Employment Agreement

 

This EMPLOYMENT AGREEMENT (the “Agreement”), is entered into as of November 22,
2013, by and between Petro River Oil Corp., a Delaware corporation (the
“Company”), and Ruben Alba (“Executive”).

 

WHEREAS, the Executive currently serves as a Company Director;

 

WHEREAS, the Company recognizes that the Executive has had and is expected to
continue to have a critical and essential role in guiding the Company and in
developing the Company’s leasehold interests;

 

WHEREAS, the Executive is expected to make major contributions to the stability,
growth and financial strength of the Company;

 

WHEREAS, the Company has determined that appropriate arrangements should be
taken to encourage the continued attention and dedication of the Executive to
his assigned duties without distraction;

 

WHEREAS, in consideration of the Executive’s employment with the Company, the
Company desires to provide the Executive with certain compensation and benefits
as set forth in this Agreement;

 

WHEREAS, as of the date of this Agreement, the Company wishes to continue
Executive’s service as Executive Vice President under the terms of an employment
agreement on the terms set forth herein, which shall supersede all previous
agreements regarding Executive’s service as a director and employment by the
Company; and

 

WHEREAS, the Executive desires to be employed by the Company on the terms
contained in this Agreement.

 

NOW, THEREFORE,in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

 

1. Position and Duties.

 

(a) The Executive shall serve as Executive Vice President reporting to the
Company’s Executive Chairman.

 

The Executive shall have such duties and authority as are consistent therewith
and as may be set forth by the Executive Chairman. For purposes of the
applicability of the Company compensation plans to the Executive, Executive
shall be considered an “employee.” The Executive shall devote his full business
time to the performance of his duties hereunder. Notwithstanding the foregoing,
the Executive shall be entitled to (i) serve as a member of the board of
directors of unaffiliated companies, (ii) serve on civic, charitable,
educational, religious, public interest or public service boards, (iii) and
manage the Executive’s personal and family investments, and (iv) have an
ownership interest in other businesses, including, without limitation,
businesses engaged in the oil and gas industry. In addition, the Executive has
disclosed to the Company his involvement in oil and gas entities and investments
other than the Company (collectively, the “Outside Activities”). A non-exclusive
list of Outside Activities is contained is Schedule A. The Company shall permit
the Executive to continue to engage in the Outside Activities provided that the
Executive agrees to disclose to the Board of Directors of the Company (the
“Board”) any actual or potential conflict of interest arising out of any such
Outside Activity.

 

 

 

 

 

This Agreement and Executive’s employment hereunder shall be for an initial term
of two (2) years commencing on the date hereof (the “Effective Date”) and ending
on the second anniversary of the Effective Date (the “Expiration Date”), unless
terminated earlier by the Company or the Executive pursuant to Section 4 of this
Agreement (the “Term”).

 

2. Compensation and Related Matters.

 

(a) Base Salary. The Executive’s initial annual base salary shall be $120,000,
less applicable withholdings (the “Base Salary”). The Company will increase the
Base Salary of the Executive upon the initial capital raise of the Company, once
it is listed and trading, subject the approval of the Executive Chairman. The
Base Salary shall be payable in accordance with the Company’s normal payroll
procedures in effect from time to time. The Board shall review the Base Salary
annually and may increase the Base Salary, and the term “Base Salary” shall
refer to such increased amount.

 

(b) Annual Bonus. During the Term, the Executive may receive additional annual
cash and/or stock bonuses, in respect of each full or partial fiscal year of the
Company occurring during the Term, as well as other cash and/or stock bonuses,
as determined in the sole discretion of the Board based on its assessment of
Company and individual performance in relation to performance targets, a
subjective evaluation of Executive’s performance or such other criteria as may
be established by it (the “Annual Bonus”). The Annual Bonus will be paid no
later than the seventy-fifth (75th) day following the end of the fiscal year to
which the Annual Bonus relates.

 

(c) Equity Grants. Upon the Effective Date, the Executive shall receive options
to purchase 12,500,000 shares of the Company’s common stock (the “Common
Stock”), such options to have an exercise price equal to the fair market value
of the Company’s common stock on the date of grant. The vesting of the options
will be subject to time based vesting and shall be subject to the terms and
conditions as more fully set forth on Exhibit A, attached hereto.

