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Unassociated Document

EXHIBIT 4.2

 

ELDORADO GOLD CORPORATION

INCENTIVE STOCK OPTION PLAN

 

OFFICERS & DIRECTORS

Amended and Restated

as of May 5, 2011

 

 

1.           Purpose of the Plan

 

1.1           The purpose of the Plan is to (a) attract and retain superior directors and officers engaged to provide ongoing services to the Company, to provide an incentive for such persons to put forth maximum effort for the continued success and growth of the Company, and in combination with these goals, to encourage their equity participation in the Company; and (b) closely align the personal interests of such directors and officers with those of the shareholders by providing them with the opportunity, through options, to acquire common shares in the capital of the Company.

 

2.           Definitions

 

2.1           For the purposes of the Plan, the following terms have the respective meanings set forth below:

 

	
  

	
(a)

	
“Black-Out Period” means that period during which a trading black-out period is imposed by the Company to restrict trades in the Company’s securities by an Eligible Person or Permitted Assign;

 

	
  

	
(b)

	
“Board” means the board of directors of the Company;

 

	
  

	
(c)

	
“Business Combination” has the meaning ascribed to the term in Subsection 10.7 hereof;

 

	
  

	
(d)

	
“Cause” means any act, which at common law in the applicable jurisdiction, would be considered cause for dismissal without the obligation to provide notice or pay in lieu of notice;

 

	
  

	
(e)

	
“Change of Control” means:

 

	
  

	
(i)

	
an acquisition of 40% or more of the voting rights attached to all outstanding voting shares of the Company by a person or combination of persons acting in concert by virtue of an agreement, arrangement, commitment or understanding, or by virtue of a related series of such events, and whether by transfer of existing shares or by issuance of shares from treasury or both; or

 

 

  

  

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(ii)

	
the amalgamation,  consolidation or combination of the Company with, or merger of the Company into, any other person, whether by way of amalgamation, arrangement or otherwise, unless (1) the Company is the surviving person or the person formed by such amalgamation, consolidation or combination, or into which the Company has merged, is a corporation and (2) immediately after giving effect to such transaction at least 60% of the voting rights attached to all outstanding voting shares of the Company or the corporation resulting from such amalgamation, consolidation or combination, or into which the Company is merged, as the case may be are owned by persons who held at least 60% of the voting rights attached to all outstanding voting shares of the Company immediately before giving effect to such transaction; or

 

	
  

	
(iii)

	
the direct or indirect transfer, conveyance, sale, lease or other disposition, by virtue of a single event or a related series of such events, of 90% or more of the assets of the Company based on gross fair market value to any person unless (1) such disposition is to a corporation and (2) immediately after giving effect of such disposition, at least 60% of the voting rights attached to all outstanding voting shares of such corporation are owned by the Company or its related entities or by persons who held at least 60% of the voting rights attached to all outstanding voting shares of the Company immediately before giving effect to such disposition; or

 

	
  

	
(iv)

	
individuals who are elected by the shareholders to the Board at the beginning of any one year term to constitute the directors of the Company cease for any reason in such year to constitute at least 50% of the Board;

 

	
  

	
(f)

	
“Company” means Eldorado Gold Corporation;

 

	
  

	
(g)

	
“Compensation Committee” means the compensation committee of the Board and if there is none, means the full Board;

 

	
  

	
(h)

	
“Eligible Person” means, from time to time, any director or officer of the Company;

 

	
  

	
(i)

	
“Exchange” means, if the Shares are listed on the TSX, the TSX and, if the Shares are not listed on the TSX, any other principal exchange upon which the Shares are listed;

 

	
  

	
(j)

	
“Grant Date” has the meaning ascribed to that term in Subsection 5.1 hereof;

 

	
  

	
(k)

	
“Insider” means a reporting insider as defined under National Instrument 55-104 – Insider Reporting Requirements and Exemptions;

 

	
  

	
(l)

	
“Market Value” of a Share means, on any given day, the closing board lot sale price per share of Shares on the Exchange on the trading day immediately 
preceding the relevant date and if there was not a board lot sale on the Exchange on such date, then the last board lot sale prior thereto;

 

 

  

  

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(m)

	
“NI 45-106” means National Instrument 45-106 – Prospectus and Registration Exemptions;

 

	
  

	
(n)

	
“Option” means an option, granted pursuant to Section 5 hereof, to purchase a Share;

 

	
  

	
(o)

	
“Option Period” has the meaning ascribed to that term in Subsection 6.3 hereof;

 

	
  

	
(p)

	
“Option Price” means the price per Share at which Shares may be purchased under the Option, as determined pursuant to Paragraph 5.1(b) hereof and as may be adjusted in accordance with Section 10 hereof;

 

	
  

	
(q)

	
“Optionee” means an Eligible Person to whom an Option has been granted;

 

	
  

	
(r)

	
“Permitted Assign” means for an Eligible Person, a holding entity (as defined in Section 2.22 of NI 45-106) or an RRSP or RRIF of that person;

 

	
  

	
(s)

	
“Plan” means the Incentive Stock Option Plan of the Company as set forth herein as the same may be amended and/or restated from time to time;

 

	
  

	
(t)

	
“related entity” has the meaning ascribed to that term in Section 2.22 of NI 45-106;

 

	
  

	
(u)

	
“Securities Regulators” has the meaning ascribed to that term in Section 11 hereof;

 

	
  

	
(v)

	
“security based compensation arrangement” means

 

	
  

	
(i)

	
stock option plans of the Company for the benefit of employees, insiders, service providers or any one of such groups;

 

	
  

	
(ii)

	
individual stock options granted to employees, service providers or insiders if not granted pursuant to a plan previously approved by the Company’s shareholders;

 

	
  

	
(iii)

	
stock purchase plans where the Company provides financial assistance or where the Company matches the whole or a portion of the securities being purchased;

 

	
  

	
(iv)

	
stock appreciation rights involving issuances of securities from treasury of the Company;

 

	
  

	
(v)

	
any other compensation or incentive mechanism involving the issuance or potential issuances of securities from treasury of the Company; and

 

	
  

	
(vi)

	
security purchases from treasury by an employee, insider or service provider which is financially assisted by the Company by any means whatsoever,

 

  

  

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and for greater certainty, arrangements which do not involve the issuance from treasury or potential issuance from treasury of the Company are not security based compensation arrangements;

 

	
  

	
(w)

	
“Share” means, subject to Section 10 hereof, a Common share without nominal or par value in the capital of the Company;

 

	
  

	
(x)

	
“Shareholder” means a registered holder of Shares of the Company;

 

	
  

	
(y)

	
“Take-Over Bid” has the meaning ascribed to the term in Subsection 10.6 hereof; and

 

	
  

	
(z)

	
“TSX” means the Toronto Stock Exchange.

