EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT ("Agreement") is executed as of May 1, 2007 (“Effective
Date”) between PETROSEARCH
ENERGY CORPORATION, a
Nevada
corporation ("Company") and XXXXX
XXXXXXX (“Employee”).
RECITALS:
A. Company
has been capitalized under the laws of the State of Nevada in order to acquire
and develop key oil and gas development prospects across the United States.
B. Company
desires to engage the services of Employee
on an
exclusive basis as an
executive officer
for the
Company.
TERMS
OF AGREEMENT:
NOW,
THEREFORE, FOR VALUE RECEIVED, and in consideration of the mutual covenants
contained herein, Company and Employee agree as follows:
1. Engagement/Term. Company
shall employ Employee as Vice President and Chief Financial Officer for a period
of one (1) year from the Effective Date, subject to the termination provisions
herein (the “Term”),
and
Employee hereby agrees to be engaged by Company for the Term in such capacity.
This Agreement shall automatically expire at the end of the indicated term
unless extended in writing by Company. In the absence of such an extension
or
notice of non-renewal by the Company, this Agreement shall be treated as an
agreement from month-to-month in the event that the Employee chooses to work
for
Company beyond the expired Term. Should Employee choose not to continue to
work
beyond the expired Term on a month-to-month basis, then Employee shall be
entitled to the severance benefits described in paragraph 10a below. Should
the
Term of this Agreement expire and Employee choose to continue to work for
Company on a month-to-month basis after the Term at Company’s behest, Employee
shall not
be
entitled to severance benefits upon termination of the month-to-month employment
(except accrued benefits as of termination) unless otherwise awarded at the
sole
discretion of the Company Chief Executive Officer. For severance purposes,
bonuses shall not be deemed to be accrued unless and until the Board of
Directors has declared and awarded the particular bonus to the particular
Employee. THIS
AGREEMENT SUPERSEDES AND REPLACES THE PRIOR EMPLOYMENT AGREEMENT BETWEEN THE
PARTIES DATED MAY 1, 2005 (“PRIOR AGREEMENT”) AND UPON EXECUTION HEREOF BY THE
PARTIES, THE PRIOR AGREEMENT SHALL BE DEEMED TO BE TERMINATED AND OF NO FURTHER
EFFECT.
2. Exclusive
Employment/Other Engagements. Company
and Employee hereby stipulate that this Agreement is exclusive as to Employee,
and Employee shall not accept or enter into contemporaneous
consulting/employment
relationships with third parties. Employee shall dedicate a minimum of forty
(40) hours per week to the tasks associated with the executive position assumed
under this Agreement.
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3. Compensation.
Employee
shall be compensated for his services as follows:
a. Base
Salary.
As
compensation to Employee for the performance of his duties or obligations under
this Agreement, Company shall pay Employee a base salary (the “Base Salary”) of
TWO HUNDED FIFTEEN THOUSAND AND NO/100 DOLLARS ($215,000.00) annually, payable
monthly, in semi-monthly installments of EIGHT THOUSAND NINE HUNDRED FIFTY
EIGHT
AND 33/100 DOLLARS ($8,958.33) during the term of this Agreement.
b. Bonus.
In
addition to receiving the Base Salary described in Section 3.a., Employee may
be
awarded such bonuses from time to time as are recommended by the CEO to the
Board of Directors, and then reviewed and approved by the Compensation Committee
of the Board of Directors (or, alternatively, approved by the Board of Directors
directly without committee recommendation should such committee be non-existent
or inactive).
c. Company
Related Travel.
Employee shall be reimbursed, upon submission of receipts and proper
documentation, for any and all Company related travel away from the principal
office (Houston, Texas), including coach airfare, hotel and meals (subject
to
the expenditure limitations imposed by Company).
d. Documented
Out-of-Pocket Expenses.
Employee shall be promptly reimbursed for all other reasonable out-of-pocket
expenses incurred on behalf of Company which are properly documented to Company;
including, long distance telephone charges on telephones other than Company’s
office phones.
e. Medical/Dental
Insurance.
