EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit
10.1
This
Agreement, dated as of February 6, 2009 (the "Effective Date"), is between
Bonanza Oil and Gas, Inc., a Nevada corporation, (the "Company") and G. Xxxx
Xxxxxxxxxxxx, an individual ("Employee").
1. Term: The
Company shall employ Employee for the period (the “Term”) commencing on the
Effective Date and ending upon the earlier of (i) the fifth anniversary of the
Effective Date and will automatically renew each year until both parties agree
to terminate; or (ii) the date upon which Employee’s employment is terminated in
accordance with Section 4.
2. Position
and Responsibilities
2.A. Position: Employee
is employed by the Company to render services to the Company in the position of
Senior Vice President and Chief Financial Officer. Employee shall
perform such duties and responsibilities as are normally related to such
position in accordance with the standards of the industry and any additional
duties now or hereafter assigned to Employee by the Board of Directors or the
Company’s Chief Executive Officer. Employee shall abide by the
Company's rules, regulations, and practices as they may from time-to-time be
adopted or modified.
2.B. Other
Activities: Except upon the prior written consent of the Company,
Employee will not during the Term, (i) accept any other employment, or (ii)
engage, directly or indirectly, in any other business activity (whether or not
pursued for pecuniary advantage) that might interfere with Employee's duties and
responsibilities hereunder or create a conflict of interest with the
Company.
2.C. No
Conflict: Employee represents and warrants that Employee's execution
of this Agreement, his employment with the Company, and the performance of his
proposed duties under this Agreement shall not violate any obligations Employee
may have to any other employer, person or entity, including any obligations with
respect to proprietary or confidential information of any other person or
entity.
3. Compensation
and Benefits
3.A. Base
Salary: In consideration of the services to be rendered under this
Agreement, the Company shall pay Employee an initial salary at the rate of
Seventy Two Thousand Dollars ($72,000.00) per year ("Base
Salary"). The initial Base Salary shall be paid in accordance with
the Company's regularly established payroll practices. Employee's
Base Salary will be reviewed at least annually in accordance with the Company's
established procedures for adjusting salaries for similarly situated employees
and may be increased in the sole discretion of the Company's Compensation
Committee. The Base Salary may not be decreased, except upon a mutual written
agreement between the parties.
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3.B. Signing
Bonus: On or before 30 days following the execution of this
agreement, the Company shall transfer to Employee four hundred thousand
(500,000) restricted shares of the Company's Common Stock.
3.C. Regular
Bonus: Employee shall be eligible for any bonus program or plan that
is established by the Company for similarly situated employees. The Company's
Compensation Committee, in its sole discretion, may establish a bonus program or
plan for Employee.
3.D. Stock
and Stock Options: The Company's Compensation Committee, in its sole
discretion, may grant Employee one or more stock options or other equity
rights.
3.D(1).
Employee Representations: In connection with the shares of Common
Stock to be granted to Employee pursuant to Section 3.B and any future grants of
stock or options pursuant to this Section 3.D, Employee represents and warrants
that:
3.D(1)(a) Employee
is an "accredited investor" within the meaning of Rule 501 of the General Rules
and Regulations under the Securities Act of 1933, as amended;
3.D(1)(b) Employee
has sufficient knowledge and experience in financial and investment matters so
that Employee is able to evaluate the risks and merits of Employee's investment
in the Company’s stock and is able financially to bear the economic risks
thereof;
3.D(1)(
c) Employee
will acquire the shares of the Company stock for Employee's own account and not
with a view to or for sale in connection with any distribution thereof in
violation of any securities laws, and Employee has no present or future
intention of selling or distributing any of such securities in violation of any
securities laws; and
3.D(1)(d) Employee
is familiar with the business and financial condition, properties and operations
and prospects of the Company and has received copies of the Company’s existing
private placement memoranda, and has read carefully and understands the
information contained in such documents, and has been afforded the opportunity
to ask questions and receive answers from the Company’s officers and directors
concerning the business and financial condition, properties, operations and
prospects of the Company, and has asked such questions as Employee desires to
ask and all such questions have been answered to Employee's full
satisfaction.
3.D(2) Stock
Certificate Legend: The Company may, at its option, cause to
conspicuously appear on all stock certificates representing the Company’s stock
which are issued and delivered to Employee pursuant to the provisions of Section
3.B or this Section 3.D, the legend set forth below, the provisions of which are
agreed to by Employee:
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL (I) SUCH OFFERING AND SALE OR OTHER
TRANSFER HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, OR (II) THE HOLDER
HEREOF PROVIDES THE COMPANY WITH (A) A WRITTEN OPINION OF LEGAL COUNSEL, WHICH
COUNSEL AND OPINION (IN FORM AND SUBSTANCE) SHALL BE REASONABLY SATISFACTORY TO
THE COMPANY, TO THE EFFECT THAT THE PROPOSED TRANSFER OF SUCH SECURITY MAY BE
EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT, OR (B) SUCH OTHER
EVIDENCE AS MAY BE REASONABLY SATISFACTORY TO THE COMPANY THAT THE PROPOSED
TRANSFER OF THIS SECURITY MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT.
