Exhibit 10.5

 
SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS
 
This Separation Agreement and General Release of Claims (this “Agreement”) is
made by and between Byron A. Dunn (“EMPLOYEE”) and CAMAC Energy Inc. (“COMPANY”)
effective as of April 11, 2011 (the “Effective Date”).
 
 
WITNESSETH
 
1.           Whereas, EMPLOYEE and COMPANY entered into an employment agreement
effective September 21, 2010 (the “Employment Agreement”); and
 
2.           Whereas, EMPLOYEE is resigning his employment from the COMPANY and
from his position on the Board of the COMPANY effective as of the Effective
Date; and
 
3.           Whereas, EMPLOYEE and COMPANY desire to clarify EMPLOYEE’s
obligations with respect to any trade secrets and/or proprietary and
confidential information acquired during EMPLOYEE’s employment; and
 
4.           Whereas, EMPLOYEE desires to release any claims or causes of action
EMPLOYEE may have against the COMPANY, including without limitation those that
may have arisen from EMPLOYEE’s employment or the end of EMPLOYEE’s employment
with the COMPANY; and
 
5.           Whereas, COMPANY desires to release any claims or causes of action
COMPANY may have against EMPLOYEE.
 
Now, therefore, for and in consideration of the mutual covenants and promises
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, EMPLOYEE and the
COMPANY hereby agree:
 
Section  1. Severance and Other Benefits.  The COMPANY, in exchange for the
promises of EMPLOYEE contained below, agrees as follows:
 
A.  COMPANY agrees to pay EMPLOYEE the total amount of $600,000.00 less any
legally required deductions and withholdings.  This amount will be paid in two
separate installments.   A first payment of $400,000.00, minus any applicable
deductions and withholdings, will be made on the first business day following
the expiration of the EMPLOYEE’s revocation option set forth in Section 5(C)
below.  A second payment of $200,000.00, minus applicable deductions and
withholdings, will made within ninety (90) days after the Effective Date.
 
B.  During the portion, if any, of the eighteen-month period following the
Effective Date that EMPLOYEE elects to continue coverage for EMPLOYEE and
EMPLOYEE’s eligible dependents under the COMPANY’s group health and dental plans
under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”) and/or Sections 601 through 608 of the Employee Retirement Income
Security Act of 1974, as amended, the COMPANY shall reimburse Executive on a
monthly basis for the premium costs paid by EMPLOYEE in order to continue such
health and/or dental coverage (the “COBRA Reimbursement”).  The COMPANY shall
provide the COBRA reimbursement within five days after EMPLOYEE submits
documentation to the COMPANY evidencing his monthly payments to elect applicable
continuation coverage; provided, however, that EMPLOYEE must submit such
documentation within (30) days of his applicable payments, and provided further
that the COMPANY shall have no obligation to make the COBRA Reimbursements
described above as of the date that EMPLOYEE becomes eligible to participate in
another entity’s health and/or dental insurance coverage, as applicable (which
such eligibility shall be promptly reported by EMPLOYEE to the COMPANY).
 
 
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C.  Upon expiration of the EMPLOYEE’s revocation option set forth in Section
5(C), the 250,000 shares of restricted stock issued to EMPLOYEE pursuant to
Section 3(d)(i) of the Employment Agreement and issued in accordance with the
COMPANY’s 2009 Equity Incentive Plan (the “Plan”) shall become fully vested
pursuant to the terms of the Plan, and all restrictions relating to such shares
under the Plan shall be released.  Within five business days thereafter, COMPANY
shall deliver to EMPLOYEE a certificate evidencing such shares free and clear of
any restriction upon transfer; provided, however, that such shares shall
continue to be subject to the transfer restrictions and reporting requirements
set forth in Section 16 of the Securities Exchange Act of 1934, and any other
state or federal laws applicable to the transfer of securities.
 
D.  COMPANY acknowledges and agrees that EMPLOYEE shall remain covered by
COMPANY’S Directors and Officers Errors and Omissions Liability Insurance (the
“Insurance Policy”) to the extent applicable under that Insurance Policy with
regard to legal proceedings EMPLOYEE may become a party to that relate to
matters occurring during the time when EMPLOYEE was employed by the COMPANY.
 
E.      COMPANY shall pay in accordance with its normal payroll procedures, the
base salary payable to EMPLOYEE under the Employment Agreement accruing prior to
the Effective Date and shall reimburse EMPLOYEE for all ordinary business
expenses in accordance with COMPANY’s business expense reimbursement
policy.  EMPLOYEE shall submit evidence of reimbursable business expenses
incurred prior to the Effective Date within 10 business days after the Effective
Date and COMPANY shall reimburse such business expenses within five business
days after receipt of such evidence.
 
