EMPLOYMENT AGREEMENT BETWEEN WILLIAM GREENE AND SURGE GLOBAL ENERGY, INC.
Exhibit
10.1
BETWEEN
XXXXXXX XXXXXX AND SURGE GLOBAL ENERGY, INC.
THIS
AGREEMENT ("Agreement")
is made
as of December 14, 2006 by and between SURGE GLOBAL ENERGY, INC. a Delaware
corporation ("Company"), and XXXXXXX XXXXXX, an individual who resides in
California ("Executive"), under the following circumstances:
A. The
Company is a publicly-traded company engaged in the business of oil and gas
exploration.
B. The
Company has retained Executive since 2004 as an independent consultant to
assist
with SEC compliance matters.
C. Executive
was appointed by the Company's board of directors as Chief Financial Officer
to
be effective as of June 30, 2006.
D. The
Company desires to hire Executive as an employee to serve as its Chief Financial
Officer and Executive desires to accept such employment on the terms and
conditions set forth herein.
NOW,
THEREFORE, in consideration of the foregoing, the representations, warranties
and covenants contained in this Agreement and for other good and valuable
consideration, the receipt and sufficiency of which is acknowledged, and
intending to be legally bound, the parties hereby agree as follows:
1.
Employment. Effective
as of June 30, 2006 (the "Effective Date") the Company employed Executive,
and
Executive hereby accepted employment by the Company. Executive shall serve
as
Chief Financial Officer (CFO) and shall report to the Chief Executive Officer
of
the Company, or, if none, to the Board. During the term of this Agreement,
Executive shall devote substantially all of his business time and effort
to the
performance of his duties hereunder. The Company shall not require Executive,
without Executive's
consent, to relocate from the greater Southern California area or to spend
more
than five (5) nights away from home during any calendar month.
2. Duties.
Executive
shall serve in an executive capacity and shall perform such duties as are
consistent with his position as CFO as may be reasonably required by the
CEO or
the Board. Such duties shall include without limitation, preparing financial
statements, timely SEC compliance filings, proformas, operating budgets,
financial models, P&L responsibility, communicating with shareholders,
investors, public relations
firm,
subsidiaries, financing sources to maximize shareholder value. In addition
executive will be assisting the CEO in developing Surge's
strategic initiatives, M&A activity, expansion plans and cash funding
requirements.
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3. Term.
Executive's employment under this Agreement shall commence on the Effective
Date
and continue for the period (the "Term") from such date until the earlier
of
the first (1st) anniversary of such date or the date Executive's
employment otherwise is terminated as provided in Section 7 hereof. The
Term may
be extended by mutual written agreement of the parties.
4. Compensation.
Executive
shall receive as compensation for his services under this Agreement an annual
salary ("Base
Compensation")
of
$180,000, payable in installments in accordance with the normal payroll policies
of the Company. In the event the Tenn of this Agreement is extended, Executive
shall be entitled to annual increases in Base Salary determined at the sole
discretion of the Compensation Committee of the Board (or the Board if there
shall be no Compensation Committee) in its annual review of
Executive.
5. Performance
Bonus Compensation. Executive
shall be eligible to receive a bonus based upon performance ("Performance
Bonus") as follows:
5.1
Criteria and Calculation. The
Performance Bonus shall be discretionary and based upon performance above
and
beyond the required customary duties of the Chief Financial Officer. And
may be
paid in cash or stock.
5.2 Eligibility.
As
a
condition of eligibility for the Performance Bonus, Executive must be employed
by the Company on the date payment is,due.
6. Other
Benefits. Executive
shall be entitled to receive other benefits, as follows:
6.1
Vacation. Executive
shall be entitled to four (4) weeks of paid vacation per year. The days selected
for Executive's vacations shall be mutually agreeable to Company and
Executive,
6.2
Medical Benefits. Executive
shall be provided medical benefits similar to those extended to other executive
officers of the Company. The Company may, in its sole discretion and from
time
to time establish other medical and dental benefit programs applicable to
all
executive officers as it deems appropriate,
6.3
Other Benefit Plans. Executive
shall be entitled to participate in other benefit plans and arrangements
as are
generally made available by the Company to its employees but only if executive
officers of the Company are generally eligible to participate in such plan
or
program. Executive understands that any such plans may be modified or eliminated
in Company's
discretion.