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3.E. Benefits: The
Company will provide Employee with benefits in accordance with the benefit plans
established by the Company for similarly-situated executives from time to time
in the Company's sole discretion. The Company will seek to establish
a medical and dental insurance plan, long term disability program, Company-paid
life insurance program, Company-paid excess liability umbrella policy coverage,
and a 401K Plan as promptly as practicable after the Effective
Date. Until such time as the Company has a company medical and dental
insurance plan, it shall pay Employee’s monthly COBRA premiums for insurance
from Employee’s prior employer. The Company shall also provide
Employee with at least four weeks of paid vacation leave annually, which shall
accrue monthly and shall be governed by the Company's regular policies and
practices regarding vacation leave (as may be established and amended from time
to time in the Company's sole discretion).
3.F. Expenses: The
Company shall reimburse Employee for all reasonable business expenses incurred
in the performance of his duties hereunder in accordance with the Company's
expense reimbursement guidelines. As soon as it is available to
Company, the Company will provide Employee with a Company credit card to use for
business-related expenses.
3.G. Indemnification: The
Company agrees to defend and indemnify Employee against any liability that
Employee incurs within the scope of his employment with the Company to fullest
extent permitted by the Company's articles and by-laws and Nevada’s
corporation's law.
4. Termination
of Employment; Severance
4.A. Termination
By the Company: The Company may terminate Employee's employment with
the Company for Cause prior to the scheduled expiration date of the
Term.
4.X. Xxxxxxxxx: If
Employee's employment is terminated by the Company prior to the scheduled
expiration date of the Term (other than a termination by the Company for Cause
or as a result of Employee’s Disability (as defined below)), Employee will be
eligible to receive the following: (i) an amount equal to twenty-four (24)
months of Employee's then-current Base Salary ("Severance") payable as follows:
50% of the Severance shall be paid as a lump sum within a reasonable period not
to exceed sixty (60) days following the termination date and 50% of the
Severance will be paid as salary continuation for twelve (12) months following
the termination date; and (ii) reimbursement for any COBRA payments made by
Employee for COBRA coverage during the twelve (12) months following the
termination date. Employee shall not be entitled to any Severance payments or
benefit continuation unless Employee executes a general release in favor of the
Company in customary form to be provided by the Company. Employee
shall not be entitled to any other payments or benefits upon termination of his
employment pursuant to this Section 4.B, except as provided in Section 5.E and
Section 3.G.
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4.C. Termination
For Cause: For purposes of this Agreement, "Cause" shall mean: (i)
Employee commits a crime involving dishonesty, breach of trust, or physical harm
to any person; (ii) Employee willfully engages in conduct that is in bad faith
and materially injurious to the Company, including but not limited to,
misappropriation of trade secrets, fraud or embezzlement; (iii) Employee commits
a material breach of this Agreement, which breach is not cured within twenty
(20) days after written notice to Employee from the Company; (iv) Employee
willfully fails to implement or follow a reasonable and lawful policy or
directive of the Company, which breach is not cured within twenty (20) days
after written notice to Employee from the Company; or (v) Employee engages in a
pattern of failure to perform job duties diligently and professionally, which
pattern is not cured within twenty (20) days after written notice to Employee
from the Company. Prior to the date of any termination for Cause, the
Company's Board of Directors shall meet and the Employee shall have an
opportunity to present to the Board any information relevant to the event
constituting Cause, unless waived by Employee. The Company may
terminate Employee's employment For Cause at any time, without any advance
notice. Upon any termination for Cause pursuant to this Section 4.C,
the Company shall pay to Employee all compensation to which Employee is entitled
up through the date of termination, and thereafter, all of the Company's
obligations under this Agreement shall cease, except as provided in Section 5.E
and Section 3.G.
4.D. By
Disability: If Employee becomes eligible for the Company's long term
disability benefits or if, in the reasonable opinion of the Company's Board of
Directors, Employee shall be unable to carry out the responsibilities and
functions of the position held by Employee by reason of any physical or mental
impairment for a period of six (6) consecutive months or six (6)
months during any consecutive twelve (12) month period then, to the extent
permitted by law, the Company may terminate Employee's employment for
“Disability”. Upon any termination for Disability pursuant to this
Section 4.D, the Company shall pay to Employee all compensation to which
Employee is entitled up through the date of termination, and thereafter, all of
the Company's obligations under this Agreement shall cease, except as provided
in Section 5.E and Section 3.I. Nothing in this Section shall affect
Employee's rights under any disability plan in which he is a
participant.
