Exhibit 10.2
XXX XXXXX
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), effective as of the 1st day of
July 2008, is between New Frontier Energy, Inc., a Colorado corporation with its
principal place of business located at 0000 X. Xxxxxxxxx Xxxx., Xxxxxxxxx,
Xxxxxxxx 00000 (the "Company") and Xxx Xxxxx (the "Employee").
RECITALS
A. The Company desires to be assured of the association and services of
Employee for the Company.
B. Employee is willing and desires to be employed by the Company, and the
Company is willing to employ Employee, upon the terms, covenants and
conditions hereinafter set forth.
C. The Employee and the Company wish to cancel the employment agreement
dated August 1, 2006 (the "Previous Employment Agreement") in its
entirety and substitute this Agreement.
NOW THEREFORE, in consideration of the Recitals and the mutual covenants,
promises, agreements, representations and warranties contained in this
Agreement, the parties hereby accept employment on the terms and conditions
hereinafter set forth.
1. Employment. The Company hereby employs Employee as its
Secretary/Treasurer, Principal Accounting Officer and Chief Financial Officer of
the Company.
2. Term. The term of this Agreement shall be for a period of three (3)
years effective as of July 1, 2008 and ending on June 30, 2011 (the "Initial
Term"), unless terminated earlier pursuant to Section 10 below; provided,
however, that Employee's obligations in Section 11 below shall continue in
effect after such termination. This Agreement shall be automatically renewed for
successive one-year periods (the "Renewal Term") unless, at least 60 days prior
to the expiration of the Initial Term or any Renewal Term, either party gives
written notice to the other party specifically electing to terminate this
Agreement at the end of the Initial Term or any such Renewal Term.
3. Compensation.
(a) Base Salary. For all services rendered by Employee under this
Agreement, the Company shall pay Employee a base salary of Two Hundred Thousand
Dollars ($200,000) per year (the "Base Salary"). The Base Salary shall be
payable in equal, consecutive monthly installments. Payment of the Salary shall
be subject to the customary withholding tax and other employment taxes as
required with respect to compensation paid by a corporation to an employee. It
is expressly understood and agreed that the Base Salary may be increased upon
the approval of the Company's Compensation Committee (if such a committee
exists) or of the Board of Directors. Furthermore, the Base Salary shall be
increased, effective on the 1st day of July of each year, beginning on July 1,
2009, for increases in the cost of living, based either on (i) inflation as
measured the federal Consumer Price Index ("CPI"), or (ii) Ten Thousand Dollars
($10,000) per year, whichever is greater. To determine the amount of the
increase in Base Salary using the CPI method, the Base Salary shall be
multiplied by a fraction, the numerator of which shall be the CPI most recently
published on the month immediately preceding the date of the Base Salary
adjustment, and the denominator of which shall be the CPI in effect on the last
day in June of the immediately preceding year. The term "Base Salary" as used
herein shall refer to the Base Salary, as adjusted.
(b) Bonus. In addition to the Base Salary, the Company shall pay Employee
such Bonus or Bonuses as the Board of Directors shall determine in their sole
discretion.
4. Reimbursement. The Employee is authorized to incur reasonable expenses
for promoting the business of the Company, including his out-of-pocket expenses
for entertainment, travel and similar items. The Company shall reimburse the
Employee for all such expenses on the presentation by the Employee, from time to
time, of an itemized account of such expenditures in accordance with the
guidelines set forth by the Internal Revenue Service for travel and
entertainment.
5. Duties. Employee is engaged as the Secretary/Treasurer, Principal
Accounting Officer and Chief Financial Officer of the Company. Employees' duties
shall include, but not be limited to those duties that are generally associated
with the positions of Secretary/Treasurer, Principal Accounting Officer and
Chief Financial Officer of a company similarly situated to the Company.
6. Employee's Devotion of Time. Employee shall devote such productive time,
ability, and attention to the business of the Company during the term of this
agreement, as employee deems necessary to accomplish the duties assigned to him
and to the promotion and forwarding of the business affairs of the Company, and
not to divert any business opportunities from the Company to himself or to any
other person or business entity. Such services shall be rendered at such other
place or places as the Company shall in good faith require or as the interest,
needs, business or opportunity of the Company shall require. The Company
understands that Employee has other commitments and will not function
exclusively as the Company's employee; however, it is expected that the Employee
will devote significant time to the business of the Company.