 

(d) Long Term Incentive Plan. The Executive shall be entitled to participate in
all bonus plans, policies, practices, policies and programs adopted by the
Company and applicable generally to senior executives of the Company.

 

(e) Equity Incentive Plan. The Executive shall be entitled to participate in any
and all plans providing for awards of equity or instruments convertible into
equity adopted by the Company and applicable generally to other senior
executives of the Company.

 

(f) Business Expenses. The Executive shall be entitled to receive prompt
reimbursement for all reasonable business expenses incurred by him in performing
services hereunder, in accordance with the policies and procedures then in
effect and established by the Company for its senior executive officers.

 

(g) Other Benefits. The Executive shall be entitled to participate in all
pension, savings and retirement plans, welfare and insurance plans, practices,
policies, programs and perquisites of employment applicable generally to other
senior executives of the Company.

 

(h) Vacation. The Executive shall be entitled to accrue up to 15 paid vacation
days in each year, which shall be accrued annually and ratably. The Executive
shall also be entitled to all paid holidays given by the Company to its
executives.

 

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(i) Attorneys’ Fees. The Company shall reimburse Executive for the attorneys’
fees and costs incurred by him in connection with the drafting, review and
negotiation of this Agreement within fifteen (15) days following Executive’s
submission to the Company of invoices evidencing such fees and costs, subject to
a cap of $10,000.

 

(j) Withholding. All amounts payable to the Executive under this Section 3 shall
be subject to all required federal, state and local withholding, payroll and
insurance taxes.

 

3. Termination. The Executive’s employment may be terminated and this Agreement
terminated under the following circumstances:

 

(a) Death. The Executive’s employment hereunder shall terminate upon his death.

 

(b) Disability. The Company may terminate the Executive’s employment if the
Executive becomes subject to a Disability. For purposes of this Agreement,
“Disability” means the Executive is unable to perform the essential functions of
his position as Executive Vice President , with or without a reasonable
accommodation, for a period of one-hundred twenty (120) consecutive days or
one-hundred eighty (180) days during any rolling consecutive twelve (12) month
period.

 

(c) Termination by Company for Cause. The Company may terminate the Executive’s
employment for Cause. For purposes of this Agreement, “Cause” means the
Executive’s: (i) willful misconduct or gross negligence which causes material
harm to the Company; (ii) fraud, embezzlement or other material dishonesty with
respect to the Company; (iii) conviction, plea of nolo contendere, guilty plea,
or confession to a felony or any lesser crime of which fraud, embezzlement, or
moral turpitude is a material element; or (iv) a material breach of this
Agreement, provided that a breach of this Agreement, if curable, shall not
constitute Cause unless the Company has provided the Executive with (x) written
notice of the acts or omissions giving rise to a termination of his employment
for Cause; (y) the opportunity to correct the act or omission within 30 days
after receiving the Company’s notice (the “Cure Period”); and (z) an opportunity
to be heard before the Board with the Executive’s counsel present prior to the
Board’s decision to terminate the Executive’s employment for Cause.

 

(d) Termination by the Company without Cause. The Company may terminate the
Executive’s employment at any time without Cause. For purposes hereof, the
Company’s election not to renew the Term or any Renewal Term shall constitute a
termination without Cause.

 

(e) Termination by the Executive. The Executive may terminate his employment at
any time for any reason other than a Good Reason.

 

(f) Termination by the Executive for Good Reason. The Executive may terminate
his employment for Good Reason. For purposes of this Agreement, “Good Reason”
means: (i) a material reduction in the Executive’s Base Salary; (ii) a material
diminution in the Executive’s responsibilities; (iii) the assignment of duties
to the Executive materially inconsistent with his position as Executive Vice
President; (iv) the requirement that the Executive relocate his primary place of
employment more than 20 miles from its current location (unless such location is
closer to the Executive’s primary residence); or (v) the Company’s material
breach of this Agreement; provided that, within 90 days of the Company’s act or
omission giving rise to a resignation for Good Reason, the Executive notifies
the Company in a writing of the act or omission, the Company fails to correct
the act or omission within 30 days after receiving the Executive’s written
notice (the “Cure Period”) and the Executive actually terminates his employment
within 60 days after the date the Company receives the Executive’s notice.

 

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(g) Expiration. Executive’s employment shall terminate on the Expiration Date.

