CONSULTING AGREEMENT
AGREEMENT made as of this 1st day of September 2012 by and between Three
Forks, Inc. the ("Company"), located at 000 Xxxxxxxx Xxxx Xxxxxxxxxx, Xxxxxxxx
and W. Xxxxxx Xxxxxxx, located at 8950 Scenic Pine Dr. (the "Consultant" or
"Xxxxxxx").
WHEREAS, Xxxxxxx is Chairman of the Board of Directors of the Company; and,
WHEREAS, Xxxxxxx is licensed to practice law in the State of Colorado and
is member of the American Bar Association, and;
WHEREAS, the Company desires professional guidance and advice regarding
financing, management, legal, oil and gas acquisitions and general business
advice and desires Consultant to aid it in business matters; and
WHEREAS, Consultant has expertise in the area of corporate structure, oil
and gas been Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
herein contained, the parties hereto agree as follows:
1. DUTIES, SCOPE OF AGREEMENT, AND RELATIONSHIP OF THE PARTIES
(a) The company hereby agrees to retain Consultant as in house legal
counsel and advisor and consultant on business matters, consistent with
Consultant's expertise and ability, and Consultant agrees to consult with the
Company during the term of this Agreement. All parties understand that
Consultant has many other business interests and will devote as much time as in
its discretion as necessary to perform its duties under this Agreement. In
addition, the company understands that consultant's efforts on behalf of his
other interests are the sole and separate property of Consultant. It is
acknowledged that Consultant has been providing the Company with approximately
35 hours per week of services.
(b) The services rendered by consultant to the company pursuant to this
Agreement shall be as an independent contractor, and this Agreement does not
make Consultant the employee, agent, or legal representative of the Company for
any purpose whatsoever, including without limitation, participation in any
benefits or privileges given or extended by the Company to its employees. No
right or authority is granted to Consultant to assume or to create any
obligation or responsibility, express or implied, on behalf of or in the name of
the company, except as may be set forth herein or in his capacity as a member
and Chairman of the Board of Directors. The company shall not withhold for
Consultant any federal or state taxes from the amounts to be paid to consultant
hereunder, and Consultant agrees that he will pay all taxes due on such amounts.
(c) Consultant agrees to make available to Company his services, which
include legal, strategic planning, assistance in business development,
assistance in the acquisition of oil and gas properties, management, and the
structuring of new debt and equity offerings. Consultant shall provide planning
for and other advisory services as the Company may specifically request. (d)
Xxxxxxx shall also perform the services as Chairman of the Board of Directors
and as a member of the audit committee.
2. TERM. This Agreement shall be for a term of 2 years.
3. COMPENSATION.
(a) Company agrees to pay Consultant no less than a Base Fee of $120,000.00
per year.
In addition to the Base Salary, Consultant shall be paid a monthly car
allowance of six hundred dollars. Consultant shall be paid an annual bonus of
one half of one percent of the net asset increases over the prior year. The
basis of the calculation shall be the net assets as listed in the company
financials and shall be paid every six months within 30 days after the
accounting for the applicable period has been completed. The first payment
period will be for the period of September 1, 2012 through February 2013.
(b). BENEFITS. At its cost, Company shall reimburse Consultant for the
costs of medical health insurance, dental and vision insurance, disability
income insurances and other such benefits at the level afforded the same level
executives and consultants of the Company. Consultant shall be entitled to
participate in any Incentive Stock Option plan.
(c) Consultant shall be entitled to four (4) weeks of paid vacation & sick
leave beginning the 1st and ending after the last calendar year of engagement
and for each calendar year during the term of this Agreement. Vacation shall be
at a mutually agreed upon time, such agreement not to be unreasonably withheld.
Said vacation and sick leave shall be fully earned the first and last calendar
years of engagement.
(d) BUSINESS EXPENSES. Company shall reimburse Consultant for all
reasonable and necessary business expenses incurred by him in carrying out his
duties under this Consulting Agreement so long as such expenses are properly
documented in accordance with the Company's policies for expense reimbursement.
(e) COMPANY RESOURCES. As a matter of convenience, Consultant will have
limited use of Company's resources for personal purposes, including
long-distance telephone, copy machine, vehicles, staff and such other resources
as the parties may agree. Company will reimburse Consultant for the cost of a
mobile phone, and shall furnish Consultant a personal computer for office and
home use, and such other equipment as the parties may agree in accordance with
the Company's usual practice. Upon termination or expiration of this Agreement
the Consultant may retain the personal computer.
