RETENTION BONUS AGREEMENT
This
Retention Bonus Agreement (the “Agreement”)
by
and between Ignis Petroleum Group, Inc., a Nevada corporation (the
“Company”)
with its principal place of business at One Legacy Town Center,
0000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxx, Xxxxx 00000, and Lifestyles Integration,
Inc. (the “Consultant”)
shall be effective as of June 1, 2007 (the “Effective
Date”).
WHEREAS,
the Board of Directors of the Company (the “Board”)
has determined that it is in the best interests of the Company
and
its stockholders that certain key members of management and key consultants
to
the Company be provided with the appropriate incentives to cause them to
continue providing services to the Company pending the Company's
reorganization;
NOW
THEREFORE, in consideration of the agreements contained herein including
the
undertakings of the parties hereto, the receipt and sufficiency of which
are
hereby acknowledged by each of the parties hereto, it is agreed as
follows:
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1.
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Definitions. For
purposes of this Agreement, the following words and phrases shall
have the
following meanings:
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(a)
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“Affiliate”means,
as it relates to a specified person or entity, a Person that directly,
or
indirectly through one or more intermediaries, controls, is controlled
by,
exercises a controlling influence over, or is under common control
with,
the Person specified.
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(b)
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“Consultant's
Employee”means
Xxxx Xxxxxx, an employee of
Consultant.
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(c)
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“Cause”means:
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(i) Consultant
or
Consultant's Employee's willful failure, neglect, refusal, or nonperformance,
at
any time, of Consultant's duties or obligations set forth in this Agreement
or
in Consultant's consulting contract with the Company, if any (the
“Consulting
Contract”),
or(i)
a willful breach by Consultant of this Agreement or
Consultant's Consulting Contract;
(ii) Consultant
or
Consultant's Employee's conviction or no contest or guilty plea to or indictment
for (or its procedural equivalent) a felony or crime involving moral turpitude,
or Consultant or Consultant's Employee's guilty plea or no contest plea to
a
lesser included offense or crime in exchange for withdrawal of a felony
indictment, felony charge by information, or a charged crime involving moral
turpitude, whether the charge arises under federal, state or local
law;
(iii) Consultant's
Employee's
death or disability rendering Consultant's employee incapable of performing
duties or obligations set forth in this Agreement or in Consultant's consulting
contract with the Company, if any, for longer than 4 weeks;
(iv) Consultant
or
Consultant's Employee's appropriation (or attempted appropriation) of a material
business opportunity of the Company or any of its affiliates, including,
without
limitation, attempting to secure or securing, any personal profit in connection
with any transaction entered into on behalf of the Company or any of its
affiliates;
(v) Consultant
or
Consultant's Employee's commission of an act of fraud, illegality, theft
or
willful misconduct toward the Company or any of its affiliates in the course
of
employment with the Company that relates to the Company's or any of its
affiliates' assets, activities, operations or other
employees;
(vi) Consultant's
Employee's
repeated intoxication with alcohol or drugs while on the Company's premises
during regular business hours; or
(vii) Consultant's
Employee's
gross incompetence that has a material adverse impact on the Company's finances
or operations or a pattern of gross incompetence of Consultant's Employee,
in
each case as determined in good faith by the Board of Managers of the
Company;
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(d)
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“Change
of
Control”means,
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(i) a
merger or consolidation
approved by the Company's stockholders in which securities possessing more
than
fifty percent (50%) of the total combined voting power of the Company's
outstanding securities are transferred to a person or persons different from
the
persons holding those securities immediately prior to such
transaction;
(ii) any
stockholder-approved
sale, transfer or other disposition of all or substantially all of the Company's
assets in complete liquidation or dissolution of the
Company;
(iii) any
sale of substantially
all of the company's assets pursuant to either Chapter 11 or Chapter 7 of
the
United States Bankruptcy Code (the "Code"),
(iv) confirmation
of a Plan of
Reorganization or a Plan of Liquidation under Chapter 11 of the
Code;
(v) liquidation
of the
Company under Chapter 7 of the Code;
(vi) the
acquisition, directly
or indirectly, by any person or related group of persons (other than the
Company
or a person that directly or indirectly controls, is controlled by or is
under
common control with, the Company) of beneficial ownership (within the meaning
of
Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities
possessing more than fifty percent (50%) of the total combined voting power
of
the Company's outstanding securities pursuant to a tender or exchange offer
made
directly to the Company's stockholders; or
(vii) a
change in the
composition of the Board over a period of six consecutive months or less
such
that a majority of the Board members ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who either
(A)
have been Board members continuously since the beginning of such period or
(B)
have been elected or nominated for election as Board members during such
period
by at least a majority of the Board members described in clause (A) who were
still in office at the time the Board approved such election or
nomination.
