EXECUTIVE EMPLOYMENT
AGREEMENT
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. Wade Stubblefield, 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.
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.
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.B. Severance: 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.
4.C.&n