(f) OTHER SOURCES OF INCOME/EARNINGS. The Company understands that the
Consultant has other sources of income and earning through consultancy, or
positions in associations, companies, enterprises or ventures where the Company
had or has an existing relationship; and that these relationships will continue
and that new and additional relationships and sources of income may be
established in the future. The Company agrees that these relationships and
sources of income may continue as long as the Consultant fulfills his duties and
responsibilities and as long as the Consultant hereby warrants that there is no
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current relationship that constitutes even the perception of a conflict of
interest or that would preclude the Consultant from the fulfillment of duties
and responsibilities.
4. TERMINATION. The following shall apply:
(a). Death. In the event of Consultant's death during this Agreement, this
Agreement and the Consultants duties shall terminate.
(b). Illness or Incapacity. If, during any term of this Agreement,
Consultant shall become unable to perform his duties by reason of illness or
incapacity, then Company, may, at its option, terminate this Agreement. In such
event, the notice period shall be not less than the applicable elimination
period in any employee disability plan of the Company in which Consultant
participates. It is agreed that the determination of illness or incapacity shall
be made upon the basis of qualified medical evidence and if, during the notice
period, Consultant returns to work and is capable of carrying out his duties,
then Company's right to terminate for illness or incapacity is suspended.
(c) For Cause. Upon thirty (30) days written notice, the Consultants
engagement hereunder may be terminated without further liability on the part of
the Company for Cause. Only the following shall constitute "Cause" for such:
(i) Conviction of a felony, a crime or moral turpitude or commission
of an act of embezzlement or fraud against the Company or any subsidiary or
affiliate thereof:
(ii) Deliberate dishonesty of the Consultant resulting in damages to
the Company or any subsidiary or affiliate thereof;
(iii) Dereliction of duty, misfeasance or malfeasance. In the event of
a termination for cause the Consultant shall not be entitled to the
benefits of any bonus for the period preceding the termination nor will the
company be required to repurchase any of the shares owned by the Consultant
as hereinafter provided.
(d) Termination at will by the Company. The Company may terminate this
agreement at will upon 60 days written notice. In the Company decides to
terminate this agreement the company shall repurchase fifty percent of the
Consultants shares up to one million shares at a price equal to ninety percent
of the average trading price over the 60 days preceding the notice of
termination. The Company shall pay fifty percent of the repurchase within price
within 30 days of termination and the balance within 60 additional days.
(e) Resignation by Consultant. The Consultant may resign and terminate this
agreement on 60 days written notice and he shall not be required to render any
further services to the Company.
(f) Set-Off. The Company shall not be entitled to any set off against any
cash compensation to be provided to the Company under this Agreement, or any and
all compensation received by the Consultant while he was also receiving
compensation from any other Company, unless a Conflict of Interest arises. In
such case the Consultant shall inform the Company of any such amounts of cash
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compensation pertaining to the conflict of interest and shall refund to the
Company any related amounts paid by the Company. It is acknowledged that
Consultant is also a director of Xxxxxx Resources Inc.
Should Consultant terminate this with or without Good Reason, he agrees to
assist Company for a period of time not less than thirty (30) days in order to
effect a smooth transition, unless otherwise requested by Company.
5. EXPENSES
The Company shall reimburse Consultant for all reasonable and necessary
expenses incurred by him in carrying out its duties under this Agreement.
Consultant shall submit related receipts and documentation with his request for
reimbursement.
6. RENEWAL; TERMINATION
(a) This Agreement shall continue in effect until terminated by the parties
or its expiration date.
(b) Subject to the continuing obligations of Consultant under Section 7
below, either party may terminate this Agreement at any time if the other party
shall fail to fulfill any material obligation under this Agreement and shall not
have cured the breach within 10 days after having received notice thereof.
(c) Termination or expiration of this Agreement shall not extinguish any
rights of compensation that shall accrue prior to the termination.
7. CONFIDENTIAL INFORMATION
(a) "Confidential Information," as used in this Section 7, means
information that is not generally known and that is proprietary to the Company
or that the Consulant is obligated to treat as proprietary. This information
includes, without limitation:
(i) Trade secret information about the Company and its products or
assets;
(ii) Information concerning the Company's business as the Company has
conducted it since the Company's incorporation or as it may conduct it in
the future; and
(iii) Information concerning any of the Company's past, current, or
possible future products, including (without limitation) information about
the Company's research, development, engineering, purchasing,
manufacturing, accounting, marketing, selling, or leasing efforts.
