EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this
“Agreement”)
is
dated the 11th day of August, 2008 (the “Effective
Date”),
by
and between Platinum Energy Resources, Inc., a Delaware corporation (the
“Company”)
and
Xxxx Xxxxx (the “Executive”)
(collectively the “Parties”).
WITNESSETH:
WHEREAS,
the
Company desires to employ the Executive, and the Executive wishes to accept
such
employment with the Company, upon the terms and conditions set forth in this
Agreement;
NOW,
THEREFORE, in
consideration of the mutual promises and agreements set forth herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. Employment.
The
Company hereby employs the Executive to serve as Chief Financial Officer and
Treasurer of the Company and as President of the Company’s new services and
infrastructure division (“PSI”) and the Executive hereby accepts such employment
by the Company, upon the terms and conditions hereinafter set forth. PSI is
a
proposed new business that the Executive will help develop in the drilling
&
workover businesses, and operate in the areas of compression, pipelines, gas
storage, specialty chemicals and downhole tools. For the sake of clarity, PSI’s
business shall not include the Company’s existing Maverick
business.
2. Employment
Period.
Subject
to the provisions of Section
7
hereof,
the term of the employment shall be for an initial period commencing on the
Effective Date and ending on the fifth anniversary of the Effective Date. This
Agreement and the term of the employment hereunder may be renewed for additional
periods to be mutually determined by the parties hereto in writing, on the
same
terms and conditions as set forth herein or upon such other terms and conditions
as they may mutually determine in writing. The term of the Executive’s
employment hereunder, including any continuation of the original term, is
hereinafter referred to as the “Employment
Period.”
3. Compensation.
(a) For
performance of all services rendered under this Agreement, the Company shall
pay
the Executive a base salary at an annual rate of $250,000, with an annual
minimum increase of five percent (5%) each January, payable in installments
in
accordance with the Company’s customary payroll practices, but no less
frequently than once each month. The Company shall withhold from any and all
payments required to be made to the Executive pursuant to this Agreement all
federal, state, local and/or other taxes that are required to be withheld in
accordance with applicable statutes and/or regulations.
(b) In
addition to base salary, the Executive shall be eligible for a performance
bonus
in such amount and payable at such time or times as the Board of Directors
of
the Company (the “Board”),
or
any compensation committee thereof, may in its sole discretion determine, which
bonus may be pursuant to the incentive compensation plan of the Company or
otherwise as may be determined by the Board or committee thereof, provided,
however, that in the event the Company’s net cash flow as set forth on the
Company audited year end financial statements is positive, such bonus shall
be
no less than $50,000. In
addition, Executive
shall be entitled to a bonus
based on
Company’s performance measured
against certain target goals set forth in the budget for the applicable fiscal
year, which bonus shall be no less than $100,000. The target goals shall be
determined by the Board or committee thereof. The target bonus shall be fifty
percent (50%) of base salary for such year. The actual amount of any bonus,
if
any, shall be determined by the Board or committee in its sole discretion,
but
shall be no less then the amounts stated above. To be eligible for any
performance bonus, or any other bonus, Executive must be in the employ of the
Company or a subsidiary of the Company upon the date of payment, which shall
occur on or before ninety days following the close of the fiscal year in which
the bonus was earned.
(c) On
the
Effective Date, the Executive shall receive from the Company cash and equity
incentive awards relating to the performance of the business of PSI, in the
forms set forth hereto as Exhibit
A.
(d) On
the
Effective Date, the Executive shall receive from the Company an initial grant
of
stock options pursuant to the Company’s 2006 Long-Term Incentive Compensation
Plan (the “Plan”)
to
purchase 50,000 shares of common stock of the Company in the form of incentive
stock options. The stock options will vest over a four year vesting period
and
will have an exercise price equal to the fair market value of Platinum's common
stock on the respective date of grant. On the date of each regular yearly
grant of options to senior executives following the Effective Date during the
Employment Period, the Executive shall receive an additional 50,000 incentive
stock options pursuant to the Plan. Each grant of stock options: (i) shall
entitle the Executive to purchase shares of the Company common stock at an
exercise price equal to the Fair Market Value (as defined in the Plan) per
share
of the Company’s common stock on the date of grant; and (ii) shall vest with
respect to one-quarter of the shares represented by the grant on each
anniversary of the grant until all shares represented by the stock options
are
vested and (iii) shall expire upon the tenth anniversary of the date of the
grant of such options, or any later date made applicable by the terms of the
Plan. A form of stock option award agreement is attached hereto as Exhibit
B,
which
Executive agrees to execute and deliver to the Company on the Effective
Date.
(e) No
termination or amendment of the Plan will relieve the Company of its obligations
hereunder with respect to the Company stock options to be granted pursuant
to
this Agreement.
(f) The
compensation set forth in this Section
3
shall
constitute total compensation for the Executive as an officer, director or
employee of the Company or any of the subsidiaries of the Company, including
PSI.
4. Duties.
The
Executive shall be employed as Chief Financial Officer of the Company and as
President of PSI, and the Executive hereby accepts such employment by the
Company, of the Company, and shall have such duties and responsibilities on
behalf of the Company as are customarily performed by individuals holding such
positions in a public company in the oil and gas industry. The Executive shall
devote her entire working time, attention and energy exclusively to the business
of the Company and shall cooperate fully with the CEO and the Board in the
advancement of the best interests of the Company. The Executive agrees not
to
engage in any activities outside of the scope of the Executive’s employment that
would detract from, or interfere with, the fulfillment of her responsibilities
or duties under this Agreement. The Executive agrees that the Executive will
not
serve as a director or the equivalent position of any company or entity, and
will not render services of a business, professional or commercial nature to
any
other person or firm, without the prior written consent of the Board.