 

(h) Termination Date. The “Termination Date” means: (i) if the Executive’s
employment is terminated by his death under Section 4(a), the date of his death;
(ii) if the Executive’s employment is terminated on account of his Disability
under Section 4(b), the date on which the Company provides the Executive a
written termination notice; (iii) if the Company terminates the Executive’s
employment for Cause under Section 4(c), the date on which the Company provides
the Executive a written termination notice, unless the circumstances giving rise
to the termination are subject to a Cure Period, in which case the date on which
the Company provides the Executive a written termination notice following the
end of the Cure Period; (iv) if the Company terminates the Executive’s
employment without Cause under Section 4(d), 90 days after the date on which the
Company provides the Executive a written termination notice; (v) if the
Executive resigns his employment without Good Reason under Section 4(e), 30 days
after the date on which the Executive provides the Company a written termination
notice, (vii) if the Executive resigns his employment with Good Reason under
Section 4(f), the date on which the Executive provides the Company a timely
written termination notice following the end of the Cure Period, and (viii) the
Expiration Date if the Executive’s employment terminates under Section 4(g).

 

4. Compensation upon Termination.

 

(a) Termination by the Company for Cause; by the Executive without Good Reason;
or upon the Expiration Date following the Executive’s election not to Renew. If
the Executive’s employment with the Company is terminated pursuant to Sections
4(c), 4(e), or 4(g) following the Executive’s election not to renew the Term or
Renewal Term, the Company shall pay or provide to the Executive the following
amounts through the Termination Date: any earned but unpaid Base Salary, unpaid
expense reimbursements, any earned but unpaid Annual Bonus and any vested
benefits the Executive may have under any employee benefit plan of the Company
(the “Accrued Obligations”) on or before the time required by law but in no
event more than 30 days after the Executive’s Termination Date.

 

(b) Death; Disability. If the Executive’s employment terminates because of his
death as provided in Section 4(a) or because of a Disability as provided in
Section 4(b), then the Executive (or his authorized representative or estate)
shall be entitled to

 

(i) the Accrued Obligations earned through the Termination Date (payable at the
time provided for in Section 5(a)).

 

(ii) the Executive’s Annual Bonus for the fiscal year in which the Executive’s
termination occurs based on the actual achievement of performance criteria for
that year payable at the same time bonuses for such year are paid to other
senior executives of the Company.

 

(iii) Subject to the Executive’s or, in the event of his death, his eligible
dependents’ timely election of continuation coverage under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company
shall reimburse the Executive and/or his eligible dependents the monthly premium
payable to continue his and his eligible dependents’ participation in the
Company’s group health plan (to the extent permitted under applicable law and
the terms of such plan) which covers the Executive (and the Executive’s eligible
dependents) for a period of eighteen (18) months, provided that the Executive is
eligible and remains eligible for COBRA coverage and such eligibility is not
limited by the Executive’s death; and provided, further, that in the event that
the Executive obtains other employment that offers group health benefits, such
continuation of coverage by the Company shall immediately cease. If the
reimbursement of any COBRA premiums would violate the nondiscrimination rules or
cause the reimbursement of claims to be taxable under the Patient Protection and
Affordable Care Act of 2010, together with the Health Care and Education
Reconciliation Act of 2010 (collectively, the “Act”) or Section 105(h) of the
Code, the Company paid premiums shall be treated as taxable payments and be
subject to imputed income tax treatment to the extent necessary to eliminate any
discriminatory treatment or taxation under the Act or Section 105(h) of the
Code.

 

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(iv) in the case of a termination due to Disability, in addition to the
aforementioned compensation, benefits and awards, continuation of the Base
Salary in effect on the date of termination until the earlier of (A) the
eighteenth month anniversary of the date of termination, and (B) the date
Executive is eligible to commence receiving payments under the Company’s
long-term disability policy. If the net compensation from the Base Salary is
greater than the net compensation from the long-term disability policy, the
Company, through the eighteenth month anniversary of the date of termination
will compensate the Executive’s estate the difference in net compensation.

 

(c) Termination by the Company without Cause, by the Executive with Good Reason.
If the Executive’s employment is terminated by the Company without Cause as
provided in Section 4(d) (excluding as a result of the Company’s failure to
renew the Term or any Renewal Term) or the Executive terminates his employment
for Good Reason as provided in Section 4(f)

 

(i) the Accrued Obligations earned through the Termination Date (payable at the
time provided for in Section 5(a)).

