EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “ Agreement ”), dated October 10, 2013, with an
Effective Date of September 9, 2013 (the “Effective Date”), by and between
Torchlight Energy Resources, Inc., a Nevada corporation with principal executive
offices at 5700 W. Plano Pkwy, Ste. 3600, Plano, TX  75093 (the “Company ”), and
Roger Wurtele, of 5913 Glen Heather Drive, Plano, Texas 75093 (the “Employee”)
(each of which a “Party” or, collectively, the “Parties”).

 

W I T N E S S E T H:

WHEREAS, the Company desires to employ Employee for management and executive
services, and Employee desires to serve the Company in those capacities, upon
the terms and subject to the conditions contained in this Agreement;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the Parties hereto hereby agree as follows:

1.   Employment.

(a)

Services. Upon effective date, Employee will be employed by the Company as the
Chief Financial Officer to provide services related to all Company financial
dealings.  Employee will report to the President of the Company with primary
direction being given by the President and the Company’s Board.  Employee agrees
to perform such Services faithfully, to devote a significant portion of his
working time, attention and energies to the business of the Company, and while
remaining employed, to not engage in any other business activity that directly
conflict with his duties and obligations to the Company.   At the commencement
of the Term, Employee shall be made an employee of the Company and shall be and
remain employed by the Company.        

(b)

Acceptance. At the commencement of the Term, Employee hereby accepts such
employment and agrees to render the Services.

(c)

Independent Investment Activities

Notwithstanding any provision to the contrary herein, Employee shall be free to
engage in any independent investment activity, provided such independent
investment activities are not in conflict with his duties and obligations to the
Company.  To the extent that Employee has any prospective investment or other
activities in fields of operations of the Company, then Employee shall first
notify the Chief Executive Officer and shall present such opportunity to the
Company.  The Company shall have fifteen (15) days to accept or reject such
opportunity.  If the Company elects not to proceed with such opportunity after
the fifteen (15) day period, then Employee shall be free to pursue such
opportunity independently.  

 

2.   Term of Employment. The term of employment (the "Term") shall commence on
the effective date and shall continue for a term of three (3) years, unless
sooner terminated pursuant to Section 9 of this Agreement. Notwithstanding
anything to the contrary contained herein, the provisions of this Agreement
governing protection of Confidential Information shall continue in effect as
specified in Section 5 hereof and survive the expiration or termination here.
The Term may be extended for additional one (1) year periods upon mutual written
consent of Employee and the Board.  

3.   Best Efforts; Place of Performance. Employee shall devote his business
time, attention and energies to the business and affairs of the Company, and
shall use his commercially reasonable best efforts to advance the lawful
interests of the Company and shall not during the Term be actively engaged in
any other business activity that will adversely interfere with the performance
by Employee of his duties hereunder or Employee’s availability to perform such
duties or that will adversely affect, or negatively reflect upon the Company.
 The duties to be performed by the Employee hereunder shall be performed
primarily at the office of the Company in Plano, TX subject to reasonable travel
requirements on behalf of the Company.

Employment Agreement  1

--------------------------------------------------------------------------------

 

4.   Compensation. As compensation for the performance by Employee of the duties
under this Agreement, the Company shall pay Employee as follows:

 

(a)   Base Fees.   The Company shall pay Employee Base Fees (the “Base Fees”)
equal to $120,000 per year. Payment shall be made monthly, on the last day of
each calendar month.  The Employee will be entitled to increases in Base Fees
subject to the following provisions:

a.

Employee will be entitled to an increase of $2,500.00 per month when the Company
and its affiliates achieve 500 Barrels of Oil or Gas Equivalent Per Day (BOEPD)
in net production to the Company and its affiliates;

b.

Employee will be entitled to an additional increase of $2,500.00 per month when
the Company and its affiliates achieve 750 Barrels of Oil or Gas Equivalent Per
Day (BOEPD) in net production to the Company and its affiliates; and

c.