Notwithstanding the foregoing, the Executive shall be permitted to serve on
the
board of directors of Northern Oil and Gas Company. If elected as a director
of
the Company or any of the subsidiaries of the Company, the Executive agrees
to
fulfill the duties of such directorships without additional
compensation.
2
5. Expenses.
Subject
to compliance by the Executive with such policies regarding expenses and expense
reimbursement as may be adopted from time to time by the Company, the Executive
is authorized to incur reasonable expenses in the performance of her duties
hereunder in furtherance of the business and affairs of the Company, and the
Company will reimburse the Executive for all such reasonable expenses, upon
the
presentation by the Executive of an itemized account satisfactory to the Company
in substantiation of such expenses when claiming reimbursement not
later
than December 31 of the calendar year following the calendar year in which
the expenses were incurred.
The
Executive shall be entitled to a reasonable monthly auto allowance of not less
than $1,000.
6. Employee
Benefits; Vacations.
The
Executive shall be eligible to participate in such life insurance, medical
and
other employee benefit plans of the Company that may be in effect from time
to
time, to the extent she is eligible under the terms of those plans, on the
same
basis as similarly-situated executive officers of the Company. The Company
may
from time to time modify or eliminate any or all benefits extended or provided
in its sole discretion. The Executive shall be entitled to four weeks paid
vacation per year, to be taken in accordance with the policies of the Company
in
effect from time to time, as determined by the Board.
7. Termination.
Upon
termination of the Executive’s employment, the Executive shall be entitled to
any earned but unpaid base salary, as well as the additional benefits provided
below in this Section 7. All capitalized terms used in this Section
7
and not
previously defined are defined
below in
Section
11.
(a) Termination
By the Company for reasons other than Cause, By the Employee for Good Reason
or
for Change in Control.
In the
event that the Executive’s employment is terminated by the Company for reasons
other than Cause, the Executive resigns her employment for Good Reason or
if
either
of the Company or Executive terminate this Agreement one hundred and twenty
(120) days following a Change of Control,
the
Executive will be provided a severance package which shall consist of (A) one
and one-half times (1.5x) Executives annual salary under Section
3(a)
on the
Termination Date,
(B)
a
payment equal to one year of employee benefits as provided under Section
6;
(c)
payment of COBRA obligations for eighteen months; and, (D) a payment equal
to
the prorated portion of the performance bonus paid to her, if any, in the last
full fiscal year of her employment by the Company, but in no event less then
fifty percent (50% ) of her latest years annual salary. The severance package
shall be divided into two parts. Fifty (50%) of the severance payment amount
shall be paid within
sixty (60) days of the Termination Date and shall be made in
exchange for the signing of a release, in the form of Exhibit B. Fifty (50%)
of
the severance payment amount shall be paid, subject to Section 8(c) hereof,
in
equal monthly installments over the eighteen (18) month period following the
Termination Date (“Payout Amount”). The Executive and the Company agree and
stipulate that the foregoing severance benefit is intended to fully compensate
Executive for the consequences suffered by her in the event of a termination
of
her employment hereunder by the Company for reasons other than Cause or by
the
Executive with Good Reason, which consequences are uncertain and difficult
to
prospectively determine, Such severance is not a penalty, and shall not be
subject to reduction in the event that Executive obtains other employment during
any period over which such severance is payable.
(b) Termination
by the Company for Cause or Resignation by the Employee.
In the
event that the Executive’s employment is terminated by the Company for Cause or
the Executive resigns without Good Reason, the Executive will not be entitled
to
a severance package and no payments or benefits hereunder (other than payment
of
earned but unpaid base salary) shall be owing or payable by the
Company. In
the
event the Executive is terminated for Cause or because of Disability, she will
promptly resign from any officer and/or director positions she may hold at
the
Company or any of its subsidiaries.
(c)
Termination
for Death or Disability.
In the
event of the Executive’s death or Disability, the Company may (in the case of
Disability) terminate the Executive’s employment and its sole obligation
hereunder shall be to continue to pay to the Executive (or, in the case of
death
or incompetence, to her personal representative) her salary under Section
3(a)
hereof
for a period of eighteen (18) months following the date of death or termination.
Executive shall also be paid a prorated portion of her bonus paid in the last
full fiscal year.
3
(d) Pursuant
to applicable tax regulations, with respect to any incentive stock options
or
nonqualified stock options granted to the Executive, in the event that the
Executive’s employment is terminated by the Company for Cause or by Executive
without Good Reason all unvested stock options will be forfeited by the
Executive and shall be cancelled. In the event that the Executive’s employment
is terminated by the Company without Cause or by Executive with Good Reason,
all
stock options actually granted prior to such termination date shall immediately
vest. If the Executive’s employment terminates by reason of death or Disability,
the Executive or the Executive’s personal representative will have twelve (12)
months in which to exercise any vested incentive stock options and, with respect
to vested nonqualified stock options, the Executive or the Executive’s personal
representative will have the remaining term of the option period in which to
exercise the option, and any unvested stock options as of such date of
termination shall be cancelled. Notwithstanding the provisions of this
subsection (c), in no event may any option be exercised past the expiration
date
of the option. The Board may, in its sole discretion, accelerate the vesting
of
any unvested options in the event of termination of employment. The provisions
herein relating to the exercise of options in the event of termination are
intended to modify the provisions of Section 11.2 of Platinum’s 2006 Long-Term
Incentive Plan, as it may be amended (the “Plan”) with respect to the Executive
and are intended to be consistent with the stock option award agreement issued
to Executive and, in the event of any conflict, the terms of the stock option
award agreement shall govern.
