EXHIBIT 10.1
 
 ASPEN EXPLORATION CORPORATION
 
EMPLOYMENT AGREEMENT
 
This Employment Agreement (this “Agreement”), effective August 23, 2010, is by
and between the following parties:
 
Company:
 
Aspen Exploration Corporation, a Delaware corporation, and
 
Executive:
 
Bob Maughmer, an individual resident of the state of Oklahoma.
 
Background
 
A.  
In order to induce Executive to serve as the President and Chief Operating
Officer, the Company desires to provide Executive with compensation and other
benefits on the terms and conditions contained in this Agreement.

 
B.  
Executive is willing to accept such employment and perform services for the
Company on the terms and conditions contained in this Agreement.

 
Agreement
 
In consideration of the mutual promises and consideration described below, the
parties agree as follows:
 
1.  
Employment.  Subject to the terms and conditions of this Agreement, the Company
and Executive agree to enter into an employment relationship whereby Executive
will serve as the Company’s President and Chief Operating Officer.  Executive
will report to the Company’s Chief Executive Officer.  Executive will have such
responsibilities and authority as are consistent with the offices of President
and Chief Operating Officer and as may be determined from time to time by the
Company’s Chief Executive Officer.

 
2.  
Term of Employment.  Executive’s term of employment under this Agreement will
commence on August 23, 2010 and continue until August 22, 2013 (the “End Date”,
and such period, the “Term”), unless otherwise terminated as described in
Section 5 below.  There will not be any automatic renewal of this
Agreement.  Should Executive continue to be employed following the expiration of
the Term, unless Executive enters into another employment agreement, Executive
acknowledges that he will at such time be considered an at-will employee.

 
 
 
 
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3.  
Compensation.

 
a.  
Base Salary.  The Company will pay Executive during the Term an annual base
salary in the amount of $225,000.00 (“Base Salary”).  At each and every July 1
during the Term, the Base Salary will be increased by not less than 5% of the
Base Salary as of June 30 immediately preceding.  Base Salary will be payable in
accordance with the ordinary payroll practices of the Company.

 
b.  
Bonus.  Executive will be eligible each year for a discretionary bonus in
addition to Executive’s Base Salary, which will be awarded in such amounts as
the Company’s board of directors will determine and based upon Executive’s
individual performance and the Company’s financial performance; provided,
however, that with the approval of the Company’s board of directors, the Company
may establish a formula-based bonus for Executive calculated from Company’s
financial performance.  Such bonus for any year, if any, will be paid during the
90-day period beginning February 1of the year immediately after the year for
which the bonus was earned.

 
c.  
Options.  Subject to and in accordance with the Company’s 2010 Stock Incentive
Plan, the Company will grant to Executive an option to acquire 1,000,000 shares
of Company common stock.  The option will expire five years from the date of
grant.  The option will vest pursuant to the following schedule:

 
(i)  
333,333 immediately at the time of the grant;

 
(ii)  
333,333 on the first anniversary of the grant date; and

 
(iii)  
333,334 on the second anniversary of the grant date.

 
d.  
Withholding.  All payments to Executive under this Agreement will be subject to
withholding as required by law.

 
4.  
Employee Benefits.

 
a.  
Benefit Plans.  During the Term, the Company will provide Executive with
coverage under all employee benefit plans available to the Company’s senior
executives to the extent permitted under any such employee benefit plan and in
accordance with the terms thereof.

 
b.  
Automobile.  At all times during the Term, Company will provide Executive with
an automobile allowance of not less than $1,000 per month.

 
c.  
Vacation.  During the term of Executive’s employment under this Agreement,
Executive will be entitled to take four weeks of paid vacation per calendar year
as well as sick leave consistent with the Company’s policy in effect at the
time.  Vacation will be taken at times mutually satisfactory to the Chief
Executive Officer and the Executive.  Executive will not take vacations at times
or in amounts that would materially affect Executive’s ability to perform his
work duties.  Up to 15 days of Executive’s paid vacation may be rolled-over each
year.  Executive will be entitled to payment for any unused vacation days upon
termination of Executive’s employment with Company.

 
 
 
 
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d.  
Expenses.  Executive is authorized to incur reasonable expenses in carrying out
his duties and responsibilities under this Agreement.  The Company will
reimburse Executive for such expenses upon presentation by Executive from time
to time of appropriately itemized and approved accounts of such expenditures
consistent with the Company’s policies and practices.

