EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT
(this “ Agreement
”) is dated the 11th day of August, 2008 (the “
Effective Date ”), by and between Platinum Energy
Resources, Inc., a Delaware corporation (the “ Company
”) and Lisa Meier (the “ Executive ”)
(collectively the “Parties”).
WHEREAS, the Company desires to employ the Executive, and
the Executive wishes to accept such employment with the Company,
upon the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
1.
Employment . The Company hereby employs the Executive to
serve as Chief Financial Officer and Treasurer of the Company and
as President of the Company’s new services and infrastructure
division (“PSI”) and the Executive hereby accepts such
employment by the Company, upon the terms and conditions
hereinafter set forth. PSI is a proposed new business that the
Executive will help develop in the drilling & workover
businesses, and operate in the areas of compression, pipelines, gas
storage, specialty chemicals and downhole tools. For the sake of
clarity, PSI’s business shall not include the Company’s
existing Maverick business.
2.
Employment Period . Subject to the provisions of Section
7 hereof, the term of the employment shall be for an initial
period commencing on the Effective Date and ending on the fifth
anniversary of the Effective Date. This Agreement and the term of
the employment hereunder may be renewed for additional periods to
be mutually determined by the parties hereto in writing, on the
same terms and conditions as set forth herein or upon such other
terms and conditions as they may mutually determine in writing. The
term of the Executive’s employment hereunder, including any
continuation of the original term, is hereinafter referred to as
the “ Employment Period .”
(a) For performance of all services rendered under
this Agreement, the Company shall pay the Executive a base salary
at an annual rate of $250,000, with an annual minimum increase of
five percent (5%) each January, payable in installments in
accordance with the Company’s customary payroll practices,
but no less frequently than once each month. The Company shall
withhold from any and all payments required to be made to the
Executive pursuant to this Agreement all federal, state, local
and/or other taxes that are required to be withheld in accordance
with applicable statutes and/or regulations.
(b) In addition to base salary, the Executive shall
be eligible for a performance bonus in such amount and payable at
such time or times as the Board of Directors of the Company (the
“ Board ”), or any compensation committee
thereof, may in its sole discretion determine, which bonus may be
pursuant to the incentive compensation plan of the Company or
otherwise as may be determined by the Board or committee thereof,
provided, however, that in the event the Company’s net cash
flow as set forth on the Company audited year end financial
statements is positive, such bonus shall be no less than $50,000.
In addition, Executive shall be entitled to a bonus based on
Company’s performance measured against certain target goals
set forth in the budget for the applicable fiscal year, which bonus
shall be no less than $100,000. The target goals shall be
determined by the Board or committee thereof. The target bonus
shall be fifty percent (50%) of base salary for such year. The
actual amount of any bonus, if any, shall be determined by the
Board or committee in its sole discretion, but shall be no less
then the amounts stated above. To be eligible for any performance
bonus, or any other bonus, Executive must be in the employ of the
Company or a subsidiary of the Company upon the date of payment,
which shall occur on or before ninety days following the close of
the fiscal year in which the bonus was earned.
(c) On the Effective Date, the Executive shall
receive from the Company cash and equity incentive awards relating
to the performance of the business of PSI, in the forms set forth
hereto as Exhibit A .
(d)
On the Effective Date, the
Executive shall receive from the Company an initial grant of stock
options pursuant to the Company’s 2006 Long-Term Incentive
Compensation Plan (the “ Plan ”) to purchase
50,000 shares of common stock of the Company in the form of
incentive stock options. The stock options will vest over a four
year vesting period and will have an exercise price equal to the
fair market value of Platinum's common stock on the respective date
of grant. On the date of each regular yearly grant of options
to senior executives following the Effective Date during the
Employment Period, the Executive shall receive an additional 50,000
incentive stock options pursuant to the Plan. Each grant of stock
options: (i) shall entitle the Executive to purchase shares of the
Company common stock at an exercise price equal to the Fair Market
Value (as defined in the Plan) per share of the Company’s
common stock on the date of grant; and (ii) shall vest with respect
to one-quarter of the shares represented by the grant on each
anniversary of the grant until all shares represented by the stock
options are vested and (iii) shall expire upon the tenth
anniversary of the date of the grant of such options, or any later
date made applicable by the terms of the Plan. A form of stock
option award agreement is attached hereto as Exhibit B ,
which Executive agrees to execute and deliver to the Company on the
Effective Date.