(e) Notwithstanding
any termination of the Executive’s employment for any reason whatsoever (with or
without Cause or Good Reason), the Executive will continue to be bound by the
provisions of the Section
8
below.
(f) All
payments and benefits provided pursuant to subdivisions (a) and (c) of this
Section
7
shall be
conditioned upon the Executive’s (or, in the case of her death or incompetence,
the Executive’s personal representative’s) execution and non-revocation of a
general release substantially in the form attached hereto as Exhibit
B
at the
time of the completion of all payments pursuant to subdivisions (a) and (c)
of
this Section
7.
The
Executive’s refusal to execute such general release shall constitute a waiver by
the Executive of any and all payments and benefits referenced in this
Section
7.
(g) In
the
event the Executive materially breaches the terms of Section
8
below or
any of the terms of the general release shown as Exhibit
B,
all of
the Company’s obligations to the Executive pursuant to this Section
7
shall
terminate and be void.
8. Confidentiality,
Non-solicitation and Non-competition.
(a)
Confidentiality.
The
Company considers the protection of its confidential information and proprietary
materials to be very important. In connection with her duties, the Company
shall
provide Executive with Confidential Information essential and relevant to the
performance of job duties. Other than in the normal course of fulfilling
Executive’s duties to and positions with the Company, its subsidiaries and
affiliates, the Executive in return shall: (i) receive and hold all Confidential
Information absolutely secret, undisclosed, in trust and in confidence, and
shall comply with the Company’s policies and guidelines and use her best efforts
for the protection of Confidential Information; and (ii) not reveal or disclose
to any person outside the Company (and its subsidiaries and affiliates) or
use
for her own benefit, whether by private communication or by public address
or
publication or otherwise, any Confidential Information without the Company’s
specific written authorization or except as required by a mandatory provision
of
applicable law, provided however, that prior to any unauthorized use or
disclosure of Confidential Information that is required by law, the Executive
shall, unless prohibited from doing so by applicable law, use best efforts
to
give the Company prior notice of any disclosure of Confidential Information
required by law and shall permit and cooperate with any effort by the Company
to
obtain a protective order or similar protection for the Company.
All
Confidential Information, including originals, copies and other forms thereof,
however and whenever produced, shall be the sole property of the Company and
its
subsidiaries and affiliates, not to be removed from the premises or custody
of
the Company and its subsidiaries and affiliates, except in the normal course
of
business.
(1)
“Confidential Information” shall mean the following information, whether or not
originated by the Executive that relates to the business or affairs of the
Company and its subsidiaries or affiliates:
(i)
“Material Information” meaning any information relating to the business,
operations, capital and affairs of the Company and its subsidiaries and
affiliates that when released would have, or would reasonably be expected to
have, a significant effect on the market price or value of any of the Company’s
securities (or the securities of other companies with whom the Company may
be
conducting confidential negotiations). Material information consists of both
material facts and material changes relating to the Company’s business,
operations, capital and affairs and includes developments in the Company’s
business, operations, capital and affairs;
(ii)
“Business Opportunities” meaning all business ideas, prospects, proposals or
other opportunities pertaining to the lease, acquisition, exploration,
production, gathering or marketing of oil and gas and related products and
the
exploration potential of geographical areas on which oil and gas exploration
prospects are located, which are developed by the Company (or its subsidiaries
or affiliates) during the term hereof, or originated by any third party and
brought to the attention of the Company (or its subsidiaries or affiliates)
during the term hereof, together with information relating thereto (including,
without limitation, geological and seismic data and interpretations thereof,
whether in the form of maps, charts, logs, seismographs, calculations,
summaries, memoranda, opinions or other written or charted means);
(iii)
“Proprietary Information” meaning any and all records, notes, memoranda, data,
ideas, patterns, processes, methods, techniques, systems, formulas, patents,
models, samples, specimens, devices, programs, computer software, writings,
research, personnel information, plans, customer lists, supplier lists, pricing
materials and policies, purchasing methods and policies, seismic data, estimated
or actual reserve amounts, potential drilling locations or any other information
of whatever nature in the possession or control of the Company which has not
been published or disclosed to the general public, over which the Company
exercises reasonable efforts to maintain in confidence or which is the type
of
information that a similarly situated company would have an expectation would
remain in confidence, and which gives to the Company an opportunity to obtain
an
advantage over competitors who do not know of or currently use such confidential
information.
4
The
above
notwithstanding, information that:
(A) was
at the time of receipt by a third person otherwise known to that third person
from a source other than the Executive; (B) has been published or is otherwise
within the public domain, or is generally known to the public at the time of
its
disclosure; or (C) becomes known or available to the recipient from a source
other than the Executive, is not Confidential Information
hereunder.
