EMPLOYMENT
AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this “ Agreement ”) is made
and entered into as of the 1 st day of August, 2008 (the “Effective
Date”), by and between EnerJex Resources, Inc. ,
a Nevada corporation (“ EnerJex
”), and Dierdre P. Jones (“ Jones
”).
W I T N E S S E T
H:
WHEREAS , EnerJex and Jones desire to enter into this
Employment Agreement, pursuant to which Jones shall be employed by
EnerJex, to set forth the respective rights, duties and obligations
of the parties hereto.
NOW
THEREFORE , in
consideration of the promises and covenants contained herein, and
other good and valuable consideration, the receipt and sufficiency
of which the parties hereto acknowledge, EnerJex and Jones agree as
follows:
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EMPLOYMENT. EnerJex hereby agrees to employ Jones and Jones
hereby accepts such employment, upon the terms and conditions
hereinafter set forth.
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TERM. For purposes of this Agreement, “
Term ” shall mean the original term (as defined in
Section 2.1 below), if Renewal Term is initiated, then
“Term” shall mean the renewal term period (as defined
in Section 2.2, below).
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Original
Term: The Term of
this Agreement shall commence on August 1, 2008 and expire on July
31, 2011, unless sooner terminated pursuant to the terms and
provisions herein stated.
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Renewal: At any time prior to the expiration
of the Original Term, as stated above, EnerJex and Jones may, by
mutual written agreement, extend Jones’ employment under the
terms of this Agreement for such additional periods as they may
agree.
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Salary: EnerJex shall pay
Jones a base salary of One Hundred Forty Thousand Dollars
($140,000) per year (“Salary”). Such Salary shall be
payable in accordance with EnerJex’s normal policies.
Further, the Governance, Compensation and Nominating Committee of
the Board of Directors shall review the Salary annually for an
increase, such increase not to be less than the year-over-year
increase in the U.S. Consumer Price Index.
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Stock
Options: Effective as
of August 1, 2008 (the “Grant Date”), EnerJex shall
grant to Jones, as a signing bonus, Stock Option Certificates
(“ Certificates ”) to purchase 40,000 common
shares of EnerJex at an exercise price equal to the greater of
$6.25 per share or the fair market value per
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share on the
Grant Date. Certificates may be exercised at any time, in whole or
in part, during the three (3) year period measured from the Grant
Date and shall be subject to the terms and conditions of the
EnerJex Resources, Inc. Stock Option Plan and any related award
agreement thereunder. The Certificates shall be fully vested as of
the Grant Date.
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Incentive
Compensation: In addition to the Salary, Jones shall be
eligible to receive as incentive compensation (“ Bonus
”) in respect of each fiscal year (or portion thereof) of
EnerJex, thirty percent (30%) of her then applicable Salary, in
addition to any other amount determined in accordance with any
other short term incentive compensation program, which has been or
may be established by the Board either for Jones or for executives
or senior management. The determination as to the amounts of any
awards to be paid to Jones under these programs shall be reviewed
at least annually by the appropriate Board committees to ensure
that such amounts are competitive with awards granted to similarly
situated CFO’s of publicly held companies comparable to
EnerJex. The specific goals and objectives, including quantitative
and qualitative measures, used to determine the amount to be paid
as a Bonus for fiscal 2009 shall be agreed to by and between the
CEO and CFO not later than September 30, 2008. Thereafter, the CEO
and CFO shall determine Bonus measures on or before June 30
th of each successive year this
Agreement.
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General
Benefits: Jones shall be entitled to receive
or participate in all benefit plans and programs of EnerJex made
available from time to time to executives or senior management of
EnerJex, including but not limited to, dental and medical
insurance, pension and profit sharing plans, 401(k) plans,
incentive savings plans, stock option plans, group life insurance,
salary continuation plans, disability coverage and other fringe
benefits.
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Vacation: Jones shall be entitled during the
Term of this Agreement to four (4) weeks vacation per year during
which time Jones’ compensation will be paid in
full. Unused days of vacation will be compensated in
accordance with EnerJex’s policy as established by EnerJex
from time to time. Jones may take the vacation periods
at any time during the year as long as Jones schedules time off as
to not create an unreasonable hardship on EnerJex. In
addition, Jones shall have such other days off, including paid sick
leave and paid holidays, in accordance with EnerJex’s
policy.
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Perquisites: Jones shall be entitled to receive reimbursement
for all pre-approved fees, costs and expenses related to the
maintenance of her professional designations, including but not
limited to, continuing education, licensing and membership fees,
filing fees and other reasonable and related costs approved in
advance by EnerJex.
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Position: Jones shall be employed as Chief Financial
Officer and shall perform such services and duties as are defined
in Addendum A , Job Description, attached hereto, and as are
normally associated with such position, subject to the direction,
supervision and rules and regulations of EnerJex.
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Place of
Employment: The place of Jones’ employment and the
performance of Jones’ duties will be at EnerJex’s
corporate headquarters or at such location as agreed upon by
EnerJex and Jones.
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Extent of
Services: Jones shall
at all times and to the best of her ability perform her duties and
obligations under this Agreement in a reasonable manner consistent
with the interests of EnerJex. The precise services of
Jones may be extended or curtailed, from time to time at the
discretion of EnerJex, and Jones agrees to render such different
and/or additional services of a similar nature as may be assigned
from time-to-time by EnerJex, reasonably requested and as are
further in accordance with the responsibilities and duties normally
associated with similarly situated executives.
