EXHIBIT 10.02
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, effective as of the 1st day of January, 2003, by
and between ASPEN EXPLORATION CORPORATION, a public Delaware corporation, Suite
208, 0000 X. Xxxxxx Xxxxxx, Xxxxxx, XX 00000, (000) 000-0000 ("ASPEN"), and
XXXXXX X. XXXXX, 00000 Xxxxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000, (661)
588-1539 ("XXXXX"), sometimes collectively referred to as the "Parties."
WITNESSETH
WHEREAS, ASPEN has employed XXXXX pursuant to an employment agreement dated
the 16th day of April, 1998 which agreement has expired; and
WHEREAS, ASPEN wishes to continue to employ XXXXX in the capacity of
President - West Coast Division, and XXXXX wishes to continue to serve ASPEN in
such capacity, with the possibility understood by each of ASPEN and XXXXX that
ASPEN may ask XXXXX to serve as President pursuant to the terms of this
Agreement should the current President accept a different position within the
Company.
NOW, THEREFORE, in consideration of the conditions and covenants set forth,
it is agreed as follows:
1. TERM OF EMPLOYMENT: The current Employment Agreement, dated the 16th day of
April, 1998, is hereby terminated to the extent that there are any obligations
remaining due by either party thereunder. XXXXX and ASPEN hereby agree that
XXXXX shall be employed by ASPEN for a period of three years commencing January
1, 2003 and ending December 31, 2005, in accordance with the terms of this
Agreement. Thereafter, XXXXX'x employment shall continue on a year-to-year basis
unless XXXXX or the Company gives notice to the other of an intention not to
renew this Agreement on such terms.
2. DUTIES:
(a) XXXXX shall continue to be employed with the title of President - West
Coast Division, and shall be subject to the general direction and control of the
President of ASPEN. Should the Board of Directors of ASPEN appoint XXXXX
President of ASPEN, and should XXXXX accept such position, his activities shall
thereafter be subject to the general direction and control of the Board of
Directors.
(b) XXXXX shall have such authority and responsibilities as are customarily
performed by a person holding such positions, and consistent with the authority
and responsibility heretofore held by XXXXX. XXXXX shall devote substantially
full time, attention and energies to the business of ASPEN. XXXXX shall not
engage in any business or render services to others who directly or indirectly
compete in direct or indirect competition with the oil and gas business of
Employment Agreement - Xxxxxx X. Xxxxx Page 1
ASPEN. This provision shall not preclude XXXXX from making investments in any
entity or continuing to maintain XXXXX'x existing investments in certain oil and
gas properties as in the past. In addition, XXXXX may make other passive
investments in oil and gas opportunities only after having first offered such
investment opportunity to ASPEN and thereafter only if ASPEN states to XXXXX in
writing that XXXXX may participate in such opportunity.
3. COMPENSATION:
(a) ASPEN shall pay XXXXX a salary of $125,000 per year through April 15,
2003, at which time his salary will increase to $135,000 through April 15, 2004,
and then to $145,000 for the remaining term of this Agreement, subject to such
further salary increases and bonuses as the Board of Directors may determine to
be appropriate. ASPEN shall deduct and withhold such sums as are required by
statute and applicable laws for Social Security, taxes and otherwise, to be
deducted or withheld from compensation.
(b) ASPEN shall provide XXXXX the other benefits and expense reimbursement
as described in Section 5, below.
4. DUTIES:
(a) XXXXX'x primary responsibilities will involve the coordination of all
work required to drill or purchase oil and natural gas xxxxx in the Sacramento
and San Xxxxxxx Basins of California, and to operate those xxxxx on behalf of
ASPEN to the extent ASPEN is the operator of such xxxxx. Xxxxx will, among other
things, review numerous prospects in an effort to select and obtain quality
deals, lease acquisition, seismic acquisition, package preparation, fund
raising, permitting, AFE preparation, and oversee drilling, completion,
production, and marketing of oil & gas xxxxx. XXXXX will utilize various
consultants and subcontractors to assist in this work as needed. In addition to
the above described duties, XXXXX may also be required to review and evaluate
prospects owned by ASPEN, or submitted by third parties to ASPEN in states other
than California.