(2)
Executive acknowledges and agrees that: (a) she will receive or will become
eligible to receive substantial benefits and compensation as a result of her
employment by the Company, which benefits and compensation are offered to her
only because and on condition of her willingness to commit her best efforts
and
loyalty to the Company (b) as a result of the acquisition of Confidential
Information, the Executive will occupy a position of trust and confidence with
the Company and its subsidiaries, and affiliates; (c) the Business Opportunities
constitute the exclusive property of the Company; (d) the Executive’s position
of trust and knowledge of Confidential Information would enable the Executive
to
put the Company at a significant competitive disadvantage if the Executive
breaches the restrictions in this Section
8;
(e)
irreparable damage would result to the Company if the provisions of this
Section
8
hereof
are not specifically enforced, and the Company shall be entitled to any
appropriate legal, equitable, or other remedy, including injunctive relief,
in
respect of any failure or continuing failure on her part to comply with Section
8: and (g) any breach of this Section
8
shall
constitute grounds for termination of the Executive’s employment for Cause.
(b)
Non-solicitation.
The
Executive covenants and agrees that she will not at any time during her
employment by the Company and for a period of eighteen (18) months thereafter
(the “Restricted
Period”),
solicit, employ or otherwise, engage, as an employee, independent consultant
or
otherwise, any person who is an employee of the Company as of the Executive’s
last day of employment with the Company, or in any manner induce or attempt
to
induce any employee of the Company to terminate his or her employment with
the
Company (as the case may be),.
(c)
Non-competition.
While
employed by the Company and for a period of eighteen (18) months thereafter,
Executive will not compete with the Company in any State in the United States
in
which the Company is, on the date hereof or on the date of termination, engaged
in business, either in the form of ongoing business operations or active efforts
to establish business operations. In accordance with this restriction regarding
scope of activity, but without limiting its terms, while employed by the
Company, Executive will not: (i) enter into or engage in any business which
competes with the Company’s business or that will result in the use or
disclosure of the Company’s Confidential Information; (ii) solicit customers,
business, patronage or orders for, or sell, any products or services in
competition with, or for any business that competes with, the Company’s
business; (iii) divert, entice or otherwise take away any customers, business,
patronage or orders of the Company or attempt to do so; or (iv) promote or
assist, financially or otherwise, any person, firm, association, partnership,
corporation or other entity engaged in any business which directly competes
with
the Company’s business. The covenant of the Executive contained in Section 8(c)
is referred to herein as the Executive’s “Non-Compete
Covenant.”
Notwithstanding
the restrictions contained in 8(c), during the eighteen (18) month period
following the Termination Date, Executive shall be allowed to serve as the
chief
financial officer of any competitor or other company engaged in the Company’s
business provided that she maintains her obligations pursuant to Sections 8(a)
and 8(b), provided further that in the event Executive serves in such capacity,
any remaining Payout Amounts due pursuant to Section 7(a) hereunder shall be
reduced by and off set against any compensation, benefits or other payments
to
be made to Executive in connection with Executive’s service.
The
foregoing notwithstanding, Executive may, without breaching or violating the
Executive’s Non-Compete Covenant: (i) at any time following termination of
Executive’s employment by the Company (but before the end of the Restricted
Period), acquire, invest in, own and dispose of interests in minerals, royalty
interests, overriding royalty interests, non-operating working interests and
other non-operating interests in individual oil and gas properties or (ii)
subject to the compliance with the Company’s Code of Ethics, at any time during
or after Executive’s employment by the Company, directly or indirectly, acquire,
invest in, own and dispose of publicly traded securities (in the aggregate
being
less than 3% of the total outstanding amount of any such securities) of
companies other than the Company engaged in one or more competing business
of
the Company; provided however that during Executive’s employment Executive shall
have no agreements, arrangements or other relationships with such company other
than consumer agreements or community charitable organization relationships
of
the sort that such companies routinely maintain with members of the public
at
large, meaning that nothing herein shall prevent the Executive from, for
example, holding a credit card issued by or soliciting a charitable contribution
from a publicly traded oil company.
5
(d)
Indirect
competition.
For the
purposes of Sections
8(b)
and
8(c),
but
without limitation thereof, Executive will be in violation thereof if Executive
engages in any or all of the activities set forth therein directly as an
individual on Executive’s own account, or indirectly as a partner, joint
venturer, employee, agent, salesperson, consultant, officer and/or director
of
any firm, association, partnership, corporation or other entity. Notwithstanding
the foregoing, the Executive shall be permitted to serve on the board of
directors of Northern Oil and Gas Company.
(e)
Company.
For the
purposes of this Section
8,
the
Company shall include the Company and any and all direct and indirect
subsidiaries of the Company for which Executive served in an executive capacity
(other than CFO of the Platinum) at the time of termination of her employment
and at any time during the one (1) year period prior to such termination.
(f)
Survival.
Notwithstanding the termination of this Agreement and the Executive’s
employment, the provisions of this Section
8
shall
survive such termination.
(g)
Enforcement.
It is
the desire and intent of the parties hereto that the provisions of this
Agreement be enforceable to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, to the extent that a restriction contained in this Agreement is
more restrictive than permitted by the laws of any jurisdiction where this
Agreement may be subject to review and interpretation, the terms of such
restriction, for the purpose only of the operation of such restriction in such
jurisdiction, will be the maximum restriction allowed by the laws of such
jurisdiction and such restriction will be deemed to have been revised
accordingly herein.
9. Cooperation
with the Company after Termination.
Following termination of this Agreement for any reason (with or without Cause
or
Good Reason), the Executive shall fully cooperate with the Company in all
matters relating to the winding up of the Executive's services under this
Agreement and the orderly transfer of such matters to any person designated
by
the Company for a fair and reasonable consulting fee of no less than $100 per
hour and for a maximum of 50 hours after the termination of this Agreement
or
Executive’s employment and shall promptly return to the Company all of the
property of the Company (including any Confidential Information, and any copies
thereof) and any other materials or information related to the Company,
including all work product, whether finished or unfinished, prepared or produced
by the Executive for the benefit of the Company under this
Agreement.
