EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
EMPLOYMENT AGREEMENT
(this “Agreement”) is entered into effective the 16th
day of
January, 2008 by and between Xxxxxxx X. Xxxxx, a resident of the State of
Minnesota (“Employee”), and Northern Oil and Gas, Inc., a Nevada corporation
having its principal office at 000 Xxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxxx (the
“Company”).
WHEREAS,
the Company is an oil
and gas exploration and production company headquartered in Wayzata, Minnesota,
focused on drilling exploratory and developmental xxxxx in the Rocky Mountain
regions of the United States;
WHEREAS, the
Company desires to
employ Employee, and Employee desires to accept such employment, pursuant to
the
terms and conditions set forth in this Agreement.
NOW,
THEREFORE, in
consideration of the mutual covenants herein contained, the parties agree as
follows:
1.
Services. The
Company
hereby agrees to employ Employee in the role of the Company’s Chief Executive
Officer, and Employee hereby accepts such employment with the Company on the
terms and conditions set forth herein. Employee shall perform all
activities and services as the Company’s Chief Executive Officer, which shall
include duties and responsibilities as the Company’s Board of Directors may from
time-to-time reasonably prescribe consistent with the duties and
responsibilities of the Chief Executive Officer of the Company (the
“Services”). Employee shall use his best efforts to make himself
available to render such Services to the best of his abilities. The
Services shall be performed in a good professional and workmanlike manner by
Employee, to the Company’s reasonable satisfaction, which shall include duties
and responsibilities as the Company’s Chief Executive
Officer. Employee shall have the authority to bind the Company to any
contract, agreement or other arrangement, whether oral or written, or make
any
representation or deliver any instructions on behalf of the
Company. Employee shall be considered an executive officer for
purposes of Section 16 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).
2.
At-Will
Relationship. Employee’s
employment with the Company shall be entirely “at-will,” meaning that either
Employee or the Company may terminate such employment relationship by
terminating this Agreement in writing delivered to the other party at any time
for any reason or for no reason at all, subject to the provisions of this
Agreement.
3.
Compensation. In
consideration for
Employee entering into this Agreement with the Company and performing the
Services required hereunder during the term of this Agreement:
3.1
Annual
Salary. During
the 2008 fiscal year, the Company shall pay Employee an annual base
salary in the amount of One Hundred Eighty-Five Thousand Dollars ($185,000)
(the
“Annual Salary”), which salary shall be payable to Employee retroactive to
January 1, 2008 and in accordance with the Company’s customary payroll
practices. Employee’s Annual Salary shall be increased each year
following the 2008 fiscal year at the discretion of the Company’s Compensation
Committee or Board of Directors, as the case may be; provided, however, that
the
Annual Salary shall increase a minimum of four percent (4.0%) over the prior
year’s Annual Salary each year commencing in January 2009.
3.2
Signing
Bonus. In addition to Employee’s Annual Salary, the Company
shall pay Employee One Hundred Thousand Dollars ($100,000) as a signing bonus
immediately upon executing this Agreement in consideration for Employee entering
into this Agreement and submitting to the duties and obligations set forth
herein.
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3.3
Annual
Bonus. In addition to Employee’s Annual Salary, Employee shall
be entitled to receive an annual bonus of up to twice the amount of the
Employee’s Annual Salary for that year as may be determined appropriate in the
discretion of the Company’s Compensation Committee or Board of Directors from
time-to-time based upon Employee meeting or exceeding mutually agreed upon
performance goals; provided, however, that nothing herein shall obligate the
Company to pay any bonus to Employee at any time.
3.4
Change in
Control. Upon a “change in control” of the Company (as defined
below), Employee’s obligations hereunder shall immediately cease, this Agreement
shall terminate and the Company shall immediately pay to Employee the
following:
(i)
A lump sum payment equal to twice Employee’s then-applicable Annual Salary
payable to Employee under the terms of this Agreement in lieu of any and all
other benefits and compensation to which Employee otherwise would be entitled
under the terms of this Agreement; and
(ii)
Pre-payment of the remaining lease term of Employee’s Company vehicle and use of
such vehicle through the remaining lease term of such vehicle, along with a
lump
sum payment to employee of the estimated insurance premiums for such vehicle
through the remaining lease terms.