 

2.2           Unless otherwise indicated, all dollar amounts referred to in this Option Plan are in Canadian funds.

 

2.3           As used in this Plan,

 

	
  

	
(a)

	
words importing the masculine gender shall include the feminine and neuter genders, words importing the singular shall include the plural and vice versa, unless the context otherwise requires and references to person includes any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, company or corporation (with or without share capital), unincorporated association, trust, trustee, executor, administrator or other legal representative; and

 

	
  

	
(b)

	
the term “include” (or words of similar import) is not limiting whether or not non-limiting language (such as “without limitation” or words of similar import) is used with reference thereto.

 

3.           Administration of the Plan

 

3.1           The Plan shall be administered by the Compensation Committee.

 

3.2           The Chief Executive Officer of the Company shall periodically make recommendations to the Compensation Committee as to the grant of Options.

 

3.3           The Compensation Committee shall, periodically, after considering the Chief Executive Officer’s recommendations, make recommendations to the Board as to the grant of Options.

 

3.4           In addition to the powers granted to the Board under the Plan and subject to the terms of the Plan, the Board shall have full and complete authority to grant Options, to interpret the Plan, to prescribe such rules and regulations as it deems necessary for the proper administration of the Plan and to make such determinations and to take such actions in connection therewith as it deems necessary or advisable.  Any such interpretation, rule, determination or other act of the Board shall be conclusively binding upon all persons.

 

  

  

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3.5           The Board may authorize one or more officers of the Company to execute and deliver and to receive documents on behalf of the Company.

 

4.           Shares Subject to the Plan

 

4.1           Effective May 5, 2011, the maximum number of Shares which may be issued under the Plan from and after May 5, 2011 shall not exceed 13,654,234 Shares, subject to adjustment as provided in Section 10.

 

4.2           The total number of Shares that may be reserved for issuance to any one Optionee pursuant to Options shall not exceed 1% of the Shares of the Company issued and outstanding on a non-diluted basis on the Grant Date of the Options.

 

4.3           The total number of Shares that may be reserved for issuance to all non-executive directors pursuant to Options shall not exceed three-quarters of one percent (0.75%) of the Shares outstanding on a non-diluted basis on the Grant Date of the Options.  Within any one financial year period, the total value of Options granted to a non-executive director, as determined by the Board on the Grant Date, shall not exceed $100,000.  Notwithstanding Subsection 5.1, in determining those non-executive directors entitled to grants of Options and the number of Options to be granted to non-executive directors, the Board shall not discriminate against any particular non-executive director and shall make such determinations in accordance with its duties to act honestly and in good faith with a view to the best interest of the Company.

 

4.4           Notwithstanding anything in this Plan to the contrary:

 

	
  

	
(a)

	
the maximum number of Shares issuable pursuant to Options granted under the Plan to Insiders together with the number of Shares issuable to Insiders pursuant to Options granted under the Company’s Employees, Consultants & Advisors Incentive Stock Option Plan (as may be amended and restated from time to time) and any other security based compensation arrangements shall not exceed 9% of the Shares issued and outstanding on a non-diluted basis at the Grant Date of the Options; and

 

	
  

	
(b)

	
within any one-year period, the maximum number of Shares issued pursuant to Options granted under the Plan to Insiders, together with the number of Shares issued to Insiders pursuant to Options granted under the Company’s Employees, Consultants & Advisors Incentive Stock Option Plan (as may be amended and restated from time to time) and any other security based compensation arrangements shall not exceed 9% of the Shares issued and outstanding on a non-diluted basis.

 

	
  

	
Any entitlement to acquire Shares granted pursuant to the Plan or otherwise prior to the grantee becoming an Insider shall be excluded for the purpose of the limits set out above.

 

4.5           Options may be granted in respect of authorized and unissued Shares. Shares in respect of which Options have expired, cancelled or otherwise terminated for any reason (other than exercise of the Options) shall be available for subsequent Options under the Plan.

 

  

  

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4.6           No fractional Shares may be purchased or issued under the Plan.

 

5.           Grants of Options

 

5.1           Subject to the provisions of the Plan, the Board shall, in its sole discretion and from time to time, determine those Eligible Persons to whom Options shall be granted and the date on which such Options are to be granted (the “Grant Date”).  The Board shall also determine, in its sole discretion, in connection with each grant of Options:

 

	
  

	
(a)

	
the number of Options to be granted;

 

	
  

	
(b)

	
the Option Price applicable to each Option, provided that the Option Price shall not be less than the Market Value per Share on the Grant Date; and

 

	
  

	
(c)

	
the other terms and conditions (which need not be identical and which, without limitation, may include non-competition provisions) of all Options covered by any grant.

 

6.           Eligibility, Vesting and Terms of Options

 

6.1           Options may be granted to Eligible Persons only.

 

6.2           Subject to the adjustments provided for in Section 10 hereof, each Option shall entitle the Optionee to purchase one Share.

 

6.3           The option period (the “Option Period”) of each Option commences on the Grant Date and expires no later than at 4:30 p.m. Vancouver time on the fifth anniversary of the Grant Date.  If an Option expires during a Black-Out Period then, notwithstanding any other provision of the Plan, the Option shall expire 10 business days after the Black-Out Period is lifted by the Company.

 

6.4           Without restricting the authority of the Board in respect of the terms of Options to be granted hereunder, the Board may at its discretion, in respect of any such Option, provide that the right to exercise such Option will vest in instalments over the life of the Option, with the Option being fully-exercisable only when such required time period or periods have elapsed, and in connection therewith determine the terms under which vesting of the Options may be accelerated.

 

6.5           Any Optionee whose employment, engagement or directorship with the Company is terminated

 

	
  

	
(a)

	
by the Company, for any reason other than for Cause, at any time in the 12 months following a Change of Control of the Company, or

 

	
  

	
(b)

	
by the Optionee, if the Company makes a material adverse change in the location, salary, duties or responsibilities assigned to the Optionee, at any time in the 12 months following a Change of Control of the Company and the Optionee has provided notice in writing to the Company within 30 days of such material adverse change to terminate employment, engagement or directorship,

 

  

  

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then any outstanding Options that have not yet vested on the date of termination shall be deemed to have vested on such date.

 

6.6           Notwithstanding any other provision hereunder, pursuant to the Company’s Compensation Policy for non-executive directors, at the discretion of the Board, non-executive directors may be granted up to a maximum of 100,000 fully vested Options upon initial election or appointment to the Board.

 

6.7           Subject to Section 8, an Option which is not subject to vesting, may be exercised (in each case rounded down to the nearest full Share) at any time during the Option Period.  Subject to Section 8, an Option which is subject to vesting, may once vested, be exercised (in each case rounded down to the nearest full Share) at any time during the Option Period.

 

6.8           An Option is personal to the Optionee and is non-assignable and non-transferable otherwise than:

 

	
  

	
(a)

	
by will or by the laws governing the devolution of property in the event of death of the Optionee; or

 

	
  

	
(b)

	
with the prior consent of the Board, to a Permitted Assign.