Employee shall be entitled during the Term, upon satisfaction of all eligibility
requirements, to participate in all health, dental, disability, life insurance,
retirement and other benefit programs now or hereafter established by Company
and shall receive such other benefits as may be approved from time to time
by
the CEO.
4. Death
or Disability. Upon
the
death or long term disability of the Employee, this Agreement will automatically
terminate, and the Employee (or his heirs in the case of death) will be entitled
to six (6) months of Base Salary and benefits as listed above. All of the
Employee’s outstanding warrants shall become exercisable upon the date of death
or long term disability, and shall remain outstanding and exercisable per the
terms of the warrant agreement.
5. Acknowledgment
of Legislative Impact Upon Taxation.
Company
and Employee acknowledge and agree that Employee may in the future be awarded
stock or warrant-based compensation as a bonus or as part of a plan implemented
to benefit a group. Employee acknowledges that he/she has been advised of
proposed legislative enactments which create uncertainty regarding future
taxation of such stock or warrant-based compensation. Such compensation may
be
refused by Employee, if offered, but the Company shall have no duty to keep
Employee apprised of the legislative enactments regarding taxation and shall
have no liability for adverse tax consequences to Employee should Employee
accept such stock or warrant-based compensation unless otherwise provided in
this Agreement.
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6. Duties
and Obligations.
Employee
shall perform such duties and tasks pertaining to Employee’s expertise as
Company shall from time to time reasonably determine and specify as well as
those duties and tasks customarily attributable to the assignment assumed as
described in paragraph 1 above. Employee shall perform the designated tasks
at
the location or locations assigned by CEO from time to time, which may include
locations other than the Company’s home office in Houston, Texas.
Employee
hereby covenants and agrees to perform the services for which he is hereby
retained in good faith and with reasonable diligence in light of attendant
circumstances. The Employee shall, at all times, be under the supervision of
the
CEO and shall comply with such person’s directives as to all duties and tasks to
be performed.
7. Termination
for Cause
by Company.
This
Agreement may be terminated for
“cause”
by
Company
immediately, without prior notice (except as indicated hereinbelow) and without
severance pay or benefits. For purposes hereof, “cause”
shall mean any of the following events:
a. Any
embezzlement or wrongful diversion of funds of Company or any affiliate of
Company by Employee;
b. Malfeasance,
poor performance as to core or delegated job assignments in the opinion of
the
Company CEO or insubordination by Employee in the conduct of his
duties;
c. Failure
to observe or strictly adhere to all Company policies put into effect and/or
amended from time to time.
d. Abandonment
by Employee of his job duties or repeated absences from Company-directed tasks
which are not otherwise excused by the Company.
e. Competing
with the Company or otherwise diverting away from the Company business
opportunities intended for the Company or which could reasonably benefit the
Company’s core business.
f. Other
material
breach
of this Agreement by
Employee that
remains uncured for a period of at least thirty (30) days following written
notice from Company to Employee of such alleged breach, which written notice
describes in reasonable detail the nature of such alleged breach;
or
g. Conviction
of Employee or the entry of a plea of nolo contendere or equivalent plea of
a
felony in a court of competent jurisdiction, or any other crime or offense
involving moral turpitude.
8. Termination for
Good Reason by Employee.
This
Agreement may
be
terminated for “good reason” by Employee which, if so terminated, shall give
rise to the severance pay provisions set forth in paragraph 10a below. For
purposes hereof, “good reason” shall mean only material
breach
of
this Agreement by the
Company that remains uncured for a period of at least thirty (30) days following
written notice from Employee to Company of such alleged breach, which written
notice describes in reasonable detail the nature of such alleged
breach.