(e) No termination or amendment of the Plan will
relieve the Company of its obligations hereunder with respect to
the Company stock options to be granted pursuant to this
Agreement.
(f) The compensation set forth in this Section
3 shall constitute total compensation for the Executive as an
officer, director or employee of the Company or any of the
subsidiaries of the Company, including PSI.
4.
Duties . The Executive shall be employed as Chief Financial
Officer of the Company and as President of PSI, and the Executive
hereby accepts such employment by the Company, of the Company, and
shall have such duties and responsibilities on behalf of the
Company as are customarily performed by individuals holding such
positions in a public company in the oil and gas industry. The
Executive shall devote her entire working time, attention and
energy exclusively to the business of the Company and shall
cooperate fully with the CEO and the Board in the advancement of
the best interests of the Company. The Executive agrees not to
engage in any activities outside of the scope of the
Executive’s employment that would detract from, or interfere
with, the fulfillment of her responsibilities or duties under this
Agreement. The Executive agrees that the Executive will not serve
as a director or the equivalent position of any company or entity,
and will not render services of a business, professional or
commercial nature to any other person or firm, without the prior
written consent of the Board. Notwithstanding the foregoing, the
Executive shall be permitted to serve on the board of directors of
Northern Oil and Gas Company. If elected as a director of the
Company or any of the subsidiaries of the Company, the Executive
agrees to fulfill the duties of such directorships without
additional compensation.
5.
Expenses . Subject to compliance by the Executive with such
policies regarding expenses and expense reimbursement as may be
adopted from time to time by the Company, the Executive is
authorized to incur reasonable expenses in the performance of her
duties hereunder in furtherance of the business and affairs of the
Company, and the Company will reimburse the Executive for all such
reasonable expenses, upon the presentation by the Executive of an
itemized account satisfactory to the Company in substantiation of
such expenses when claiming reimbursement not later than
December 31 of the calendar year following the calendar year
in which the expenses were incurred. The Executive shall be
entitled to a reasonable monthly auto allowance of not less than
$1,000.
6. Employee
Benefits; Vacations . The Executive shall be eligible to
participate in such life insurance, medical and other employee
benefit plans of the Company that may be in effect from time to
time, to the extent she is eligible under the terms of those plans,
on the same basis as similarly-situated executive officers of the
Company. The Company may from time to time modify or eliminate any
or all benefits extended or provided in its sole discretion. The
Executive shall be entitled to four weeks paid vacation per year,
to be taken in accordance with the policies of the Company in
effect from time to time, as determined by the Board.
7.
Termination . Upon termination of the Executive’s
employment, the Executive shall be entitled to any earned but
unpaid base salary, as well as the additional benefits provided
below in this Section 7. All capitalized terms used in this
Section 7 and not previously defined are defined below in
Section 11 .
(a) Termination By the Company for reasons other
than Cause, By the Employee for Good Reason or for Change in
Control . In the event
that the Executive’s employment is terminated by the Company
for reasons other than Cause, the Executive resigns her employment
for Good Reason or if either of the Company or Executive terminate
this Agreement one hundred and twenty (120) days following a Change
of Control, the Executive will be provided a severance package
which shall consist of (A) one and one-half times (1.5x) Executives
annual salary under Section 3(a) on the Termination Date,
(B) a payment equal to one year of employee benefits as provided
under Section 6; (c) payment of COBRA obligations for
eighteen months; and, (D) a payment equal to the prorated portion
of the performance bonus paid to her, if any, in the last full
fiscal year of her employment by the Company, but in no event less
then fifty percent (50% ) of her latest years annual salary. The
severance package shall be divided into two parts. Fifty (50%) of
the severance payment amount shall be paid within sixty (60) days
of the Termination Date and shall be made in exchange for the
signing of a release, in the form of Exhibit B. Fifty (50%) of the
severance payment amount shall be paid, subject to Section 8(c)
hereof, in equal monthly installments over the eighteen (18) month
period following the Termination Date (“Payout
Amount”). The Executive and the Company agree and stipulate
that the foregoing severance benefit is intended to fully
compensate Executive for the consequences suffered by her in the
event of a termination of her employment hereunder by the Company
for reasons other than Cause or by the Executive with Good Reason,
which consequences are uncertain and difficult to prospectively
determine, Such severance is not a penalty, and shall not be
subject to reduction in the event that Executive obtains other
employment during any period over which such severance is
payable.
