JAMES C. STEINHAUSER EMPLOYMENT AGREEMENT
EXHIBIT 10.1
XXXXX X. XXXXXXXXXXX EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this “Agreement”), is made
and entered into this 26th day of January, 2009, but
effective January 13, 2009 (the “Effective Date”), by and between
PetroHunter Operating Company, a Maryland corporation
(the “Employer”), and Xxxxx
X. Xxxxxxxxxxx, an individual (the “Employee”).
The
parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For the
purposes of this Agreement, the following terms have the meanings specified or
referred to in this Section 1.
“Agreement” means this
Employment Agreement, as amended, restated or otherwise modified from time to
time.
“Benefits” is defined
in Section
3.3.
“Board” means the
Board of Directors of the Employer.
“Confidential
Information” means any and all:
(a) trade
secrets concerning the business and affairs of the Employer, whether a
technical, business or other nature that is disclosed to the Employee or that is
otherwise learned by Employee in the course of employment with the Company,
including but not limited to know-how, processes, designs, samples, inventions
and ideas, past, current, and planned property or mineral acquisition, and all
information related thereto, exploration or development activities or methods,
customer and vendor lists, business plans as well as any other information,
however documented, that is a trade secret within the meaning of the Colorado
Trade Secrets Act, as in effect as of the date hereof and as amended from time
to time; and
(b) information
concerning the business and affairs of the Employer (which includes historical
financial statements, financial projections and budgets, historical and
projected sales, capital spending budgets and plans, however
documented).
(c) "Confidential
Information" shall not include information, data, knowledge and know-how that
(a) is in the Employee’s possession prior to disclosure to the recipient
party, (b) is in the public domain prior to disclosure to the Employee,
(c) lawfully enters the public domain through no violation of this
Agreement after disclosure to the Employee, (d) becomes available to the
Employee on a non-confidential basis from a source other than the Employer,
provided that such source is not known by the Employee to be bound by a
confidentiality agreement with the Employer or another party,
“Effective Date” means
January 13, 2009.
“Employee Invention”
means any idea, invention, or improvement (whether patentable or not), any
industrial design (whether registrable or not), and any work of authorship
(whether or not copyright protection may be obtained for it) created, conceived,
or developed by the Employee, either solely or in conjunction with others,
during the Employment Period, or a period that includes a portion of the
Employment Period, that relates to the business then being conducted or proposed
to be conducted by the Employer.
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“Employment Period”
means the period of the Employee’s employment under this Agreement.
“Person” means any
individual, corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, or governmental body.
“For Cause” means:
(a) the Employee’s material breach of this Agreement; (b) the Employee’s
material failure to adhere to any written Employer policy; (c) the appropriation
(or attempted appropriation) of a material business opportunity of the Employer,
including attempting to secure or securing any personal profit in connection
with any transaction entered into on behalf of the Employer; (d) the
misappropriation (or attempted misappropriation) of any of the Employer’s funds
or property; or (e) the conviction of, or the entering of a guilty plea or plea
of no contest with respect to, a felony.
“Salary” is defined in
Section
3.1.
2. EMPLOYMENT
TERMS AND DUTIES
2.1 Employment. The
Employer hereby employs the Employee, and the Employee hereby accepts employment
by the Employer, upon the terms and conditions set forth in this
Agreement.
2.2 Term. The Employer
hereby employs the Employee effective as of the Effective Date. The
employment with the Employer is not for any specified period of
time. As a result, either the Employer or the Employee is free to
terminate the employment relationship at any time, subject to the other
provisions of this Agreement. Unless earlier terminated, this
Agreement will terminate on December 31, 2013.