Employee will be entitled to an additional increase of $2,500.00 per month when
the Company and its affiliates achieve 1000 Barrels of Oil or Gas Equivalent Per
Day (BOEPD) in net production to the Company and its affiliates.

(b)   Discretionary Bonus. Employee shall be eligible to receive an additional
annual bonus (the “Discretionary Bonus”) in an amount up to 25% of the Base
Fees, based upon performance on behalf of the Company during the prior year.
Factors to be considered by the Board of Directors shall include, but not be
limited to, significant growth in the Company’s market capitalization, the
liquidity and performance of the Company’s Common Stock as well as any financing
received by the Company from third parties introduced to the Company by
Employee.  The Discretionary Bonus shall be payable either as a lump-sum payment
or in installments as determined by the Board of Directors of the Company in its
sole discretion.  In addition, the Board of Directors of the Company shall
annually review the Bonus to determine whether an increase in the amount thereof
is warranted. For the purposes of calculating the first year’s bonus, the
Effective Date shall be used as the starting point for calculation.  

 

(c)

Withholding; Employee Status. The Company shall withhold applicable federal,
state and local taxes and social security and such other amounts as may be
required by law from all amounts payable to Employee under this Section 4.
 Employee shall be classified as a W-2 employee and Company agrees to pay all
employer-based taxes levied by any and all governmental agencies.  Company
hereby agrees to indemnify, defend, and pay all taxes and expenses of Employee
for any claims made by any governmental agency that: (i) Employee is an
independent contractor relative to the payments made under this Section 4 and is
charged self-employment tax, and/or (ii) any taxes withheld have not been
remitted to the appropriate governmental agency.   

 

(d)   Stock Options.  As additional compensation for the services to be rendered
by Employee pursuant to this Agreement, the Company shall grant to Employee
stock options to purchase a total of 300,000 shares of Common Stock of the
Company for five years at a price equal to $2.09 per share (the “Stock
Options”).  At signing, the Company shall issue Employee the 300,000 Stock
Options. 100,000 of the Stock Options will vest immediately with the balance of
the Stock Options to vest based on the following milestones:  

(i)

On the first anniversary of employment, the second 100,000 Stock Options shall
vest; and

(ii)

On the second anniversary date of employment, the third 100,000 Stock Options
shall vest.

The Stock Options will be in addition to and not in lieu of any stock issued
pursuant to an ESOP, 401K, or other retirement plan as the Company may make
generally available to senior executives or other employees.

All Stock Options not vested at the occurrence of any of the following shall
vest in full at such occurrence:

(i)

  Death or disability

(ii)

  Change in control

Employment Agreement  2

--------------------------------------------------------------------------------

(e)   Expenses. The Company shall reimburse Employee for all normal, usual and
necessary expenses incurred by Employee in furtherance of the business and
affairs of the Company, including reasonable travel and entertainment, upon
timely receipt by the Company of appropriate vouchers or other proof of
Employee’s expenditures and otherwise in accordance with any expense
reimbursement policy as may from time to time be adopted by the Company, but, in
no event, will Employee be reimbursed less frequently than monthly.

 

(f)   Other Benefits. Employee shall be entitled to all rights and benefits
under any benefit or other plan (including, without limitation, dental, medical,
medical reimbursement and hospital plans, pension plans, employee stock purchase
plans, profit sharing plans, bonus plans and other so-called "fringe" benefits)
as the Company shall make available to its senior executives from time to time.

 

(g)   Vacation. Employee shall, during the Term, be entitled to a vacation of
four weeks (4) per annum, in addition to holidays observed by the Company.
Employee shall not be entitled to carry any vacation forward to the next year of
employment and shall not receive any compensation for unused vacation days.

(h)  COLA.  All monetary compensation hereunder shall be reviewed by the Board
of Directors for inflation on a yearly basis or more frequently if inflation is
at an abnormally high level.  If the Consumer Price Index (“CPI”), as published
by the United States Government, rises significantly, the Board of Directors
will reevaluate compensation and, if feasible given the financial condition of
the Company, upwardly adjust compensation hereunder.   