10. No
Conflict.
The
Executive hereby represents and warrants to the Company that (a) this Agreement
constitutes the Executive’s legal and binding obligation, enforceable against
her in accordance with its terms, (b) her execution and performance of this
Agreement does not and will not breach any other agreement, arrangements,
understanding, obligation of confidentiality or employment relationship to
which
he is a party or by which he is bound, and (c) during the Employment Period,
he
will not enter into any agreement, either written or oral, in conflict with
this
Agreement or her obligations hereunder.
11. Definitions.
(a) The
term
“Cause” shall mean:
(i)
the
Executive’s willful refusal to perform the Executive’s material duties or the
willful refusal to carry out the reasonable and lawful directions of the Board
(other than as a result of physical or mental illness, accident or injury)
or
any other material breach of this Agreement by the Executive (other than Section
8 which is covered by (vii) below);
(ii)
intentional misconduct or illegal conduct by the Executive in connection with
the Executive’s employment with the Company;
(iii)
the
Executive’s conviction of, or plea of guilty or nolo contendere to, a charge of
commission of a felony or any misdemeanor involving moral turpitude, or a
material violation by the Executive of federal or state securities laws as
determined by a court or other governmental body of competent jurisdiction;
(iv)
the
Executive’s unlawful possession, use, sale or distribution of narcotics or other
controlled substances;
(v)
any
intentional violation by the Executive of a material Company policy or procedure
resulting in material and demonstrable harm to the Company including, without
limitation, a material violation of the Company’s Code of Ethics;
(vi)
any
willful act or omission by Executive in the scope of her employment by the
Company which in the reasonable and good faith judgement of the Board is of
the
type of act of omission that could reasonably result (A) in the assessment
of a
civil or criminal penalty against the Executive, the Company or its affiliates,
(B) in a violation of any material foreign or United States federal, State,
or
local law or (C) is materially injurious to the Company or any of its
affiliates; (vii) any intentional misrepresentation by the Executive of a
material fact to, or intentional concealment by the Executive of a material
fact
from, (A) the Board or (B) the chief executive officer or any other member
of
senior management of the Company, where the misrepresentation or concealment
results in the reasonable and good faith judgement of teh Board in material
and
demonstrable harm to the Company (including, for example, the Company’s
materially violating federal or state securities laws); and,
(vii)
any
breach by the Executive of the provisions of Section 8 hereof;
6
provided,
however, in the case of claim (i) above, the Company shall be required to give
the Executive thirty (30) calendar days prior written notice of its intention
to
terminate the Executive for Cause and a reasonable and through explanation
of
the contractual and factual basis for Cause and the Executive shall have the
opportunity during such thirty (30) day period to cure such specified event;
provided, further, that in the event that the Executive terminates her
employment with the Company during such thirty (30) day period for any reason,
other than for Good Reason the basis of which occurred prior to the date of
notice of intention to terminate, such termination shall be considered a
termination for Cause.
(b) The
term
“Disability” shall mean if the Executive is incapacitated or disabled by
accident or sickness or otherwise so as to render her mentally or physically
incapable of performing the services required to be performed by her under
this
Agreement for a period of 90 consecutive days or longer.
c) The
term
“Good Reason” shall mean:
(i)
any
material adverse change in the Executive’s title or any material diminution in
the Executive’s authority or responsibilities taken as a whole;
(ii)
the
imposition of a requirement upon Executive that she relocate her residence
more
than 25 miles from Xxxxxx County, Texas or that her normal place of report
is
other than a location in Xxxxxx County, Texas or within 25 miles thereof;
(iii)
the
taking
of any action by the Company that would materially adversely affect Executive’s
participation in, or materially reduce Executive’s benefits under, any material
employee benefit plan, unless such failure or such taking of any action
adversely affects persons similarly situated in the Company generally;
(iv)
any
act or inaction or conduct, in connection with the business of the Company,
on
behalf of management, any member of Board or the Audit Committee, which requires
the Executive to commit in connection with the discharge of the Executive’s
duties to the Company (1) malfeasance, fraud, or dishonesty, or (2) a material
violation of Company policies or U.S. laws and regulations (including SEC rules
and regulations) or accounting and auditing rules and regulations generally
known as U.S. generally accepted accounting principles and U.S. generally
accepted auditing standards.
(v)
any
failure by the Company to obtain the assumption and performance of this
Agreement by any successor (by merger, consolidation, or otherwise) or assign
of
the Company; and,
(vi)
any
material breach by the Company of its obligations under this Agreement; provided
that, in any case, the Executive provides the Company with written notice of
the
Executive’s intention to terminate the Executive’s employment for Good Reason
within ninety (90) days after Executive becoming aware of the occurrence of
the
event that the Executive believes would constitute Good Reason, gives the
Company an opportunity to cure for thirty (30) days following receipt of such
notice from the Executive or to have the Company’s representatives meet with the
Executive and the Executive’s counsel to be heard regarding whether Good Reason
exists for the Executive to terminate the Executive’s employment with the
Company.