(b) Termination by the Company for Cause or
Resignation by the Employee. In the event that the Executive’s
employment is terminated by the Company for Cause or the Executive
resigns without Good Reason, the Executive will not be entitled to
a severance package and no payments or benefits hereunder (other
than payment of earned but unpaid base salary) shall be owing or
payable by the Company. In the event the Executive is
terminated for Cause or because of Disability, she will promptly
resign from any officer and/or director positions she may hold at
the Company or any of its subsidiaries.
(c) Termination for Death or Disability.
In the event of the
Executive’s death or Disability, the Company may (in the case
of Disability) terminate the Executive’s employment and its
sole obligation hereunder shall be to continue to pay to the
Executive (or, in the case of death or incompetence, to her
personal representative) her salary under Section 3(a)
hereof for a period of eighteen (18) months following the date of
death or termination. Executive shall also be paid a prorated
portion of her bonus paid in the last full fiscal year.
(d) Pursuant to applicable tax regulations, with
respect to any incentive stock options or nonqualified stock
options granted to the Executive, in the event that the
Executive’s employment is terminated by the Company for Cause
or by Executive without Good Reason all unvested stock options will
be forfeited by the Executive and shall be cancelled. In the event
that the Executive’s employment is terminated by the Company
without Cause or by Executive with Good Reason, all stock options
actually granted prior to such termination date shall immediately
vest. If the Executive’s employment terminates by reason of
death or Disability, the Executive or the Executive’s
personal representative will have twelve (12) months in which to
exercise any vested incentive stock options and, with respect to
vested nonqualified stock options, the Executive or the
Executive’s personal representative will have the remaining
term of the option period in which to exercise the option, and any
unvested stock options as of such date of termination shall be
cancelled. Notwithstanding the provisions of this subsection (c),
in no event may any option be exercised past the expiration date of
the option. The Board may, in its sole discretion, accelerate the
vesting of any unvested options in the event of termination of
employment. The provisions herein relating to the exercise of
options in the event of termination are intended to modify the
provisions of Section 11.2 of Platinum’s 2006 Long-Term
Incentive Plan, as it may be amended (the “Plan”) with
respect to the Executive and are intended to be consistent with the
stock option award agreement issued to Executive and, in the event
of any conflict, the terms of the stock option award agreement
shall govern.
(e) Notwithstanding any termination of the
Executive’s employment for any reason whatsoever (with or
without Cause or Good Reason), the Executive will continue to be
bound by the provisions of the Section 8 below.
(f) All payments and benefits provided pursuant to
subdivisions (a) and (c) of this Section 7 shall be
conditioned upon the Executive’s (or, in the case of her
death or incompetence, the Executive’s personal
representative’s) execution and non-revocation of a general
release substantially in the form attached hereto as Exhibit
B at the time of the completion of all payments pursuant to
subdivisions (a) and (c) of this Section 7 . The
Executive’s refusal to execute such general release shall
constitute a waiver by the Executive of any and all payments and
benefits referenced in this Section 7 .
(g) In the event the Executive materially breaches
the terms of Section 8 below or any of the terms of the
general release shown as Exhibit B , all of the
Company’s obligations to the Executive pursuant to this
Section 7 shall terminate and be void.
8.
Confidentiality, Non-solicitation and Non-competition
.
(a) Confidentiality . The Company
considers the protection of its confidential information and
proprietary materials to be very important. In connection with her
duties, the Company shall provide Executive with Confidential
Information essential and relevant to the performance of job
duties. Other than in the normal course of fulfilling
Executive’s duties to and positions with the Company, its
subsidiaries and affiliates, the Executive in return shall: (i)
receive and hold all Confidential Information absolutely secret,
undisclosed, in trust and in confidence, and shall comply with the
Company’s policies and guidelines and use her best efforts
for the protection of Confidential Information; and (ii) not reveal
or disclose to any person outside the Company (and its subsidiaries
and affiliates) or use for her own benefit, whether by private
communication or by public address or publication or otherwise, any
Confidential Information without the Company’s specific
written authorization or except as required by a mandatory
provision of applicable law, provided however, that prior to any
unauthorized use or disclosure of Confidential Information that is
required by law, the Executive shall, unless prohibited from doing
so by applicable law, use best efforts to give the Company prior
notice of any disclosure of Confidential Information required by
law and shall permit and cooperate with any effort by the Company
to obtain a protective order or similar protection for the
Company.