5.   Confidential Information.

 

(a)   Employee recognizes and acknowledges that in the course of his duties he
is likely to receive confidential or proprietary information owned by the
Company, its affiliates or third Parties with whom the Company or any such
affiliates has an obligation of confidentiality.  Accordingly, during and after
the Term, Employee agrees to keep confidential and not disclose or make
accessible to any other person or use for any other purpose other than in
connection with the fulfillment of his duties under this Agreement, any
Confidential and Proprietary Information (as defined below) owned by, or
received by or on behalf of, the Company or any of its affiliates. “Confidential
and Proprietary Information” shall include, but shall not be limited to,
confidential or proprietary scientific or technical information, data, business
plans (both current and under development), trade secrets, or any other
confidential or proprietary business information relating to development
programs, costs, revenues, investments,  credit and financial data, financing
methods, or the business and affairs of the Company. Employee agrees to return
immediately all Company material and reproductions (including but not limited,
to writings, correspondence, notes, drafts, records, invoices, technical and
business policies, computer programs or disks) thereof in Employee’s possession
to the Company upon request and in any event immediately upon termination of
employment.

 

(b)   Except with prior authorization by the Company or in furtherance of
Employee’s duties as an executive of the Company, Employee agrees not to
disclose or publish any of the Confidential and Proprietary Information, or any
confidential, scientific, technical or business information of any other Party
to whom the Company or any of its affiliates owes an obligation of confidence,
at any time during or after his employment with the Company.

(c)    Notwithstanding the foregoing, the following shall not be considered to
be Confidential Information:  (i) information publicly available; (ii)
information which becomes available to Employee on a non-confidential basis from
sources other than Company, provided such Employee does not know or have reason
to know that such sources are prohibited by contractual, legal or fiduciary
obligation from transmitting such information to Employee; (iii) and information
that was lawfully in the possession of a Employee prior to the Effective Date of
this Agreement, provided such Confidential Information was not provided to
Employee by Company.   Company acknowledges that Employee is bringing with him
certain contacts and industry knowledge.  Such information shall not be the
Confidential Information of Company, but shall remain the confidential
information of Employee.

(d)   The provisions of this Section 5 shall survive any termination of this
Agreement.

Employment Agreement  3

--------------------------------------------------------------------------------

 

6.   Non-Competition, Non-Solicitation and Non-Disparagement.

 

(a)  Employee understands and recognizes that his services to the Company are
special and unique and that in the course of performing such services Employee
will have access to and knowledge of Confidential and Proprietary Information
(as defined in Section 5) and Employee agrees that, during the Term and for a
period of twelve (12) months thereafter, he shall not in any manner, directly or
indirectly, on behalf of himself or any person, firm, partnership, joint
venture, corporation or other business entity (“Person”), enter into or engage
in any business which is engaged in any business directly or indirectly
competitive with the business of the Company, either as an individual for his
own account, or as a partner, joint venturer, owner, executive, employee,
independent contractor, principal, agent, consultant, officer, director or
shareholder of a Person in a business competitive with the Company within the
geographic area of the Company’s business.   The Company acknowledges the need
for Employee to be employed in his profession and, for the purposes of this
Agreement, competition shall mean pursuing oil and gas opportunities that
compete directly with the same specific projects that Employee was exposed to as
an Employee.  

 

(b)   During the Term and for a period of 12 months thereafter, Employee shall
not, directly or indirectly, without the prior written consent of the Company,
solicit or induce any employee of the Company or any of its affiliates to leave
the employ of the Company or any such affiliate; or hire for any purpose any
employee of the Company or any affiliate or any employee who has left the
employment of the Company or any affiliate within one year of the termination of
such employee’s employment with the Company or any such affiliate or at any time
in violation of such employee’s non-competition agreement with the Company or
any such affiliate

 

(c)   The Company and Employee each agree that both during the Term and at all
times thereafter, neither party shall directly or indirectly disparage, whether
or not true, the name or reputation of the other party or any of its affiliates,
including but not limited to, any officer, director, employee or shareholder of
the Company or any of its affiliates.