7
(d)
A
“Change
of
Control”
shall be
deemed to have occurred if:
(i) Any
“person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934) other than (A) Braesridge Energy LLC, JD
Capital Management LLC or any of their respective affiliates or (B) a trustee
or
other fiduciary holding securities under an employee benefit plan of the
Company, becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of 30% or more of
the
Company’s then outstanding voting common stock; or
(ii) At
any
time during the period of three (3) consecutive years (not including any period
prior to the date hereof), individuals who at the beginning of such period
constituted the Board (and any new director whose election by the Board or
whose
nomination for election by the Company’s shareholders were approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority thereof; or
(iii) The
shareholders of the Company approve a reorganization, merger, consolidation
or
similar business combination involving the Company (a “Merger”), unless
immediately following such Merger, substantially all of the holders of the
then
outstanding shares of common stock of the Company (the “Outstanding Company
Voting Securities”) immediately prior to the Merger beneficially own, directly
or indirectly, more than fifty percent (50%) of the common stock of the
corporation resulting from such Merger (or its parent corporation) in
substantially the same proportions as their ownership of Outstanding Company
Voting Securities immediately prior to such Merger;
(iv) All
or
substantially all of the assets of the Company and its subsidiaries are sold
or
otherwise disposed of (including through sale or other disposition of the stock
of such subsidiaries), unless immediately following such sale or other
disposition, substantially all of the holders of the Outstanding Company Voting
Securities immediately prior to the consummation of such sale or other
disposition beneficially own, directly or indirectly, more than fifty percent
(50%) of the common stock of the corporation acquiring such assets in
substantially the same proportions as their ownership of Outstanding Company
Voting Securities immediately prior to the consummation of such sale or
disposition;
(v) The
shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets.
(e) The
term
“person” shall mean any individual, corporation, firm, association, partnership,
other legal entity or other form of business organization.
(f) The
term
“Termination
Date”
shall
mean the date Executive’s employment terminates or is terminated
for any
reason pursuant to this Agreement.
8
12. Section
409A and Gross-Up Payments. Section
409A shall mean Section 409A of the Code and related Department of Treasury
guidance, including such Department of Treasury guidance as may be issued after
the date of this Agreement. Notwithstanding any provision in this Agreement
to
the contrary, (a) no payment or benefit shall be paid pursuant to this Agreement
that would be considered “deferred compensation” under Section 409A until the
Executive has incurred a “separation from service” in accordance with Treas.
Reg. §1.409A-1(h)(ii), and (b) no payments contemplated by this Agreement will
be paid during the six-month period following the Executive’s Termination Date
unless the Company determines that the Executive is not a “specified employee”
(as that term is defined in Section 409A), or if the Company determines that
the
Executive is a “specified employee,” that paying such amounts would not cause
the Executive to incur an additional tax under Section 409A (in which case
such
amounts shall be paid at the time or times indicated in this Section
0).
If
the
payment of any amounts are delayed as a result of the previous sentence, on
the
first day following the end of the six-month period, the Company will pay the
Executive a lump sum amount in cash equal to the cumulative amounts that would
have otherwise been previously paid to the Executive under this Agreement during
such six-month period. Thereafter, payments will resume in accordance with
this
Agreement if necessary.
If
Executive receives any payments pursuant to Section 3 which are subject to
an
excise tax imposed under Section 4999 of the Internal Revenue Code of 1986,
as
amended (the “Code”),
or any
similar tax imposed under federal, state, or local law (collectively,
“Excise
Taxes”),
the
Company shall pay to Executive (on or before the date on which the Company
is
required to withhold such Excise Taxes, provided, however, that this payment
shall be made not later than December 31 of the taxable year following the
Executive’s taxable year when such Excise Taxes are paid), (i) an additional
amount equal to all Excise Taxes then due and payable, and (ii) the amount
necessary to defray Executive’s increased (federal, state, and local) tax
liability arising due to payment of the amount specified in Section 3 which
shall include any costs and expenses, including penalties and interest incurred
by Executive in connection with any audit, proceedings, etc. related to the
payment of such Excise Taxes or this payment. For purposes of calculating the
amount payable to Executive under Section 3, the federal and state income tax
rates used shall be the highest marginal federal and state rates applicable
to
ordinary income in Executive’s state of residence, taking into account any
federal income tax deductions or credits available to Executive for state income
taxes. The Company shall cause its independent auditors to calculate such amount
and provide Executive a copy of such calculation at least ten days prior to
the
date specified above for payment of such amount. It is the intent of the Parties
that this Section 3 shall place Executive in the same net after-tax position
Executive would have been in had no payment been subject to an Excise Tax,
and,
notwithstanding anything to the contrary, it shall be construed to effectuate
said result.
Additionally,
in the event that following the date hereof the Company or the Executive
reasonably determines that any compensation or benefits payable under this
Agreement may be subject to Section 409A, the Company and the Executive shall
work together to adopt such amendments to this Agreement or adopt other policies
or procedures (including amendments, policies and procedures with retroactive
effect), or take any other commercially reasonable actions necessary or
appropriate to (x) exempt the compensation and benefits payable under this
Agreement from Section 409A and/or preserve the intended tax treatment of the
compensation and benefits provided with respect to this Agreement or (y) comply
with the requirements of Section 409A.
The
Company agrees to indemnify the Executive in the event the Executive is required
to remit additional taxes, interest or penalties such that after payment by
the
Executive of all applicable taxes (other than interest and penalties due to
the
Executive’s failure to timely make any applicable election, file a tax return or
pay taxes shown on her return) including any taxes imposed upon the indemnified
payment, the Executive retains an amount of the indemnified payment equal to
the
taxes imposed by reason of the payments. Any such indemnification payment shall
be made by the Company no later than December 31 of the year immediately
following the taxable year in which such taxes and interest, if applicable,
are
paid by the Executive.