6.4
Reimbursement of Business Expenses. The
Company shall reimburse Executive for all reasonable travel and entertainment
expenses incurred by Executive in the course of his employment in accordance
with the Company's normal policies, upon submission of properly documented
expense account reports.
6.5 Insurance.
The
Company will purchase and maintain a Directors and Officers Liability Insurance
Policy of having a limit of no less than $5,000,000.
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6.6 Indemnification. To
the
maximum extent permitted by law, the Company shall indemnify, defend and
hold
Executive harmless for any and all liabilities incurred in direct consequence
of
the discharge of his employment with the Company, unless the Executive believed
such activities to be unlawful at the time he undertook or was directed to
undertake such actions.
7. Stock
Options. Executive
shall be entitled to the following stock options:
7.1 Initial
Option. As
of the
Effective Date of this Agreement, the Company shall issue Executive an option
to
purchase four hundred thousand (400,000) shares of Common Stock of the Company
at an exercise price of One Dollar and eleven cents ($1.11) per share (the
"Initial Option")
7.2 Vesting.
The
Initial Option shall vest over 3 years at the rate of 1136 per month. The
Initial Option shall be exercisable for a term of ten (10) years, subject
to
continuing Service (as defined in the Option
Agreement), which
states the exercise period from date of departure to be 90 days.
7.3 Vesting
on Change of Control. Vesting
of the Initial Option shall accelerate upon a Change in Control (as defined
in
the Option
Agreement).
8. Termination.
Executive's
employment under this Agreement may be terminated prior to the end of the
Term
as follows:
8.1
By the Company Without Cause. Subject
to the payments pursuant to Section 8.5, the Executive's employment under
this
Agreement may be terminated by the Employer without Cause.
8.2
By Death or Disability. Subject
to the payments pursuant to Section 8.5, Executive's employment shall terminate
automatically upon his death or Total Disability (as hereinafter defined).
For
purposes of this Agreement, "Total
Disability"
means
that Executive is unable to perform the essential functions of the position,
even with reasonable accommodation, for ninety (90) consecutive
days.
8.3
By the Company for Cause. Subject
to the payments pursuant to Section 8.5, the Company may terminate Executive's
employment under this Agreement at any time for Cause (as hereinafter defined),
upon written notice to Executive stating the reason(s) for such termination.
For
purposes of this Agreement, "Cause" means the occurrence or existence of
any of
the following with respect to Executive: (a) Executive's repeated and continued
failure to perform his duties and responsibilities as a Company employee
in good
faith after having a reasonable opportunity to cure such failure upon receiving
specific written notice of such failure from the Board; (b) commission of
any
act of fraud with respect to the Company; or (c) conviction of a felony or
a
crime involving moral turpitude if such felony or crime caused material harm
to
the business and affairs of the Company.
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8.4 Resignation.
Executive
may terminate his employment with the Company
at any time on ninety (90) days prior written notice.
8.5Payment
upon Termination. If
Executive's employment is terminated pursuant
to section 8.1, then the Company shall
(a) pay
Executive all amounts and receive such other benefits which would have been
due
if Executive's employment had terminated pursuant to sections 8.2 and 8.3,
within thirty (30) days of such termination;
(b) the
company will pay Executive the balance of contract and pro rate his options
based on the date of departure;
If
Executive's employment is terminated pursuant to section 8.3, then the Company
shall
(a) pay
Executive's Base Compensation and other benefits through the termination
date
set forth in the applicable section, within thirty (30) days of such termination
date; and
(b) all
unvested stock options and other equity awards granted by the Company to
Executive shall be pro-rated through the applicable termination date and
such
stock options and other equity awards shall remain outstanding and exercisable
according to the terms of the option agreement and option plan.
9.