 

(d)   In the event that Employee breaches any provisions of Section 5 or this
Section 6 or there is a threatened breach, then, in addition to any other rights
which the Company may have, the Company shall be entitled to injunctive relief
to enforce the restrictions contained in such Sections.

(e)   Each of the rights and remedies enumerated in Section 6(d) shall be
independent of the others and shall be in addition to and not in lieu of any
other rights and remedies available to the Company at law or in equity.  If any
of the covenants contained in this Section 6, or any part of any of them, is
hereafter construed or adjudicated to be invalid or unenforceable, the same
shall not affect the remainder of the covenant or covenants or rights or
remedies which shall be given full effect without regard to the invalid
portions.  If any of the covenants contained in this Section 6 is held to be
invalid or unenforceable because of the duration of such provision or the area
covered thereby, the parties agree that the court making such determination
shall have the power to reduce the duration and/or area of such provision and in
its reduced form such provision shall then be enforceable.  No such holding of
invalidity or unenforceability in one jurisdiction shall bar or in any way
affect the Company’s right to the relief provided in this Section 6 or otherwise
in the courts of any other state or jurisdiction within the geographical scope
of such covenants as to breaches of such covenants in such other respective
states or jurisdictions, such covenants being, for this purpose, severable into
diverse and independent covenants.

 

(g)   The provisions of this Section 6 shall survive any termination of this
Agreement unless terminated pursuant to Sections 9(c) and (d) upon which
termination the provisions of this Section shall automatically terminate.

(h)  Notwithstanding any provision to the contrary herein, Employee shall be
free to conduct business of any form or fashion with any contact that he had
prior to the Effective Date of this Agreement.  

Employment Agreement  4

--------------------------------------------------------------------------------

 

7.   Representations and Warranties:

 

Employee hereby represents and warrants to the best of his knowledge and belief
to the Company as follows:

 

(i)   

Except as set forth below, neither the execution or delivery of this Agreement
nor the performance by Employee of his duties and other obligations hereunder
violate or will violate any statute, law, determination or award, or conflict
with or constitute a default or breach of any covenant or obligation under
(whether immediately, upon the giving of notice or lapse of time or both) any
prior employment agreement, contract, or other instrument to which Employee is a
Party or by which he is bound;

(ii)

Employee has the full right, power and legal capacity to enter and deliver this
Agreement and to perform the duties and other obligations hereunder;  

(iii)

This Agreement constitutes the legal, valid and binding obligation of Employee
enforceable against Employee in accordance with its terms; and

(iv)

No approvals or consents of any persons or entities are required for Employee to
execute and deliver this Agreement or perform its duties and other obligations
hereunder.

8.   Termination. This Agreement may be terminated as follows:

 

(a)

Employee hereunder may be terminated by the Board of Directors of the Company
for Cause. Any of the following actions by Employee shall constitute “Cause”:

 

(i)

The willful failure, disregard or refusal by Employee to perform his duties
hereunder, which is not cured by Employee within fifteen (15) days after notice
thereof is given to Employee by the Company;

(ii)  

Any willful, intentional or grossly negligent act by Employee, not excusable
under the business judgment rule, having the effect of injuring, in a material
way (whether financial or otherwise and as determined in good-faith by a
majority of the Board of Directors of the Company), the business or reputation
of the Company or any of its affiliates, including but not limited to, any
officer, director, executive or shareholder of the Company or any of its
affiliates;

 

(iii)   Willful misconduct by Employee in respect of the lawful duties or
obligations of Employee under this Agreement, including, without limitation,
gross insubordination with respect to directions received by Employee from the
Board of Directors of the Company, which is not cured by Employee within fifteen
(15) days after notice thereof is given to Employee by the Company;

 

(iv)

Employee’s conviction of any felony or a misdemeanor involving moral turpitude
(including entry of a nolo contendere plea);

 