 

7.           Option Agreement

 

7.1           Upon the grant of an Option, the Company and the Optionee shall enter into an option agreement, in a form set out in Appendix A or in such form as approved by the Board, subject to the terms and conditions of the Plan, which agreement shall set out the Optionee’s agreement that the Options are subject to the terms and conditions set forth in the Plan as it may be amended or replaced from time to time, the Grant Date, the name of the Optionee, the Optionee’s position with the Company, the number of Options, the Option Price, the expiry date of the Option Period and any vesting or other terms and conditions as the Board may deem appropriate.

 

8.           Termination of Employment, Engagement or Directorship

 

8.1           In the event an Optionee’s employment, engagement or directorship terminates for any reason other than death or cause, the Optionee may exercise any Option granted hereunder to the

 

extent such Option was exercisable and had vested on the date of termination no later than 365 days after such termination or such later date within the Option Period first established by the Board for such Option as the Board may fix; provided, however, that in no event shall any Option be exercisable following the expiration of the Option Period applicable thereto.  In the event an Optionee’s employment, engagement or directorship is terminated for cause, each Option held by the Optionee that has not been effectively exercised prior to such termination shall lapse and become null and void immediately upon such termination.

 

8.2           In the event of the death of an Optionee, either while in the employment or engagement or while a director of the Company, the Optionee’s estate may, within 365 days from the date of 

 

 

 

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the Optionee’s death, exercise any Option granted hereunder to the extent such Option was exercisable and had vested on the date of the Optionee’s death; provided, however, that no Option shall be exercisable following the expiration of the Option Period applicable thereto.  The Optionee’s estate shall include only the executors or administrators of such estate and persons who have acquired the right to exercise such Option directly from the Optionee by bequest or inheritance.

 

8.3           The Board may also in its sole discretion increase the periods permitted to exercise all or any of the Options covered by any Grant following a termination of employment, engagement or directorship as provided in Subsections 8.1 or 8.2 above, if allowable under applicable law; provided, however, that in no event shall any Option be exercisable following the expiration of the Option Period applicable thereto.

 

8.4           The Plan shall not confer upon any Optionee any right with respect to a continuation of employment, engagement or directorship of, the Company nor shall it interfere in any way with the right of the Company to terminate any Optionee’s employment, engagement or directorship at any time.

 

8.5           Unless otherwise agreed to in writing by the Board in accordance with this Section, references to “termination”, “date of termination” or similar references in this Section 8 and in Subsection 6.5 in the case of officers who are also employees, are deemed to be the last day of active employment with the Company or its related entity, as the case may be, regardless of any salary continuance or notice period required under applicable law or the reason for termination of employment (whether with or without cause or with or without notice), and in the case of a Permitted Assign are deemed to be the termination of the Eligible Person that the Permitted Assign is related to.

 

8.6           For greater certainty (and subject to Subsections 6.5 and 8.5), an Option that has not become vested on the date that the relevant termination event referred to in this Section 8 occurred, shall not be or become exercisable and shall be cancelled.

 

9.           Exercise of Options

 

9.1           Subject to the provisions of the Plan, an Option may be exercised from time to time by delivery to the Company at its head office of a written notice of exercise addressed to the President and Chief Executive Officer, the Chief Financial Officer or the Corporate Secretary of the Company specifying the number of Shares with respect to which the Option is being

 

exercised, together with the appropriate form of payment (to be determined by the Company) for the aggregate of the Option Prices to be paid for the Shares to be purchased.  Certificates for such Shares shall be issued and delivered to the Optionee within a reasonable time following the receipt of such notice and payment.

 

10.           Adjustment on Alteration of Share Capital

 

10.1           In the event of a subdivision, consolidation or reclassification of outstanding Shares or other capital adjustment, the number of Shares reserved or authorized to be reserved under the Plan, the number of Shares receivable on the exercise of an Option and the Option Price therefor shall be increased or reduced proportionately and such other adjustments shall be made as may 

 

 

 

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be deemed necessary or equitable by the Board in its sole discretion and such adjustment shall be binding for all purposes.

 

10.2           If the Company amalgamates, consolidates or combines with or merges with or into another body corporate, whether by way of amalgamation, arrangement  or otherwise (the right to do so being hereby expressly reserved), any Share receivable on the exercise of an Option shall be converted into the securities, property or cash which the Optionee would have received upon such amalgamation, consolidation, combination or merger if the Optionee had exercised his or her Option immediately prior to the effective date of such amalgamation, consolidation, combination or merger and the Option Price shall be adjusted as may be deemed necessary or equitable by the Board in its sole discretion and such adjustment shall be binding for all purposes of the Plan.

 

10.3           In the event of a change in the Company’s currently authorized Shares which is limited to a change in the designation thereof, the shares resulting from any such change shall be deemed to be Shares within the meaning of the Plan.

 

10.4           In the event of any other change affecting the Shares, such adjustment, if any, shall be made as may be deemed necessary or equitable by the Board in its sole discretion to properly reflect such event and such adjustment be binding for all purposes of the Plan.

 

10.5           No adjustment provided in this Section 10 shall require the Company to issue a fractional Share and the total adjustment with respect to each Option shall be limited accordingly.

 

10.6           If, at any time when an Option granted under the Plan remains unexercised, an offer (“Take-over Bid”) to purchase all of the Shares of the Company is made by a third party, the Company shall use its best efforts to bring such offer to the attention of the Optionee as soon as practicable and the Board may, in a fair and equitable manner, at its option, require the acceleration of the time for the exercise of the Options granted under the Plan and of the time for the fulfillment of any conditions or restrictions on such exercise (including without limitation, vesting requirements).

 

10.7           Notwithstanding any other provision herein, if because of a proposed merger, amalgamation or other corporate arrangement or reorganization, the exchange or replacement of Shares in the Company for securities, property or cash in or from another company is imminent (“Business Combination”), the Board may, in a fair and equitable manner, determine the manner in which all unexercised option rights granted under the Plan shall be treated including, for example, requiring the acceleration of the time for the exercise of such rights by the Optionees and of the time for the fulfillment of any conditions or restrictions on such exercise (including without limitation, vesting requirements) or providing that any Share which would be receivable prior to the effective time of the Business Combination on the exercise of an Option be replaced with the securities, property or cash which the Optionee would have received if the Optionee had exercised his or her Option immediately prior to the effective time of the Business Combination and make any necessary adjustment, including adjustments to the Option Price, as may be deemed necessary or equitable by the Board in its sole discretion.  All determinations of the Board under this Subsection 10.7 shall be binding for all purposes of the Plan.  Any adjustments made by the Board in the context of a Business Combination are subject to TSX approval.

 

  

  

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10.8           In order to permit Optionees to participate in a proposed Take-over Bid made by means of a take-over bid circular or a proposed Business Combination that could result in a Change of Control, the Board may make appropriate provisions for the exercise of options (whether vested or not) conditional upon the Shares resulting therefrom being taken up and paid for under the Take-over Bid or the completion of the Business Combination, as applicable.

