Employment Agreement
Exhibit
10.2
THIS
EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of July 3,
2007 and shall be effective as of June 4, 2007 (the “Effective Date”) by and
between Tatonka
Oil and Gas, Inc., a
Colorado corporation, with an office located at 0000 Xxxxxxxx Xxxxxx, Tower
1,
10th
Floor,
Denver, Colorado 80202 (the “Company”) and Xxxxx
Xxxxx,
an
individual with an address located at 00000 Xxxx 00xx
Xxxxx,
Xxxxxx, Xxxxxxxx 00000 (“Tromp”).
WHEREAS,
the Company desires to retain the services of Tromp as Chief Executive Officer
and Tromp is willing to be employed by the Company in such
capacity.
NOW,
THEREFORE, in consideration of the mutual covenants contained herein, the
parties agree as follows:
1.
Employment.
Tromp is
hereby employed and engaged to serve the Company as the Company’s Chief
Executive Officer, or such additional titles as the Company shall specify from
time to time with the consent of Tromp, and Tromp does hereby accept and agrees
to such engagement and employment.
2.
Duties.
Tromp’s
duties shall be such duties and responsibilities as the Company shall specify
from time to time, which shall entail those duties customarily performed by
the
Chief Executive Officer of a company with a business commensurate with those
of
the Company. Tromp shall have such authority, discretion, power and
responsibility, and shall be entitled to office, secretarial and other
facilities and conditions of employment, as are customary or appropriate to
his
position. Tromp shall diligently and faithfully execute and perform such duties
and responsibilities, subject to the approval of the Company’s Board of
Directors. Tromp shall be responsible and report to the Company’s Board of
Directors. Tromp shall devote the majority of his attention, energy, and skill
to the business and affairs of the Company. Tromp shall be permitted to engage
in other business activities that do not directly compete with the Company.
Nothing
in this Agreement shall preclude Tromp from devoting reasonable periods required
for:
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(a)
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serving
as a director or member of a committee of any organization or corporation
involving no conflict of interest with the interests of the
Company;
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(b)
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serving
as a consultant in his area of expertise (in areas other than in
connection with the business of the Company), to government, industrial,
and academic panels where it does not conflict with the interests
of the
Company; and
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(c) managing
his personal investments or engaging in any other non-competing
business;
provided
that such activities do not materially interfere with the regular performance
of
his duties and responsibilities under this Agreement as reasonably determined
in
good faith by the Company.
3.
Best Efforts of Tromp.
During
his employment hereunder, Tromp shall devote the majority of his business time,
best commercially reasonable efforts, business judgment, skill, and knowledge
to
the advancement of the Company's interests and to the discharge of his duties
and responsibilities hereunder. Notwithstanding the foregoing, nothing herein
shall be construed as preventing Tromp from investing his assets in any
business.
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4.
Compensation of Tromp.
| (a) |
Base
Compensation.
As
compensation for the services provided by Tromp under this Agreement,
the
Company shall pay Tromp an annual salary of Two Hundred Forty Thousand
Dollars ($240,000). The compensation of Tromp under this Section shall
be
paid in accordance with the Company's usual payroll procedures.
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| (b) |
Stock
and Stock Options.
Upon execution of this Agreement, the Company shall xxxxx Xxxxx options
to
purchase 500,000 shares of the Company’s common stock with an exercise
price of $0.85, 250,000 shares at an exercise price of $1.00, and 250,000
shares at an exercise price of $1.25. Options will vest at 25% per
year.
Upon closing future equity financing, the Company shall xxxxx Xxxxx
an
additional 1,000,000 options to purchase the Company’s stock. The exercise
price of 500,000 of these options shall be set at market value, 250,000
options at market plus $0.15, and 250,000 options at market plus $0.40.
The options shall vest 25% per year from grant and have a term of five
(5)
years from the respective dates of
vesting.
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In
the
event of a conflict between the above grant and either the shareholder approved
stock option plan or corresponding board resolution, the covenants of the
approved plan and board resolution take precedence.
| (c) |
Bonus.