(v)   The determination by the Company, after a reasonable and good-faith
investigation by the an independent investigator following a written allegation
by another employee of the Company, that Employee engaged in some form of
harassment prohibited by law (including, without limitation, verbal harassment,
age, sex or race discrimination), unless Employee’s actions were specifically
directed by the Board of Directors of the Company;

 

(vi)  Any misappropriation or embezzlement of the property of the Company or its
affiliates (whether or not a misdemeanor or felony);

 

(vii)   Breach by Employee of any of the provisions of Sections 5, 6 or 7 of
this Agreement; and

(viii)   Breach by Employee of any provision of this Agreement which is not
cured by Employee within thirty (30) days after notice thereof is given to
Employee by the Company, unless such breach is not curable.

Employment Agreement  5

--------------------------------------------------------------------------------

 

(b)   Employee’s employment hereunder may be terminated by the Board of
Directors of the Company due to Employee’s Disability or Death. For purposes of
this Agreement, a termination for “Disability” shall occur (i) when the Board of
Directors of the Company has provided a written termination notice to Employee
supported by a written statement from a reputable independent physician to the
effect that Employee shall have become so physically or mentally incapacitated
as to be unable to resume, within the ensuing twelve (12) months, his employment
hereunder by reason of physical or mental illness or injury, or (ii) upon
rendering of a written termination notice by the Board of Directors of the
Company after Employee has been unable to substantially perform his duties
hereunder for 90 or more consecutive days, or more than 120 days in any
consecutive twelve month period, by reason of any physical or mental illness or
injury. For purposes of this Section 9(b), Employee agrees to make himself
available and to cooperate in any reasonable examination by a reputable
independent physician retained by the Company.

(c)   Employee’s employment hereunder may be terminated by the Board of
Directors of the Company (or its successor) upon the occurrence of a Change of
Control.  For purposes of this Agreement, “Change of Control” means (i) the
acquisition, directly or indirectly, following the date hereof by any person (as
such term is defined in Section 13(d) and 14(d)(2) of the Securities Exchange
Act of 1934, as amended), in one transaction or a series of related
transactions, of securities of the Company representing in excess of fifty
percent (50%) or more of the combined voting power of the Company’s then
outstanding securities if such person or his or its affiliate(s) do not own in
excess of 50% of such voting power on the date of this Agreement, or (ii) the
future disposition by the Company (whether direct or indirect, by sale of assets
or stock, merger, consolidation or otherwise) of all or substantially all of its
business and/or assets in one transaction or series of related transactions
(other than a merger effected exclusively for the purpose of changing the
domicile of the Company).

(d)   Employee’s employment hereunder may be terminated by Employee for Good
Reason. For purposes of this Agreement, “Good Reason” shall mean any of the
following: (i) the assignment to Employee of duties inconsistent with Employee's
position, duties, responsibilities, titles or offices as described herein;
(ii) any material reduction by the Company of Employee's duties and
responsibilities; (iii) any reduction by the Company of Employee's benefits
payable hereunder; or (iv) Company’s material breach of any of its obligations
under this Agreement.

 

9.   Compensation upon Termination.

 

(a)   If Employee’s employment is terminated as a result of his Death or
Disability, the Company shall pay to Employee, as applicable, the Base Fee, and
any accrued but unpaid Bonus and expense reimbursement amounts through the date
of the Death or through the date of termination notice due to disability. All
warrants not vested at the occurrence of death or disability shall vest in full
at such occurrence.

 

(b)   If Employee’s employment is terminated by the Board of Directors of the
Company for Cause, then the Company shall pay to the Employee the Base Fee
through the date of his termination and Employee shall have no further
entitlement to any other compensation or benefits from the Company.

 

(c)   If Employee’s employment is terminated by the Company (or its successor)
upon the occurrence of a Change of Control, the Company (or its successor, as
applicable) shall continue to pay to Employee the Base Fee, Discretionary Bonus
and benefits until the earlier to occur of (1) the end of the Term and (2) the
date that is one year following such termination. All warrants not vested at the
occurrence of a change in control shall vest in full at such occurrence.