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(b) Any information that Consultant reasonably considers Confidential
Information, or that the Company treats as Confidential Information, will be
presumed to be Confidential Information (whether Consultant or others originated
it and regardless of how it obtained it).
(c) Except as required in its duties to the Company, Consultant will never,
either during or after the term of this Agreement, use or disclose confidential
Information to any person not authorized by the Company to receive it.
(d) If this Agreement is terminated, Consultant will promptly turn over to
the Company all records and any compositions, articles, devices, apparatus and
other items that disclose, describe, or embody Confidential Information,
including all copies, reproductions, and specimens of the Confidential
Information in its possession, regardless of who prepared them. The rights of
the Company set forth in this Section 7 are in addition to any rights of the
Company with respect to protection of trade secrets or confidential information
arising out of the common or statutory laws of the State of Colorado or any
other state or any country wherein Consultant may from time to time perform
services pursuant to this Agreement. This Section 7 shall survive the
termination or expiration of this Agreement.
8. FALSE OR MISLEADING INFORMATION
The Company warrants that it will provide Consultant with accurate
financial, corporate, and other data required by Consultant and necessary for
full disclosure of all facts relevant to any efforts required of Consultant
under this Agreement. Such information shall be furnished promptly upon request.
If the Company fails to provide such information, or if any information provided
by the Company to Consultant shall be false or misleading, or if the Company
omits or fails to provide or withholds relevant material information to
Consultant , then, in such event, any and all fees paid hereunder will be
retained by Consultant as liquidated damages and this Agreement shall be null
and void and Consultant shall have no further obligation hereunder. Further, by
execution of this Agreement, the Company hereby indemnifies Consultant from any
and all costs for expenses or damages incurred and holds Consultant harmless
from any and all claims and/or actions that may arise out of providing false or
misleading information or by omitting relevant information in connection with
the efforts required of Consultant under this Agreement.
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9. MISCELLANEOUS
(a) Successors and Assigns. This Agreement is binding on and ensures to the
benefit of the Company, its successors and assigns, all of which are included in
the term the "Company" as it is used in this Agreement and upon Consultant, its
successors and assigns. Neither this Agreement nor any duty or right hereunder
will be assignable or otherwise transferable by either party without the written
consent of the other party, except that the Company shall assign this Agreement
in connection with a merger, reorganization, business combination,
consolidation, assignment, sale or other disposition of substantially all of its
assets or business. This Agreement will be deemed materially breached by the
Company if its successor or assign does not assume substantially all of the
company's obligations under this Agreement.
(b) Modification. This Agreement may be modified or amended only by a
writing signed by both the Company and Consultant.
(c) Governing Law. The laws of Colorado will govern the validity,
construction, and performance of this Agreement. Any legal proceeding related to
this Agreement will be brought in an appropriate Colorado court, and both the
Company and Consultant hereby consent to the exclusive jurisdiction of that
court for this purpose.
(d) Construction. Wherever possible, each provision of this Agreement will
be interpreted so that it is valid under the applicable law. If any provision of
this Agreement is to any extent invalid under the applicable law, that provision
will still be effective to the extent it remains valid. The remainder of this
Agreement also will continue to be valid, and the entire Agreement will continue
to be valid in other jurisdictions.
(e) Waivers. No failure or delay by either the Company or Consultant in
exercising any right or remedy under this Agreement will waive any provision of
the Agreement, nor will any single or partial exercise by either the Company or
Consultant of any right or remedy under this Agreement preclude either of them
from otherwise or further exercising these rights or remedies, or any other
rights or remedies granted by any law or any related document.
(f) Captions. The headings in this Agreement are for convenience only and
do not affect this Agreement's interpretation.
(g) Entire Agreement. This Agreement supersedes all previous and
contemporaneous oral negotiations, commitments, writings, and understandings
between the parties concerning the matters in this Agreement.
(h) Notices. All notices and other communications required or permitted
under this Agreement shall be in writing and sent by registered first-class
mail, postage prepaid, and shall be effective five days after mailing to the
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addresses stated below. These addresses may be changed at any time by like
notice.
In the case of the Company: Three Forks, Inc.
000 Xxxxxxxx Xxxx.
Xxxxxxxxxx, XX 00000
In the case of Consultant: W. Xxxxxx Xxxxxxx
0000 Xxxxxx Xxxx Xx.
Xxxxxx, XX 00000
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
"The Company" "Consultant"
By: By:
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