Intellectual Property. Executive
acknowledges and agrees that any copyrightable works prepared by him, either
alone or jointly with others, within the scope of his employment are "works
made
for hire" under the United States Copyright Act and that the Company will
be
considered the author and owner of such copyrightable works. In the event
that
any such copyrightable works are not deemed to be "works made for hire,"
Executive hereby irrevocably assigns all of his right, title and interest
in and
to such copyrightable works to the Company.
Except
for any invention that qualifies under Labor Code § 2870 (below), all
inventions, designs, drawings, concepts, products, methods, or other
developments ("Developments") that Executive conceives, assists in conceiving,
improves, or otherwise develops during the term relating in any way to the
business of the Company, developed during working hours or using supplies,
equipment, or facilities of the Company, will be the exclusive property of
the
Company, and Executive assigns any rights Executive has or may have therein
to
the Company. Executive will promptly disclose to the Company any such
Developments of any kind that relate to the Company's business that Executive
conceives, makes, develops, or acquires during the term. Executive will execute
any documents necessary or appropriate to perfect the Company's
rights
in and title to the Developments, including any assignment of copyright or
assistance with any patent application. Company will reimburse Executive
the
reasonable cost of any lost wages incurred by Executive in complying with
the
execution of said documents, whether during or after employment terminates.
Executive warrants and represents that Employee will not use and does not
need
to use any property or infringe any rights of any third party in the performance
of Employee's duties under this Agreement.
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California
Labor Code § 2870 excludes from assignment any invention for which no equipment,
supplies, facility, or trade secret information of the employer was used
and
which was developed entirely on the employee's own time, and
which (i) does not relate (1) to the business of the employer, or (2) to
the
employer's actual or demonstrably anticipated research or development, or
(ii)
does not result from the work performed by the employee for the employer.10. Confidentiality.
(a) Executive
shall not, during the period commencing on the date of this Agreement and
ending
two years after the last day of the Term, to the detriment of the Company
or any
of its Affiliates, disclose or furnish to any person any Confidential
Information (as hereinafter defined) or otherwise use any such Confidential
Information for Executive's own benefit or the direct or indirect benefit
of any
person other than the Company or any such Affiliate. Notwithstanding the
foregoing, however, the requirements of this section shall not apply to
information which: (i) is or becomes generally available to the public other
than as a result of a disclosure by Executive, or (ii) becomes available
to
Executive on a non-confidential basis from a source other than the Company
or
any of its Affiliates which is not known by Executive to be under a
confidentiality obligation to the Company or any of its Affiliates.
(b) For
purposes of this Agreement, "Confidential Information" means any information,
data or other materials of the Company or any of its Affiliates which: (i)
is
proprietary or confidential to the Company or such Affiliate or otherwise
was or
is designated by the Company or such Affiliate as Confidential information,
(ii)
is not generally available to the general public, and (iii) is acquired by,
disclosed to or known by Executive as a result of or through Executive's
relationship with the Company or such Affiliate (including information
conceived, originated, discovered or developed in whole or in part by
Executive). "Confidential Information" includes, without limitation: (i)
information concerning actual and potential customers, (ii) sales information,
marketing and product development plans, marketing techniques, pricing policies
and market forecasts, (iii) information concerning proprietary computer systems
(including hardware and software), support systems and techniques and methods,
(iv) information with respect to developments, improvements, inventions,
ideas,
processes, procedures, discoveries, concepts, designs, drawings, specifications,
data and "know-how," (v) financial information (including, without limitation,
sales and revenue information and financial statements), (vi) product or
service
information (including, without limitation, product designs and specifications,
product development plans, product strategies and product delivery systems),
(vii) information which, if used or disclosed, could adversely affect the
Company or any of its Affiliates or give a competitor an advantage over a
party
without access to the information, and (viii) information of a type described
in
the foregoing clause (i) through (vii) which the Company or any of its
Affiliates obtained from another party who treats the information as proprietary
or designates it as confidential information or which is designated with
a
legend indicating that it is confidential or proprietary (whether or not
owned
or developed by the Company or such Affiliate).
(c) Executive
may respond to a lawful and valid subpoena or other legal process but shall
give
the Company the earliest possible notice thereof and shall, as much in advance
of the return date as possible, make available to the Company and its counsel
the documents and other information sought and shall assist such counsel
in
resisting or otherwise responding to such process.