All Confidential Information, including
originals, copies and other forms thereof, however and whenever
produced, shall be the sole property of the Company and its
subsidiaries and affiliates, not to be removed from the premises or
custody of the Company and its subsidiaries and affiliates, except
in the normal course of business.
(1) “Confidential Information” shall
mean the following information, whether or not originated by the
Executive that relates to the business or affairs of the Company
and its subsidiaries or affiliates:
(i)
“Material Information” meaning any information relating
to the business, operations, capital and affairs of the Company and
its subsidiaries and affiliates that when released would have, or
would reasonably be expected to have, a significant effect on the
market price or value of any of the Company’s securities (or
the securities of other companies with whom the Company may be
conducting confidential negotiations). Material information
consists of both material facts and material changes relating to
the Company’s business, operations, capital and affairs and
includes developments in the Company’s business, operations,
capital and affairs;
(ii)
“Business Opportunities” meaning all business ideas,
prospects, proposals or other opportunities pertaining to the
lease, acquisition, exploration, production, gathering or marketing
of oil and gas and related products and the exploration potential
of geographical areas on which oil and gas exploration prospects
are located, which are developed by the Company (or its
subsidiaries or affiliates) during the term hereof, or originated
by any third party and brought to the attention of the Company (or
its subsidiaries or affiliates) during the term hereof, together
with information relating thereto (including, without limitation,
geological and seismic data and interpretations thereof, whether in
the form of maps, charts, logs, seismographs, calculations,
summaries, memoranda, opinions or other written or charted
means);
(iii)
“Proprietary Information” meaning any and all records,
notes, memoranda, data, ideas, patterns, processes, methods,
techniques, systems, formulas, patents, models, samples, specimens,
devices, programs, computer software, writings, research, personnel
information, plans, customer lists, supplier lists, pricing
materials and policies, purchasing methods and policies, seismic
data, estimated or actual reserve amounts, potential drilling
locations or any other information of whatever nature in the
possession or control of the Company which has not been published
or disclosed to the general public, over which the Company
exercises reasonable efforts to maintain in confidence or which is
the type of information that a similarly situated company would
have an expectation would remain in confidence, and which gives to
the Company an opportunity to obtain an advantage over competitors
who do not know of or currently use such confidential
information.
The above
notwithstanding, information that: (A) was at the time of receipt
by a third person otherwise known to that third person from a
source other than the Executive; (B) has been published or is
otherwise within the public domain, or is generally known to the
public at the time of its disclosure; or (C) becomes known or
available to the recipient from a source other than the Executive,
is not Confidential Information hereunder.
(2) Executive acknowledges and agrees that: (a)
she will receive or will become eligible to receive substantial
benefits and compensation as a result of her employment by the
Company, which benefits and compensation are offered to her only
because and on condition of her willingness to commit her best
efforts and loyalty to the Company (b) as a result of the
acquisition of Confidential Information, the Executive will occupy
a position of trust and confidence with the Company and its
subsidiaries, and affiliates; (c) the Business Opportunities
constitute the exclusive property of the Company; (d) the
Executive’s position of trust and knowledge of Confidential
Information would enable the Executive to put the Company at a
significant competitive disadvantage if the Executive breaches the
restrictions in this Section 8 ; (e) irreparable damage
would result to the Company if the provisions of this Section
8 hereof are not specifically enforced, and the Company shall
be entitled to any appropriate legal, equitable, or other remedy,
including injunctive relief, in respect of any failure or
continuing failure on her part to comply with Section 8: and (g)
any breach of this Section 8 shall constitute grounds for
termination of the Executive’s employment for
Cause.
(b) Non-solicitation . The Executive
covenants and agrees that she will not at any time during her
employment by the Company and for a period of eighteen (18) months
thereafter (the “ Restricted Period ”), solicit,
employ or otherwise, engage, as an employee, independent consultant
or otherwise, any person who is an employee of the Company as of
the Executive’s last day of employment with the Company, or
in any manner induce or attempt to induce any employee of the
Company to terminate his or her employment
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