2.3 Termination. If the
Employee is terminated by the Employer for any reason (including a Change of
Control as hereinafter defined), other than For Cause, he will receive Salary
and Benefits as severance in an amount equal to six months of
Salary. No severance payments will be made until Employee executes a
valid release of any and all claims that he may have relating to his employment
against the Employer and its agents in a form provided by the
Employer. If the Employee is terminated For Cause, or resigns, his
Salary and Benefits will terminate immediately upon leaving the
Employer. The Employer may terminate Employee For Cause only after
(a) Employee has had the opportunity to discuss such termination with the Board
of Directors, (b) the Board of Directors of the Employer has adopted a
resolution terminating Employee’s employment and specifying, in reasonable
detail, the “For Cause” termination, and (c) the Employee shall have received
written notice of such action, which notice shall include a copy of the
resolution specifying the “For Cause” termination. If a matter
purportedly giving rise to a “For Cause” termination could be cured by Employee,
the Board of Directors shall not take any action to terminate the Employee
hereunder unless and until the Employee has received written notice by or on
behalf of the Board of Directors of the Employer specifying such cause and
Employee shall have failed to cure or correct such cause within 30 days after
receiving such notice.
For
purposes of this Agreement, a Change of Control shall mean the first to occur
of:
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organized,
appointed or established by the Employer for or pursuant to the terms of any
such plan, acquiring beneficial ownership of voting securities of the Employer,
is or becomes the beneficial owner, directly or indirectly, of securities of the
Employer representing 50% or more of the combined voting power of the Employer’s
then outstanding securities.
(ii) consummation
of a reorganization, merger or consolidation of the Employer (a “Business
Combination”), in each case, unless, following such Business Combination,
the individuals and entities who were the beneficial owners of outstanding
voting securities of the Employer immediately prior to such Business Combination
beneficially own, by reason of such ownership of the Employer’s voting
securities immediately before the Business Combination, directly or indirectly,
more than 50% of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors of the
Employer resulting from such Business Combination (including, without
limitation, a company which as a result of such transaction owns the Employer or
all or substantially all of the Employer’s assets either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership
of the outstanding voting securities of the Employer immediately prior to such
Business Combination; or
(iii) approval
by the stockholders of the Employer of a complete liquidation or dissolution of
the Employer.
Notwithstanding
the foregoing subparagraphs (i) through (iii), in no event shall any transaction
or series of transactions entered into between the Employer, or their respective
Affiliates as of the date of this Agreement or entities wholly owned by the
forgoing, or changes associated therewith, be considered a Change in
Control.
2.4 Duties. The Employee
will have such duties as are assigned or delegated to the Employee by the Board.
The Employee will devote substantially all of his business time, attention,
skill, and energy to the business of the Employer, will use his best efforts to
promote the success of the Employer’s business, and will cooperate fully with
the Board in the advancement of the best interests of the
Employer. Employee will not compete with the Employer during the
Employment Period. Nothing in this Section 2.4, however,
will prevent the Employee from engaging in additional activities in connection
with personal investments and community affairs that are not inconsistent with
the Employee’s duties under this Agreement. At the Employer’s
request, Employee may also perform services for companies that have a business
relationship with the Employer. Unless agreed to by the Employer,
Employee will receive no additional Salary or Benefits or other compensation for
these services.
3. COMPENSATION
3.1 Salary. The Employee
will be paid an annual salary of $225,000 (the “Salary”), which will
be payable in equal periodic installments according to the Employer’s customary
payroll practices, but no less frequently than monthly. During
the term of this Agreement, the salary may be increased by the
Board.
3.2 Benefits. During the
Employment Period, the Employee shall be permitted to participate in such
pension, profit sharing, bonus, life insurance, hospitalization, major medical,
and other employee benefit plans of the Employer that may be in effect from time
to time, to the extent the Employee is eligible under the terms of those plans
(collectively, the “Benefits”).
3.3 Stock
Options. The Employee will receive stock option grants
totaling 1,000,000 stock options of PetroHunter Energy Corporation common stock
(the “Stock
Options”) to be priced at the last reported sale price of the common
stock as quoted on the OTC Bulletin Board
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on the
Effective Date (or on the preceding stock market business day if such date is a
Saturday, Sunday, or a holiday). The Stock Options shall be
exercisable as follows: (i) 20% of the Stock Options shall be
exercisable upon the Effective Date, and (ii) 20% of the Stock Options shall
become exercisable annually thereafter until fully vested. The term
of the options shall be five (5) years.