  

 

(d)   If Employee’s employment is terminated by the Company other than as a
result of Employee’s death or disability and other than for reasons specified in
Sections 9(b) or (c), then the Company shall continue to pay to Employee the
Base Fee and Benefits until the earlier to occur of (1) the end of the Term and
(2) the date that is one year following such termination.

(e)   If this Agreement is terminated pursuant to Section 8(d), Company shall
continue to pay to Employee the Base Fee and Benefits until the earlier to occur
of (1) the end of the Term and (2) the date that is one year following such
termination. All Stock Options that have not vested as of the date of such
termination shall be fully vested on the termination date.

Employment Agreement  6

--------------------------------------------------------------------------------

(f)  Upon termination for any reason Company will pay Employee any expense
reimbursement amounts owed through the date of termination

 

(g)   This Section 9 sets forth the only obligations of the Company with respect
to the termination of Employee’s employment with the Company, and Employee
acknowledges that, upon the termination of its employment, it shall not be
entitled to any payments or benefits which are not explicitly provided in
Section 9.

 

(h)   The provisions of this Section 9 shall survive any termination of this
Agreement.

 

10.   Miscellaneous.

 

(a)   This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Texas, without giving effect to its
principles of conflicts of laws.

 

(b)   THE PARTIES AGREE THAT IN THE EVENT THAT LITIGATION ARISES OUT OF OR IS
RELATED TO THIS AGREEMENT, ANY ACTION MUST BE BROUGHT IN DALLAS COUNTY, TEXAS,
AND BOTH PARTIES HEREBY CONSENT TO PERSONAL JURISDICTION THERE.  

(c)

This Agreement shall be binding upon and inure to the benefit of the Parties
hereto, and their respective heirs, legal representatives, successors and
assigns.

(d)

This Agreement may not be assigned by Employee except to an entity that is
affiliated with Employee.  Employee may assign Employee’s payments or right to
receive payments to any entity that is affiliated with Employee.  The Company
may assign its rights, together with its obligations, hereunder in connection
with any sale, transfer or other disposition of all or substantially all of its
business or assets.

 

(e)   This Agreement cannot be amended orally, or by any course of conduct or
dealing, but only by a written agreement signed by the Parties hereto.

 

(f)   The failure of either Party to insist upon the strict performance of any
of the terms, conditions and provisions of this Agreement shall not be construed
as a waiver or relinquishment of future compliance therewith, and such terms,
conditions and provisions shall remain in full force and effect.  No waiver of
any term or condition of this Agreement on the part of either Party shall be
effective for any purpose whatsoever unless such waiver is in writing and signed
by such Party.

 

(g)   All notices, requests, consents and other communications, required or
permitted to be given hereunder, shall be in writing and shall be delivered
personally or by an overnight courier service or sent by registered or certified
mail, postage prepaid, return receipt requested, to the Parties at the addresses
set forth on the first page of this Agreement, and shall be deemed given when so
delivered personally or by overnight courier, or, if mailed, five days after the
date of deposit in the United States mails.  Either Party may designate another
address, for receipt of notices hereunder by giving notice to the other Party in
accordance with this paragraph (g).

 

(h)   This Agreement sets forth the entire agreement and understanding of the
Parties relating to the subject matter hereof.  No representation, promise or
inducement has been made by either Party that is not embodied in this Agreement,
and neither Party shall be bound by or liable for any alleged representation,
promise or inducement not so set forth.

 

(j)   The section headings contained herein are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Agreement.

 

(k)   This Agreement may be executed in any number of counterparts, each of
which shall constitute an original, but all of which together shall constitute
one and the same instrument.

Employment Agreement  7

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement to be
effective as of the Effective Date.

TORCHLIGHT ENERGY RESOURCES, INC.

By: /s/ John Brda

JOHN BRDA, President

Date: October 10, 2013

/s/ Roger Wurtele

ROGER WURTELE

Date: October 10, 2013

Employment Agreement  8