Chief Executive Officer
 
By: /s/ David Deisley  
David Deisley
Executive VP & General Counsel
 

 
 
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SCHEDULE A

Member of the Trustees Council and Board of Directors of the Rocky Mountain
Mineral Law Foundation, Westminster, Colorado.
 
 
 
 
 
 
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