3.3.1 Change of
Control. All grants made under the stock option or other equity
incentive plans of Employer (the “Equity Plans”)
(including those made prior to the effective date of this Agreement) shall vest
in full immediately prior to the occurrence of a Change of Control. To
the extent that the terms of this Agreement conflict with the terms of the
Equity Plans of the Employer, the terms of this Agreement shall control and the
Employer agrees that the provisions set forth herein regarding Change in Control
shall be included in any stock option agreement or similar granting instrument
entered into with or provided to Employee in connection with Employee’s
employment with Employer.
3.4 Relocation
Allowances. The Employer will reimburse Employee for actual
move expenses up to a maximum of $15,000. Such expenses shall be
limited to costs incurred in connection with the transportation of Employee’s
family and household furnishings, fixtures, and automobiles.
3.5 Travel
Expenses. The Employer will provide the Employee with twelve
round trip airline tickets from San Francisco, California, to Denver, Colorado,
during the six-month transition period following the Effective
Date. These tickets may be used by the Employee and/or Employee’s
spouse.
4. VACATIONS,
HOLIDAYS AND SICK LEAVE
The
Employee will accrue 6.67 hours of vacation time for each pay period for a total
of 160 hours of annual vacation time, will be entitled to 5 sick days/personal
days annually and will be entitled to paid holidays in accordance with the
policies of the Employer.
5. NON-DISCLOSURE
COVENANT; EMPLOYEE INVENTIONS
5.1 Acknowledgments by the
Employee. The Employee acknowledges that (a) during the
Employment Period and as a part of his employment, the Employee will be afforded
access to Confidential Information; (b) public disclosure of such Confidential
Information could have an adverse effect on the Employer and its business; (c)
because the Employee possesses substantial technical expertise and skill with
respect to the Employer’s business, the Employer desires to obtain exclusive
ownership of each Employee Invention, and the Employer will be at a substantial
competitive disadvantage if it fails to acquire exclusive ownership of each
Employee Invention; and (d) the provisions of this Section 5 are
reasonable and necessary to prevent the improper use or disclosure of
Confidential Information and to provide the Employer with exclusive ownership of
all Employee Inventions.
5.2 Agreements of the
Employee. In consideration of the compensation and benefits to be paid or
provided to the Employee by the Employer under this Agreement, the Employee
covenants as follows:
(a) Confidentiality.
(i) During
and following the Employment Period, the Employee will hold in confidence the
Confidential Information and will not disclose it to any Person
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except
with the specific prior written consent of the Employer or except as otherwise
expressly permitted by the terms of this Agreement.
(ii) Any trade
secrets of the Employer will be entitled to all of the protections and benefits
under the Colorado Trade Secrets Act, as in effect on the date hereof, and as
amended from time to time, and any other applicable law.
(iii) None of
the foregoing obligations and restrictions applies to any part of the
Confidential Information that the Employee demonstrates was or became generally
available to the public other than as a result of a disclosure by the
Employee.
(iv) Compelled Disclosure.
Notwithstanding the provisions of this Section 5.2(a), if the Employee is
required to disclose any Confidential Information pursuant to any applicable
law, rule or regulation or a subpoena, court order, similar judicial process,
regulatory agency or stock exchange rule, the Employee will, if possible,
promptly notify the Employer of any such requirement so that the Employer, at
its sole cost and expense, may seek an appropriate protective order or waive
compliance with the provisions of this Agreement. If such order is not obtained,
or the Employer waives compliance with the provisions of this Agreement, the
Employee will disclose only that portion of the Confidential Information which
he is legally required to so disclose. In the event that the Employee shall have
complied fully with the provisions of this Section, the Employer agrees that
such disclosure may be made by the Employee without any liability
hereunder.
(b) Employee Inventions.
During the Employment Period, each Employee Invention will belong exclusively to
the Employer. The Employee acknowledges that the Employee’s writing, works of
authorship, and other Employee Inventions are works made for hire and the
property of the Employer, including any copyrights, patents, or other
intellectual property rights pertaining thereto. The Employee covenants that he
will promptly:
(i) disclose
to the Employer in writing any Employee Invention;
(ii) assign to
the Employer or to a party designated by the Employer, at the Employer’s request
and without additional compensation, all of the Employee’s right to the Employee
Invention for the United States and all foreign jurisdictions;
(iii) execute
and deliver to the Employer such applications, assignments, and other documents
as the Employer may request in order to apply for and obtain patents or other
registrations with respect to any Employee Invention in the United States and
any foreign jurisdictions;
(iv) sign all
other papers necessary to carry out the above obligations; and
(v) give
testimony and render any other assistance, without expense to the Employee, in
support of the Employer’s rights to any Employee Invention.