4.E. Termination
By Employee: Employee may terminate his/her employment with the
Company at any time for any reason, including no reason at all, upon sixty (60)
days advance written notice. The Company shall have the option, in its sole
discretion, to make Employee's termination effective at any time prior to the
end of such notice period as long as the Company provides Employee with all
compensation to which he is entitled up through the last day of the sixty (60)
day notice period. Thereafter, all obligations of the Company under
this
Agreement
shall cease, except as provided in Section 5.E and Section 3.G.
Should
the Employee terminate his employment for Good Reason, Employee shall be
entitled to receive the compensation and benefits set forth in Section
4.B. Good Reason shall mean any of (i) a reduction in Executive's
Base Salary, unless agreed to by Executive; (ii) a material adverse change in
Executive's position within the Company’s management structure or the nature or
scope of Executive's duties (including reporting responsibilities), other than
as expressly provided in Section 2A; (iii) failure of the Company to comply with
any material provision of this Agreement; or (iv) a request by the Company that
Executive relocate his principal business office to a location outside of
Houston, Texas, and which reduction, change, failure, relocation or request for
relocation under (i), (ii), (iii) or (iv) is not remedied within thirty (30)
days after the receipt of written notice from Executive specifying that "Good
Reason" exists for purposes of this Agreement, or (vi) Executive's voluntary
termination of his employment for any reason during the one hundred and eighty
(180) day period commencing upon the occurrence of a Change of Control (and each
future Change of Control, should they exist)
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A Change
of Control of the Company shall be deemed to have occurred if any of the events
set forth in any one of the following clauses shall occur:
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(i)
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The
acquisition by any Person, directly or indirectly, of securities of the
Company representing more than fifty percent (50%) of the combined voting
power of the Company's then outstanding voting
securities;
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(ii)
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The
acquisition by any Person, directly or indirectly, of the right to appoint
a majority of the members of the
Board;
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(iii)
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Consummation
of a sale of all or substantially all of the assets of the Company in one
or a series of related transactions;
or
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(iv)
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Approval
by the Board of a plan to effect the complete liquidation or dissolution
of the Company (other than a liquidation in connection with a
reorganization of the Company in which immediately thereafter the
owners/members of the Company own substantially the same interests in the
reorganized entity in substantially the same
proportions).
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4.F. By
Death: Employee's employment shall terminate automatically upon his
death. The Company shall pay to Employee's beneficiaries or estate,
as appropriate, any compensation then due and owing through the date of death.
Thereafter, all obligations of the Company under this Agreement shall cease,
except as provided in Section 5.E and Section 3.G. Nothing in this
Section shall affect any entitlement of Employee's heirs to the benefits of any
life insurance plan or other applicable benefits.
5. Additional
Termination Obligations
5.A. Employee
agrees that all property, including, without limitation, all equipment, tangible
proprietary information, documents, records, notes, contracts, and
computer-generated materials provided to or prepared by Employee incident to his
or her employment belong to the Company and shall be promptly returned to the
Company upon termination of Employee's employment.
5.B. Upon
termination of Employee's employment, Employee shall be deemed to have resigned
from all offices and directorships then held with the Company. Following any
termination of employment, Employee shall cooperate with the Company in the
winding up or transferring to other employees of any pending work and shall also
cooperate with the Company in the defense of any action brought by any third
party against the Company that relates to Employee's employment by the
Company.
5.C. Employee
agrees that following termination of his or her employment, Employee shall not
access or use any of the Company's computer systems, e-mail systems, voicemail
systems, intranet system or other system, except as authorized by the Company in
writing.
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5.D. The
Company agrees that immediately following termination of Employee's employment,
the Company will take all steps reasonably necessary to release Employee from
all personal guarantees or other personal obligations, if any, that Employee
made with respect to any debts of the Company.
5.E. Upon
any termination of Employee’s employment with the Company, including as a result
of the expiration of the Term, Employee shall be entitled to all benefits as
provided in applicable Company benefit plans, any salary earned through the date
of such termination, and reimbursement of all expenses incurred through the date
of termination in accordance with the Company’s policies.