 

(d) Change of Control: Termination by the Company without Cause, by the
Executive with Good Reason. If the Executive’s employment is terminated by the
Company without Cause as provided in Section 4(d) (including as a result of the
Company’s failure to renew the Term or any Renewal Term) or the Executive
terminates his employment for Good Reason as provided in Section 4(f), and such
termination occurs (x) at the same time as, or within the twelve (12) month
period following, the consummation of a Change in Control or (y) within the
sixty (60) day period prior to the date of a Change in Control where the Change
in Control was under consideration at the time of Executive’s Termination Date,
then the Executive shall be entitled to two years of all Compensation set forth
in Section 3 and the following payable no later than thirty (30) days following
the Termination Date:

 

(i) the Accrued Obligations earned through the Termination Date (payable at the
time provided for in Section 5(a)).

 

(ii) severance of twice the Executive’s annual base salary based upon the
greater of (x) the base salary in existence on the termination date, or (y) the
base salary pursuant to Section 3(a) of this agreement. The severance is payable
in a single lump sum payment no later than thirty (30) days following the
Termination Date.

 

(iii) A pro-rata portion of the Executive’s Annual Bonus for the fiscal year in
which the Executive’s termination occurs based on the actual achievement of
performance criteria for that year. If there is no Annual Bonus for which he is
eligible in the fiscal year of the termination date, then the award shall be
based upon a pro rata share of the Annual Bonus most recently issued to the
Executive. If the Annual Bonus has been reduced either 60 days prior to a Change
in Control or within twelve months following a Change in Control then the
pro-rata bonus shall be based upon the highest Annual Bonus previously awarded
to the Executive.

 

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(iv) full vesting of the Executive in any and all outstanding previously granted
options and all equity-based incentive awards that would have been granted and
vested over two years from the Termination Date. Subject to the Executive’s
timely election of continuation coverage under COBRA, the Company shall
reimburse the Executive the monthly premium payable to continue his and his
eligible dependents’ participation in the Company’s group health plan (to the
extent permitted under applicable law and the terms of such plan) which covers
the Executive (and the Executive’s eligible dependents) for a period of eighteen
(12) months, provided that the Executive is eligible and remains eligible for
COBRA coverage; and provided, further, that in the event that the Executive
obtains other employment that offers group health benefits, such continuation of
coverage by the Company shall immediately cease. If the reimbursement of any
COBRA premiums would violate the nondiscrimination rules or cause the
reimbursement of claims to be taxable under the Patient Protection and
Affordable Care Act of 2010, together with the Health Care and Education
Reconciliation Act of 2010 (collectively, the “Act”) or Section 105(h) of the
Code, the Company paid premiums shall be treated as taxable payments and be
subject to imputed income tax treatment to the extent necessary to eliminate any
discriminatory treatment or taxation under the Act or Section 105(h) of the
Code.

 

(e) Change of Control: For purposes of Section 5(d), a change of control shall
have occurred upon any of the following:

 

(i) any person or entity becoming the beneficial owner, directly or indirectly,
of securities of the Company representing eighty (80%) percent of the total
voting power of all its then outstanding voting securities;

 

(ii) a merger or consolidation of the Company in which its voting securities
immediately prior to the merger or consolidation do not represent, or are not
converted into securities that represent, a majority of the voting power of all
voting securities of the surviving entity immediately after the merger or
consolidation;

 

(iii) a sale of substantially all of the assets of the Company or a liquidation
or dissolution of the Company; or

 

(f) Consequence of a Change in Control. Notwithstanding the terms of any
employee compensation plan, if, as of the date of a Change in Control, Executive
holds stock options issued under such a plan that are not vested and
exercisable, such stock options shall become fully vested and exercisable as of
the date of the Change in Control if the acquirer does not agree to assume or
substitute for equivalent stock options such outstanding stock options.

 

(g) No Mitigation or Offset. In the event of any termination of Executive’s
employment hereunder, Executive shall be under no obligation to seek other
employment or otherwise mitigate the obligations of the Company under this
Agreement, and there shall be no offset against any amounts due under this
Agreement on account of any remuneration attributable to any subsequent
employment that Executive may obtain.