 
5.  
Termination of Employment.

 
a.  
Termination Without Cause.  If Executive’s employment is terminated by the
Company (other than for Cause), Executive will be entitled to all accrued and
unpaid Base Salary and accrued benefits through the date of termination plus he
will be entitled to receive the following severance benefits:

 
(i)  
Executive will be entitled to his remaining Base Salary through the Term, and

 
(ii)  
Company will provide Executive with the same or similar health care benefits
(including life, dental and vision, if any) as provided to Executive at the time
of termination, such health care benefits to be provided through the Term.

 
Upon termination of Executive’s employment without cause, except for the
obligations set forth in this subsection a., the obligations of the Company to
make any further payments or to provide any further benefits to Executive under
this Agreement will cease and terminate.
 
b.  
Termination By Resignation.  Except as set forth below, if Executive resigns for
any reason, Executive will be entitled to receive only accrued but unpaid Base
Salary and accrued benefits (including vested options pursuant to subsection
3.c. above) through the effective date Executive’s resignation.

 
c.  
Termination For Cause.  The Company will have the right to terminate the
employment of Executive for Cause.  In the event that Executive’s employment is
terminated by the Company for Cause, Executive will be entitled to receive only
accrued but unpaid Base Salary and accrued benefits (including vested options
granted pursuant to subsection 3.c above) through the date of
termination.  Executive will not be entitled to any bonus payments or severance
payments unless agreed to in writing by the Company.  Upon termination of
Executive’s employment for Cause, except as set forth in this subsection c., the
obligations of the Company under this Agreement to make any further payments or
to provide any further benefits to Executive will cease and terminate. As used
in this Agreement, the term “Cause” means as a result of (i) any breach of any
written policy of the Company; (ii) conduct involving moral turpitude,
including, but not limited to, misappropriation or conversion of assets of the
Company (other than immaterial assets); (iii) Executive’s conviction of, or
entry of a plea of nolo contendere to, a felony; and (iv) a material breach of
this Agreement.

 
 
 
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d.  
Permanent Disability.  If Executive is unable to engage in the activities
required by Executive’s job by reason of any medically determined physical or
mental impairment which has lasted or can be expected to last for a continuous
period of not less than three consecutive months (“Permanent Disability”), the
Company or Executive may terminate Executive’s employment on written notice
thereof, and Executive will receive accrued but unpaid Base Salary and accrued
benefits (including vested options pursuant to subsection 3.c. above) through
the date of termination and/or any payments under applicable employee benefit
plans or programs.  Upon termination of Executive’s employment by Permanent
Disability, except as set forth in this subsection d., the obligations of the
Company under this Agreement to make any further payments or to provide any
further benefits to Executive will cease and terminate.

 
e.  
Death.  In the event of Executive’s death during the Term, Executive’s estate or
designated beneficiaries will receive or commence receiving, as soon as
practicable, accrued but unpaid Base Salary through the date of death and any
payments under applicable employee benefit plans or programs (including vested
options pursuant to subsection 3.c. above).  Upon termination of Executive’s
employment by death, except as set forth in this subsection e., the obligations
of the Company under this Agreement to make any further payments or to provide
any further benefits to Executive will cease and terminate.

 
6.  
Nondisclosure of Confidential Information.  During Executive’s employment, and
for a period of two years thereafter, Executive will not, without the prior
written consent of the Manager, use, divulge, disclose or make accessible to any
other person, firm, partnership, corporation or other entity any Confidential
Information pertaining to the business of the Company or any of its affiliates,
except (a) while employed by the Company, in the business of and for the benefit
of the Company, or (b) as required by law.  “Confidential Information” includes
without limitation non-public information concerning the financial data,
business plans, product development (or other proprietary product data),
customer lists, marketing, acquisition and divestiture plans and other
non-public, proprietary and confidential information of the Company.  Executive
or his legal representatives, heirs or designated beneficiaries must return all
Confidential Information within 15 days of the termination of Executive’s
employment for any reason.  Executive acknowledges that this Section 6 survives
the termination of Executive’s employment and is enforceable by the Company at
anytime, regardless of whether the Executive continues to be employed by the
Company.

 
7.  
Non-Competition and Non-Solicitation.

 
a.  
From the date hereof through the End Date or, in the event Executive’s
employment is terminated pursuant to Section 5.c. hereof, from the date hereof
through the first anniversary of Executive’s termination of employment with the
Company, Executive agrees that, without the prior written consent of the Chief
Executive Officer, he will not (i) engage in or have any direct interest in, as
an employee, officer, director, agent, subcontractor, consultant, security
holder, partner, creditor or otherwise, any business in competition with the
Company; (ii) cause or attempt to cause any person who is, or was at any time
during the six months immediately preceding the time of the solicitation or
hiring of Executive, an employee of the Company to leave the employment of the
Company; or (iii) solicit, divert or take away, or attempt to take away, the
business or patronage of any client, customer or account, or prospective client,
customer or account, of the Company.