(b) XXXXX will perform these duties in the manner that he has performed
these duties in the past, basing his operations out of the office that ASPEN has
provided to him in Bakersfield, California, for which ASPEN pays rent and
provides all utilities, office equipment (including furniture and computer
equipment and accessories), and supplies reasonably necessary or appropriate for
the conduct of ASPEN's business.
6. BENEFITS AND EXPENSES:
(a) While employed, ASPEN agrees to reimburse XXXXX on his monthly expense
report submitted to ASPEN for all expenses incurred in appropriate pursuit of
business, including but not limited to, travel, meals, lodging, telephone and
other communication costs, materials and aid required to perform duties.
Employment Agreement - Xxxxxx X. Xxxxx Page 2
(b) XXXXX shall be entitled to participate in ASPEN's health, dental and
life insurance plans, paid vacations, and any other benefits available to full
time employees.
(c) XXXXX shall be entitled to four weeks paid vacation during each year of
this Agreement. No more than one week may be carried forward to any subsequent
year.
(d) While employed, ASPEN agrees to reimburse XXXXX on his monthly expense
report submitted to ASPEN for all expenses associated with the use of ASPEN's
four-wheel drive vehicle.
(e) As a performance incentive, ASPEN will assign to XXXXX an overriding
royalty and other interests as available and as agreed to by the Parties in each
project in which ASPEN becomes involved.
7. TERMINATION:
(a) Termination for Cause by Xxxxx. XXXXX may terminate this Agreement and
his employment hereunder for Cause (as hereinafter defined) at any time upon
written notice, effective immediately.
(i) When used in this Section 7(a), the term "Cause" shall mean any of the
following events: (1) Any breach by ASPEN of its material obligations to
XXXXX as defined in this Agreement which remains uncured following 30 days'
written notice to ASPEN specifying the breach; (2)Any material diminution
of XXXXX'x responsibility and authority for and on behalf of ASPEN; (3)
Should ASPEN not reappoint XXXXX to the highest executive office that he
holds at any time, or should the shareholders of ASPEN not reelect XXXXX as
a director at any meeting; (4) Any change of control of ASPEN, where the
term "change of control" means any person not currently owning equity
securities holding a vote equal to or greater than 15% of the votes that
might be cast at a meeting of ASPEN's shareholders acquiring the right to
cast votes at such meeting equal to or greater than 15%; (5) Any change in
the Board of Directors of Aspen such that the combined vote of the existing
directors of ASPEN is less than 75% of the members of the Board of
Directors; and (6) Any merger, consolidation, or other business combination
by which either ASPEN is not the surviving corporation, or as the surviving
corporation ASPEN becomes a majority (or greater) owned subsidiary of
another entity. XXXXX may waive any of the foregoing by acting as an
officer, director or shareholder of ASPEN to approve such event.
(ii) Upon termination of this Agreement for "Cause" pursuant to this
Section 7(a), ASPEN shall pay XXXXX as its sole and exclusive liability
hereunder, an amount equal to the greater of: (1) the amount due for the
remaining term of this Agreement; or (2) six months of XXXXX'x then current
monthly Base Salary. Payment shall be made within 30 days of such
termination.
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(b) Termination for Cause by Aspen. ASPEN may terminate this Agreement and
XXXXX'x employment for Cause (as hereinafter defined) at any time upon written
notice, effective immediately.