 

5. Section 409A Compliance.

 

(a) All in-kind benefits provided and expenses eligible for reimbursement under
this Agreement shall be provided by the Company or incurred by the Executive
during the time periods set forth in this Agreement. All reimbursements shall be
paid as soon as administratively practicable, but in no event shall any
reimbursement be paid after the last day of the taxable year following the
taxable year in which the expense was incurred. The amount of in-kind benefits
provided or reimbursable expenses incurred in one taxable year shall not affect
the in-kind benefits to be provided or the expenses eligible for reimbursement
in any other taxable year. Such right to reimbursement or in-kind benefits is
not subject to liquidation or exchange for another benefit.

 

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(b) To the extent that any of the payments or benefits provided for in Section
5(b), (c) or (d) are deemed to constitute non-qualified deferred compensation
benefits subject to Section 409A of the United States Internal Revenue Code (the
“Code”), the following interpretations apply to Section 5:

 

(i) Any termination of the Executive’s employment triggering payment of benefits
under Section 5(b), (c) or (d) must constitute a “separation from service” under
Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before
distribution of such benefits can commence. To the extent that the termination
of the Executive’s employment does not constitute a separation of service under
Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result
of further services that are reasonably anticipated to be provided by the
Executive to the Company or any of its parents, subsidiaries or affiliates at
the time the Executive’s employment terminates), any benefits payable under
Section 5(b), (c) or (d) that constitute deferred compensation under Section
409A of the Code shall be delayed until after the date of a subsequent event
constituting a separation of service under Section 409A(a)(2)(A)(i) of the Code
and Treas. Reg. §1.409A-1(h). For purposes of clarification, this Section
6(b)(i) shall not cause any forfeiture of benefits on the Executive’s part, but
shall only act as a delay until such time as a “separation from service” occurs.

 

(ii) If the Executive is a “specified employee” (as that term is used in Section
409A of the Code and regulations and other guidance issued thereunder) on the
date his separation from service becomes effective, any benefits payable under
Section 5(b), (c) or (d) that constitute non-qualified deferred compensation
under Section 409A of the Code shall be delayed until the earlier of (A) the
business day following the six-month anniversary of the date his separation from
service becomes effective, and (B) the date of the Executive’s death, but only
to the extent necessary to avoid such penalties under Section 409A of the Code.
On the earlier of (A) the business day following the six-month anniversary of
the date his separation from service becomes effective, and (B) the Executive’s
death, the Company shall pay the Executive in a lump sum the aggregate value of
the non-qualified deferred compensation that the Company otherwise would have
paid the Executive prior to that date under Section 5(b), (c) or (d) of this
Agreement.

 

(iii) It is intended that each installment of the payments and benefits provided
under Section 5(b), (c) and (d) of this Agreement shall be treated as a separate
“payment” for purposes of Section 409A of the Code.

 

(iv) Neither the Company nor the Executive shall have the right to accelerate or
defer the delivery of any such payments or benefits except to the extent
specifically permitted or required by Section 409A of the Code.

 

6. Excess Parachute Payments.

 

(a) To the extent that any payment, benefit or distribution of any type to or
for the benefit of the Executive by the Company or any of its affiliates,
whether paid or payable, provided or to be provided, or distributed or
distributable pursuant to the terms of this Agreement or otherwise (including,
without limitation, any accelerated vesting of stock options or other
equity-based awards) (collectively, the “Total Payments”) would be subject to
the excise tax imposed under Section 4999 of the Internal Revenue Code of 1986,
as amended (the “Code”), then the Total Payments shall be reduced (but not below
zero) so that the maximum amount of the Total Payments (after reduction) shall
be one dollar ($1.00) less than the amount which would cause the Total Payments
to be subject to the excise tax imposed by Section 4999 of the Code, but only if
the Total Payments so reduced result in the Executive receiving a net after tax
amount that exceeds the net after tax amount the Executive would receive if the
Total Payments were not reduced and were instead subject to the excise tax
imposed on excess parachute payments by Section 4999 of the Code. Unless the
Executive shall have given prior written notice to the Company to effectuate a
reduction in the Total Payments if such a reduction is required, any such notice
consistent with the requirements of Section 409A of the Code to avoid the
imputation of any tax, penalty or interest thereunder, the Company shall reduce
or eliminate the Total Payments by first reducing or eliminating any cash
severance benefits (with the payments to be made furthest in the future being
reduced first), then by reducing or eliminating any accelerated vesting of stock
options or similar awards, then by reducing or eliminating any accelerated
vesting of restricted stock or similar awards, then by reducing or eliminating
any other remaining Total Payments. The preceding provisions of this Section
7(a) shall take precedence over the provisions of any other plan, arrangement or
agreement governing the Executive’s rights and entitlements to any benefits or
compensation; provided however, that any total benefits or compensation that
would otherwise be due and payable to Executive under any terms of this
Agreement would still be paid to Executive but in a manner that is in compliance
with Section 4999.