 
 
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b.  
For purposes of this Section 7, a business will be deemed to be in competition
with the Company if it is in the business of providing services to oil and/or
gas production companies.

 
c.  
Executive acknowledges that this Section 7 survives the termination of
Executive’s employment and is enforceable by the Company at anytime, regardless
of whether the Executive continues to be employed by the Company.

 
d.  
Executive and the Company agree that this covenant not to compete is a
reasonable covenant under the circumstances with respect to both scope and
duration, and further agree that if in the opinion of any court of competent
jurisdiction such restraint is not reasonable in any respect, such court will
have the right, power and authority to excise or modify such provision or
provisions of this covenant as to the court will appear not reasonable and to
enforce the remainder of the covenant as so amended.

 
e.  
Executive agrees that any breach of the covenants contained in this Section 7
would irreparably injure the Company.  Accordingly, Executive agrees that the
Company may, in addition to pursuing any other remedies it may have in equity,
obtain an injunction against Executive from any court having jurisdiction over
the matter restraining any further violation of this Agreement by Executive and
cease making any payments otherwise required by this Agreement.

 
8.  
Ownership of Intellectual Property.  Executive acknowledges and agrees that all
intellectual property created, acquired, adapted, modified or improved, in whole
or in part, by or through the efforts of Executive during the course of his
employment by the Company, including without limitation all copyrights, patents,
trademarks, service marks, trade secrets, know-how or other work product in any
way related to the Company’s operations and activities, are works for hire and
are owned exclusively by the Company, and Executive hereby disclaims any right
or interest in or to any such intellectual property.

 
 
 
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9.  
Miscellaneous.

 
a.  
All notices and other communications required or to be given under this
Agreement will be in writing and given either (i) by personal delivery against a
receipted copy, (ii) by certified or registered United States mail, return
receipt requested, postage prepaid, (iii) by facsimile, or (iv) by attachment to
electronic mail in PDF or similar file format, at the addresses and numbers set
forth on the signature page hereto or such other addresses and numbers as a
party hereto may provide in accordance with this subsection a.  Notice will be
deemed delivered when received if by personal delivery; three days after
placement with the United States Postal Service if mailed; upon receipt of a
confirmation that the transmission has been successfully sent if by facsimile;
and when sent if sent by electronic mail.

 
b.  
This Agreement, along with any amendments from time to time made hereto,
constitutes the full, entire and integrated agreement between the parties hereto
with respect to the subject matter hereof.

 
c.  
This contract will be binding upon and inure to the benefit of the heirs and
representatives of Executive and the assigns and successors of the Company, but
neither this Agreement nor any rights or obligations hereunder will be
assignable by Executive (except by will or by operation of the laws of intestate
succession) or by the Company, except that the Company may assign this Agreement
to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or businesses of the Company, if such
successor expressly agrees to assume the obligations of the Company hereunder.

 
d.  
Whenever possible, each provision of this Agreement will be interpreted in such
manner as to be effective and valid under applicable law, but if any clause or
provision of this Agreement is held illegal, invalid or unenforceable then it is
the intention of the parties hereto that the remainder of this Agreement will
not be affected thereby.  It is also the intention of the parties to this
Agreement that in lieu of each clause or provision of this Agreement that is
illegal, invalid or unenforceable, there be added, as a part of this Agreement,
a clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be legal, valid and enforceable.

 
e.  
The respective rights and obligations of the parties hereunder will survive any
termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations.  The provisions of this subsection
e. are in addition to the survivorship provisions of any other section of this
Agreement.

 
f.  
No provision of this Agreement may be amended, waived or otherwise modified
without the prior written consent of all of the parties hereto.

 
g.  
The waiver by any party hereto of a breach of any provision or condition
contained in this Agreement will not operate or be construed as a waiver of any
subsequent breach or of any other conditions hereof.

 
 
 
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h.  
This Agreement may be executed in any number of counterparts, each of which will
be deemed to be an original and all of which together will be deemed to be one
and the same instrument.

 
i.  
This Agreement was made in the state of Colorado, and will be governed by,
construed, interpreted and enforced in accordance with the laws of the state of
Colorado.

 

 
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Signature Page
to Employment Agreement
 
The parties hereto have executed or caused to be executed this Employment
Agreement effective as of the date first above written.
 

  Company:           Aspen Exploration Corporation, a Delaware corporation     
     
 
By:
/s/   Michael D. Herman       Michael D. Herman, Chairman and CEO            
Executive:                 /s/   Bob Maughmer        Bob Maughmer