6. EXCLUSIVE
EMPLOYMENT
Subject
to the provisions of Section 2.4, above,
during the Employment Period, (a) Employee will not do anything to compete with
the Employer’s present or contemplated business (as that may change from time to
time during the Employment Period), nor will he plan or organize any competitive
business activity; and (b) Employee will not enter into any agreement which
conflicts with his duties or obligations to the Employer. Employee
will not
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during
the Employment Period or within six months after it ends, without the Employer’s
express written consent, solicit or encourage any employee, agent, independent
contractor, supplier, consultant, investor or alliance partner to terminate or
alter a relationship with the Employer.
It is the
desire and intent of the Employer and the Employee that the provisions of this
Section 6 be
enforced to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is
sought. Accordingly, if any particular portion of this Section 6
shall be adjudicated to be invalid or unenforceable, this Section 6 shall be
deemed amended to apply in the broadest allowable manner and to delete therefrom
the portion adjudicated to be invalid or unenforceable, such amendment and
deletion to apply only with respect to the operation of Section 6 in the
particular jurisdiction in which that adjudication is made.
7. GENERAL
PROVISIONS
7.1 Covenants of Sections 5
and 6 Are Essential and Independent Covenants. The covenants by the
Employee in Sections
5 and 6 are essential elements of this Agreement, and without the
Employee’s agreement to comply with such covenants, the Employer would not have
entered into this Agreement or employed or continued the employment of the
Employee. The Employer and the Employee have independently consulted their
respective counsel and have been advised in all respects concerning the
reasonableness and propriety of such covenants, with specific regard to the
nature of the business conducted by the Employer.
The
Employee’s covenants in Sections 5 and 6
are independent covenants and the existence of any claim by the Employee against
the Employer under this Agreement or otherwise, will not excuse the Employee’s
breach of any covenant in Sections 5 and
6.
If the
Employee’s employment hereunder expires or is terminated, this Agreement will
continue in full force and effect as is necessary or appropriate to enforce the
covenants and agreements of the Employee in Sections 5 and 6, and
the Employer will have the right in addition to any other rights it may have, to
seek injunctive relief to restrain or specifically enforce provisions of this
Agreement.
7.2 Deferred
Compensation. If the Company (or, if applicable, any successor
entity thereto) determines that the Salary and Benefits provided to the Employee
upon termination pursuant to Section 2.3 or any other payments provided for in
this Agreement (any such payments, the “Deferred Payments”) constitute “deferred
compensation” under Section 409A of the Internal Revenue Code of 1986, as
amended (together, with any state law of similar effect, “Section 409A”) and if
the Employee is a “specified employee” of the Company (or, if applicable, any
successor entity thereto), as such term is defined in Section 409A(a)(2)(B)(i)
(a “Specified Employee”), then, solely to the extent necessary to avoid the
imposition of the adverse personal tax consequences under Section 409A, the
timing of the Deferred Payments will be delayed as follows: on the earlier to
occur of (1) the date that is six months and one day after the date of
termination of Employee’s employment, and (2) the date of Employee’s
death. Prior to the imposition of any delay on the Deferred Payments
as set forth above, it is intended that (A) any installment of the Deferred
Payments be regarded as a separate “payment” for purposes of Treas. Reg.
§1.409A-2(b)(2)(i), (B) all Deferred Payments satisfy, to the greatest extent
possible, the exemptions from the application of Section 409A provided under
Treas. Reg. §1.409A-1(b)(4) and 1.409A-1(b)(9)(iii), and (C) the Agreement
Payments consisting of COBRA premiums also satisfy, to the greatest extent
possible, the exemption from the application of Section 409A provided under
Treas. Reg. §1.409A-1(b)(9)(v).