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(e)
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“Employed
Months”
means the number of days between the Effective
Date
and the Transaction Date divided by
30.
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(f)
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“Good
Reason”
means the Company's breach of this Agreement
or the
Consulting Contract, if any, and the continuing breach by the Company
after receiving written notice by the Consultant giving the Company
at
least 15 days to cure such
breach.
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(g)
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“Monthly
Consulting Fee”
means $12,500, the Consultant's monthly consulting
fee in effect on the date of this
Agreement.
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(h)
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“Person”
means any individual, corporation (including
any
non-profit corporation), general or limited partnership, limited
liability
company, joint venture, estate, trust, association, organization,
labor
union, governmental or quasi-governmental authority of any nature,
or
other entity.
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(i)
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“Retention
Bonus”
means the Monthly Consulting Fee multiplied
by the
number of Employed Months.
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(j)
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“Transaction
Date”
means the date upon which a Change of Control,
Reorganization or Liquidation becomes
effective.
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2.
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Payment
of Retention Bonus.
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(a)
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In
consideration for the Consultant's efforts with the Company, the
Company
shall pay to the Consultant a Retention Bonus in the manner and
at the
times set forth herein.
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(b)
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The
payments provided for in this Section 2 shall commence on June
1, 2007 and
will be paid as follows: (i) Payments equal to 25% of the Monthly
Consulting Fee shall be paid at the commencement of each month
beginning
on the effective date and continuing so long as this agreement
is in
affect. This amount paid monthly is 25% of the Retention Bonus;
(ii) the
remaining 75% of the Retention Bonus shall be paid as a lump sum
on the
earlier of: (A) the occurrence of a Change of Control, or (B) six
months
from the Effective Date. Any Retention Bonus amount that has accrued
before this Agreement has been signed shall be paid at the time
of
signing. All payments under this agreement are in addition to payments
made in accordance with the Consultant's consulting
contract.
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(c)
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if
the Consultant's consulting contract with the Company is terminated
at any
time during the Term (as defined in Section 3) (i) by the Company
without
Cause or (ii) by the Consultant with Good Reason, Consultant will
be
eligible for and the Company will pay to the Consultant any remaining
unpaid portions of the Retention Bonus so that the Consultant will
receive
an additional payment of an amount equal to (A) the Monthly Consulting
Fee
multiplied by six minus (B) all prior Retention Bonus payments
paid under
this agreement to the Consultant The Company shall pay any amount
owed to
the Consultant pursuant to this Section 2(c) within five business
days of
any such termination.
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(d)
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If
the Consultant's consulting contract with the Company is terminated
at any
time during the Term by the Company for Cause as a result of the
Consultant's Employee's death or disability, Consultant will be
eligible
for and the Company will pay to the Consultant any remaining unpaid
portions of the Retention Bonus so that the Consultant will receive
an
amount equal to (i) the Monthly Consulting Fee multiplied by the
number of
Employed Months minus (ii) all prior Retention Bonus payments paid
to the
Consultant under this agreement. The Company shall pay any amount
owed to
the Consultant pursuant to this Section 2(d) within five business
days of
any such termination.
