Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
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On
December 31, 2020, Gold Resource Corporation (the “Company”) issued a press release announcing that effective as of
the completion of the spin-off of the Company’s wholly-owned subsidiary, Fortitude Gold Corporation (the “Spin-off”),
Jason Reid, has stepped down as the Company’s Chief Executive Officer, President and a member of the Board of Directors,
in order to continue in those same roles at Fortitude Gold Corporation. In connection with his separation from the Company, the
Board of Directors approved a severance payment of $500,000 and accelerated the vesting of all outstanding equity awards held by
Mr. Reid.
On
December 31, 2020, Gold Resource Canada Corporation, a wholly-owned subsidiary of the Company, entered into an employment
agreement with Allen Palmiere pursuant to which he will provide services as Chief Executive Officer of the Company effective
as of January 1, 2021. Mr. Palmiere has also been appointed to serve as a member of the Board of Directors to fill the
vacancy created by Mr. Reid’s departure. Mr. Palmiere, has more than 35 years of experience in the mining industry both from a
financial and operational perspective. His international experience includes South Africa, Central America, Guyana and
Brazil and 10 years of experience in China. Mr. Palmiere’s expertise includes operations, executive management
and financing, both debt and equity, and mergers and acquisitions. Since 2016, Mr. Palmiere has served as Chief Executive
Officer of Ferrox Holdings Ltd., a privately held company focused on a titanium dioxide project in Africa. Mr. Palmiere
previously served as Chief Executive Officer of Guyana Goldfields Ltd. (TSX:GUY), from August 2019 to December 2019 and also
served as a director of that company from May 2019 to August 2020. Since June 2019, Mr. Palmiere has served as a director of
Dundee Corporation (TSX:DC), a diversified holding company with investments in natural resource, mining and energy sectors.
Mr. Palmiere’s former executive positions also include Chief Executive Officer and Chairman of the Board of HudBay
Minerals Inc.; Executive Chairman of Barplats Investments Ltd.; Vice President and Chief Financial Officer of Zemex
Corporation; and President and Chief Executive Officer of Breakwater Resources Ltd. Mr. Palmiere is a Chartered
Accountant and holds a Bachelor’s degree from the University of British Columbia.
Pursuant
to the terms of Mr. Palmiere’s employment agreement, he will receive an annual base salary of $450,000, an annual performance
bonus target opportunity of up to 60% of his annual base salary (or higher upon exceptional performance), and up to $500,000 per
year in long term incentive awards. Mr. Palmiere will receive all other customary benefits payable to other executive officers.
If his employment is terminated, Mr. Palmiere will be eligible for severance benefits including up to 24 months’ salary
and pro-rated bonus for termination without cause or with good reason, and 24 months’ salary and bonus for termination within
12 months of a change in control. The foregoing description of Mr. Palmiere’s employment agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the agreement, a copy of which is attached hereto as
Exhibit 10.1 and incorporated by reference herein.
In
connection with the Spin-off, Bill Conrad, Chairman of the Board, is stepping down as Chairman and will continue to serve as
a director of the Company and Alex Morrison will serve as Chairman. One vacancy on the Board was created when Kimberly Perry
previously stepped down to serve as Chief Financial Officer of the Company. On December 31, 2020, the Board determined to
expand the size of the Board to five members and appointed two independent directors, Joseph Driscoll and Lila Manassa
Murphy, to fill the vacancies effective as of January 1, 2021. Each independent director is expected to also fill vacancies
on the various Board committees, which assignments will be determined at the next meeting of the Board. The new directors
will receive a monthly cash retainer fee, which is subject to adjustment for among other things, committee membership and
leadership, and are eligible for long-term equity incentive awards as determined by the Compensation Committee of the
Board.
Joseph
Driscoll has 33 years’ operational and progressive management experience in the mining industry. Since July 2020, Mr. Driscoll
is serving as the Vice President and Mining Director of Forte Dynamics and Analytical. From September 2016 to July 2020, he was
a senior partner and Mining Account Director at Environmental Resources Management. From October 2013 to September 2016, Mr. Driscoll
was the manager of the metals and mining division of AMEC Engineering and Consulting. Mr. Driscoll has also served in various positions
at Great Basin Gold Limited, Newmont, Barrick, Queenstake Resources, Stillwater Mining, Independence Mining, New Butte Mining and
Pegasus Gold. Mr. Driscoll currently serves as an advisory board member for the Colorado School of Mines and is a member of
the boards of directors of the professional organizations SME Foundation and the Global Underground Mining Guidelines Group, respectively.
He is a qualified mining engineer and holds a Bachelor of Science degree from Montana Tech.
Lila A. Manassa Murphy,
CFA, founded and has served as Principal of Intrinsic Value Partners, LLC since 2018, a provider of consulting services
to asset management firms and family offices. Since August 2018, she has served as an independent director and member of
the audit committee of Dundee Corporation (TSX:DC), a diversified holding company with investments in natural resource, mining
and energy sectors. Ms. Murphy has also served on the board of directors and finance committee of Sustainable Development
Strategies Group, a collaborative research and policy advisor organization focused on sustainable management of natural resources
since June 2019. From December 2008 to August 2018, she was Vice President and Portfolio Manager at Federated Hermes, Inc.
(NYSE:FHI), a Fortune 500, ESG focused investment firm with over $500 billion in assets under management, and was responsible for
portfolio management and fundamental analysis in the alternative equity investment area with a dedicated focus in natural resources
and hard assets. Previously, Ms. Murphy has worked as an analyst at David W. Tice & Associates Inc. with a dedicated
focus on natural resources investing for the Prudent Global Natural Resources Fund and the Prudent Global Gold Fund and an equity
research analyst at Lee Financial Corporation. She has more than 25 years of diverse investment management experience. She
earned the Chartered Financial Analyst designation in 2004. Ms. Murphy holds a Bachelor of Arts degree from New York University.