In
addition to the base compensation in Section 5(a), Tromp shall be eligible
to receive an annual bonus determined by the Board of Directors based
on
the performance of the Company and Tromp.
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5.
Benefits. Tromp
shall also be entitled to participate in any and all Company benefit plans,
from
time to time, in effect for employees of the Company, including, but not limited
to, health, dental and vision insurance plans available to the Company's senior
management executives and their dependents. Such participation shall be subject
to the terms of the applicable plan documents and generally applicable Company
policies.
6.
Vacation, Sick Leave and Holidays.
Tromp
shall be entitled to four (4) weeks of paid vacation, with such vacation to
be
scheduled and taken in accordance with the Company's standard vacation policies.
Two (2) weeks of unused, accrued vacation can be carried into the next year.
Remaining unused, accrued vacation time will be paid during the first quarter
of
the following year. In addition, Tromp shall be entitled to such sick leave
and
holidays at full pay in accordance with the Company's policies established
and
in effect from time to time.
7.
Business Expenses.
The
Company shall promptly reimburse Tromp for all reasonable out-of-pocket business
expenses incurred in performing Tromp’s duties and responsibilities hereunder in
accordance with the Company's policies, provided Tromp promptly furnishes to
the
Company adequate records of each such business expense. Such expenses shall
be
reimbursed in accordance with the Company’s regular reimbursement
practices.
8.
Location of Tromp's Activities. Tromp’s
principal place of business in the performance of his duties and obligations
under this Agreement shall be at the Company’s primary office in Denver,
Colorado. Notwithstanding the preceding sentence, Tromp will engage in such
travel and spend such time in other places as may be reasonably necessary or
appropriate in discharging of his duties hereunder.
9.
Confidential Information/Inventions.
2
(a)
Confidential
Information.
Tromp
shall not, in any manner, for any reasons, either directly or indirectly,
divulge or communicate to any person, firm or corporation, any confidential
information concerning any matters not generally known or otherwise made public
by Company which affects or relates to the Company’s business, finances,
marketing and/or operations, research, development, inventions, products,
designs, plans, procedures, or other data (collectively, “Confidential
Information”) except in the ordinary course of business, as necessary to joint
venture partners or as required by applicable law for a period of one year.
Without regard to whether any item of Confidential Information is deemed or
considered confidential, material, or important, the parties hereto stipulate
that as between them, to the extent such item is not generally known in the
oil
and gas industry, such item is important, material, and confidential and affects
the successful conduct of the Company’s business and goodwill, and that any
breach of the terms of this Section 9 shall be a material and incurable breach
of this Agreement. Confidential Information shall not include: (i) information
obtained or which became known to Tromp other than through his employment by
the
Company; (ii) information in the public domain at the time of the disclosure
of
such information by Tromp; (iii) information that Tromp can document was
independently developed by Tromp; (iv) information that is disclosed by Tromp
with the prior written consent of the Company and (v) information that is
disclosed by Tromp as required by law, governmental regulation or court
order.
(b)
Documents.
Tromp
further agrees that all documents and materials furnished to Tromp by the
Company and relating to the Company’s business or prospective business are and
shall remain the exclusive property of the Company. Tromp shall deliver all
such
documents and materials, not copied, to the Company upon demand therefore and
in
any event upon expiration or earlier termination of this Agreement. Any payment
of sums due and owing to Tromp by the Company upon such expiration or earlier
termination shall be conditioned upon returning all such documents and
materials, and Tromp expressly authorizes the Company to withhold any payments
due and owing pending return of such documents and materials.
(c)
Inventions. All
ideas, inventions, and other developments or improvements conceived or reduced
to practice by Tromp, alone or with others, during the Term of this Agreement,
whether or not during working hours, that are within the scope of the business
of the Company or that relate to or result from any of Tromp’s work or projects
or the services provided by Tromp to the Company pursuant to this Agreement,
shall be the exclusive property of the Company. Tromp agrees to assist the
Company, at the Company’s expense, to obtain patents and copyrights on any such
ideas, inventions, writings, and other developments, and agrees to execute
all
documents necessary to obtain such patents and copyrights in the name of the
Company.