Section  2. Prior Rights and Obligations.  Except as provided for in this
Agreement, this Agreement extinguishes all rights, if any, which EMPLOYEE may
have, contractual or otherwise, relating to his employment with the COMPANY,
including any rights to severance benefits under the Employment
Agreement.  EMPLOYEE expressly acknowledges and agrees that his employment will
end, or has ended, as of the Effective Date and that he has not vested, and will
not vest, in the stock options referenced in Section 3(d) of the Employment
Agreement.  Further, in entering this Agreement, EMPLOYEE expressly acknowledges
and agrees that he has received all leaves (paid and unpaid) and compensation
that he is owed (other than sums that he is owed under this Agreement) as a
result of, or arising out of, his employment with the COMPANY.
 
Section  3. Resignation.  Effective as of the Effective Date, EMPLOYEE has
resigned from his employment with the COMPANY and from the Board of Directors of
the COMPANY (the “Board”).
 
Section  4. Release by Employee.  EMPLOYEE hereby releases and discharges the
Company, the Board, their predecessors, successors, affiliates, subsidiaries and
each of their respective owners, partners, officers, directors, members,
employees, agents, attorneys, successors, administrators and insurers
(collectively the “Company Parties”), from any and all claims, demands,
liabilities and causes of action, whether statutory or common law, including,
but not limited to, any claim for salary, benefits, payments, expenses, costs,
damages, penalties, compensation, remuneration, contractual entitlements; and
all claims or causes of action relating to any matter occurring on or prior to
the date that EMPLOYEE executed this Agreement, including without limitation any
claim arising out of, or relating to:  (i) the Age Discrimination in Employment
Act of 1967, as amended; (ii) Title VII of the Civil Rights Act of 1964, as
amended; (iii) the Civil Rights Act of 1991; (iv) Sections 1981 through 1988 of
Title 42 of the United States Code, as amended; (v) the Employee Retirement
Income Security Act of 1974, as amended; (vi) the Immigration Reform Control
Act, as amended; (vii) the Americans with Disabilities Act of 1990, as amended;
(viii) the National Labor Relations Act, as amended; (ix) the Occupational
Safety and Health Act, as amended; (x) the Family and Medical Leave Act of 1993,
as amended; (xi) any state or federal anti-discrimination law; (xii) any other
local, state or federal law, regulation or ordinance; (xiii) any public policy,
contract, tort, or common law claim; (xiv) any allegation for costs, fees, or
other expenses including attorneys’ fees incurred in the matters referenced
herein; and (xv) any and all claims EMPLOYEE may have arising as the result of
any alleged breach of any contract, incentive compensation plan or agreement,
restricted unit agreement, or stock option plan or agreement with any Company
Party including, without limitation the Employment Agreement (collectively, the
“Released Claims”).  This Agreement is not intended to indicate that any such
claims exist or that, if they do exist, they are meritorious.  Rather, EMPLOYEE
is simply agreeing that, in exchange for the consideration recited in Section 1
of this Agreement, any and all potential claims of this nature that EMPLOYEE may
have against the Company Parties, regardless of whether they actually exist, are
expressly settled, compromised and waived.
 
 
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(b)     Notwithstanding this release of liability, nothing in this Agreement
prevents EMPLOYEE from filing any non-legally waivable claim, including a
challenge to the validity of this Agreement with the Equal Employment
Opportunity Commission (“EEOC”) or comparable state or local agency, or
participating in any investigation or proceeding conducted by the EEOC or
comparable state or local agency; however, EMPLOYEE understands and agrees that
he is waiving any and all rights to recover any monetary or personal relief or
recovery as a result of such EEOC or comparable state or local agency proceeding
or subsequent legal actions.  Further, in no event shall the Released Claims
include any claim which arises after the date this Agreement is executed by
EMPLOYEE, including any claim to enforce EMPLOYEE’S rights under this Agreement.
 
Section  5. ADEA Rights.  EMPLOYEE further acknowledges that:
 
A.  He has been advised in writing by virtue of this Agreement that he has the
right to seek legal counsel, and he has sought such counsel, before signing this
Agreement.
 
B.  He has been given twenty-one (21) days within which to consider the waivers
included in this Agreement. If EMPLOYEE chooses to sign the Agreement at any
time prior to that date, it is agreed that EMPLOYEE signs willingly and
voluntarily and expressly waives his right to wait the entire twenty-one (21)
day period as provided in the law.
 