7. Benefits. The Employee shall be entitled to receive any and all health,
insurance, disability or any other benefit, if and when a plan is adopted by the
Board of Directors for the benefit of its employees.
8. Vacation. The Employee shall be entitled each year to a vacation of a
reasonable amount during which time his compensation shall be paid in full.
9. Change of Control. If any time during the Initial Term or any Renewal
Term of this Agreement there is a Change of Control of the Company, as defined
below, and Employee's employment is terminated by the Company under Section
10.1(a), (b), (d) or (e) within the greater of one (1) year following the change
of control or the remaining term of this Agreement (the "Change of Control
Date"), the Company shall pay to Employee (a) the balance of all amounts due
under this Agreement from the date of the Change of Control until the end of the
Initial Term plus (b) an amount equal to 2.99 times the sum of (i) his annual
Base Salary as in effect on the date of termination plus (ii) the amount of
bonus paid in the prior year to Employee either pursuant to this Agreement or
the Previous Employment Agreement, and (c) any other amounts due to Employee
under any other provision of this Agreement. This amount shall be paid to
Employee in one lump sum as soon as practicable, but in no event later than one
hundred twenty (120) days, after the date that Employee's employment is
terminated. In addition to the lump sum payment referenced in the preceding
sentence, the Company shall pay to Employee any accrued and unpaid bonuses as
provided for in Section 3(b) at the same time as the lump sum payment is made.
Additionally, the Company will maintain and pay for Employee's health benefits
for the remaining Initial Term or the then in effect Renewal Term of this
Agreement. For example, if the Change of Control Date was July 1, 2008, the
amount paid to would be equal to [$200,000 (Base Salary) + $0 (Bonus)] X 3
(years remaining on contract)] + [$200,000 (Base Salary) + $180,000 (Bonus paid
during fiscal year ended February 28, 2008) X 2.99] or an aggregate of
$1,736,200).
If any payment or distribution by the Company to Employee is determined to
be subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code, Employee is entitled to receive a payment on an after-tax basis equal to
the excise tax imposed. Employee is under no obligation to mitigate amounts
payable under these agreements.
For purposes of this subsection, a change of control shall mean the
occurrence of one or more of the following three events:
(1) After the effective date of this Agreement, any person becomes a
beneficial owner (as such term is defined in Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, as amended) directly or
indirectly of securities representing 33% or more of the total number
of votes that may be cast for the election of directors of the
Company, provided however, that this provision shall not be applicable
to Iris Energy Holdings Limited and its affiliates if, as a result of
the conversion of any shares of the Company's 2.5% Series C Preferred
Stock, or the exercise of the Company's AC Warrants or BC Warrants
owned by Iris Energy Holdings Limited and its affiliates, Iris Energy
Holdings Limited and its affiliates collectively become the beneficial
owner directly or indirectly of securities representing 33% or more of
the total number of votes that may be cast for the election of
directors of the Company unless within one year following the
acquisition of 33% or more of the total number of votes that may be
cast for the election of directors of the Company by Iris Energy
Holdings Limited and its affiliates, the individuals who were
directors of the Company immediately prior thereto shall cease to
constitute a majority of the Board of Directors;
(2) Within one year after a merger, consolidation, liquidation or sale of
assets involving the Company, or a contested election of a Company
director, or any combination of the foregoing, the individuals who
were directors of the Company immediately prior thereto shall cease to
constitute a majority of the Board of Directors; or
(3) Within one year after a tender offer or exchange offer for voting
securities of the Company, the individuals who were directors of the
Company immediately prior thereto shall cease to constitute a majority
of the Board of Directors.
10.1 Termination and Bases for Termination.
(a) Employee's employment hereunder may be terminated at any time by mutual
agreement of the parties.