(d)
Disclosure. During
the Term, Tromp will promptly disclose to the Board of Directors full
information concerning any interest, direct or indirect, of Tromp (as owner,
shareholder, partner, lender or other investor, director, officer, employee,
consultant or otherwise) or any member of his immediate family in any business
that is reasonably known to Employee to purchase or otherwise obtain services
or
products from, or to sell or otherwise provide services or products to, the
Company or to any of its suppliers or customers.
10.
Non-Compete. Except
as
expressly permitted herein, during the Term of this Agreement, Tromp shall
not
engage in any of the following competitive activities: (a) engaging directly
or
indirectly in any business or activity substantially similar to any business
or
activity engaged in (or proposed to be engaged in) by the Company in North
America; (b) engaging directly or indirectly in any business or activity
competitive with any business or activity engaged in (or proposed to be engaged
in) by the Company in North America; (c) soliciting or taking away any employee,
agent, representative, contractor, supplier, vendor, customer, franchisee,
lender or investor of the Company, or attempting to so solicit or take away;
(d)
interfering with any contractual or other relationship between the Company
and
any employee, agent, representative, contractor, supplier, vendor, customer,
franchisee, lender or investor; or (e) using, for the benefit of any person
or
entity other than the Company, any Confidential Information of the Company.
The
foregoing covenant prohibiting competitive activities shall survive the
termination of this Agreement and shall extend, and shall remain enforceable
against Tromp, for the period of the lesser of (6) six months or the duration
of
termination pay as described in paragraph 13 below, following the date this
Agreement is terminated In addition, during the one-year period following such
expiration or earlier termination, neither Tromp nor the Company shall make
any
negative statement of any kind concerning the Company or its affiliates, or
their directors, officers or agents or Tromp.
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11.
Injunctive Relief. Tromp
acknowledges and agrees that the covenants and obligations of Tromp set forth
in
Sections 9 and 10 with respect to non-competition, non-solicitation,
confidentiality and the Company’s property relate to special, unique and
extraordinary matters and that a violation of any of the terms of such covenants
and obligations will cause the Company irreparable injury for which adequate
remedies are not available at law. Therefore, Tromp agrees that the Company
shall be entitled to an injunction, restraining order or such other equitable
relief (without the requirement to post bond) as a court of competent
jurisdiction may deem necessary or appropriate to restrain Tromp from committing
any violation of the covenants and obligations referred to in this Section
11.
These injunctive remedies are cumulative and in addition to any other rights
and
remedies the Company may have at law or in equity.
12.
Survival.
Tromp
agrees that the provisions of Sections 9, 10 and 11 shall survive expiration
or
earlier termination of this Agreement for any reasons, whether voluntary or
involuntary, with or without cause, and shall remain in full force and effect
thereafter. Notwithstanding the foregoing, if this Agreement is terminated
upon
the dissolution of the Company, the filing of a petition in bankruptcy by the
Company or upon an assignment for the benefit of creditors of the assets of
the
Company, Sections 9, 10 and 11 shall be of no further force or
effect.
13.
Termination.
Your
employment with the Company will be “at will”, meaning that either you or the
Company will be entitled to terminate your employment at any time and for any
reason, with or without cause, after ninety (90) days written notice is given.
Notwithstanding any other provisions hereof to the contrary, Tromp’s employment
hereunder shall terminate under the following circumstances:
| (a) |
Voluntary
Termination by Tromp.
Tromp shall have the right to voluntarily terminate this Agreement
and his
employment hereunder at any time during the Employment Term.
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| (b) |
Voluntary
Termination by the Company. The
Company shall have the right to voluntarily terminate this Agreement
and
Tromp’s employment hereunder at any time. If the Company initiates an “at
will” termination of your employment as described above the Company agrees
to pay Tromp a lump-sum separation fee at the time of termination equal
to
six (6) months salary plus benefits and be granted immediate vesting
of
all unvested stock and options.
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| (c) |
Termination
for Cause.