 

11.           Regulatory Approval

 

11.1           Notwithstanding any of the provisions contained in the Plan or any Option, the Company’s obligation to grant Options and issue Shares and to issue and deliver certificates for such securities to an Optionee pursuant to the exercise of an Option shall be subject to:

 

	
  

	
(a)

	
compliance with all applicable laws, regulations, rules, orders of governmental or regulatory authorities in Canada and the United States (“Securities Regulators”);

 

	
  

	
(b)

	
compliance with the requirements of the Exchange; and

 

	
  

	
(c)

	
receipt from the Optionee of such covenants, agreements, representations and undertakings, including as to future dealings in such Shares, as the Company determines to be necessary or advisable in order to safeguard against the violation of the securities laws of any jurisdiction.

 

11.2           The Company shall in no event be obligated to take any action in order to cause the issuance and delivery of such certificates to comply with any laws, regulations, rules, orders or requirements.

 

11.3           Notwithstanding any provisions in the Plan or any Option, if any amendment, modification or termination to the provisions hereof or any Option made pursuant hereto are required by any Securities Regulators, a stock exchange or a market as a condition of approval to a distribution to the public of any Shares or to obtain or maintain a listing or quotation of any Shares, the Board is authorized to make such amendments and thereupon the terms of the Plan, any Options, including any option agreement made pursuant hereto, shall be deemed to be amended accordingly without requiring the consent or agreement of any Optionee or shareholder approval.

 

12.           Miscellaneous

 

12.1           An Optionee entitled to Shares as a result of the exercise of an Option shall not be deemed for any purpose to be, or to have rights as, a shareholder of the Company by such exercise, except to the extent Shares are issued therefor and then only from the date such Shares are issued.  No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to the date such Shares are issued pursuant to the exercise of Options.

 

12.2           If the Company shall be required to withhold any amounts by reason of any federal, provincial, state, local or other rules or regulations concerning taxes or social security contributions in respect of the issuance or delivery of Shares to the Optionee, the Company may deduct and withhold such amount or amounts from any payment made by the Company to such Optionee, whether or not such payment is made pursuant to this Plan.  In addition, or as an 

 

 

 

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alternative to such withholding from payments, the Company may require an Optionee, as a condition of exercise of an Option, to pay to the Company an amount not exceeding the total of the withholding obligation of the Company arising in respect of the issuance or delivery of Shares to the Optionee, or to reimburse the Company for such amount. Under no circumstances shall the Company be responsible for funding the payment of any tax on behalf of any Eligible Person, any Permitted Assign or any transferee of an Option as permitted hereunder, or for providing any tax advice to them.

 

13.           Amendment and Termination

 

13.1           The Plan has been amended and restated as of May 5, 2011.  Any amendments made are effective as of the date amended.

 

13.2           The Board may, subject to Shareholder approval, amend the Plan at any time.   Notwithstanding the foregoing, the Board is specifically authorized to amend or revise the terms of the Plan without obtaining Shareholder approval in the following circumstances:

 

	
  

	
(a)

	
to change the termination provisions of the Options or Plan which does not extend beyond the original expiry date;

 

	
  

	
(b)

	
to add a cashless exercise feature, payable in cash or securities, whether or not the feature provides for a full deduction of the number of underlying securities from the reserved Shares; and

 

	
  

	
(c)

	
other amendments of a housekeeping nature, including the correction or rectification of any ambiguities, defective or inconsistent provisions, errors, mistakes or omissions herein and updating provisions herein to reflect changes in the governing laws, including tax laws, and the TSX requirements.

 

Except as otherwise permitted by the TSX, amendments to this provision as well as amendments to the number of Shares issuable under the Plan (including an increase to a fixed maximum number of Shares or a fixed maximum percentage of Shares, as the case may be, or a change from a fixed maximum number of shares to a fixed maximum percentage), may not be made without obtaining approval of the Shareholders in accordance with TSX requirements.  For

 

greater certainty, an increase does not include reloading after exercise under a fixed maximum number or percentage provided the fixed maximum or percentage is not increased and the Plan otherwise permits reloading.

 

13.3           The Board may suspend or terminate the Plan at any time.  No action by the Board to terminate the Plan pursuant to this Section 13 shall affect any Options granted hereunder pursuant to the Plan prior to termination.

 

13.4           Except as set out below, the Board may (without Shareholder approval) amend, modify or terminate any outstanding Option, including, but not limited to, substituting another award of the same or of a different type or changing the date of exercise; provided, however that, the Optionee’s consent to such action shall be required unless the Board determines that the action, when taken with any related action, would not materially and adversely affect the Optionee or is specifically permitted hereunder.

 

  

  

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The exercise price of any outstanding Options may not be reduced and the original Option Period extended unless Shareholder approval is obtained by way of a resolution passed by a majority of the votes cast by the Shareholders at a meeting of Shareholders.  The Option Price of any outstanding Options may not be reduced and the original term of the Option Period may not be extended to the benefit of Insiders unless disinterested Shareholder approval is obtained in accordance with TSX requirements.

 

 

 

 

  

  

  

 

 

 

APPENDIX A

 

OFFICERS & DIRECTORS INCENTIVE STOCK OPTION PLAN

 

OF ELDORADO GOLD COMPANY

(“the Company”)

 

 

OPTION AGREEMENT

 

This Option Agreement is entered into between the Company and the Optionee named below pursuant to the Company’s Incentive Stock Option Plan (the “Plan”) a copy of which is attached hereto, and confirms the following:

 

	  	
Grant Date:

	  
	 	 	 
	  	
Optionee:

	  
	 	 	 
	  	
Optionee’s Position

with the Company:

	  
	 	 	 
	  	
Number of Options:

	  
	 	 	 
	  	
Option Price

($ per Share):

	
$

	 	 	 
	  	
Vesting Period:

	  
	 	 	 
	  	
Expiry Date of

Option Period:

	  

 

Subject to the Plan, each Option that has vested entitles the Optionee to purchase one Share at any time up to 4:30 p.m. Vancouver time on the expiry date of the Option Period.

 

This Option Agreement is subject to the terms and conditions set out in the Plan, as amended or replaced from time to time.  In the case of any inconsistency between this Option Agreement and the Plan, the Plan shall govern.

 

The Optionee acknowledges and agrees that the Optionee will, at all times, act in strict compliance with any and all applicable laws and any policies of the Company applicable to the Optionee in connection with the Plan.

 

  

  

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The Optionee hereby acknowledges that he or she has not received any advice from the Corporation as to tax or legal ramification of the grant of Options hereunder and has been advised to seek independent tax advice as he or she deems necessary.

 

Unless otherwise indicated, all defined terms shall have the respective meanings attributed thereto in the Plan.

 

By signing this agreement, the Optionee acknowledges that he, she, or his or her authorized representative has read and understands the Plan.

 

IN WITNESS WHEREOF the parties hereto have executed this Option Agreement as of the          day of                       ,            .