(i) When used in this Section 7(b), the term "Cause" shall mean (1) the
continued failure by XXXXX to substantially perform his duties for ASPEN in
a reasonably professional manner, other than due to XXXXX'x Total and
Permanent Disability (hereinafter defined) or death, for a period of 30
days after a written demand for substantial performance is delivered to
XXXXX by the Board of Directors or President of ASPEN, which demand
identifies the manner in which the Board of Directors or President believes
XXXXX has not substantially performed his duties; (2) the unauthorized
dissemination by XXXXX of Confidential Information (as hereinafter defined)
of ASPEN; (3) the breach by XXXXX of any other material term or provision
of this Agreement to be performed by XXXXX which has not been cured within
30 days of receipt of written notice of such breach; or (4) any action by
XXXXX which causes ASPEN to be liable under any federal or state
non-discrimination or equal employment opportunity law.
(ii) Upon termination of XXXXX'x employment for Cause pursuant to this
Section 7(b), ASPEN shall have no further obligation to pay any
compensation to XXXXX for periods after the effective date of the
termination for Cause, except for Base Salary which accrued and was unpaid
as of the termination date. In addition, the right to exercise any vested
stock option shall terminate on the thirtieth (30th) day following the
effective date of the termination of employment for Cause, notwithstanding
any provision in any option agreement to the contrary.
(c) Termination Upon Death or Total and Permanent Disability.
(i) The employment of XXXXX shall terminate upon (1) his death; or (2) ten
business days after written notice by ASPEN of termination following
XXXXX'x Total and Permanent Disability (as hereinafter defined).
(ii) Upon termination by reason of death or during XXXXX'x Total and
Permanent Disability, ASPEN shall pay XXXXX as its sole and exclusive
liability hereunder, an amount equal to the greater of: (1) the amount due
for the remaining term of this Agreement; or (2) six months of XXXXX'x then
current monthly Base Salary. The term "Total and Permanent Disability"
means the incurrence of a Disability for a period (whether or not
continuous) in excess of ninety (90) days, unless extended in writing by
ASPEN. A Total and Permanent Disability shall be deemed to commence upon
the expiration of such ninety (90) day period.
(d) Termination by ASPEN Without Cause. ASPEN may terminate this Agreement
and XXXXX'x employment without Cause prior to the expiration of the Term,
in which case ASPEN shall pay XXXXX as its sole and exclusive liability
hereunder, an amount equal to the greater of: (i) the amount due for the
remaining term of this Agreement; or (ii) nine months of XXXXX'x then
current monthly Base Salary. Payment shall be made within five days of such
termination.
Employment Agreement - Xxxxxx X. Xxxxx Page 4
8. COMPANY PROPERTY: All records, designs, business plans, financial statements,
manuals, memoranda, lists and other property delivered to or compiled by XXXXX
on behalf of ASPEN or its representatives, vendors or customers which pertain to
the business of ASPEN shall be and remain the property of ASPEN, and shall be
subject at all times to its discretion and control. Upon termination of his
employment or upon the demand of ASPEN at any time, XXXXX shall deliver the same
to ASPEN within 24 hours of such termination or demand.
9. CONFIDENTIAL INFORMATION. ASPEN may disclose to XXXXX (or XXXXX may develop
during his employment with ASPEN) certain Confidential Information (defined
below). XXXXX acknowledges and agrees that ASPEN has a reasonable, competitive
business interest in the Confidential Information and the Confidential
Information is the sole and exclusive property of ASPEN (or a third party
providing such information to ASPEN) and that ASPEN or such third party owns all
worldwide rights therein under patent, copyright, trade secret, confidential
information, moral right or other property right. XXXXX acknowledges that his
obligations with regard to the Confidential Information shall remain in effect
while XXXXX is employed by ASPEN and for a period of one (1) year thereafter.
"Confidential Information" shall mean any confidential or proprietary
information possessed by ASPEN or any direct or indirect subsidiary of ASPEN or
relating to the business of ASPEN, including, without limitation, any
confidential "know-how," trade secrets, pricing policies, market studies,
business plans and operational methods. Provided, however, that XXXXX shall not
be restricted from disclosing or using Confidential Information that XXXXX
establishes: (1) is or becomes generally available to the public other than as a
result of an unauthorized disclosure; (2) becomes available to XXXXX in a manner
that is not in contravention of applicable law from a source that is not bound
by a confidential relationship with ASPEN or by a confidentiality or other
similar agreement; or (3) is required to be disclosed by law, court order or
other legal process.