The Company shall have the right to terminate this Agreement and Tromp’s
employment hereunder at any time for cause. For purposes of this
Agreement, the term “cause” for termination by the Company shall be (a) a
conviction of or plea of guilty or nolo
contendere by
Tromp to a felony, or any crime involving fraud or embezzlement; (b)
the
refusal by Tromp to perform his material duties and obligations hereunder;
(c) Tromp’s willful and intentional misconduct in the performance of his
material duties and obligations; or (d) if Tromp or any member of his
family makes any personal profit arising out of or in connection with
a
transaction to which the Company is a party or with which it is associated
without making disclosure to and obtaining the prior written consent
of
the Board of Directors. The written notice given hereunder by the Company
to Tromp shall specify in reasonable detail the cause for termination.
For
purposes of this Agreement, “family” shall mean Tromp’s spouse and/or
children. In the case of a termination for the causes described in
(a) and
(d) above, such termination shall be effective upon receipt of the
written
notice. In the case of the causes described in (b) and (c) above, such
termination notice shall not be effective until ten (10) days after
Tromp’s receipt of such notice, during which time Tromp shall have the
right to respond to the Company’s notice and cure the breach or other
event giving rise to the termination.
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| (d) |
Event
of Sale, Merger or Change of Control.
In
the event of the sale, merger or change of control of the Company during
your employment, or in the event of an agreement to sell, merge or
change
control of the Company during your employment, the Company or its
successor(s) agree to immediately vest all unvested stock and options
and
offer you employment under the terms given above, for a period of at
least
(6) six months after the sale or merger closing date. If this extension
is
not given by the Company or its successor(s) and accepted by you, then
the
Company or its successor(s) agree to pay to you a lump-sum separation
fee
equivalent to (6) six months of salary plus benefits. Employment “at will”
provisions described above cannot be applied by the Company from 120
days
before the date of the agreement to sell or merge the Company to the
closing date. If an “at will” action to terminate your employment is taken
by the Company during this time period, or if you are asked to voluntarily
end your employment by the Company during this time period, you will
be
entitled to immediate vesting of all unvested stock and options and
a
lump-sum payment of the equivalent of your salary and benefits for
(6) six
months, to be paid on or before the sale or merger closing date.
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| (e) |
Termination
Upon Death.
If
Tromp dies during the Term of this Agreement, this Agreement shall
terminate, except that Tromp’s legal representatives shall be entitled to
receive any earned but unpaid compensation or expense reimbursement
due
hereunder through the date of death.
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| (f) |
Termination
Upon Disability.
If, during the Term of this Agreement, Tromp suffers and continues
to
suffer from a “Disability” (as defined below), then the Company may
terminate this Agreement by delivering to Tromp thirty (30) calendar
days’
prior written notice of termination based on such Disability, setting
forth with specificity the nature of such Disability and the determination
of Disability by the Company. For the purposes of this Agreement,
“Disability” means Tromp’s inability, with reasonable accommodation, to
substantially perform Tromp’s duties, services and obligations under this
Agreement due to physical or mental illness or other disability for
a
continuous, uninterrupted period of one hundred and eighty (180) calendar
days or two hundred and ten (210) days during any twelve month period.
Upon any such termination for Disability, Tromp shall be entitled to
receive any earned but unpaid compensation or expense reimbursement
due
hereunder through the date of
termination.
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| (g) |
Effect
of Termination.
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(i)
In
the event that this Agreement and Tromp’s employment is voluntarily terminated
by Tromp pursuant to Section 13(a), or in the event the Company terminates
this
Agreement for cause pursuant to Section 13(c), all obligations of the Company
and all duties, responsibilities and obligations of Tromp under this Agreement
shall cease. Upon such termination, the Company shall (i) pay Tromp a cash
lump
sum equal to all accrued base salary through the date of termination plus all
accrued vacation pay and bonuses, if any; and (ii) any shares of common stock
or
options granted to Tromp by the Company which have not vested pursuant to
Section 4 hereof shall be terminated.
5
(ii)
In
the event that this Agreement and Tromp’s employment is voluntarily terminated
by the Company pursuant to Section 13(b), all obligations of the Company and
all
duties, responsibilities and obligations of Tromp under this Agreement shall
cease. Upon such termination, the Company shall pay Tromp a cash lump sum equal
to all accrued base salary through the date of termination plus all accrued
vacation pay and bonuses, if any; (ii) the separation fee; and (iii) any shares
of common stock or options granted to Tromp by the Company pursuant to Section
4
hereof shall become immediately vested.
