Exhibit 10.2
Employment Agreement
HYD Resources Corporation
Whereas HYD Resources, herein also referred to as "Employer", is in the business
of drilling for oil and gas in the continental United States of America; and
Whereas, Xx. Xxx Xxxxxx, Xx. (herein referred to as "Employee") has been working
with Employer to setup new operations together with Xx. Xxxxxxx Xxxxxx Xxxxxxx
and with the help of Xxxxxxx X. Xxxxx; and
Whereas, HYDR has an agreement with its parent company, Hyperdynamics
Corporation to process payroll for it and lease its employees from Hyperdynamics
Corporation (herein referred to as "HYPD") so that only one payroll can be
processed and administered and costs can be allocated directly to HYDR by HYPD
for Employee services provide specifically for and in behalf solely for the
benefit of HYDR, and
Whereas, Employee and HYDR believe that the credentials of Employee regarding
his educational credentials and extensive experience with many oil companies
makes him qualified and a good candidate to be HYDR's President; and
Whereas, Employee is keenly interested in helping to build HYDR as a successful
drilling company; and
Now therefore the parties agree as follows:
1. The Employer will add Employee to its payroll as HYDR's
President.
2. Employer agrees to pay Employee pursuant to its agreement with
HYDR semi-monthly $1,750 semi-monthly or $3,500 per month and an
initial signing bonus of $5,250 will be paid paying for services
rendered through April 30, 2004 and then the next payroll will be made
for the semi-monthly period ending 5/15/04 on the payroll processed on
May 31, 2004 and so forth.
3. HYDR hereby additionally makes a five year (from June 30, 2004
through June 30, 2009) Contingent Note Payable (herein referred to as
the "CNP") to Employee for a total amount of three hundred and Fifty
Thousand Dollars ($350,000) payable IN THE FORM OF AN EMPLOYEE BONUS
ONLY IN THE FOLLOWING MANNER WITH SPECIFIED CONTINGENCIES MET:
CONTINGENCIES THAT MUST BE MET FOR CNP TO BE PAID IN FULL OR IN
PART WITHIN THE TERM OF THE CNP:
a. HYDR must have net income as determined by generally accepted
accounting principles (GAAP).
b. As measured per externally reviewed financials (reviewed by
HYPD's external auditors) on a quarterly basis, 45 days after the end
of each quarter ending on September 30th, December 31st , and March
31st of each year while the CNP is still in effect, 10.25% of the Net
Income as determined by HYDR's accounts and/or external auditors as
the case may be, in accordance with GAAP, will be eligible to pay down
against the CNP upon the date of the filing of HYPD's quarterly SEC
filing.
c. As measured and adjusted per HYPD's financial audit of each
fiscal year to end on June 30th of each year while the CNP is in
effect, any HYDR Net Income that has not been previously used on a
quarterly basis to base a 10.25% payment on the CNP, shall be eligible
for payment up to 10.25% of the GAAP based Net Income.
For example, if $100,000 is determined to be the audited Net
Income of HYDR for June 30, 2004 as of the completion of the audit on
or around September 30, 2004, then a payment on the CNP will be made
in the amount of $10,250, within 10 days of the determination of that
audited Net Income amount. If as of November 15, 2004 the Net Income
for the quarter ended September 30, 2004 is $100,000 for that quarter,
then another payment on the CNP would be made in the amount of $10,250
within 10 days of that determination. On the other hand, if as of
November 15, 2004 there is no Net Income for the quarter ended
September 30, 2004 and for example purposes, lets say there was a
$100,000 Net Loss as determined by GAAP, then no payment on the CNP
would be due. Also, in the case of a $100,000 Net Loss for the quarter
ending September 30, 2004, then on the next measurement date (December
31, 2004) no additional payment would be due on the CNP until more
than $100,000 of Net Income was realized and recognized on the books
of HYDR. Thus, on a cumulative basis, once Net Income is used to base
a CNP payment, it cannot be used again, and if there is a Net Loss,
HYDR must recover the Net Loss prior to having eligible Net Income to
base any CNP payment that may be due thereafter until the expiration
of the five year term.
4. Employee agrees to uphold, defend, and protect the interests and
ownership rights of Employer as a priority and to have professional conduct
and ethics in all facets of the performance of Employees duties under this
agreement. Employee agrees that 100% of his efforts in the oil and gas
industry are performed in his capacity as an employee of HYDR and agrees to
work full time for HYDR and not to compete in anyway with any business
outside the corporate veil of HYDR and agrees not to circumvent any oil and
gas related business in anyway while this agreement is in effect.
5. Employee agrees to maintain strict confidentiality and adhere to
HYPD's and HYDR's confidentiality policies and procedures when talking with
3rd parties in general including but not limited to oil exploration and
production companies and to only disclose information regarding to HYPD and
HYDR's exploration work and exploration results except as he is directed by
management and/or the board of directors of HYDR. No work product will ever
be taken out of the offices of Employer unless approval from
management has been obtained.
6. Employer may terminate Employee at any time that HYDR's has a
cumulative Net Loss any time after the first nine months of operation.
Employer also may terminate Employee in the case of a serious breach of
ethics or negligence in performance of duties. A 60-day notice is required
for termination in this case.
7. In the case of a termination with a 60-day notice, Employee will be
compensated for the 60-day notice period.
8. In the case of termination under number 6 above, the CNP will be
honored for the entire five-year term.
The parties hereby agree to the forgoing as evidenced by their
signatures hereunder.
Agreement:
Employer Employee
HYD Resources Corporation Xxx Xxxxxx, Xx.
/s/ Xxxx Xxxxx /s/ Xxx Xxxxxx, Xx.
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Xxxx X. Xxxxx, CEO
Date: / / Date: / /