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(d)
As
used in this Agreement, the term "Affiliate" means a person or entity that,
directly or indirectly through one or more intermediaries, controls or is
controlled by the Company and including, without limitation, any joint venture
entity that the Company or an Affiliate of the Company is a member, partner
or
shareholder. For purposes of this Agreement, Executive is not deemed an
Affiliate.
11. Injunctive
Relief. The
parties acknowledge that the remedy at law for a breach of any provision
of
Sections 9 and 10 will be inadequate. In addition to any other remedies that
the
Company may have in the event of such a breach, the Company shall be entitled
to
temporary and permanent injunctive relief to prevent Executive's continued
breach of such provisions without the necessity of proving actual damage
and
without being required to post any bond. The obligations of Executive set
forth
in Sections 9 and 10 are independent, and the existence of any claim or cause
of
action by Executive or any of his affiliates against the Company, whether
predicated on this Agreement or otherwise, shall not constitute a defense
to the
enforcement of this Agreement by the Company.
12. Notices.
Any
notice under this Agreement shall be in writing and shall be deemed to have
been
given when: (a) delivered personally, (b) sent by express mail or other
overnight courier service, or (c) deposited in the United States mail, certified
or registered and with proper postage prepaid, addressed as follows, or to
such
other address as is provided by written notice delivered in accordance with
this
Section:
If
to
Executive, to:
Xxxxxxx
Xxxxxx
If
to the
Company, to:
SURGE
GLOBAL ENERGY INC. 00000 Xx Xxxxxx Xxxx Xxxxx 000 Xxx Xxxxx, XX
00000
Attention:
Office of the CEO Tel. (000) 000-0000
Fax:
(000) 000-0000
13. Amendment;
Waiver. No
modification, amendment or waiver of any provision of this Agreement shall
be
valid and binding unless it is in writing and signed by both of the parties
hereto, A waiver of any provision of this Agreement shall be effective only
in
the specific instance and for the particular purpose for which it was given.
No
failure to exercise and no delay in exercising, any right or power under
this
Agreement shall operate as a waiver of such right or power.
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14.
Assignment. This
Agreement shall inure to the benefit of and shall be binding upon the parties
hereto and their respective successors, personal representatives, heirs and
assigns. Neither this Agreement, nor the rights and obligations created
hereunder, may be assigned by either party without the prior written consent
of
the other party.
15.
Severability. If
any
provision of this Agreement is held to be illegal, invalid, or unenforceable
under present or future laws effective during the term hereof, such provision
shall be fully severable; this Agreement shall be construed and enforced
as if
such illegal, invalid, or unenforceable provision had never comprised a part
hereof; and the remaining provisions shall remain in full force and effect
and
shall not be affected by the illegal, invalid, or unenforceable provision
or by
its severance from this Agreement. Furthermore, in lieu of such illegal,
invalid, or unenforceable provision, there shall be added automatically as
a
part of this Agreement a legal, valid and enforceable provision as similar
in
terms to such illegal, invalid, or unenforceable provision as is possible;
provided, however, that any such added provision shall not result in any
material change in Executive's duties, responsibilities and obligations under
this Agreement.
16.
Entire Agreement. This
document constitutes the final, complete, and exclusive embodiment of the
entire
agreement and understanding between the parties related to the subject matter
of
this Agreement and supersedes and preempts any prior or contemporaneous
understandings, agreements, or representations by or between the parties,
written or oral.
17.
Governing Law.
This
Agreement shall be governed by, and the legal relations among the parties
shall
be construed in accordance with, the laws of the State of California as applied
to agreements executed and performed entirely within the United States and
State
of California.
18.
Arbitration.