C.  EMPLOYEE has seven (7) days after signing this Agreement to revoke it.  This
Agreement will not become effective or enforceable until the revocation period
has expired. Any notice of revocation of the Agreement is effective only if
given to Clark R. Moore, Esq., Corporate Counsel and Secretary of the COMPANY
(at the address of the COMPANY set forth below), in writing by the close of
business on the seventh (7th) day after EMPLOYEE’S signing of this Agreement.
EMPLOYEE acknowledges and agrees that if he chooses to revoke his acceptance of
this Agreement, he will not receive the payments and benefits set forth in
Section 1.
 
D.  EMPLOYEE agrees that he is receiving, pursuant to this Agreement,
consideration greater than anything of value to which he is already entitled.
 
Section  6. Release by Company.  COMPANY hereby releases and discharges the
EMPLOYEE, his successors, administrators and legal representatives (collectively
the “Employee Parties”), from any and all claims, demands, liabilities and
causes of action, whether statutory or common law, including, but not limited
to, any claim for losses, expenses, costs, damages, penalties, and all claims or
causes of action relating to any matter occurring on or prior to the date that
EMPLOYEE executed this Agreement, including without limitation any claim arising
out of, or relating to:  (i) any public policy, contract, tort, or common law
claim, including, without limitation, any claim for breach of a fiduciary duty
or other obligation to COMPANY and any claims arising under or based upon the
Employment Agreement; and (ii) any allegation for costs, fees, or other expenses
including attorneys’ fees incurred in the matters referenced herein
(collectively, the “Released Claims”).  This Agreement is not intended to
indicate that any such claims exist or that, if they do exist, they are
meritorious.  Rather, COMPANY is simply agreeing that, in exchange for the
promises of EMPLOYEE in this Agreement, any and all potential claims of this
nature that COMPANY may have against the Employee Parties, regardless of whether
they actually exist, are expressly settled, compromised and waived.
 
Section  7. Continuation of Indemnity Rights.  COMPANY agrees that EMPLOYEE
shall, notwithstanding EMPLOYEE’s resignation and the terms of this Agreement,
continue to be the beneficiary of any Indemnity provisions in the COMPANY’s
Articles of Incorporation or Bylaws and any Indemnity Agreement executed by
EMPLOYEE and COMPANY prior to the date hereof.
 
Section  8. Opportunity to Consult with Professional Advisors.  EMPLOYEE
expressly acknowledges and agrees that he has had the opportunity to consult
with, and has consulted with independent legal, tax and other professional
advisors of his choosing with regard to his entry into this Agreement and the
consequences thereof. EMPLOYEE acknowledges and agrees that he enters into this
Agreement knowingly and voluntarily with full understanding of the claims
released herein and the tax consequences of the payments and benefits to be
received by him hereunder.
 
 
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Section  9. Proprietary and Confidential Information.  EMPLOYEE agrees and
acknowledges that, during the course of his employment with the COMPANY, he has
acquired information regarding the COMPANY’s trade secrets and/or proprietary
and confidential information related to the COMPANY’s past, present and
anticipated business.  Therefore, except as may be required by law, EMPLOYEE
acknowledges that EMPLOYEE will not, at any time, disclose to others, permit to
be disclosed, used, permit to be used, copy or permit to be copied, any trade
secrets and/or proprietary and confidential information acquired during his
employment with the COMPANY.
 
Section  10. Amendments.  This AGREEMENT may only be amended in writing signed
by EMPLOYEE and an authorized officer of the COMPANY.
 
Section  11. Confidentiality.  COMPANY agrees it will, that the Company Parties
not, and that any person acting on behalf of the COMPANY or the Company Parties
will not, and EMPLOYEE agrees that he will not and that any person acting on
EMPLOYEE’s behalf will not, directly or indirectly, speak about, disclose or in
any way, shape or form communicate to anyone, except as permitted in this
Section, the terms of this AGREEMENT or the consideration paid under this
Agreement.  COMPANY and EMPLOYEE agree that the above described information may
be disclosed only as follows:
 
A.  to the extent as may be required by law to support the filing of EMPLOYEE’S
or COMPANY’s income tax returns or any legally required disclosures or legal
filings;
 
B.  to the extent as may be compelled by legal process;
 
C.  to the extent necessary to EMPLOYEE’s legal or financial advisors, but only
after such person to whom the disclosure is to be made agrees to maintain the
confidentiality of such information and to refrain from making further
disclosures or use of such information.
 
Section  12. Non-disparagement.
 