(iii)
In
the event this Agreement is terminated upon the death of Tromp pursuant to
Sections 11(e), Tromp’s estate shall be entitled to all compensation pursuant to
Sections 4 and 5 for the period of 6 months after his death. Payment will be
made to Tromp’s estate. In the event of a merger, consolidation, sale, or change
of control, the Company's rights hereunder shall be assigned to the surviving
or
resulting company, which company shall then honor this Agreement with Tromp
and
his estate.
14.
Resignation as Officer.
In the
event that Tromp’s employment with the Company is terminated for any reason
whatsoever, Tromp agrees to immediately resign as an Officer and/or Director
of
the Company and any related entities. For the purposes of this Section 14,
the
term the "Company" shall be deemed to include subsidiaries, parents, and
affiliates of the Company.
15.
Governing Law, Jurisdiction and Venue.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Colorado without giving effect to any applicable conflicts of law
provisions.
16.
Independent Legal Advice.
The
Company has obtained legal advice concerning this Agreement and has requested
that Tromp obtain independent legal advice with respect to same before executing
this Agreement. Tromp, in executing this Agreement, represents and warranties
to
the Company that he has been so advised to obtain independent legal advice,
and
that prior to the execution of this Agreement he has so obtained independent
legal advice, or has, in his discretion, knowingly and willingly elected not
to
do so.
17.
Business Opportunities.
During
the Employment Term Tromp agrees to bring to the attention of the Company’s
Board of Directors all written business proposals that come to Tromp’s attention
and all business or investment opportunities of whatever nature that are created
or devised by Tromp and that relate to areas in which the Company conducts
business and might reasonably be expected to be of interest to the Company
or
any of its subsidiaries.
18.
Employee’s Representations and Warranties.
Tromp
hereby represents and warrants that he is not under any contractual obligation
to any other company, entity or individual that would prohibit or impede Tromp
from performing his duties and responsibilities under this Agreement and that
he
is free to enter into and perform the duties and responsibilities required
by
this Agreement.
19.
Indemnification.
| (a) |
The
Company agrees that if Tromp is made a party, or is threatened to be
made
a party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), by reason of the
fact
that he is or was a director, officer or employee of the Company or
is or
was serving at the request of the Company as a director, officer, member,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, including service with respect to employee
benefit plans, whether or not the basis of such Proceeding is Tromp’s
alleged action in an official capacity while serving as a director,
officer, member, employee or agent, Tromp shall be indemnified and
held
harmless by the Company to the fullest extent permitted or authorized
by
the Company's certificate of incorporation or bylaws or, if greater,
by
the laws of the State of Colorado, against all cost, expense, liability
and loss (including, without limitation, attorney's fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid
in
settlement) reasonably incurred or suffered by Tromp in connection
therewith, and such indemnification shall continue as to Tromp even
if he
has ceased to be a director, member, employee or agent of the Company
or
other entity and shall inure to the benefit of Tromp’s heirs, executors
and administrators. The Company shall advance to Tromp to the extent
permitted by law all reasonable costs and expenses incurred by his
in
connection with a Proceeding within 20 days after receipt by the Company
of a written request, with appropriate documentation, for such advance.
Such request shall include an undertaking by Tromp to repay the amount
of
such advance if it shall ultimately be determined that he is not entitled
to be indemnified against such costs and
expenses.
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| (b) |
Neither
the failure of the Company (including its Board of Directors, independent
legal counsel or stockholders) to have made a determination prior to
the
commencement of any proceeding concerning payment of amounts claimed
by
Tromp that indemnification of Tromp is proper because he has met the
applicable standard of conduct, nor a determination by the Company
(including its Board of Directors, independent legal counsel or
stockholders) that Tromp has not met such applicable standard of conduct,
shall create a presumption that Tromp has not met the applicable standard
of conduct.
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| (c) |
The
Company agrees to continue and maintain a liability insurance policy
covering Tromp to the extent the Company provides such coverage for
its
other executives and officers.