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(e)
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Notwithstanding
the foregoing, the Company shall not be required to pay and the
Consultant
shall not be eligible for a Retention Bonus (except for portions
already
paid) if the Consultant's consulting contract with the Company
is
terminated at any time during the Term (i) by the Company for Cause
(other
than as a result
of the Consultant's Employee's death or disability) or (ii) by
the
Consultant without Good Reason. In the event of any termination
pursuant
to this Section 2(e), any amount paid to the Consultant prior to
such
termination may be retained by the
Consultant.
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3.
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Term.
This Agreement shall become effective as of the Effective Date
and shall
terminate upon the earlier of the date upon which the Consultant
is paid
its entire Retention Bonus, including the amount set forth in Section
2(b)(ii) above, or the date upon which the Consultant's consulting
contract with the Company is terminated (as the case may be, the
"Term").
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4.
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Release
of Liability. In consideration for the Company's agreement to make the
payments provided for herein, the Company's obligation to pay such
amounts
is expressly conditioned upon Consultant's release of certain claims
as to
the Company and its Affiliates from any accrued actions, suits,
damages,
demands and claims related to the period of Consultant's employment
and/or
the termination of Consultant's consulting contract, except for
the
following: (a) any claims for fees, wages, commissions, benefits,
vacation
pay, reimbursement of expenses and any and all other ordinary or
accrued
amounts owed to the Consultant by the Company and its Affiliates;
and (b)
any and all claims, causes of action, demands, cross-claims,
counterclaims, rights of setoff, indemnity, contribution or subrogation
or
any other defense or claim which Consultant or Consultant's Employee
may
hold against the Company and its Affiliates where the Consultant
or
Consultant's Employee may be required to defend themselves due
to
litigation against the Consultant or Consultant's
Employee.
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5.
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Indemnification.
Company shall indemnify, defend, protect, and hold harmless the
Consultant
and Consultant's Employee from and against alt actions, suits,
or
proceedings (collectively "Proceedings") and all other claims,
demands,
losses, damages, liabilities, judgments, awards, penalties, fines,
settlements, costs, and expenses (including court costs and reasonable
attorneys' fees) arising out of Consultant's and Consultant's Employee's
work on behalf of the Company, this Retention Bonus Agreement,
or the
Consulting Contract. THIS INDEMNITY SHALL APPLY TO MATTERS THAT
ARISE OUT OF THE NEGLIGENCE, STRICT LIABILITY OR OTHER GUILT OR
RESPONSIBILITY BY SUCH CONSULTANT OR CONSULTANT'S EMPLOYEE; PROVIDED,
HOWEVER, THAT THIS INDEMNITY SHALL NOT APPLY TO MATTERS ARISING
OUT OF THE
GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR BREACH OF THIS AGREEMENT
BY SUCH
CONSULTANT OR CONSULTANT'S
EMPLOYEE.
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6.
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Role
of Consultant. The Company acknowledges and agrees that the
Consultant’s role is and has been to provide advice to the Company’s
management based on data provided and approved by the
Company. The Company, its board of directors, and officers
remain solely responsible for all business decisions in accordance
with
the Company’s bylaws and other applicable law. The Consultant
does not accept the legal duties owed by officers and directors
to the
Company’s shareholders, and the Company has not retained the Consultant
to
discharge any such duties.
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7.
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Section
409A. In the event that the Company determines that any payments
to
which Consultant becomes entitled under this Agreement in connection
with
the termination of Consultant's employment constitute deferred
compensation subject to Section 409A of the Internal Revenue Code
of 1986,
as amended, and the regulations promulgated thereunder, the Company
promptly shall inform Consultant of such determination, and Consultant
may
request a delay in the receipt of any payments to be made pursuant
to this
Agreement. The Company will agree to such delay upon receipt of
a written
request from Consultant.
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8.