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9. Termination
Upon a Change in Control. Should
either the Company or Employee terminate employment under this
Agreement
as a
result of a change in control (as defined below) and at the time of which change
of control, Employee is not offered within forty five (45) days following the
change of control a renewal of employment for at least one (1) year beyond
the
time of the change in control at an equal or greater monthly salary in effect
at
the time of the change of control which
likewise permits Employee to perform his work tasks in the City in which
Employee is living and working at the time of the offer,
then
Employee shall be entitled to the severance pay benefits described in paragraph
10b below. In order to comply with this provision, such offer of employment
need
not include the same job title or job description as held by Employee at the
time of the change in control, so long as the new employment is reasonably
commensurate with Employee’s skills and capabilities, and need not contain a new
change in control provision covering subsequent changes in control.
For
purposes hereof, a “Change in Control” shall mean the occurrence during the Term
of any of the following events: (i) An acquisition (other than directly from
the
Company) of any voting securities of the Company (the “Voting Securities”) by
any “Person” (as the term person is used for purposes of Section 13(d) or 14(d)
of the Securities Exchange Act of 1934 (the “1934 Act”)) immediately after which
such Person has “Beneficial Ownership” (within the meaning of Rule 13d-3
promulgated under the 0000 Xxx) of 40% or more of the combined voting power
of
the Company’s then outstanding Voting Securities; provided however, that in
determining whether a Change in Control has occurred, Voting Securities which
are acquired in a “Non-Control Acquisition” (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in Control. A “Non-Control
Acquisition” shall mean an acquisition by (a) an employee benefit plan (or a
trust forming a part thereof) maintained by (x) the Company or (y) any
corporation or other Person of which a majority of its voting power or its
equity securities or equity interest is owned directly or indirectly by the
Company (a “Subsidiary”), (2) the Company or any Subsidiary, or (3) any Person
in connection with a “Non-Control” Acquisition, (ii) the sale or other
disposition of all or substantially all of the business or assets of the Company
to any person (other than a transfer to a Subsidiary); or (iii) a merger,
consolidation or reorganization involving the Company (other than with a
Subsidiary).
10. Severance
Pay Provisions/Effect of Termination Without Cause by Company, With Good Reason
by Employee or Due to Change in Control.
a. In
the
event that Company delivers to Employee a notice of non-renewal in accordance
with paragraph 1 above, then
Employee’s sole remedy shall be limited to recovery by Employee from Company of
the Base Salary and
benefits described
above for a period equal to three (3) months. In
the
event that (i) this Agreement is terminated by Company without
“cause”,
or (ii)
Employee terminates his employment for the “good reason set forth in paragraph 8
above, then Employee’s sole remedy shall be limited to recovery by Employee from
Company of the Base Salary and
benefits described
above for a period equal to six (6) months. At the sole discretion of the
Company CEO, the severance benefits package may be expanded to a longer period
and/or to include benefits other than those described herein.
b. In
the
event that this Agreement is within its Term (i.e. not on a holdover
month-to-month basis) and is terminated as a result of a change in control
which
is not
accompanied by an appropriate employment offer as described above, then Employee
shall be entitled to severance benefits equal to the sum of twenty (24) months
Base Salary and benefits and the average of Employee’s last two (2) calendar
year’s paid bonuses (if any) up to a maximum severance package equal to three
(3) times Employee’s Base Salary at the time of termination. The
severance pay provided for in this Agreement shall be in lieu of any other
severance or termination pay to which the Employee may be entitled under any
Company severance or termination plan, program, practice or arrangement. The
Employee’s entitlement to any other compensation or benefits shall be determined
in accordance with the Company’s employee benefit plans and other applicable
programs, policies and practices then in effect.
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11. Time
of Essence, Attorneys Fees.
Time is
of the essence with respect to this Agreement and same shall be capable of
specific performance without prejudice to any other rights or remedies under
law. If either party seeks to enforce, in law or in equity (including any
arbitration proceeding), any provision contained herein, then the prevailing
party in such proceeding shall be entitled to attorneys fees, interest and
all
such other disbursements and relief provided under law, but shall not be
entitled to punitive or exemplary damages of any kind.
12. Modification
or Amendment.
The
parties hereto may modify or amend this Agreement only by written agreement
executed and delivered by the respective parties.