	  	  	
ELDORADO GOLD CORPORATION

	 	 	 
	 	 	 
	  	  	  	
Per:

	  
	  	  	  	  	
Authorized Signatory

 

Acknowledged and Agreed to:

	  	  	  
	  	
)

)

)

	  
	
Signature of Optionee

	
)

	
Signature of Witness

	  	
)

)

)

	  
	
Name and Title of Optionee

	
)

	
Name of Witnessexhibit10_1.htm

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into by THE PANTRY, INC., a Delaware corporation (the “Corporation”) and Thomas D. Carney (the “Employee”) and shall be effective as of June 27, 2011 (the “Effective Date”).

 

The Corporation desires to employ Employee and Employee desires to accept such employment on the terms set forth below.

 

In consideration of the mutual promises set forth below and other good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the Corporation and Employee agree as follows:

 

1.           EMPLOYMENT.  The Corporation employs Employee and Employee accepts employment on the terms and conditions set forth in this Agreement.  Employee shall serve as Senior Vice President and General Counsel and have such responsibilities and authority as the Corporation may assign from time to time.  Employee, at the Corporation’s discretion, may be reassigned or transferred to different units or locations.

 

1.1           Employee shall perform all duties and exercise all authority in accordance with, and otherwise comply with, all Corporation policies, procedures, practices and directions.

 

1.2           Employee shall devote all working time and best efforts to successfully perform his duties and advance the Corporation’s interests.  During his employment, Employee shall not engage in any other business activities of any nature whatsoever (including board memberships) for which he receives compensation without the Corporation’s prior consent; provided, however, this provision does not prohibit him from personally owning and trading in stocks, bonds, securities, real estate, commodities or other investment properties for his own benefit which do not create actual or potential conflicts of interest with the Corporation.

 

2.           COMPENSATION.

 

2.1           Base Salary.  Employee’s annual salary for all services rendered shall be Three Hundred Thousand Dollars and Zero Cents ($300,000.00), less any applicable taxes and withholdings, payable in accordance with the Corporation’s policies, procedures and practices as they may exist from time to time.  Employee’s salary periodically may be subject to annual increases in the Corporation’s discretion in accordance with its policies, procedures and practices as they may exist from time to time.

 

2.2           Bonus Programs.  Employee may participate in any incentive program which may be made available from time to time to Corporation’s employees at Employee’s level; provided, however, that Employee’s participation is subject to the applicable terms, conditions and eligibility requirements of the program, as they may exist from time to time.

 

2.3           Benefits.  Employee may participate in all medical, dental, disability, insurance, 401(k), pension, vacation and other employee benefit plans and programs which may be made available from time to time to Corporation employees at Employee’s level; provided, however, that Employee’s participation is subject to the applicable terms, conditions and eligibility requirements of these plans and programs, some of which are within the plan administrator’s discretion, as they may exist from time to time.  Notwithstanding the foregoing, Employee shall be entitled to a minimum of four (4) weeks of annual vacation.  Subject to applicable state law, accrued, unused vacation may not be carried over from year to year.

 

  

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2.4           Relocation Expenses.  The Corporation will assist Employee in relocating to North Carolina by providing relocation assistance under the Corporation’s regular relocation practices and policies.  Provided, however, no such relocation expenses shall be paid later than March 15 of the year following the year in which the expense was incurred.

 

2.5           Benefit Plans Subject to Amendment.  Nothing in this Agreement shall require the Corporation to create, continue or refrain from amending, modifying, revising or revoking any of the plans, programs or benefits set forth in Sections 2.2, 2.3 and 2.4.  Employee acknowledges that the Corporation, in its sole discretion, may amend, modify, revise or revoke any such plans, programs or benefits.  Any amendments, modifications, revisions and revocations of these plans, programs and benefits shall apply to Employee.  Nothing in this Agreement shall afford Employee any greater rights or benefits with regard to these plans, programs and benefits than are afforded to him under their applicable terms, conditions and eligibility requirements, some of which are within the plan administrator’s discretion, as they may exist from time to time.

 

2.6           Offset for Disability Payments.  If at any time during which Employee is receiving salary or post-termination payments from the Corporation, he receives payments on account of mental or physical disability from any Corporation-provided plan, then the Corporation, in its discretion, may reduce his salary or post-termination payments by the amount of such disability payments.

 

2.7           Clawback Provision. Employee agrees to promptly return to the Corporation any and all amounts received pursuant to this Agreement to the extent the Corporation is entitled or required to recover such amounts by the terms of (i) the Corporation’s Executive Compensation Recoupment Policy or other clawback or recoupment policy, as adopted, amended, implemented, and interpreted by the Corporation from time to time, and/or (ii) Section 954 of the Dodd-Frank Act (as may be amended) and any applicable rules or regulations promulgated by the Securities Exchange Commission.

 

3.           TERM OF EMPLOYMENT AND TERMINATION.  The original term of employment under this Agreement shall be for a two (2) year period of time commencing on the Effective Date and subject to the following provisions:

 

3.1           Automatic Renewal.  Upon the expiration of the original term or any renewal term of employment, Employee’s employment shall be automatically renewed for a one (1) year period unless, at least sixty (60) days prior to the renewal date, either party gives the other party written notice of its intent not to continue the employment relationship.  During any renewal term of employment, the terms, conditions and provisions set forth in this Agreement shall remain in effect unless modified in accordance with Section 8.

 

3.2           Without Cause.  During the original or any renewal term, this Agreement and the employment relationship hereunder shall be terminated without cause thirty (30) days after either the Corporation or Employee gives notice of such termination to the other party.

 

3.3           With Cause.  The Corporation may terminate this Agreement and Employee’s employment hereunder immediately without notice at any time for the following reasons which shall constitute “Cause”: (i) the willful and continued failure by Employee to substantially perform his duties with the Corporation; (ii) Employee’s insubordination in responding to any specific, reasonable instructions from either the Corporation’s Chief Executive Officer or Board of Directors; (iii) conduct by Employee which is demonstrably and materially injurious to the Corporation, monetarily or otherwise; or (iv) the conviction of Employee of, or the entry of a plea of guilty or nolo contendere by Employee to, any crime involving moral turpitude or any felony.  Prior to a termination pursuant to Section 3.3(i), Employee shall be given written notice of the manner in which he has failed to perform and a thirty (30) day opportunity to cure such failure.

 

  

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3.4           Death or Disability.  The Corporation may terminate Employee’s employment without notice in the event of Employee’s death or “Disability” which shall mean Employee’s physical or mental inability to perform the essential functions of his duties with or without reasonable accommodation for a period of 180 consecutive days or 180 days in total within a 365-day period as determined by the Corporation in its reasonable discretion and in accordance with applicable law.

 

3.5           Survival.  Section 4 (Compensation Upon Termination), Section 5 (Competitive Business Activities, Trade Secrets, Confidential Information and Corporation Property), and Section 6 (Change in Control) shall survive the expiration or termination of this Agreement, regardless of the reasons for such expiration or termination, until the obligations set forth therein have been satisfied.