10. GENERAL PROVISIONS:
(a) The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
(b) If any provision of this Agreement, or the application thereof to any
person, place or circumstance, shall be held by a court of competent
jurisdiction to be illegal, invalid, unenforceable or void, then such provision
shall be enforced to the extent that it is not illegal, invalid, unenforceable
or void, and the remainder of this Agreement, as well as such provision as
applied to other persons, places or circumstances, shall remain in full force
and effect.
(c) With regard to any power, remedy or right provided in this Agreement or
otherwise available to any party, no waiver or extension of time shall be
effective unless expressly contained in a writing signed by the waiving party,
no alteration, modification or impairment shall be implied by reason of any
previous waiver, extension of time, delay or omission in exercise or other
indulgence, and waiver by any party of the time for performance of any act or
condition hereunder does not constitute a waiver of the act or condition itself.
Employment Agreement - Xxxxxx X. Xxxxx Page 5
(d) All notices, demands, or other communications to be given or delivered
under or by reason of the provisions of this Agreement will be in writing and
shall be deemed to have duly given or delivered (i) when delivered personally;
(ii) sent by telephone facsimile transmission; or (iii) sent via a nationally
recognized overnight courier to the recipient. Such notices, demands and other
communications will be sent to the address indicated in the first paragraph
hereof, or to such other address as any party may specify by notice given to the
other party in accordance with this Section. The date of giving any such notice
shall be (i) the date of hand delivery; (ii) the date sent by telephone
facsimile if a business day or the first business day thereafter; or (iii) the
business day after delivery to the overnight courier service.
(e) This Agreement shall be governed by and construed in accordance with
the domestic laws of the State of Colorado without giving effect to any choice
or conflict of law provision or rule (whether of the State of Colorado or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Colorado. Without limitation of the
foregoing, XXXXX and ASPEN specifically acknowledge that they do not intend the
laws of the State of California to be applicable to this employment
relationship.
(f) This Agreement constitutes the entire agreement among the Parties with
respect to the subject matter of this Agreement and supersedes any prior
agreement or understanding, whether written and oral, among the Parties or
between any of them with respect to the subject matter of this Agreement. There
are no representations, warranties, covenants, promises or undertakings, other
than those expressly set forth or referred to herein.
(g) This Agreement may be amended, modified or waived only by a written
agreement signed by each of the Parties hereto.
(h) This Agreement shall be binding upon and shall inure to the benefit of
the Parties and their respective successors and, if applicable, permitted
assigns.
(i) Each party intends that this Agreement shall not benefit or create any
right or cause of action in any person other than the Parties or as specifically
expressed in this Agreement.
(j) This Agreement may be executed in one or more counterparts, each of
which shall constitute an original but when taken together shall constitute but
one instrument.
(k) Each party to this Agreement shall bear all of its own expenses in
connection with the execution, delivery and performance of this Agreement and
the transactions contemplated hereby, including without limitation all fees and
expenses of its agents, representatives, counsel and accountants.
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11. REMEDIES: In the event of any disagreement or dispute arising
hereunder, the same shall be subject to Colorado law and be submitted to
arbitration before the Judicial Arbiter Group, Inc., Denver, Colorado, in
accordance with the rules of such group.
IN WITNESS WHEREOF, the Board of Directors of ASPEN have approved this
Agreement by resolutions dated January 1, 2003, and the Parties have executed
this Agreement this 15th day of December, 2002, to be effective as of the date
and year first above written.
ASPEN EXPLORATION CORPORATION
By: /s/ X. X. Xxxxxx
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X. X. Xxxxxx, President
Date: December 20, 2002
EMPLOYEE
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Date: December 15, 2002
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