13. Binding
on Heirs and Assigns. This
Agreement shall inure to and be binding upon the undersigned and their
respective heirs, representatives, successors and permitted
assigns. This Agreement may not be assigned by either party without the prior
written consent of the other party.
14. Counterparts.
For the
convenience of the parties hereto, this Agreement may be executed in any number
of counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts shall together constitute the same
agreement.
15. No
Waivers.
No
waiver of or failure to act upon any of the provisions of this Agreement or
any
right or remedy arising under this Agreement shall be deemed or shall constitute
a waiver of any other provisions, rights or remedies (whether similar or
dissimilar).
16. GOVERNING
LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF
THE STATE OF TEXAS AND SHALL BE PERFORMABLE IN XXXXXX COUNTY, TEXAS
SECURITIES
ISSUANCE AND CORPORATE GOVERNANCE BY OFFICERS AND
DIRECTORS.
17. Notices. Any
notice, request, instruction or other document to be given hereunder by any
party to the other shall be in writing (by FAX, mail, telegram or courier)
and
delivered to the parties as follows:
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If
to Company:
|
Xxxxxxx
Xxxx, President
|
|
000
Xxxxxx Xxxxx, Xxxxx 000
|
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Xxxxxxx,
Xxxxx 00000
|
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FAX:
000-000-0000
|
|
If
to Employee:
|
Xxxxx
Xxxxxxx
|
|
____________________________
|
|
____________________________
|
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____________________________
|
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18. Entire
Contract/No Third Party Beneficiaries.
This
Agreement constitutes the entire agreement, and supersedes all other prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof, and is not intended to create any
obligations to, or rights in respect of, any persons other than the parties
hereto. There are no third party beneficiaries of this Agreement.
19. Captions
for Convenience.
All
captions herein are for convenience or reference only and do not constitute
part
of this Agreement and shall not be deemed to limit or otherwise affect any
of
the provisions hereof.
20. Severability.
In case
any one or more of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or enforceability shall not affect any other provision
hereof, and this Agreement shall be construed as if such invalid, illegal or
enforceable provision had never been contained herein.
21. BINDING
ARBITRATION.
ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
BREACH THEREOF, SHALL BE SETTLED BY FINAL AND BINDING ARBITRATION CONDUCTED
IN
HOUSTON, TEXAS, IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES ("RULES")
OF
THE AMERICAN ARBITRATION ASSOCIATION IN EFFECT AT THE TIME THE CONTROVERSY
OR
CLAIM ARISES, BUT SAID ARBITRATION NEED NOT BE ADMINISTERED BY THE AMERICAN
ARBITRATION ASSOCIATION. THE ARBITRATOR, WHICH SHALL BE AGREED UPON BY THE
PARTIES, SHALL HAVE JURISDICTION TO DETERMINE ANY SUCH CLAIM AND MAY GRANT
ANY
RELIEF AUTHORIZED BY LAW FOR SUCH CLAIM EXCLUDING CONSEQUENTIAL AND PUNITIVE
DAMAGES. EACH PARTY TO THE ARBITRATION SHALL BEAR THE INITIAL FILING FEES AND
CHARGES EQUALLY, PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD
REIMBURSEMENT OF ALL SUCH COSTS AND FEES TO THE PREVAILING PARTY AS A PART
OF
ITS AWARD. THIS PARAGRAPH SHALL LIKEWISE BE SPECIFICALLY ENFORCEABLE IN A COURT
OF COMPETENT JURISDICTION SHOULD THE PARTY NOT DEMANDING ARBITRATION REFUSE
TO
PARTICIPATE IN OR COOPERATE WITH THE ARBITRATION PROCESS.
EXECUTED
by the undersigned as of the Effective Date set forth above.
SIGNATURES
APPEAR ON FOLLOWING PAGE
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PETROSEARCH
ENERGY CORPORATION
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By:
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/s/
Xxxxxxx X. Xxxx
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Xxxxxxx
X. Xxxx, President & CEO
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/s/
Xxxxx Xxxxxxx
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XXXXX
XXXXXXX
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