 

4.           COMPENSATION UPON TERMINATION.

 

4.1           By Corporation For Cause or By Employee Without Cause or By Notice of Non-Renewal.  If Employee’s employment is terminated by the Corporation for Cause or by Employee without cause or by notice of non-renewal, the Corporation’s obligation to compensate Employee ceases on the effective termination date except as to amounts due at that time.

 

4.2           By Corporation by Non-Renewal or Without Cause.  If the Corporation terminates Employee’s employment by notice of non-renewal or without Cause, then Employee shall be entitled to receive:

 

(A)           amounts due on the effective termination date;

 

(B)           if the termination is by the Corporation without Cause in the first two years of employment under this Agreement, an amount equal to the greater of Employee’s then current monthly salary for the then remaining months in the original term of this Agreement or for twelve (12) months, less any applicable taxes and withholdings and payable in substantially equal installments on the last business day of each applicable month and, if the termination is after the first two years of employment hereunder, an amount (less any applicable taxes and withholdings) equal to Employee’s then current monthly salary for twelve (12) months, payable in substantially equal installments on the last business day of each applicable month (“Severance Payments”).  Such Severance Payments shall commence in the month immediately following the month in which the release of claims required by Section 4.4 becomes effective.  During the period in which Employee is receiving the Severance Payments, if Employee accepts employment or a consultancy with another entity or becomes self-employed, then he must notify the Corporation before such employment or consultancy begins and the payments made pursuant to Section 4.2(B) shall be reduced by the amount of compensation to be paid to him in connection with such employment, consultancy or self-employment.  If Employee does not notify the Corporation in accordance with this provision, then its obligation to make payments or further payments pursuant to Section 4.2(B) shall cease.

 

    In the event that the total amount of payments due Employee under Section 4.2(B) should exceed the maximum amount permitted to be paid under a separation pay plan exempt from regulation under Section 409A pursuant to Treasury Regulations Section 1.409A-1(b)(9)(iii), then the entire amount in excess of such maximum amount shall be paid to Employee no later than two and one-half (21⁄2) months following the end of the calendar year in which Employee's employment terminated.

  

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(C)           unless Employee obtains comparable group health insurance coverage from a subsequent employer, then, for the twelve (12) months following the termination of Employee’s employment, Employee may elect to continue participation in the Corporation’s group health insurance plan in which Employee participated upon termination of employment by electing continuation coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”).  For the twelve (12) month continuation period, the Corporation shall reimburse Employee for that portion of the COBRA premiums in excess of the amount Employee paid for group health plan coverage immediately prior to termination from employment.  In the event Employee prefers to obtain coverage under an individual health insurance policy that is less expensive than COBRA coverage rather than electing COBRA continuation coverage, the Corporation shall, for twelve (12) months, reimburse Employee for that portion of the premium payments that are in excess of the amount Employee paid for group health plan coverage immediately prior to termination of employment.  All reimbursements required pursuant to this Section 4.2(C) shall be paid as soon as reasonably practicable following Employee’s submission of proof of timely premium payments to the Corporation; provided, however, that all such claims for reimbursement shall be submitted by Employee and paid by the Corporation no later than fifteen (15) months following Employee’s termination of employment.

4.3           Death or Disability.  If Employee’s employment is terminated because of Employee’s death either before or after a Change in Control (as hereinafter defined), then the Corporation shall pay to the estate of Employee an amount (less any applicable taxes and withholdings) equal to Employee’s then current monthly salary for six (6) months.  If Employee’s employment is terminated because of Disability either before or after a Change in Control, then the Corporation shall pay Employee his then current monthly salary (less any applicable taxes and withholdings) for a period equal to the shorter of:  (i) six (6) months from the date of termination; or, (ii) the time period from the date of termination through the date on which Employee begins receiving long term disability insurance benefits in accordance with the Corporation’s long term disability plan.  Any payments paid to Employee or his estate pursuant to this Section shall be paid in periodic, substantially equal installments; provided, however, that all such amounts payable shall be paid no later than two and one-half (21⁄2) months following the end of the calendar year in which Employee's employment terminated.

 

4.4      Severance Pursuant to Agreement.

 

The Corporation’s obligation to provide the payments under Sections 4.2, 4.3 (except in the event of termination because of Employee’s death) and Section 6.3 is conditioned upon Employee’s execution of an enforceable release of all claims and his compliance with Section 5 hereof (specifically including the return of all Corporation property).  The required release shall contain a non-disparagement clause and shall be provided to Employee within seven (7) days following the date of his separation from service.  Employee must execute the release within the time period specified in the release (which shall not be longer than forty-five (45) days from the date of Employee’s receipt of the release).  Such release shall not be effective until any applicable revocation period, which shall be no more than seven (7) days, has expired.  If Employee chooses not to execute such a release or fails to comply with Section 5 of this Agreement, then the Corporation’s obligation to compensate him ceases on the effective termination date except as to amounts due at that time.

 

Employee is not entitled to receive any compensation or benefits upon his termination except as: (i) set forth in this Agreement; (ii) otherwise required by law; or (iii) otherwise required by any employee benefit plan in which he participates; provided, however, that the terms and conditions afforded Employee under this Agreement are in lieu of any severance benefits to which he otherwise might be entitled pursuant to a severance plan, policy or practice.  Nothing in this Agreement, however, is intended to waive or supplant any death, disability, retirement, 401(k) or pension benefits to which Employee may be entitled under employee benefit plans in which Employee participates.

 

  

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5.           COMPETITIVE BUSINESS ACTIVITIES, TRADE SECRETS, CONFIDENTIAL INFORMATION AND CORPORATION PROPERTY.  Employee acknowledges that by virtue of Employee’s employment and position with the Corporation, Employee (i) has or will have access to trade secrets and Confidential Information (as defined in Section 5.2(B)) of the Corporation including valuable information about its business operations and entities with whom it does business in various locations, and (ii) has developed or will develop relationships with parties with whom it does business in various locations.  Employee also acknowledges that the trade secrets, Confidential Information and Competitive Business Activities provisions set forth in this Agreement are reasonably necessary to protect the Corporation’s legitimate business interests, are reasonable as to the time, territory and scope of activities which are restricted, do not interfere with public policy or public interest and are described with sufficient accuracy and definiteness to enable him to understand the scope of the restrictions imposed on him.

 

Further, the Company and Employee specifically acknowledge that the provisions of this Section 5 are not intended to restrain Employee’s ability to practice law or to inhibit any potential client’s choice of legal representation, and all provisions of this Section 5 shall be interpreted and applied consistently with North Carolina’s Rules of Professional Conduct, specifically including Rule 5.6, “Restrictions on Right to Practice,”  Rule 1.6, “Confidentiality of Information,” and Rule 1.9, “Duties to Former Client” (or similar rules in other jurisdictions) and Employee’s rights and obligations thereunder.