A.  EMPLOYEE shall not make any unfavorable or unflattering statements about the
Company Parties including, but not limited to, comments about the conduct of
other employees or Board members.  EMPLOYEE agrees that he will not disparage,
criticize, condemn or impugn the business or personal reputation or character of
the COMPANY or any affiliated company, or any present or former COMPANY
employees or Board members, or any employees or board members of any affiliated
companies, or any of the actions which are, have been or may be taken by the
COMPANY with respect to or based upon matters, events, facts or circumstances
arising or occurring prior to the date of execution of this AGREEMENT.  In
response to inquiries, EMPLOYEE may respond that he voluntarily resigned his
employment from the COMPANY and membership on the Board for personal reasons.
 
B.  COMPANY shall not make any unfavorable or unflattering statements about the
EMPLOYEE including, but not limited to, comments regarding the conduct of
EMPLOYEE and shall provide only confirmation of employment dates and
compensation level to any person to whom COMPANY provides information about
EMPLOYEE’s employment by COMPANY.  COMPANY agrees that it will not disparage,
criticize, condemn or impugn the business or personal reputation or character of
EMPLOYEE.  In response to any inquiries, COMPANY may respond that EMPLOYEE
voluntarily resigned his employment with the COMPANY and membership on the Board
for personal reasons.
 
Section  13. Cooperation.  EMPLOYEE shall cooperate with the COMPANY to the
extent reasonably required by the COMPANY in all matters relating to the winding
up of his pending work on behalf of the Company and the orderly transfer of any
such pending work.  COMPANY hereby agrees to indemnify EMPLOYEE in connection
with all such lawful actions which EMPLOYEE shall take after the Effective Date
in performing such cooperation requested by the COMPANY. EMPLOYEE agrees to
immediately notify the COMPANY, if he is served with legal process to compel him
to disclose any information related to his employment with the Company, unless
prohibited to do so by law.
 
 
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Section  14. Documents.  EMPLOYEE agrees to deliver at the termination of
employment all correspondence, memoranda, notes, records, data, or information,
analysis, or other documents and all copies thereof, including information in
electronic form, which are related in any manner to the past, present or
anticipated business of the COMPANY or its affiliated companies.
 
Section  15. Enforcement of Agreement and Release.  Should any provisions of
this Agreement be held invalid or wholly or partially unenforceable, such
holdings shall not invalidate or void the remainder of this Agreement.  Portions
held to be invalid or unenforceable shall be revised and reduced in scope as to
be valid and enforceable, or if such is not possible, then such portion shall be
deemed to have been wholly excluded with the same force and effect as if they
had never been included herein.
 
Section  16. Notices. Any notice, request, demand, waiver or consent required or
permitted hereunder shall be in writing and shall be given by prepaid registered
or certified mail, with return receipt requested, addressed as follows:
 

 
For the COMPANY:
 
1330 Post Oak Blvd., Suite 2575
Houston, Texas 77056
Attn:  Chief Executive Officer

With a copy to the General Counsel
         
For the EMPLOYEE:
 
Byron Dunn
c/o Chris C. Pappas
Kane Russell Coleman & Logan PC
919 Milam Street, Suite 2200
Houston, Texas 77002
 

 
The date of any such notice and of such service thereof shall be deemed to be
the date of mailing.  Each party may change its address for the purpose of
notice by giving notice to the other in writing.
 
Section  17. Choice of Law. It is agreed that the laws of Texas shall govern
this Agreement and that venue for any claim necessary to enforce the provisions
of this Agreement shall be proper in state or federal courts located in Harris
County, Texas.
 
Section  18. Remedies. The Parties agree that because damages at law for any
breach or nonperformance of this Agreement by EMPLOYEE, while recoverable, will
be inadequate, this Agreement may be enforced in equity by specific performance,
injunction, or otherwise. Should any provisions of this Agreement be held to be
invalid, such holdings shall not invalidate or void the remainder of this
Agreement.  EMPLOYEE shall be entitled to enforce his rights and the COMPANY’s
obligations under this Agreement by any and all applicable actions at law or
equity.
 
Section  19. Announcement.  EMPLOYEE shall be entitled to review and comment
upon the 8-K notice of his retirement to be issued by the COMPANY and any press
release by the COMPANY announcing his resignation of employment and resignation
as a member of the Board.
 
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IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED THIS AGREEMENT AND RELEASE AS OF
THE EFFECTIVE DATE.

EMPLOYEE
 

By: 
/s/ Byron A. Dunn  
 
April 11, 2011
   
Byron A. Dunn
 
DATE
   
 
 
 
 

 
THE COMPANY
 

By:  /s/ Kase Lawal    April 11, 2011     Kase Lawal   DATE    
Chairman of the Board
CAMAC Energy, Inc.
 
 
 

 
 
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