In
addition to the foregoing payments, any options or warrants (the “Securities”)
held in the name of Employee, or any portion thereof, shall accelerate and
become immediately exercisable upon any “change in control” of the Company (as
defined below).
Any
of
the following shall constitute a “change in control” for the purposes
hereof:
(iii)
The consummation of a
reorganization, merger, share exchange, consolidation or similar transaction,
or
the sale or disposition of all or substantially all of the assets of the
Company, unless, in any case, the persons beneficially owning the voting
securities of the Company immediately before that transaction beneficially
own,
directly or indirectly, immediately after the transaction, at least seventy-five
percent (75%) of the voting securities of the Company or any other corporation
or other entity resulting from or surviving the transaction in substantially
the
same proportion as their respective ownership of the voting securities of the
Company immediately prior to the transaction;
(iv)
Individuals who constitute the
incumbent Board of Directors cease for any reason to constitute at least a
majority of the Board of Directors; or
(v)
The Company’s shareholders approve
a complete liquidation or dissolution of the Company.
The
Company shall be obligated to make
the payments to Employee required by this Section 3 immediately upon any
“change in control” that occurs during Employee’s employment with the Company or
within six (6) months following termination of Employee’s employment with the
Company. The Company’s
obligations under this Section 3 of this Agreement are absolute and
unconditional, and not subject to any set-off, counterclaim, recoupment,
defense, or other right that the Company or any affiliate of the Company may
have against the Employee. The parties agree that the
provisions of this Section 3 shall survive any termination of this
Agreement.
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4.
Benefits. During
the term
of Employee’s employment with the Company and this Agreement, Employee will be
entitled to participate in the following benefit plans to the extent available
through the Company in accordance with the policies and plans adopted by the
Company, as may be amended from time-to-time:
4.1
Retirement
Plans. Employee shall be entitled to participate in the
Company’s 401(k), profit sharing and other retirement plans (the “Plans”)
presently in effect or hereafter adopted by the Company, to the extent that
such
Plans relate generally to all employees of the Company. Employee
shall be able to contribute up to the legal limit, as a percentage of his Annual
Salary, into any such Plans, of which the Company shall match Employee’s
contribution in an amount equal to the maximum legally-permitted amount under
such Plans, up to a maximum amount of Twenty Five Thousand Dollars ($25,000)
per
calendar year. If Employee chooses not to contribute a percentage of
his Annual Salary into any such Plans, the Company nonetheless shall contribute
the maximum legally-permitted amount during the term of his employment, up
to a
maximum amount of Twenty Five Thousand Dollars ($25,000) per calendar
year.
4.2
Company
Vehicle. Employee shall be entitled to use of a Company-leased
vehicle during the term of Employee’s employment with the Company up to a
maximum expense for the Company of Fifteen Thousand Dollars ($15,000) per
calendar year, subject to the provisions of Section 3.4(ii) above.
4.3
Health
Insurance. Employee, Employee’s spouse and any children of
Employee (the “Employee’s Family”) shall be entitled to participate in health, hospitalization,
disability, dental and other such health-related benefits and/or insurance
plans
that the Company may have in effect from time-to-time, all of which insurance
premiums shall be paid by the Company on behalf of Employee and
Employee’s Family.
4.4
Vacation. Employee
shall be entitled to vacation pursuant to such general policies and procedures
of the Company consistent with past practices as are from time-to-time adopted
by the Company.
4.5
Expense
Reimbursement. Employee shall be reimbursed by the Company for
all ordinary and customary business expenses, including travel, communication
costs and other disbursements incurred by him, for and on behalf of the Company,
in connection with the provision of the Services required under this
Agreement. Employee shall provide such appropriate documentation
regarding such expenses and disbursements as Company may reasonably
require. Reimbursement shall occur at least once per
month.
4.6
Other
Benefits. Employee shall also be entitled to such other
benefits as the Company may from time-to-time generally provide to its
personnel, at the discretion of and as permitted by the Company’s
management.