 

5.1           Competitive Business Activities.  Without the Corporation’s prior written approval, during Employee’s employment and for twelve (12) months following termination of employment regardless of the reason for such termination:

 

(A)           Employee shall not, either individually or on behalf of another, directly or indirectly, as employer, employee, owner, partner, stockholder, independent contractor, agent, or otherwise enter into or in any manner participate in the convenience store business in North Carolina, South Carolina, Florida, or any other state in which the Corporation owns or operates ten (10) or more convenience stores upon the date of termination of employment.  Notwithstanding the foregoing, Employee’s ownership, directly or indirectly, of not more than one percent of the issued and outstanding stock of a corporation the shares of which are regularly traded on a national securities exchange or in the over-the-counter market shall not violate Section 5.1(A).

 

(B)           Employee will not directly or indirectly, request or induce any other employee of the Corporation to: (i) terminate employment with the Corporation, or (ii) accept employment with another business entity, or (iii) become engaged in the convenience store business in competition with the Corporation.

 

5.2           Trade Secrets; Confidential Information.

 

(A)           Employee hereby covenants and agrees not to use or disclose any Confidential Information (as hereinafter defined) or trade secrets except to authorized representatives of the Corporation or except as required by any governmental or judicial authority; provided, however, that the foregoing restrictions shall not apply to items that, through no fault of Employee’s, have entered the public domain.

 

  

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(B)           Confidential Information.  For purposes of this Agreement, “Confidential Information” means any data or information with respect to the business conducted by the Corporation, other than trade secrets, that is material to the Corporation and not generally known by the public.  To the extent consistent with the foregoing definition, Confidential Information includes without limitation: (i) reports, pricing, sales manuals and training manuals, selling and pricing procedures, and financing methods of the Corporation, together with any techniques utilized by the Corporation in designing, developing, manufacturing, testing or marketing its products or in performing services for clients, customers and accounts of the Corporation; and (ii) the business plans, financial statements, reports and projections of the Corporation, and the Corporation’s prospective strategic or expansion plans.

 

(C)           Corporation Property.  Employee acknowledges that all trade secrets and Confidential Information are and shall remain the sole, exclusive and valuable property of the Corporation and that Employee has and shall acquire no right, title or interest therein.  Any and all printed, typed, written and other material which Employee may have or obtain with respect to trade secrets or Confidential Information (including without limitation all copyrights therein) shall be and remain the exclusive property of the Corporation, and any and all such material (including any copies) and all other Corporation property shall, upon request of the Corporation, be promptly delivered by Employee to the Corporation.

 

5.3           Other Agreements.  Nothing in this Agreement shall terminate, revoke or diminish Employee’s obligations or the Corporation’s rights and remedies under law or any agreements relating to trade secrets, confidential information, or non-competition which Employee has executed in the past or may execute in the future or contemporaneously with this Agreement.

 

6.           Change in Control.

 

6.1           Definition of Change in Control.  For purposes of this Agreement, a “Change in Control” shall mean:

 

(A)           any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than: (i)the Corporation; (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation; (iii) a corporation owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation; or (iv) the existing holders of capital stock of the Corporation as of the date hereof, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing more than fifty percent (50%) of the combined voting power of the Corporation’s then outstanding securities; or

 

(B)           the consummation of a merger, share exchange, consolidation or reorganization involving the Corporation and any other corporation or other entity as a result of which less than fifty percent (50%) of the combined voting power of the Corporation or of the surviving or resulting corporation or entity after such transaction is held in the aggregate by the holders of the combined voting power of the outstanding securities of the Corporation immediately prior to such transaction; or

 

(C)           the stockholders of the Corporation approve a plan of complete liquidation of the Corporation or an agreement for the sale or disposition by the Corporation of all or substantially all of the Corporation’s assets; or

  

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(D)           during any period of twenty-four (24) consecutive months, the individuals who constitute the Board of Directors of the Corporation at the beginning of such period (the “Incumbent Directors”) cease for any reason to constitute a majority of the Board of Directors; provided, however, that a director who is not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director is elected or recommended for election by a majority of the directors who are then Incumbent Directors.

 

6.2           Termination Following a Change in Control.  After the occurrence of a Change in Control, Employee shall be entitled to receive payments and benefits pursuant to this Agreement if Employee’s employment is terminated within eighteen (18) months following the Change in Control either by the Corporation by notice of non-renewal, without Cause, or with Cause as defined in Section 3.3(i) (failure to perform) hereof, or by Employee for Good Reason.  For purposes of this Agreement, “Good Reason” shall exist for Employee to terminate his employment if Employee resigns within six (6) months of any of the following conditions having arisen without his consent after having given the Corporation written notice of the existence of such condition within sixty (60) days of the initial existence of the condition and providing the Corporation with thirty (30) days to remedy the condition:

 

(A)           a substantial adverse alteration in the nature or status of his position or responsibilities or the conditions of his employment from those in effect immediately prior to the Change in Control;

 

(B)           a material diminution by the Corporation of Employee’s annual base salary and target bonus, as such target bonus is described in the Corporation’s Annual Incentive Plan (“Target Bonus”);

(C)           the Corporation’s requiring Employee to be based more than fifty (50) miles from the Corporation’s offices at which he was principally employed immediately prior to the date of the Change in Control;

 

(D)           the Corporation’s material failure to pay Employee any compensation due under this Agreement;

 

(E)           the failure of the Corporation to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement;

 

(F)           any other action or inaction that constitutes a material breach by the Corporation of this Agreement.

 

6.3           Severance Pay and Benefits.  If Employee’s employment with the Corporation terminates under circumstances as described in Section 6.2 above, Employee shall be entitled to receive all of the following:

 

(A)           all accrued compensation through the termination date;

 

(B)           a severance payment equal to Employee’s then current monthly salary for twenty-four (24) months plus an amount equal to two (2) times the value of Employee’s Target Bonus for the year in which the termination occurs (less any applicable taxes and withholdings), payable in substantially equal installments in accordance with the Corporation’s pay schedule, policies, procedures and practices applicable to Employee and in effect immediately prior to the termination of Employee’s employment.  Said installment payments shall commence with the first such pay date immediately following the date on which the release of claims required by Section 4.4 becomes effective. During the twenty-four (24) month period following termination, if Employee accepts employment or a consultancy with another entity or becomes self-employed, then he must notify the Corporation before such employment or consultancy begins and the payments made pursuant to this Section 6.3(B) shall be reduced by the amount of compensation to be paid to him in connection with such employment, consultancy or self-employment.  If Employee does not notify the Corporation in accordance with this provision, then its obligation to make payments or further payments pursuant to this Section 6.3(B) shall cease.

 

  

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In the event that the total amount of payments due Employee under Section 6.3(B) should exceed the maximum amount permitted to be paid under a separation pay plan exempt from regulation under Section 409A pursuant to Treasury Regulations Section 1.409A-1(b)(9)(iii), then the entire amount in excess of such maximum amount shall be paid to Employee no later than two and one-half (21⁄2) months following the end of the calendar year in which Employee’s employment terminated.