6. Inventions
and Proprietary Information; Nonsolicitation
6.A. Employee
acknowledges that because of his/her position in the Company, Employee will have
access to intellectual property and confidential information. During the term of
his employment (plus any period in which the Company is paying the Employee
Severance) and for one (1) year thereafter, Employee shall not, for Employee or
any third party, directly or indirectly, (i) interfere with any business of any
kind in which the Company (or any affiliate) is engaged, including, without
limitation, diverting or attempting to divert or conducting business with any of
its suppliers or customers, or (ii) solicit, induce, recruit, hire or encourage
any person employed by the Company during the preceding six months to leave
their employment with the Company.
6.B. If
any one or more provisions of this Section 6 shall for any reason be held
invalid or unenforceable, it is the specific intent of the parties that such
provisions shall be modified to the minimum extent necessary to make it or its
application valid and enforceable.
7. Dispute
Resolution
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7.A. The
parties agree that any suit, action, or proceeding between Employee (and his or
her attorneys, successors, and assigns) and the Company (and its affiliates,
shareholders, directors, officers, employees, members, agents, successors,
attorneys, and assigns) relating in any manner whatsoever to Employee's
employment or termination that employment shall be brought in
either
the
United States District Court for the Western District of Texas or in a Texas
state court in the County of Midland and that the parties shall submit to the
jurisdiction of such court. The parties irrevocably waive, to the
fullest extent permitted by law, any objection they may have to the laying of
venue for any such suit, action or proceeding brought in such
court.
7.B. Employee
acknowledges that he is obligated under this Agreement to render services of a
special, unique, unusual, extraordinary and intellectual character, thereby
giving this Agreement peculiar value so that the loss thereof cannot be
reasonably or adequately compensated in damages in an action at law.
Accordingly, in addition to other remedies provided by law, the Company shall
have the right to injunctive relief for any actual or threatened violation of
Section 6 of this Agreement in addition to any other remedies it may
have.
8. Entire
Agreement: This Agreement is intended to be the final, complete, and
exclusive statement of the terms of Employee's employment by the Company and may
not be contradicted by evidence of any prior or contemporaneous statements or
agreements, except for agreements specifically referenced herein.
9. Amendments;
Waivers: This Agreement may not be amended except by a writing signed
by Employee and by a duly authorized representative of the Company other than
Employee. Delay or failure of either party to exercise any right
under this Agreement shall not constitute a waiver of such right by such
party.
10. Assignment: Employee
agrees that Employee will not assign any rights or obligations under this
Agreement. Nothing in this Agreement shall prevent the consolidation, merger or
sale of the Company or a sale of all or substantially all of its
assets.
11. Severability: If
any provision of this Agreement shall be held by a court or arbitrator to be
invalid, unenforceable, or void, such provision shall be enforced to fullest
extent permitted by law, and the remainder of this Agreement shall remain in
full force and effect. In the event that the time period or scope of any
provision is declared by a court or arbitrator of competent jurisdiction to
exceed the maximum time period or scope that such court or arbitrator deems
enforceable, then such court or arbitrator shall reduce the time period or scope
to the maximum time period or scope permitted by law.
12. Taxes: All
amounts paid to Employee under this Agreement (including, without limitation,
Base Salary, Signing Bonus and Severance) shall be paid to Employee, less all
applicable state and federal tax withholdings.
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13. Governing
Law: This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas.
14. Interpretation: This
Agreement shall be construed as a whole, according to its fair meaning, and not
in favor of or against any party. Captions are used for reference purposes only
and should be ignored in the interpretation of the Agreement.
15. Binding
Agreement: Each party represents and warrants to the other that the
person(s) signing this Agreement below has authority to bind the party to this
Agreement and that this Agreement will legally bind both the Company and
Employee. This Agreement will be binding upon and benefit the parties and their
heirs, administrators, executors, successors and permitted assigns. To the
extent that the practices, policies, or procedures of the Company, now or in the
future, are inconsistent with the terms of this Agreement, the provisions of
this Agreement shall control. Any subsequent change in Employee's
duties or compensation will not affect the validity or scope of the remainder of
this Agreement.
16. Employee
Acknowledgment: Employee acknowledges Employee has had the
opportunity to consult legal counsel concerning this Agreement, that Employee
has read and understands the Agreement, that Employee is fully aware of its
legal effect, and that Employee has entered into it freely based on his own
judgment and not on any representations or promises other than those contained
in this Agreement.
17. Date of
Agreement: The parties have duly executed this Agreement as of the
date first written above.
IN WITNESS WHEREOF the undersigned have
executed this Agreement as of the day and year first written
above. The parties hereto agree that facsimile signatures shall be as
effective as if originals.
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/s/Xxxxxxx
Xxxxxxx
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/s/
G. Xxxx Xxxxxxxxxxxx
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Xxxxxxx
Xxxxxxx
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G.
Xxxx Xxxxxxxxxxxx
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President
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