5.
Rights
Upon Termination of Employment. The following
provisions shall apply upon termination of Employee’s employment:
5.1
Death. In
the event Employee’s employment is terminated due to the death of
Employee:
(i)
Employee (or Employee’s estate) shall be paid (a) his Annual Salary through the
end of the month in which his death occurred and (b) any unpaid expense
reimbursement that might have accrued prior to Employee’s death;
and
(ii)
Any Securities held in the name of Employee, or any portion thereof, may be
exercised to the extent Employee was entitled to do so at the time of the
Employee’s death, by his or her executor or administrator or other person
entitled by law to the Employee’s rights under the Securities, at any time
within six (6) months subsequent to the date of death, at which time the
Securities shall expire.
5.2
Termination Other
Than
for Death. In the event that Employee’s employment and this Agreement is
terminated by the Company for any reason other than Employee’s
death:
(i)
The Company shall pay Employee a single lump sum payment equal to Employee’s
then-applicable Annual Salary and shall reimburse any unpaid expenses in lieu
of
any and all other benefits and compensation to which Employee otherwise would
be
entitled under the terms of this Agreement.
(ii)
Any Securities held in the name of Employee, or any portion thereof, may be
exercised to the extent Employee was entitled to do so at the time of
termination of Employee’s employment at any time within ninety (90) days
subsequent to the date of termination of Employee’s employment, at which time
the Securities shall expire.
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6.
Confidential
Information.
6.1
Employee shall maintain the confidentiality of all trade secrets, (whether
owned
or licensed by the Company) and related or other interpretative materials and
analyses of the Company’s projects, or knowledge of the existence of any
material, information, analyses, projects, proposed joint ventures, mergers,
acquisitions, divestitures and other such anticipated or contemplated business
ventures of the Company, and other confidential or proprietary information
of
the Company (“Confidential Information and Materials”) obtained by Employee as
result of this Agreement during the term of the Agreement and for two (2) years
following termination of Employee’s employment with the Company.
6.2
In the event that such Confidential Information and Materials are memorialized
on any computer hardware, software, CD-ROM, disk, tape, or other media, Company
shall have the right, subject to the rights of third parties under contract,
copyright, or other law, to view, use and copy for safekeeping or backup
purposes such Confidential Information and Materials. During the period of
confidentiality, Employee shall make no use of such Confidential Information
and
Materials for his own financial or other benefit, and shall not retain any
originals or copies, or reveal or disclose any Confidential Information and
Materials to any third parties, except as otherwise expressly agreed by the
Company. Employee shall have no right to use the Company’s corporate logos,
trademarks, service marks, or other intellectual property without prior written
permission of the Company and subject to any limitations or restrictions upon
such use as the Company may require.
6.3
Upon expiration or termination of this Agreement, Employee shall turn over
to a
designated representative of the Company all property in Employee’s possession
and custody and belonging to the Company. Employee shall not retain
any copies or reproductions of correspondence, memoranda, reports, notebooks,
drawings, photographs or other documents relating in any way to the affairs
of
the Company and containing Confidential Information and Materials which came
into Employee’s possession at any time during the term of this
Agreement.
6.4
Employee acknowledges that Company is a public company registered under the
Exchange Act and that this Agreement may be subject to the filing requirements
of the Exchange Act. Employee acknowledges and agrees that the applicable
xxxxxxx xxxxxxx rules and limitations on disclosure of non-public information
set forth in the Exchange Act and rules and regulations promulgated by the
SEC
shall apply to this Agreement and Employee’s employment with the
Company. Employee (on
behalf of himself as well as his executors, heirs, administrators and
assigns) absolutely and unconditionally agrees to indemnify and hold
harmless the Company and all of its past, present and future affiliates, executors, heirs,
administrators, shareholders, employees, officers, directors, attorneys,
accountants, agents, representatives, predecessors, successors and
assigns from any and all
claims, debts, demands, accounts, judgments, causes of action, equitable relief,
damages, costs, charges, complaints, obligations, controversies, actions, suits,
proceedings, expenses, responsibilities and liabilities of every kind and
character whatsoever (including, but not limited to, reasonable attorneys’ fees
and costs) in the event of Employee’s breach or alleged breach of any
obligation under the Exchange Act, any rules promulgated by the SEC and any
other applicable Federal or state laws, rules, regulations or
orders.