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| (d) |
Promptly
after receipt by Tromp of notice of any claim or the commencement of
any
action or proceeding with respect to which Tromp is entitled to indemnity
hereunder, Tromp shall notify the Company in writing of such claim
or the
commencement of such action or proceeding, and the Company shall (i)
assume the defense of such action or proceeding, (ii) employ counsel
reasonably satisfactory to Tromp, and (iii) pay the reasonable fees
and
expenses of such counsel. Notwithstanding the preceding sentence, Tromp
shall be entitled to employ counsel separate from counsel for the Company
and from any other party in such action if Tromp reasonably determines
that a conflict of interest exists which makes representation by counsel
chosen by the Company not advisable. In such event, the reasonable
fees
and disbursements of such separate counsel for Tromp shall be paid
by the
Company to the extent permitted by law.
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| (e) |
After
the termination of this Agreement and upon the request of Tromp, the
Company agrees to reimburse Tromp for all reasonable travel, legal
and
other out-of-pocket expenses related to assisting the Company to prepare
for or defend against any action, suit, proceeding or claim brought
or
threatened to be brought against the Company or to prepare for or
institute any action, suit, proceeding or claim to be brought or
threatened to be brought against a third party arising out of or based
upon the transactions contemplated herein and in providing evidence,
producing documents or otherwise participating in any such action,
suit,
proceeding or claim. In the event Tromp is required to appear after
termination of this Agreement at a judicial or regulatory hearing in
connection with Tromp's employment hereunder, or Tromp's role in
connection therewith, the Company agrees to pay Tromp a sum, to be
mutually agreed upon by Tromp and the Company, a daily fee and reasonable
expenses for each day of his appearance and each day of preparation
therefor.
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20.
Notices.
All
demands, notices, and other communications to be given hereunder, if any, shall
be in writing and shall be sufficient for all purposes if personally delivered,
sent by facsimile or sent by United States mail to the address below or such
other address or addresses as such party may hereafter designate in writing
to
the other party as herein provided.
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Company:
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Tromp:
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Tatonka
Oil and Gas Company, Inc.
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00000
Xxxx 00xx
Xxxxx
|
|
0000
Xxxxxxxx Xxxxxx, Xxxxx 0, 00xx
Xxxxx
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Xxxxxx,
XX 00000
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Xxxxxx,
XX 00000
|
|
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Fax
# (000) 000-0000
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21.
Entire Agreement.
This
Agreement contains the entire agreement of the parties and there are no other
promises or conditions in any other agreement, whether oral or written. This
Agreement supersedes any prior written or oral agreements between the parties.
This Agreement may be modified or amended, if the amendment is made in writing
and is signed by both parties. This Agreement is for the unique personal
services of Tromp and is not assignable or delegable, in whole or in part,
by
Tromp. This Agreement may be assigned or delegated, in whole or in part, by
the
Company and, in such case, shall be assumed by and become binding upon the
person, firm, company, corporation or business organization or entity to which
this Agreement is assigned, subject to the provisions of section 13 (d). The
headings contained in this Agreement are for reference only and shall not in
any
way affect the meaning or interpretation of this Agreement. If any provision
of
this Agreement shall be held to be invalid or unenforceable for any reason,
the
remaining provisions shall continue to be valid and enforceable. The failure
of
either party to enforce any provision of this Agreement shall not be construed
as a waiver or limitation of that party's right to subsequently enforce and
compel strict compliance with every provision of this Agreement. This Agreement
may be executed in two or more counterparts, each of which shall be deemed
an
original, but all of which together shall constitute one and the same instrument
and, in pleading or proving any provision of this Agreement, it shall not be
necessary to produce more than one of such counterparts.
[Remainder
of page intentionally left blank.]
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first above written.
| Tatonka Oil and Gas Company, Inc.: | Xxxxx Xxxxx: | ||
| /s/ XXXXX XXXXXX | /s/ XXXXX XXXXX | ||
|
Name: Xxxxx Xxxxxx |
Xxxxx Xxxxx |
||
|
Title:
Chairman of the Board
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