 

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(b) If the Total Payments to the Executive are reduced in accordance with
Section 7(a), as a result of the uncertainty in the application of Section 4999
of the Code at the time of the initial reduction under Section 7(a), it is
possible that Total Payments to the Executive which will not have been made by
the Company should have been made (“Underpayment”) or that Total Payments to the
Executive which were made should not have been made (“Overpayment”). If an
Underpayment has occurred, the amount of any such Underpayment shall be promptly
paid by the Company to or for the benefit of the Executive. In the event of an
Overpayment, then the Executive shall promptly repay to the Company the amount
of any such Overpayment together with interest on such amount (at the same rate
as is applied to determine the present value of payments under Section 280G of
the Code or any successor thereto), from the date the reimbursable payment was
received by the Executive to the date the same is repaid to the Company

 

7. Confidentiality and Restrictive Covenants.

 

(a) Covenant Against Disclosure. All Confidential Information relating to the
Business of the Company is, shall be and shall remain the sole property and
confidential business information of the Company, free of any rights of the
Executive. Without the prior written consent of the Company, the Executive shall
not make any use of the Confidential Information except in the performance of
his duties hereunder and shall not, without the prior written consent of the
Company, disclose any Confidential Information to third parties.

 

(b) Return of Company Documents. On the Termination Date or on any prior date
upon the Company’s written demand, the Executive will return all Confidential
Information in his possession, directly or indirectly, that is in written or
other tangible form (together with all duplicates thereof) and that he will not
retain or furnish any such Confidential Information to any third party, either
by sample, facsimile, film, audio or video cassette, electronic data, verbal
communication or any other means of communication.

 

(c) Further Covenant. During the Term and through the first anniversary of the
Termination Date, the Executive shall not, directly or indirectly, take any of
the following actions, and, to the extent the Executive owns, manages, operates,
controls, is employed by or participates in the ownership, management, operation
or control of, or is connected in any manner with, any business, the Executive
will use his best efforts to ensure that such business does not take any of the
following actions:

 

(i) persuade or attempt to persuade any customer of the Company to cease doing
business with the Company, or to reduce the amount of business any customer does
with the Company;

 

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(ii) solicit for himself or any entity the business of a customer of the
Company, or solicit any business which was a customer of the Company in
competition with the Company’s Business within twelve (12) months prior to the
termination of the Executive’s employment; or

 

(iii) persuade or attempt to persuade any employee of the Company to leave the
employ of the Company, or hire or engage, directly or indirectly, any individual
who was an employee of the Company within one (1) year prior to the Executive’s
Termination Date.

 

8. RESERVED

 

9. No Disparagement. During the Term and through the second anniversary of the
Termination Date, the Executive will not make public statements or
communications that disparage the Company or any of its businesses, services,
products, affiliates or current, former or future directors and executive
officers (in their capacity as such). During the Term and through the second
anniversary of the Termination Date, the Company will instruct its directors and
executives not to make public statements or communications that disparage the
Executive. The foregoing obligations shall not be violated by truthful
statements in response to legal process, required governmental testimony or
filings, or administrative or arbitral proceedings (including, without
limitation, depositions in connection with such proceedings).

 