6.5
The parties agree that the provisions of this Section 6 shall survive any
termination of this Agreement.
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7.
Non-Competition
and Non-Solicitation.
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7.1
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Employee
agrees that he will not:
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(i)
anywhere within the United States, engage, directly or indirectly, alone or
as a
shareholder (other than as a holder of less than ten percent (10%) of the common
stock of any publicly traded corporation), partner, officer, director, employee,
consultant or advisor, or otherwise in any way participate in or become
associated with, any other business organization that is engaged or becomes
engaged in any business that is the same or substantially identical business
of
the Company, or is directly competitive with, any business activity that the
Company is conducting at the time of the Employee’s termination or has notified
the Employee that it proposes to conduct and for which the Company has, prior
to
the time of such termination, expended substantial resources (the “Designated
Industry”),
(ii)
divert to any competitor of the Company any customer of the Company,
or
(iii)
solicit any employee, contributor or faculty member of the Company to change
its
relationship with the Company, or hire or offer employment to any person to
whom
the Employee actually knows the Company has offered employment.
7.2
Employee agrees to be bound by the provisions of this Section 7 in consideration
for the Company’s employment of Employee, payment of the compensation and
benefits provided under Section 3 and Section 4 above and the covenants and
agreements set forth herein. The provisions of this Section 7 shall
apply during the term of Employee’s employment with the Company and for a period
of one (1) year following termination of the Employee’s employment; provided, however,
that the provisions of this Section 7 shall cease to apply immediately upon
any
“change in control” as defined in Section 3 of this Agreement or in the event
that the Company terminates Employee’s employment for any reason or for no
reason whatsoever. The parties agree that the provisions of this
Section 7 shall survive any termination of this Agreement, Employee will
continue to be bound by the provisions of this Section 7 until their expiration
and Employee shall not be entitled to any compensation from the Company with
respect thereto except as provided under this Agreement.
7.3
Employee acknowledges that the provisions of this Section 7 are essential to
protect the business and goodwill of the Company. If at any time the provisions
of this Section 7 shall be determined to be invalid or unenforceable by reason
of being vague or unreasonable as to area, duration or scope of activity, this
Section 7 shall be considered divisible and shall become and be immediately
amended to only such area, duration and scope of activity as shall be determined
to be reasonable and enforceable by the court or other body having jurisdiction
over the matter; and the Employee agrees that this Section 7 as so amended
shall
be valid and binding as though any invalid or unenforceable provision had not
been included herein.
8.
Non-Disparagement. Both
the Company
and Employee agree that neither they nor any of their respective affiliates,
predecessors, subsidiaries, partners, principals, officers, directors,
authorized representatives, agents, employees, successors, assigns, heirs or
family members shall disparage or defame any other party hereto relating in
any
respect to this Agreement, their relationship or the Company’s employment of
Employee.
9.
Notices. Any
notice
required or permitted under this Agreement shall be personally delivered or
sent
by recognized overnight courier or by certified mail, return receipt requested,
postage prepaid, and shall be effective when received (if personally delivered
or sent by recognized overnight courier) or on the third day after mailing
(if
sent by certified mail, return receipt requested, postage prepaid) as
follows:
As
to
Employee, at the Employee’s home address on file with the Company.
As
to the
Company:
Prior
to February 1,
2008: Northern
Oil and Gas, Inc.
Attn: Board
of Directors
000
Xxxx
Xxxxxx Xxxx
Xxxxxxx,
Xxxxxxxxx 00000
BeginningFebruary
1,
2008: Northern
Oil and Gas, Inc.
Attn: Board
of Directors
000
Xxxxxxxx Xxxxxx – Xxxxx 000
Xxxxxxx,
Xxxxxxxxx 00000
Either
party may designate a different person to whom notices should be sent at any
time by notifying the other party in writing in accordance with this
Agreement.
