Exhibit
10.42


 


CHANGE OF
CONTROL SEVERANCE AGREEMENT


 


This Change of Control Severance Agreement is
entered into between GENERAL MOLY, INC.,
a Delaware corporation (the “Company”) and Robert Pennington (“Employee”)
to be effective as of April 23, 2009 (the “Effective Date”).  Certain capitalized terms used in this
Agreement are defined in Section 4 below.


 


RECITALS


 


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


 


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


 


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


 


AGREEMENT


 


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


 


1.                                       Term of Agreement.  The
term of this Agreement shall commence as of the Effective Date and shall
terminate automatically on the earlier of (a) December 31, 2011 or (b) the
date Employee terminates employment with the Company (the “Term”) unless
the parties, prior to the end of the Term, enter into a written agreement
renewing or extending this Agreement.


 


2.                                       Severance Pay.  If a Change
of Control event occurs, and as a result of the closing of the Change of
Control, or during the one-year period following the closing of the Change of
Control (i) the Company (or its successor) terminates Employee’s
employment without Cause or (ii) Employee terminates employment for Good
Reason during such one-year period, Employee will be entitled to Severance
Pay.  To be entitled to Severance Pay,
Employee must first execute a binding termination release agreement in a form
specified by the Company.  Severance Pay
will be in addition to any accrued but unpaid salary or vacation earned through
the date of Employee’s termination.


 


The amount of Employee’s
Severance Pay will be determined as the sum of (a) an amount equal to two (2) times
Employee’s annual base salary (as in effect immediately prior to the closing of
the Change of Control), plus (b) an amount equal to 100% of Employee’s
target annual bonus for one year (as in effect immediately prior to the closing
of the Change of Control), if any, less applicable withholdings.  In addition, all outstanding stock-based awards


 

















 


granted to Employee prior to the Change of Control shall have their
vesting and exercisability accelerated in full upon the effective date of the
closing of the Change of Control regardless of whether Employee has terminated
employment.


 


3.                                       Time and Form of Payment. 
The Severance Pay shall be paid in a lump sum, on a date determined by
the Company (or its successor), provided the release has been executed and is
effective and non-revocable, within 60 days following Employee’s separation
from service, except as required by Section 5(a).


 


4.                                       Certain Definitions.  For purposes of this Agreement the following
terms shall have the following meanings:


 


(a)                                  “Cause” means, unless otherwise
expressly defined in an employment or other agreement between the Company and
Employee, a willful failure to perform Employee’s duties, insubordination,
theft, dishonesty (as such terms are defined by the Company in good faith),
conviction of a felony or any other willful conduct that is materially
detrimental to the Company or such other cause as the Company in good faith
reasonably determines provides cause for the discharge of Employee.


 


(b)                                 “Change of Control” means:


 


(1)                                  The acquisition
by any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of either (A) the
then-outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (B) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that, for
purposes of this paragraph (1), the following acquisitions shall not constitute
a Change of Control:  (i) any
acquisition directly from the Company, (ii) any acquisition by the
Company, or (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any affiliated company; or


 


(2)                                  Consummation of
a reorganization, merger, statutory share exchange or consolidation or similar
corporate transaction involving the Company or the acquisition of assets or
stock of another entity by the Company (each, a “Business Combination”),
in each case unless, following such Business Combination, (A) all or
substantially all of the individuals and entities that were the beneficial
owners of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of
common stock and the combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation that, as a result of such transaction, owns
the Company or all or substantially all of the Company’s assets either directly
or through one or more subsidiaries) in substantially the same proportions as
their ownership immediately prior to such Business Combination of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities,
as the case may be, and (B) no Person (excluding any corporation resulting
from such Business Combination or any employee


 


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benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 50% or more of, respectively, the then-outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then-outstanding voting securities of such
corporation, except to the extent that such ownership existed prior to the
Business Combination;; or


 


(3)                                  Individuals
who, as of the date hereof, constitute the Board of Directors of the Company
(the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board; provided, however,
that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or


 


(4)                                  A sale or
disposition of all or substantially all of the operating assets of the Company
to an unrelated party; or


 


(5)                                  Approval by the
shareholders of the Company of a complete liquidation or dissolution of the
Company.


 


(c)                                  “Good Reason” means a material negative
change in the service relationship as determined in good faith by Employee of
the occurrence of any of the following conditions, without Employee’s express
written consent (i) a material dimunition in Employee’s base compensation;
(ii) a material dimunition in Employee’s authority, duties, or
responsibilities; (iii) a material change of more than 50 miles in the
geographic location at which Employee is required to perform the services; or (iv) any
action or inaction that constitutes a material breach by the Company (or its
successor) of any agreement under which Employee provides services to the
Company (or its successor).  Employee
shall provide written notice of Good Reason to the Company (or its successor)
within 30 days of the initial occurrence of the condition.


 


5.                                       Section 409A; Deferred Compensation.


 


(a)                                  Delay in Payment. 
Notwithstanding anything in this Agreement to the contrary, if Employee
is deemed by the Company (or its successor) be a “specified employee,” the
Severance Pay shall not be paid until the date which is the first business day
following the six-month period after Employee’s separation from service (or if
earlier, Employee’s death).  Such delay
in payment shall only be effected to the extent required to avoid adverse tax
treatment to Employee under Section 409A of the Internal Revenue Code of
1986, as amended (“Section 409A”). 
Any payment not subject to such delay, shall be paid pursuant to the
time and form of payment specified above. 
Any compensation which would have otherwise been paid during the delay
period shall be paid to Employee (or Employee’s beneficiary or estate) in a
lump sum payment on the first business day following the expiration of the
delay period.


 


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(b)                                 Key Definitions.  For purposes of
the Agreement, the term “termination of employment” shall mean “separation from
service” as defined in Section 409A.


 


(c)                                  Interpretation.  The
parties intend that all payments payable under this Agreement will not be
subject to the additional tax imposed by Section 409A, and the provisions
of this Agreement shall be construed and administered consistent with such
intent.  To the extent such potential
payments could become subject to Section 409A, the Company (or its
successor) and Employee agree to work together to modify the Agreement to the
minimum extent necessary to reasonably comply with the requirements of Section 409A,
provided that the Company (or its successor) shall not be required to pay Employee’s
taxes or additional compensation.


 


6.                                       At-Will Employment.  This
Agreement does not modify Employee’s status as an employee-at-will.  The parties acknowledge that Employee is an
employee-at-will and that Employee’s services may be terminated by the Company
at any time with or without Cause.


 


7.                                       Rights Not Alienable.  Any rights provided to Employee under the
terms of this Agreement shall not be assigned, transferred or alienated, except
by will or pursuant to the laws of descent and distribution.


 


8.                                       Entire Agreement.  This
Agreement contains the entire agreement between the parties hereto and
supersedes all prior agreements (oral or written), negotiations and discussions
between the Company and Employee.


 


9.                                       Amendment.  This
Agreement may only be amended by written agreement of the Company and Employee.


 


10.                                 Governing Law.  This
Agreement shall be administered, interpreted and enforced in accordance with
the substantive laws of the State of Colorado, without regard to its provisions
on conflict of laws.


 


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


 


	
   

  	
  GENERAL MOLY, INC.

  The Company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bruce D. Hansen

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  April 23,
  2009

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert Pennington

  
	
   

  	
   

  	
  Robert
  Pennington

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  April 23,
  2009

  



 


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