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No
Guarantee of Employment. Nothing contained in this Agreement shall be
construed as a contract of employment between the Company and the
Consultant, or as a right of the Consultant to continue in the
employ of
the Company, or as a limitation of the right of the Company to
terminate
the Consultant with or without
cause.
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9.
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Successors.
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(a)
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This
Agreement shall be binding upon the Company, its successors and
assigns,
and in the event of a Change of Control of the Company or in the
event the
Company shall be merged or consolidated or otherwise combined into
one or
more other corporations or other entities, or substantially all
of its
assets are sold or otherwise transferred to one or more other corporations
or entities, this Agreement shall be binding upon the corporation
or
entity resulting from such merger or consolidation or to which
such assets
shall be sold or transferred and shall be assignable by it by way
of
transfer of assets, merger, consolidation or combination to the
same
extent as if it were the Company. Except as provided above in this
Section
8(a), this Agreement shall not be assignable by the Company or
its
successors and assigns. The Company will require any successor
or assign
(whether direct or indirect, by purchase, merger, consolidation
or
otherwise) to all or substantially all of the business and/or assets
of
the Company, by agreement in form and substance satisfactory to
the
Consultant, expressly, absolutely and unconditionally to assume
and agree
to perform this Agreement in the same manner and to the same extent
that
the Company would be required to perform it if no such succession
or
assignment had taken
place
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(b)
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This
Agreement shall inure to the benefit of and be enforceable by the
Consultant's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and
legatees.
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10.
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Assignment
by Consultant. This Agreement shall not be assignable by the
Consultant and shall not be subject to attachment, execution, pledge
or
hypothecation.
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11.
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Notice.
For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and either delivered
in
hand or by mail by United States registered or certified mail,
return
receipt requested, postage prepaid, or by nationally recognized
overnight
courier, and shall be deemed to have been duly given the sooner
of when
actually received or three (3) days following deposit (a) in the
mail by
United States registered or certified mail, return receipt requested,
postage prepaid or (b) with a nationally recognized overnight courier,
as
follows:
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If
to the
Company:
One
Legacy Town Center
0000
Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxx,
Xxxxx 00000
Attn:
Chief Executive Officer
Xxxx
Xxxxxx
Lifestyles
Integration, Inc.
0000
Xxxxxxx Xx.
Xxxxxx,
XX 00000
or
to
such other address as either party may have furnished to the other in writing
in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
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12.
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Modification.
No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing
signed by the Consultant and the Company. No waiver by either party
hereto
of, or compliance with, any condition or provision of this Agreement
to be
performed by such party shall be deemed a waiver of any other provisions
hereof or of any similar or dissimilar provisions or conditions
at the
same or any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject
matter
hereof have been made by either party which are not set forth expressly
in
this Agreement.
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13.
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Validity.
The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provisions
of
this Agreement, which shall remain in full force and
effect.
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14.
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Governing
Law. This Agreement shall be governed by the laws of the State
of Texas without giving effect to the conflicts of law principles
thereof.
The parties hereby agree that the United States Bankruptcy Court
shall
retain exclusive jurisdiction to determine any disputes under this
Agreement
during the pendency of any case filed under Chapter 7 or Chapter
11 with the United States Bankruptcy
Court).
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Entire
Agreement This Agreement constitutes the entire understanding of the
parties, and revokes and supersedes all prior agreements between
the
parties related to the payment of a Retention Bonus and is intended
as a
final expression of their agreement. Any consulting agreements,
severance
agreements or change of control agreements currently in place shall
remain
in place and shall not be superseded, amended or terminated as
a result of
this Agreement.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
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Lifestyles
Integration, Inc.,
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a
Texas corporation
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a
Nevada corporation
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/s/
Xxxx Xxxxxx
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By:
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/s/
Xxxxxxx X. Xxxxxx
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Xxxx
Xxxxxx
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Name:
Xxxxxxx X. Xxxxxx
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President
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Title: President
& CEO
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