EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT ("Agreement") is executed as of May 1, 2007 (“Effective
Date”) between PETROSEARCH
ENERGY CORPORATION, a
Nevada
corporation ("Company") and XXXXXXX
X. XXXX (“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/Renewal
Term. Company
shall employ Employee as President
and Chief Executive Officer
for a
period of two (2) years 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 renew for an identical term at the end of
the
indicated term unless the Agreement is superseded by a new agreement or unless
notice of non-renewal is delivered in writing by the Company at least sixty
(60)
days prior to the end of the term then in effect. A notice of non-renewal of
this Agreement by Company to employee shall give rise to the severance benefits
described in paragraph 10a below. Bonuses shall not be deemed to be accrued
and
part of any severance package 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 NOVEMBER 15, 2004, AMENDED MAY 18, 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. Notwithstanding this exclusivity requirement,
Employee may continue to serve on the Board of Directors of Double Eagle
Petroleum Co. and other Boards of Directors as he deems appropriate and not
in
conflict with the Company’s needs.
3. Compensation. Employee
shall be compensated for his services as follows:
1
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 HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($250,000.00) annually, payable
monthly, in semi-monthly installments of TEN THOUSAND FOUR HUNDRED SIXTEEN
AND
66/100 DOLLARS ($10,416.66) each 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 (including
Employee, while Employee occupies that office) 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 twelve (12) 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.
6. Duties
and Obligations. Employee
shall perform the tasks consistent with the executive office designated herein
and such other reasonable tasks directed by the Board of Directors, from time
to
time, at the location designated by the Company Chief Executive
Officer.
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.
2
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. 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
Board of Directors 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.
9. Termination
Upon a Change in Control.
Should
either the Company or Employee terminate employment under this Agreement as
a
result of a change of control (as defined below) and in connection therewith,
should Employee not be offered (within forty five (45) days following the change
of control) a renewal of employment for at least two (2) years beyond the date
of the change-in-control at the identical role (i.e.
Chairman
of the Board and President and Chief Executive Officer) with the Company, at
an
annual compensation level (salary, bonus, benefits and stock/option awards)
equal to compensation commensurate with the new role but in no case less than
that in effect at the time of the change of control, and with such employment
being in the same City (unless consented to by Employee), or alternatively,
should such employment be offered in compliance with such parameters but
nevertheless be declined by Employee, then Employee shall be entitled to the
severance pay benefits described in paragraph 10b below.
3
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 (1) 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 (i) Company delivers to Employee a notice of non-renewal in
accordance with paragraph 1 above, (ii) this Agreement is terminated by Company
without “cause”,
or
(iii) 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 twenty-four (24) months from the date of the
expiration of this Agreement (in the case of non-renewal) or the date of
termination of this Agreement (whether termination is at the election of Company
or Employee).
b. In
the
event that this Agreement is within its term or any automatically extended
term
and is terminated as a result of a change in control which is not
accompanied by an appropriate employment offer as described above, or which
is
accompanied by an appropriate offer of employment which is declined by Employee,
then Employee shall be entitled to severance benefits equal to the sum of four
(4) years Base Salary and the average of Employee’s last two (2) year’s
aggregate bonuses (if any). Additionally,
upon a change of control without the appropriate job offer to Employee in
accordance with paragraph 9 above, or which is accompanied by an appropriate
offer of employment which is declined by Employee, resulting in termination
of
employment by Company or Employee, the Company shall pay to Employee a cash
sum
equal to the estimated total tax impact of the severance package (including
but
not limited to provisions in the Internal Revenue Code relating to excessive
compensation, alternative minimum tax or otherwise at that time) which are
expected to adversely affect Employee as a result of the aggregate severance
paid to Employee.
4
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.
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 EXCEPT
TO
THE EXTENT THAT NEVADA
CORPORATE LAW CONTROLS THE MATTERS PERTAINING TO 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:
|
If
to Company:
|
Xxxxxxx
Xxxx
|
|
000
Xxxxxx Xxxxx, Xxxxx 000
|
|
Xxxxxxx,
Xxxxx 00000
|
|
FAX:
000-000-0000
|
|
If
to Employee:
|
Xxxxxxx
Xxxx
|
|
____________________
|
|
____________________
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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/Xxxxx
Xxxxxxx
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Xxxxx
Xxxxxxx, Chief Financial Officer
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/s/
Xxxxxxx X. Xxxx
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XXXXXXX
X. XXXX
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