(b) Should the Employee, by reason of illness or incapacity, be unable to
perform his job for a period of up to and including a maximum of two (2) months,
the compensation payable for and during such period under this Agreement shall
be unabated. The Board of Directors shall have the right to determine the
incapacity of the Employee for the purposes of this provision, and any such
determination shall be evidenced by its written opinion delivered to the
Employee. Such written opinion shall specify with particularity the reasons
supporting such opinion and be manually signed by at least a majority of the
Board. Should the Board of Directors determine the Employee incapable of the
performance of his duties, the Employee's compensation thereafter shall be
terminated.
The Employee shall begin to receive full compensation pursuant to Section 3
of this Agreement upon his return to employment and regular discharge of his
full duties hereunder. Should the Employee be absent from his employment for
whatever cause for a continuous period of more than 180 calendar days, the
Company may terminate this Agreement and all obligations of the Company
hereunder shall cease upon such termination.
(c) Employee's employment may be terminated by the Company "with cause,"
effective upon delivery of written notice to Employee given at any time (without
any necessity for prior notice) if any of the following shall occur:
(1) any action by Employee which would be grounds for termination
under applicable law (currently covering any willful breach of duty, and
habitual neglect of duty);
(2) any material breach of Executive's obligations under this
Agreement other than any such breach resulting from illness or incapacity
or
(3) any material acts or events which inhibit Employee from fully
performing his responsibilities to the Company in good faith, such as (i) a
felony criminal conviction; (ii) any other criminal conviction involving
Employee's lack of honesty or Employee's moral turpitude; (iii) drug or
alcohol abuse; or (iv) acts of dishonesty, gross carelessness or gross
misconduct.
(d) Employee's employment may be terminated by the Company "without cause"
(for any reason or no reason at all) at any time by giving Employee 60 days
prior written notice of termination, which termination shall be effective on the
60th day following such notice. If Employee's employment under this Agreement is
so terminated, the Company shall (i) make a lump sum cash payment to Employee
within 10 days after termination is effective of an amount equal to (1)
Employee's Base Salary accrued to the date of termination; (2) unreimbursed
expenses accrued to the date of termination; (3) an amount equal to the greater
of (a) Employee's annual Base Salary (i.e., 12 months of Base Salary), or (b)
amounts remaining due to Employee as Base Salary (assuming that payments under
this Agreement were made until expiration of the Initial Term or if applicable
the Renewal Term), and (4) any other amounts due to Employee under any other
provision of this Agreement. For purposes of this provision, Employee's annual
Base Salary and the remaining portion of the term of the Agreement shall be
calculated as of the termination date. After the Company's termination of
Employee under this provision, the Company shall not be obligated to provide the
benefits to Employee described in Section 3 (except as may be required by law).
In addition to the lump sum payment referenced in this section, the Company
shall pay to Employee the Bonus provided for in Section 3(b) based upon the
number of days in the year that Employee was employed by the Company, within one
hundred twenty days after the end of the fiscal year in which Employee was
terminated.
(e) Employee may terminate his employment hereunder by giving the Company
60 days prior written notice, which termination shall be effective on the 60th
day following such notice. The Company shall not be obligated to compensate
Employee, his estate or representatives after any such termination. Further,
Employee shall not be entitled to any of the benefits described in Section 3
(except as provided by law) after such termination.
10.2 Payment Upon Termination. Upon termination under Sections 10.1(a),
(b), (c) or (e), the Company shall pay to Employee within 10 days after
termination an amount equal to the sum of (1) Employee's Base Salary accrued to
the date of termination; (2) unreimbursed expenses accrued to the date of
termination, and (3) any other amounts due to Employee under any other provision
of this Agreement. The Company shall not be obligated to compensate Employee,
his estate or representatives after any such termination. Further, Employee
shall not be entitled to any of the benefits described in Section 3 (except as
provided by law) after such termination.
10.3 Dismissal from Premises. At the Company's option, Employee shall
immediately leave the Company's premises on the date notice of termination is
given by either Employee or the Company.