The
parties agree that any and all disputes, claims or controversies arising
out of
or relating to this Agreement, the employment relationship between the parties,
the terms or conditions of employment, or the termination of the employment
relationship, that are not resolved by their mutual agreement shall be resolved
by final and binding arbitration as the exclusive remedy in accordance with
the
JAMS Employment Arbitration Rules and Procedures in effect at the time
arbitration is initiated. Either party may commence the arbitration process
by
filing a written demand for arbitration with JAMS and sending a copy to the
other party. The arbitration shall be conducted by one neutral arbitrator
selected by the parties from a list of arbitrators provided by JAMS, or its
successor, in San Diego County, California. If the parties are unable to
agree
upon an arbitrator from the list provided, the parties shall alternate in
striking names of arbitrators from the list until one is left who shall be
the
arbitrator. The parties shall be entitled to be represented by counsel in
the
arbitration
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proceeding.
The arbitrator shall have the authority to order such discovery, by way of
deposition, interrogatory, document production, or otherwise, as the arbitrator
considers necessary to a full and fair exploration of the issues in dispute,
consistent with the expedited nature of arbitration, The arbitrator is
authorized to award any remedy or relief that the arbitrator deems just and
equitable, including any remedy or relief that would have been available
to the
parties had the matter been heard in court. The arbitrator shall have the
authority to provide for the award of attorney's fees and costs in accordance
with applicable law. Executive shall not be required to pay any cost or expense
of the arbitration that he or she would not be required to pay if the matter
had
been heard in court. The decision of the arbitrator shall be in writing and
shall provide the reasons for the award unless the parties agree otherwise.
Proceedings to enforce, confirm, modify, set aside or vacate an award or
decision rendered by the arbitrator will be controlled by and conducted in
conformity with the Federal Arbitration Act, 9 U.S.C. Sec 1 et. seq. or
applicable state law. Nothing in this paragraph shall prohibit or limit the
parties from seeking provisional remedies under California Code of Civil
Procedure section 1281.8, including, but not limited to, injunctive relief
from
a court of competent jurisdiction. The parties agree that should either party
initiate litigation in a court in violation of this paragraph, the party
who
successfully compels arbitration shall be entitled to recover its/his/her
attorney's fees and costs incurred in compelling arbitration from the party
who
violated this paragraph, and that a court may require the payment of such
attorney's fees and costs as part of its order compelling arbitration. If
the
court declines to order the payment of the attorney's fees and costs to the
party who successfully compels arbitration, then the parties agree that the
arbitrator shall have the authority to make such an order.
19.
Mediation. Executive
and Company agree to mediate any dispute or claim arising between them out
of
this Agreement or any resulting transaction, before resulting to arbitration
or
court action. Mediation fees, if any, shall be divided equally among the
parties
involved. If any party commences an action based on a dispute or claim to
which
this paragraph applies, without first attempting to resolve the matter through
mediation, then that party shall not be entitled to recover attorney's fees,
even if they would otherwise be available to that party in any such
action.
20.
Representation Legal Counsel/Interpretation. Executive
and the Company have each consulted with legal counsel in connection with
the,
negotiation and entry into this Agreement. Accordingly, any rule of law or
decision that would require interpretation of any claimed ambiguities in
this
Agreement against the party that drafted it has no application and is expressly
waived. The provisions of this Agreement shall be interpreted in a reasonable
manner to effect the intent of the parties.
21.
Executive Representations. Executive
hereby represents and warrants to Company that he or she (a) is not now under
any contractual or quasi-contractual obligation that is inconsistent or in
conflict with this Agreement or that would prevent, limit, or impair Executive's
performance of his or her obligations under this Agreement; (b) has been
represented by legal counsel in preparing, negotiating, executing, and
delivering this Agreement; and (c) fully understands its terms and
provisions.
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22. Company
Representations. The
Company represents and warrants to Executive that (a) it is not now under
any
contractual or quasi-contractual obligation that is inconsistent or in conflict
with this Agreement or that would prevent, limit, or impair the
Company's
performance of its obligations under this Agreement; (b) has been represented
by
legal counsel in preparing, negotiating, executing, and delivering this
Agreement; and (c) this Agreement has been duly approved by the Board of
Directors hi accordance with the procedures set forth in Section 144(a)(1)
of
the Delaware General Corporation Law.
IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date
and year first above written.
Company
By:
/s/ Xxxxx Xxxxx
Name:
Xxxxx Xxxxx
Title:
CEO
Executive
By:
/s/ Xxxxxxx Xxxxxx
Dated
December 14. 2006
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