 

(C)           unless Employee obtains comparable medical insurance coverage from a subsequent employer, then, for twenty-four (24) months following the termination of Employee’s employment, the Corporation shall reimburse Employee for certain premiums paid for comparable health insurance coverage as described in this Section 6.3(C).  Employee may elect to continue coverage under the Corporation’s group health insurance plan in which he participated on the effective date of the termination of employment by election of continuation coverage under COBRA, subject to the terms of the group health plan and applicable law.  The Corporation shall reimburse Employee for that portion of the COBRA premiums that are in excess of the amount Employee paid for group health plan coverage immediately prior to termination of employment for the lesser of:  (i) the maximum COBRA period for which Employee is eligible, or (ii) twenty-four (24) months following termination of employment.  At the end of the maximum COBRA continuation period, the Corporation shall further reimburse Employee for that portion of health insurance premiums under a fully-insured, individual health insurance policy that are in excess of the amount Employee paid for coverage under the Corporation’s group health plan immediately prior to termination of employment.  Such individual health insurance policy reimbursements shall continue for no longer than the remainder, if any, of the twenty-four (24) month health insurance continuation period following expiration of the maximum COBRA continuation period.  Notwithstanding the foregoing, in the event Employee prefers to initially obtain health insurance coverage under a fully-insured, individual health insurance policy that is less expensive than COBRA coverage, the Corporation shall reimburse Employee for premiums that are in excess of the amount Employee paid for health insurance under the Corporation’s group health plan immediately prior to termination through the earlier to occur of:  (i) twenty-four (24) months following termination of employment, or (ii) the date Employee obtains comparable group health insurance coverage from a subsequent employer.  All such reimbursements required pursuant to this Section 6.3(C) shall be paid as soon as reasonably practicable following Employee’s submission of proof of timely premium payments to the Corporation; provided, however, that all such claims for reimbursement shall be submitted by Employee and paid by the Corporation no later than twenty-seven (27) months following Employee’s termination of employment.

 

7.           WAIVER OF BREACH.  The Corporation’s or Employee’s waiver of any breach of a provision of this Agreement shall not waive any subsequent breach by the other party.

 

8.           ENTIRE AGREEMENT.  Except as expressly provided in this Agreement, this Agreement:  (i) supersedes all other understandings and agreements, oral or written, between the parties with respect to the subject matter of this Agreement; and (ii) constitutes the sole agreement between the parties with respect to this subject matter.  Each party acknowledges that: (i) no representations, inducements, promises or agreements, oral or written, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement; and (ii) no agreement, statement or promise not contained in this Agreement shall be valid.  No change or modification of this Agreement shall be valid or binding upon the parties unless such change or modification is in writing and is signed by the parties.

 

  

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9.           SEVERABILITY.  If a court of competent jurisdiction holds that any provision or sub-part thereof contained in this Agreement is invalid, illegal or unenforceable, that invalidity, illegality or unenforceability shall not affect any other provision in this Agreement.  Additionally, if any of the provisions, clauses or phrases in the Competitive Business Activities, Trade Secrets, Confidential Information and Corporation Property provisions set forth in this Agreement are held unenforceable by a court of competent jurisdiction, then the parties’ desire is that they be “blue-penciled” or rewritten by the court to the extent necessary to render them enforceable.

 

10.           PARTIES BOUND.  The terms, provisions, covenants and agreements contained in this Agreement shall apply to, be binding upon and inure to the benefit of the Corporation’s successors and assigns.  The Corporation, at its discretion, may assign this Agreement.  Employee may not assign this Agreement without the Corporation’s prior written consent.

 

11.           REMEDIES.  Employee acknowledges that his breach of this Agreement would cause the Corporation irreparable harm for which damages would be difficult, if not impossible, to ascertain and legal remedies would be inadequate.  Therefore, in addition to any legal or other relief to which the Corporation may be entitled by virtue of Employee’s breach or threatened breach of this Agreement, the Corporation may seek equitable relief, including but not limited to preliminary and injunctive relief, and such other available remedies.

 

12.           SECTION 409A OF THE INTERNAL REVENUE CODE.

       

        12.1   Parties' Intent.  The parties intend that the provisions of this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder (collectively, "Section 409A") and all provisions of this Agreement shall be construed in a manner consistent wiht the requirements for avoiding taxes or penalties under Section 409A.  If any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause Employee to incur any additional tax or interest under Section 409A, the Corporation shall, upon the specific request of Employee, use its reasonable business efforts in good faith reform such provision to comply with Code Section 409A; provided, that to the maximum extent practicable, the original intent and economic benefit to Employee and the Corporation of the applicable provision shall be maintained, and the Corporation shall have no obligation to make any changes that could create any additional economic cost  or loss of benefit to the Corporation.  The Corporation shall timely use its reasonable business efforts to amend any plan or program in which Employee participates to bring it in compliance with Section 409A.

   

           12.2   Separation from Service.  A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement relating to the payment of any amounts or benefits upon or following a termination of employment unless such termination also constitutes a "Separation from Service" within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a "termination," "termination of employment," "separation from service" or like terms shall mean Separation from Service.

 

        12.3   Separate Payments.  Each installment payment required under this Agreement shall be considered a separate payment for purposes of Section 409A. 

 

  

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        12.4   Delayed Distribution to KeyEmployees.  If the Corporation determines, in accordance with Sections 409A and 416(i) of the Code and the regulations promulgated thereunder, in the Corporation’s sole discretion, that Employee is a Key Employee of the Corporation on the date his employment with the Corporation terminates and that a delay in benefits provided under this Agreement is necessary to comply with Code Section 409A(A)(2)(B)(i), then any severance payments and any continuation of benefits or reimbursement of benefit costs provided by this Agreement, and not otherwise exempt from Section 409A, shall be delayed for a period of six (6) months following the date of termination of Employee's employment (the “409A Delay Period”).  In such event, any severance payments and the cost of any continuation of benefits provided under this Agreement that would otherwise be due and payable to Employee during the 409A Delay Period shall be paid to Employee in a lump sum cash amount in the month following the end of the 409A Delay Period.  For purposes of this Agreement, “Key Employee” shall mean an employee who, on an Identification Date (“Identification Date” shall mean each December 31) is a key employee as defined in Section 416(i) of the Code without regard to paragraph (5) thereof .  If Employee is identified as a Key Employee on an Identification Date, then Employee shall be considered a Key Employee for purposes of this Agreement during the period beginning on the first April 1 following the Identification Date and ending on the following March 31.

 

13.           GOVERNING LAW.  This Agreement and the employment relationship created by it shall be governed by North Carolina law without giving effect to North Carolina choice of law provisions.

 

IN WITNESS WHEREOF, the parties have entered into this Agreement on the day and year written below.

	  	
EMPLOYEE

	  	
/s/ Thomas D. Carney

	  	
6/27/11

	  	
Thomas D.  Carney

	  	
Date

	  	
THE PANTRY, INC.

	  	
/s/ Terrance M. Marks

	  	
7/1/11

	  	
Terrance M. Marks

President & CEO

	  	
Date

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