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7.3 Representations and
Warranties by the Employee. The Employee represents and warrants to the
Employer that the execution and delivery by the Employee of this Agreement do
not, and the performance by the Employee of the Employee’s obligations hereunder
will not, with or without the giving of notice or the passage of time, or both:
(a) violate any judgment, writ, injunction, or order of any court, arbitrator,
or governmental agency applicable to the Employee; or (b) conflict with, result
in the breach of any provisions of or the termination of, or constitute a
default under, any agreement to which the Employee is a party or by which the
Employee is or may be bound.
7.4 Waiver. The rights
and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by either party in
exercising any right, power, or privilege under this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial exercise of
any such right, power, or privilege will preclude any other or further exercise
of such right, power, or privilege or the exercise of any other right, power, or
privilege. To the maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement can be discharged by one party, in whole or
in part, by a waiver or renunciation of the claim or right unless in writing
signed by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this
Agreement.
7.5 Binding Effect; Delegation
of Duties Prohibited. This Agreement shall inure to the benefit of, and
shall be binding upon, the parties hereto and their respective successors,
assigns, heirs, and legal representatives, including any entity with which the
Employer may merge or consolidate or to which all or substantially all of its
assets may be transferred. The duties and covenants of the Employee
under this Agreement, being personal, may not be delegated.
7.6 Indemnification. The
Employer shall indemnify and advance expenses to the Employee to the fullest
extent permitted by Section 2-418 of the Maryland Code, unless it is established
that (a) the act or omission was material to the matter giving rise to the
liability and was omitted in bad faith or was the result of active and
deliberate dishonesty; (b) the person actually received an improper personal
benefit in money, property or services; or (c) in the case of a criminal
proceeding, the person had reasonable cause to believe the act or omission was
unlawful.
7.7 Notices. All notices,
consents, waivers, and other communications under this Agreement must be in
writing and will be deemed to have been duly given when (a) delivered by hand
(with written confirmation of receipt), (b) sent by facsimile (with written
confirmation of receipt), provided that a copy is mailed by registered mail,
return receipt requested, or (c) when received by the addressee, if sent by a
nationally recognized overnight delivery service (receipt requested), in each
case to the appropriate addresses and facsimile numbers set forth below (or to
such other addresses and facsimile numbers as a party may designate by notice to
the other parties):
|
If
to Employer:
|
PetroHunter
Operating Company
|
|
|
0000
Xxxxx Xxxxxx, Xxxxx 0000
|
|
|
Xxxxxx,
XX 00000
|
|
|
Fax:
(000) 000-0000
|
|
If
to the Employee:
|
As
set forth on signature page.
|
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7.8 Entire Agreement;
Amendments. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, between the parties hereto with
respect to the subject matter hereof. This Agreement may not be
amended orally, but only by an agreement in writing signed by the parties
hereto.
7.9 Governing Law; Forum and
Venue. This Agreement shall be construed according to the law
of the State of Colorado and any actions to enforce the terms of this Agreement
shall be exclusively brought in either state or federal court in the City and
County of Denver, Colorado, and each of the parties consents to the jurisdiction
of such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in
any action or proceeding referred to in the preceding sentence may be served on
either party anywhere in the world. The prevailing Party in any such
action shall be entitled to recover its attorney’s fees and all costs of any
such action.
7.10 Severability. If any
provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid
or unenforceable only in part or degree will remain in full force and effect to
the extent not held invalid or unenforceable.
7.11 Counterparts and
Facsimile. This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement. Facsimile signatures shall be considered an original
signature.
7.12 Waiver of Jury
Trial. THE PARTIES HERETO HEREBY WAIVE A JURY TRIAL IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT.
IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first written above.
| EMPLOYER: | |||
| PETROHUNTER OPERATING COMPANY | |||
|
|
By:
|
/s/ | |
| Name: | Xxxx X. XxxxxXxxxxxx | ||
| Title: | Vice President of Administration | ||
| EMPLOYEE: | |||
| Name: | Xxxxx X. Xxxxxxxxxxx | ||
|
|
Address:
|
0000
Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
|
|
| Facsimile Number: | (000) 000-0000 | ||
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