9
13. Successors
and Assigns; Entire Agreement; No Assignment.
This
Agreement shall bind and inure to the benefit of the parties hereto and their
respective successors or heirs, distributees and personal representatives.
This
Agreement contains the entire agreement between the parties with respect to
the
subject matter hereof and supersede other prior and contemporaneous arrangements
or understandings with respect thereto. The Executive may not assign this
Agreement without the prior written consent of the Company.
14. Notices.
All
notices and other communications required or permitted hereunder or necessary
or
convenient in connection herewith shall be in writing and shall be deemed to
have been given when hand-delivered, mailed by registered or certified mail
(three days after deposited), faxed (with confirmation received) or sent by
a
nationally recognized courier service, as follows (provided that notice of
change of address shall be deemed given only when received):
If
to the
Company:
Platinum
Energy Resources, Inc.
00000
Xxxxxxxxxx #0000,
Xxxxxxx,
XX 00000
Attention:
Xxxxx Xxxxxxxx
Facsimile:
(000) 000-0000
With
a
copy (which
shall not constitute notice) to
Xxxxxxx
X. Xxxxxxxx, Esq.
Blank
Rome LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Facsimile:
(000) 000-0000
If
to
Executive:
Xxxx
Xxxxx
00
Xxxxx
Xxxx Xxxx
With
a
copy (which shall not constitute notice) to:
Xxxxxx
Xxxxxxxx Steely
Gardere
Xxxxx Xxxxxx LLP
0000
Xxxxxxxxx, Xxxxx 0000
Xxxxxxx,
XX 00000-0000
Fax:
(000) 000-0000
or
to
such other names and addresses as the Company or the Executive, as the case
may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.
15. Changes;
No Waiver; Remedies Cumulative.
The
terms and provisions of this Agreement may not be modified or amended, or any
of
the provisions hereof waived, temporarily or permanently, without the prior
written consent of each of the parties hereto. Either party’s waiver or failure
to enforce the terms of this Agreement or any similar agreement in one instance
shall not constitute a waiver of its or her rights hereunder with respect to
other violations of this or any other agreement. No remedy conferred upon the
Company or the Executive by this Agreement is intended to be exclusive of any
other remedy, and each and every such remedy shall be cumulative and shall
be in
addition to any other remedy given hereunder or now or hereafter existing at
law
or in equity.
16. Governing
Law; Jurisdiction.
This
Agreement and (unless otherwise provided) all amendments hereof and waivers
and
consents hereunder shall be governed by the law of the State of Texas, without
regard to the conflicts of law principles. Each party hereby agrees that service
of process may be served on her or it by certified mail, return receipt
requested, or overnight courier, sent to address of such entity listed in
Section
13
above
(or such other address as any such party notifies the others thereof by written
notice. The
Parties agree to venue in the state or federal courts in Xxxxxx County, Texas,
and agree to waive and do hereby waive any defenses and/or arguments based
upon
improper venue and/or lack of personal jurisdiction. The parties hereby
expressly waive their rights to a jury trial.
17. Severability.
The
Executive and the Company agree that should any provision of this Agreement
be
judicially determined invalid or unenforceable, that portion of this Agreement
may be modified to comply with the law. The Executive and the Company further
agree that the invalidity or unenforceability of any provision of this Agreement
will not affect the validity or enforceability of its remaining
provisions.
18. Headings;
Counterparts.
All
section headings are for convenience only. This Agreement may be executed in
several counterparts, each of which is an original.
10
IN
WITNESS WHEREOF, the
parties have executed this Employment Agreement as of the date first above
written.
|
PLATINUM
ENERGY RESOURCES, INC.
By:
/s/ Xxxxx
Xxxxxxxx
Name:
Xxxxx Xxxxxxxx
Title:
Chief Executive Officer
|
|
| /s/ Xxxx Xxxxx | |
| Xxxx Xxxxx |
11
EXHIBIT
A
Form
of Stock Option Award Agreement
Under
the Platinum Energy Resources, Inc.
2006
Long-Term Incentive Plan
12
EXHIBIT
B
GENERAL
RELEASE OF CLAIMS
For
and
in consideration of the payments and other benefits described in the Employment
Agreement dated as of August 11, 2008 (the “Agreement”) by and among Platinum
Energy Resources, Inc.(the “Company”) and Xxxx Xxxxx (the “Executive”)
(collectively the “Parties”) and for other good and valuable consideration, the
Executive hereby releases the Company and its respective divisions, operating
companies, affiliates, subsidiaries, parents, branches, predecessors,
successors, assigns, officers, directors, trustees, employees, agents,
shareholders, administrators, representatives, attorneys, insurers and
fiduciaries, past, present and future (the “Released Parties”) from any and all
claims of any kind arising out of or related to the Executive’s employment with
the Company, the Executive’s separation from employment with the Company or
derivative of the Executive’s employment, which the Executive now has or may
have against the Released Parties, whether known or unknown to the Executive,
by
reason of facts which have occurred on or prior to the date that the Executive
has signed this General Release of claims. Such released claims include, without
limitation, any alleged violation of the Age Discrimination in Employment Act,
as amended, the Older Worker Benefits Protection Act; Title VII of the civil
Rights of 1964, as amended; Sections 1981 through 1988 of Title 42 of the United
States Code; the Civil Rights Act of 1991; the Equal Pay Act; the Americans
with
Disabilities Act; the Rehabilitation Act; the Employee Retirement Income
Security Act of 1974 as amended; the Worker Adjustment and Retraining
Notification Act; the National Labor Relations Act; the Fair Credit Reporting
Act; the Occupational Safety and Health Act; the Uniformed Services Employment
and Reemployment Act; the Employee Polygraph Protection Act; the Immigration
Reform control Act; the retaliation provisions of the Xxxxxxxx-Xxxxx Act of
2002; the Federal False claims Act; (and including any and all amendments to
the
above) and/or any other alleged violation of any federal, state or local law,
regulation or ordinance, and/or contract or any other alleged violation of
any
federal, state or local law, regulation or ordinance, and/or contract or implied
contract or tort law or public policy or whistleblower claim, having any bearing
whatsoever on the Executive’s employment by and the termination of the
Executive’s employment with the Company, including, but not limited to, any
claim for wrongful discharge, back pay, vacation pay, sick pay, wage, commission
or bonus payment, money or equitable relief or damages of any kind, attorneys’
fees, costs, and/or future wage loss.