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10.
Survival
of Certain Provisions. Those provisions
of this Agreement which by their terms extend beyond the termination or
non-renewal of this Agreement (including all representations, warranties, and
covenants of the parties) shall remain in full force and effect and survive
such
termination or non-renewal.
11.
Severability. Each
provision of
this Agreement shall be considered severable such that if any one provision
or
clause conflicts with existing or future applicable law, or may not be given
full effect because of such law, this shall not affect any other provision
which
can be given effect without the conflicting provision or clause.
12.
Entire
Agreement. This Agreement, the exhibits and any addendum
hereto contain the entire agreement and understanding between the parties,
and
supersede all prior agreements and understandings relating to the subject matter
hereof. There are no understandings, conditions, representations or warranties
of any kind between the parties except as expressly set forth
herein.
13.
Assignability. Employee
may not assign this Agreement to any third party for whatever purpose without
the express written consent of the Company. The Company may not
assign this Agreement to any third party without the express written consent
of
Employee except by operation of law, or through merger, liquidation,
recapitalization or sale of all or substantially all of the assets of the
Company, provided that the Company may assign this Agreement at any time to
an
affiliate of the Company. The provisions of this Agreement shall
inure to the benefit of and be binding upon the parties and their respective
representatives, successors, and assigns.
14.
Headings. The
headings of
the paragraphs and sections of this Agreement are inserted solely for the
convenience of reference. They shall in no way define, limit, extend,
or aid in the construction of the scope, extent, or intent of this
Agreement.
15.
Waiver. The
failure of a
party to enforce the provisions of this Agreement shall not be construed as
a
waiver of any provision or the right of such party thereafter to enforce each
and every provision of this Agreement.
16.
Amendments. No
amendments of
this Agreement shall be binding upon the Company or Employee unless made in
writing, signed by the parties hereto, and delivered to the parties at the
addresses provided herein.
17.
Governing
Law. This Agreement
shall be governed by and construed under the internal laws of the State of
Minnesota, without regard to the principles of comity and/or the applicable
conflicts of laws of any state that would result in the application of any
laws
other than the State of Minnesota.
18.
Jurisdiction. This
Agreement,
including the documents, instruments and agreements to be executed and/or
delivered by the parties pursuant hereto, shall be construed, governed by and
enforced in accordance with the internal laws of the State of Minnesota, without
giving effect to the principles of comity or conflicts of laws
thereof. Employee and the Company agree and consent that any legal
action, suit or proceeding seeking to enforce any provision of this Agreement
shall be instituted and adjudicated solely and exclusively in any court of
general jurisdiction in Minnesota, or in the United States District Court having
jurisdiction in Minnesota and Employee and the Company agree that venue will
be
proper in such courts and waive any objection which they may have now or
hereafter to the venue of any such suit, action or proceeding in such courts,
and each hereby irrevocably consents and agrees to the jurisdiction of said
courts in any such suit, action or proceeding. Employee and the
Company further agree to accept and acknowledge service of any and all process
which may be served in any such suit, action or proceeding in said courts,
and
also agree that service of process or notice upon them shall be deemed in every
respect effective service of process or notice upon them, in any suit, action,
proceeding, if given or made (i) according to applicable law, (ii) by
a person over the age of eighteen (18) who personally served such notice or
service of process on Employee or the Company, as the case may be, or
(iii) by certified mail, return receipt requested, mailed to employee or
the Company, as the case may be, at their respective addresses set forth in
this
Agreement.
19.
Counterparts
and Electronic Signatures. This Agreement
may be executed in two or more counterparts, each of which shall be deemed
an
original but all of which together shall constitute one and the same
Agreement.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the
parties have executed this Agreement as of the date first set forth
above.
NORTHERN
OIL AND GAS, INC.
By
/s/
Xxxx X.
Xxxxxxxxxx
By: Xxxx
X. Xxxxxxxxxx
Its: Chief
Financial Officer
EMPLOYEE:
/s/
Xxxxxxx X.
Xxxxx
Xxxxxxx
X. Xxxxx
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