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5.3.1
Except as otherwise agreed by
EnerJex and Jones in writing, it is expressly understood and agreed
that Jones’ employment is fulltime and of a critical nature
to the success of EnerJex and is therefore
exclusive. Jones may not be employed by other entities
or otherwise perform duties and undertakings on behalf of others or
for her own interest unless pre-approved by the Board of
Directors. EnerJex acknowledges that Jones presently, or
may in the future, serve on the Board of Directors of other
companies and such action shall not be a breach of this section;
provided , however , that such companies either: (a)
are listed on Addendum B , attached hereto; or (b) do not
compete with EnerJex or interfere with the performance of
Jones’ duties pursuant to this Agreement, as determined in
the reasonable judgment of the Board of
Directors. Unless otherwise agreed by EnerJex and Jones
in writing, employment of Jones at less than full time shall not
affect the vesting of the Option Shares pursuant to this
Agreement.
5.3.2
Additionally, EnerJex recognizes
that Jones has, or may have in the future, passive equity positions
in other companies, which either: (a) are listed on Addendum
B attached hereto; or (b) do not compete with EnerJex in the
reasonable judgment of the Board of Directors. EnerJex
recognizes that such equity positions may occasionally require some
limited attention from Jones during normal business
hours. However, Jones agrees that if such time is
considered excessive by the Board of
Directors,
Jones shall be so advised and noticed by EnerJex and Jones shall be
required to make appropriate adjustments to ensure her duties and
obligations under this Agreement are fulfilled.
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TERMINATION. The Term of this Agreement shall end upon its
expiration pursuant to Section 2 hereof, provided that this
Agreement shall terminate prior to such date: (a) upon Jones’
resignation, death or permanent disability or incapacity; or (b) by
EnerJex at any time for “ Cause ” (as defined in
Section 6.4 below) or without Cause.
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By
Resignation Prior to Change of Control: If Jones resigns with “
Good Reason ” (as defined below) prior to a Change of
Control (as defined in Section 7), this Agreement shall terminate
but, Jones shall be entitled to receive a lump sum payment equal to
twelve (12) months Salary plus her prorated Bonus through the date
of termination. Further, upon resignation for Good Reason prior to
a Change of Control, all unvested stock or options held by Jones
shall immediately vest and become exercisable for the full term set
forth in such stock option or equity award
agreements. To the extent Jones elects to continue her
group health coverage pursuant to COBRA following her termination
of employment, then Jones shall be eligible to continue such
coverage for herself and her dependents (if applicable), at
EnerJex’s expense, for a period of twelve (12) months at the
same cost as if Jones were still an employee of
EnerJex. To the extent that EnerJex finds it undesirable
to cover Jones under its group health plan, EnerJex shall provide
Jones (at EnerJex’s expense) with the same level of coverage
under an individual policy or policies.
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For purposes of
this Agreement, “ Good Reason ” shall mean any
of the following if the same shall occur without Jones’
express written consent:
(i) a
material diminution in Jones’ Salary;
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a material
diminution in Jones’ authority, duties, or
responsibilities;
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a material
change in the geographic location at which Jones must perform the
services for which she is employed; or
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a change in the
current reporting structure of the CFO reporting directly to the
current CEO; or
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any other
action or inaction that constitutes a material breach by EnerJex
under this Agreement.
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Jones shall be
required to provide notice to EnerJex of the existence of any of
the foregoing conditions within 30 days of the initial existence of
the condition, upon the notice of which EnerJex shall have a period
of 30 days during which it may remedy the condition without giving
rise to the obligations under this Section 6.1
If Jones
resigns without Good Reason, Jones shall be entitled to
receive Jones’ Salary only through the date of such
resignation.
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By Reason
of Incapacity or Disability: If Jones becomes so incapacitated by reason of
accident, illness, or other disability that Jones is unable to
carry on substantially all of the normal duties and obligations of
Jones under this Agreement for a continuous period of sixty (60)
calendar days, this Agreement shall terminate. For purposes of the
foregoing, Jones’ permanent disability or incapacity shall be
determined in accordance with EnerJex’s disability insurance
policy, if such a policy is then in effect, or if no such policy is
then in effect, such permanent disability or incapacity shall be
determined by EnerJex’s Board of Directors in its good faith
judgment based upon Jones’ inability to perform normal and
reasonable duties and obligations. If Jones’ employment is
terminated due to such disability, Jones shall be entitled to
receive Jones’ Salary only through the date of such
termination. Other disability benefits, if any, will be
determined in accordance with the terms of EnerJex’s benefit
plans and programs.
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By Reason
of Death: If Jones dies during the Term of
this Agreement, EnerJex shall pay to the estate of Jones any earned
Salary only through the date of Jones’ death.
Other death benefits, if any, will be determined in accordance with
the terms of EnerJex’s benefit plans and programs.
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For
Cause: If
this Agreement is terminated by EnerJex for Cause, Jones shall be
entitled to receive Jones’ Salary only through the date of
termination.
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For purposes of
this Agreement, “ Cause ” shall mean:
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any act of
dishonesty or fraud with respect to EnerJex;
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Jones’
conviction of a felony, a crime involving moral turpitude or other
act causing material harm to EnerJex’s standing and
reputation;
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Jones’
continued material failure to perform Jones’ duties to
EnerJex after ten (10) business days’ written notice thereof
to Jones; or
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gross
negligence or willful misconduct by Jones with respect to
EnerJex.
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EnerJex shall
provide Jones, within ten (10) business days of becoming aware of a
“For Cause” breach, written notice, which shall include
written documentation, if any, of the “For Cause”
breach, as defined above. Upon receipt of the written notice, Jones
shall have thirty (30) calendar days to respond to EnerJex’s
notice and attempt to cure or resolve the “For Cause”
breach. If after that 30 day period, in the judgment of the Board
of Directors, the “For Cause” breach still exists, then
termination shall become effective immediately.
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