It
is
understood that this General Release of Claims is not intended to and does
not
affect or release any future rights or any claims arising after the date
hereof.
The
Executive understands that the consideration provided to her under the terms
of
the Agreement or otherwise does not constitute any admission by the Company
that
it has violated any law or legal obligation.
The
Executive agrees, to the fullest extent permitted by law, that she will not
commence, maintain, prosecute or participate in any action or proceeding of
any
kind against the Company or Platinum based on any of the claims waived herein
occurring up to and including the date of her signature. The Executive
represents and warrants that she has not done so as of the effective date of
this General Release of Claims. Nothing in this General Release of Claims is
intended to preclude the Executive from (1) enforcing the terms of the
Agreement; (2) challenging the knowing and voluntary nature of this General
Release of Claims; or (3) filing a charge or participating in any investigation
or proceeding conducted by the Equal Employment Opportunity
Commission.
The
Executive further agrees to waive her right to any monetary or equitable
recovery should any federal, state or local administrative agency pursue any
claims on her behalf arising out of or related to her employment with and/or
separation from employment with the Company and promises not to seek or accept
any award, settlement or other monetary or equitable relief from any source
or
proceeding brought by any person or governmental entity or agency on her behalf
or on behalf of any class of which she is a member with respect to any of the
claims she has waived.
13
The
Executive acknowledges and agrees that the Executive has read this General
Release of Claims carefully, and acknowledges that she has been given at least
twenty one (21) days from the date of receipt of this General Release of Claims
to consider all of its terms and has been advised to consult with any attorney
and any other advisors of the Executive’s choice prior to executing this General
Release of Claims. The Executive fully understands that, by signing below,
the
Executive is voluntarily giving up any right which the Executive may have to
xxx
or bring any other claims against the Released Parties, including any rights
and
claims under the Age Discrimination in Employment Act. The terms of this General
Release of Claims shall not become effective or enforceable until eight (8)
days
following the date of its execution by the Executive, during which time the
Executive may revoke the Agreement. The Executive may revoke the Agreement
by
notifying the Company in writing. For the Executive’s revocation to be
effective, written notice must be received by the Company no later than the
close of business on the eighth (8th) day after the Executive signs this General
Release of Claims. The terms of the offer to provide the payments and other
benefits described in Section
7(a)
of the
Agreement, will expire if not accepted during the twenty one (21) day review
period.
The
Parties agree to keep confidential all information contained in this General
Release of Claims and relating to this General Release of Claims, except (1)
to
the extent the other Party consents in writing to such disclosure; (2) if the
Party is required by process of law to make such disclosure and the Party
promptly notifies the other Party of its receipt of such process; or (3) because
the Party must disclose certain terms on a confidential basis to its financial
consultant, attorney or spouse.
This
General Release of Claims shall be construed and enforced in accordance with,
and governed by, the laws of the State of Texas,
without
regard to principles of conflict of laws. The
Parties agree to venue in the state or federal courts in Xxxxxx County, Texas,
and agree to waive and do hereby waive any defenses and/or arguments based
upon
improper venue and/or lack of personal jurisdiction. If
any
clause of this General Release of Claims should ever be determined to be
unenforceable, it is agreed that this will not affect the enforceability of
any
other clause or the remainder of this General Release of Claims.
This
General Release of Claims is final and binding and may not be changed or
modified except as set forth herein or in a writing signed by both parties.
The
parties have executed this General Release of Claims with full knowledge of
any
and all rights they may have, and they hereby assume the risk of any mistake
in
fact in connection wit the true facts involved, or with regard to any facts
which are now unknown to them.
By
signing this General Release of claims, the Executive acknowledges that: (1)
she
has read this General Release of Claims completely; (2) she has had an
opportunity to consider the terms of this General Release of Claims; (3) she
has
had the opportunity to consult with an attorney of her choosing prior to
executing this General Release of Claims to explain this General Release of
Claims and its consequences; (4) she knows that she is giving up important
legal
rights by signing this General Release of Claims; (5) she has not relied on
any
representation or statement not set forth in this General Release of Claims;
(6)
she understands and means everything that she has said in this General Release
of Claims, and she agrees to all its terms; and (7) she has signed this General
Release of Claims voluntarily and entirely of her own free
will.
|
________________
|
__________________ |
|
Date
|
Executive
|
| PLATINUM ENERGY RESOURCES, INC. | |
|
|
|
|
________________
|
By:______________________________ |
|
Date
|
14