11. Confidential Information. During the term of this Agreement, the
Employee will have access to certain confidential information and materials,
including but not limited to oil and gas property and lease information,
originated by the Company or disclosed to the Company by others under agreements
to hold the same confidential ("Confidential Information"). Confidential
Information further includes, but is not limited to, all technical, engineering,
property and lease information, financial, business practices, customer lists,
customer identities and commercial information heretofore or hereafter disclosed
or transmitted by the Company in any form and manner to the Employee or
otherwise received by the Employee, whether orally or in writing. Employee
acknowledges that Employee shall not either directly or indirectly use, disclose
or communicate to any person or entity any Confidential Information for any
purpose at all whether during or after the term of this Agreement, except to the
extent any such information becomes generally known to the public through no
fault of Employee. Furthermore, the terms of this provision shall survive the
Term or any Renewal Term of this Agreement, or any termination thereof will
expire two years from the termination of this agreement.
12. Miscellaneous.
(a) Entire Agreement. This Agreement contains the entire agreement between
the Company and the Employee, regarding employment of the Employee. This
Agreement shall not be modified except by written agreement signed by both
parties.
(b) Headings. The subject headings of the articles and sections contained
in this Agreement are included for convenience purposes only and shall not
control or affect the meaning, construction or interpretation of any provision
hereof.
(c) Assigns. This Agreement shall be binding upon the Company and Employee,
their respective heirs, executors, legal representatives, successors and
assigns.
(d) Notices. All notices, demands, elections, opinions or requests (however
characterized or described) required or authorized hereunder shall be deemed
given sufficiently if in writing and sent by overnight courier or by registered
or certified mail, return receipt requested and postage prepaid, in the case of
the Company:
New Frontier Energy, Inc.
0000 X. Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
and in the case of the Employee:
Xxx Xxxxx
0000 X. Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
(e) Remedies. Employee acknowledges that any failure to carry out an
obligation under this Agreement, or a breach by the Employee of any provision
herein, will constitute immediate and irreparable damage to the Company, which
cannot be fully and adequately compensated in money damages and which will
warrant preliminary and other injunctive relief, an order for specific
performance, and other equitable relief. Employee also understands that other
actions may be taken and remedies enforced against the Employee, including
termination of any other agreements the Employee may have with the Company.
(f) Waiver and Severability. No waiver by either party of any breach or
default hereof by the other shall be deemed to be a waiver of any preceding or
succeeding breach or default hereof, and no waiver shall be operative unless the
same shall be in writing. Should any provision of this Agreement be declared
invalid by a court of competent jurisdiction, the remaining provisions hereof
shall remain in full force and effect regardless of such declaration.
(g) This Agreement shall be subject to the exclusive jurisdiction of the
courts in Arapahoe County in the State of Colorado. The parties to this
Agreement agree that any breach of any term or condition of this Agreement shall
be deemed to be a breach occurring in the State of Colorado by virtue of a
failure to perform an act required to be performed in the State of Colorado and
irrevocably and expressly agree to submit to the jurisdiction of the courts in
Arapahoe County in the State of Colorado for the purpose of resolving any
disputes among the parties relating to this Agreement or the transactions
contemplated hereby. The parties irrevocably waive, to the fullest extent
permitted by law, any objection which they may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement, or any judgment entered by any court in respect hereof brought
in the State of Colorado, and further irrevocably waive any claim that any suit,
action or proceeding brought in the State of Colorado has been brought in an
inconvenient forum.
(h) Counterparts. This Agreement may be executed in several counterparts,
and as to executed shall constitute one Agreement, binding on all parties
hereto, notwithstanding that all parties are not signatory as to other original
or the same counterpart. Facsimile signatures are acceptable.
(i) Time. Time is of the essence.
(j) Governing Law. This Agreement has been entered into and shall be
construed and enforced in accordance with the laws of the State of Colorado,
without reference to the choice of law principles thereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective on
the day and year first above written.
THE COMPANY: THE EMPLOYEE:
NEW FRONTIER ENERGY, INC.
By: /s/ Xxxx X. Xxxxx /s/ Xxx Xxxxx
------------------------ ---------------------------
Xxxx X. Xxxxx, President Xxx Xxxxx