10. Indemnification. During the Term and thereafter, the Company shall indemnify
and hold the Executive and the Executive’s heirs and representatives harmless,
to the maximum extent permitted by law, against any and all damages, costs,
liabilities, losses and expenses (including reasonable attorneys’ fees) as a
result of any claim or proceeding (whether civil, criminal, administrative or
investigative), or any threatened claim or proceeding (whether civil, criminal,
administrative or investigative), against the Executive that arises out of or
relates to the Executive’s service as an officer, director or employee, as the
case may be, of the Company, or the Executive’s service in any such capacity or
similar capacity with any affiliate of the Company or other entity at the
Company’s request, both prior to and after the Effective Date, and to promptly
advance to the Executive or the Executive’s heirs or representatives such
expenses, including litigation costs and attorneys’ fees, upon written request
with appropriate documentation of such expense upon receipt of an undertaking by
the Executive or on the Executive’s behalf to repay such amount if it shall
ultimately be determined that the Executive is not entitled to be indemnified by
the Company. During the Term and thereafter, the Company also shall provide the
Executive with coverage under its current directors’ and officers’ liability
policy to the same extent that it provides such coverage to its other executive
officers. If the Executive has any knowledge of any actual or threatened action,
suit or proceeding, whether civil, criminal, administrative or investigative, as
to which the Executive may request indemnity under this provision, the Executive
will give the Company prompt written notice thereof; provided that the failure
to give such notice shall not affect the Executive’s right to indemnification.
The Company shall be entitled to assume the defense of any such proceeding and
the Executive will use reasonable efforts to cooperate with such defense. To the
extent that the Executive in good faith determines that there is an actual or
potential conflict of interest between the Company and the Executive in
connection with the defense of a proceeding, the Executive shall so notify the
Company and shall be entitled to separate representation at the Company’s
expense by counsel selected by the Executive (provided that the Company may
reasonably object to the selection of counsel within ten (10) business days
after notification thereof) which counsel shall cooperate, and coordinate the
defense, with the Company’s counsel and minimize the expense of such separate
representation to the extent consistent with the Executive’s separate defense.
This Section 11 shall continue in effect after the termination of the
Executive’s employment or the termination of this Agreement

 

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11. Disputes.

 

(a) Any dispute or controversy arising out of or relating to this Agreement or
your employment, other than injunctive relief, will be settled exclusively by
arbitration, conducted before a single arbitrator in New York New York (applying
New York law) in accordance with, and pursuant to, the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association
(“AAA”). The decision of the arbitrator will be final and binding upon the
parties hereto. Any arbitral award may be entered as a judgment or order in any
court of competent jurisdiction. Either party may commence litigation in court
to obtain injunctive relief in aid of arbitration, to compel arbitration, or to
confirm or vacate an award, to the extent authorized by the Federal Arbitration
Act. The Company and the Executive will share the AAA administrative fees, the
arbitrator’s fee and expenses, and each party will pay its own attorneys’ fees.

 

(b) BOTH THE COMPANY AND THE EXECUTIVE HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE FEDERAL OR STATE LAW.

 

(c) In the event of any contest or dispute relating to this Agreement or the
termination of Executive’s employment hereunder, the Company shall reimburse
100% of Executive’s reasonable legal fees if Executive substantially prevails in
such contest or dispute.

 

12. Integration. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements between the parties concerning such subject matter.

 

13. Successors. This Agreement shall inure to the benefit of and be enforceable
by the Executive’s personal representatives, executors, administrators, heirs,
distributees, devisees and legatees. In the event of the Executive’s death after
his termination of employment but prior to the completion by the Company of all
payments due him under this Agreement, the Company shall continue such payments
to the Executive’s beneficiary designated in writing to the Company prior to his
death (or to his estate, if the Executive fails to make such designation). The
Company shall require any successor to the Company to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.

 

14. Enforceability. If any portion or provision of this Agreement (including,
without limitation, any portion or provision of any section of this Agreement)
shall to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.

 

15. Survival. The provisions of this Agreement shall survive the termination of
this Agreement and/or the termination of the Executive’s employment to the
extent necessary to effectuate the terms contained herein.

 

16. Waiver. No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of any party to require the
performance of any term or obligation of this Agreement, or the waiver by any
party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.

 

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17. Notices. Any notices, requests, demands and other communications provided
for by this Agreement shall be sufficient if in writing and delivered in person
or sent by a nationally recognized overnight courier service or by registered or
certified mail, postage prepaid, return receipt requested, to the Executive at
the last address the Executive has filed in writing with the Company or, in the
case of the Company, at its main offices,

 

  If to Executive: Ruben Alba     11245 RIVER RUN PKWY     HENDERSON, Colorado
80640         If to Company: Petro River Oil Corp   4925 Greenville Ave, Suite
900     Dallas, Texas 75206         Copy to Board: 641 Lexington Avenue, 26th
Floor     New York, New York 10022

 

18. Amendment. This Agreement may be amended or modified only by a written
instrument signed by the Executive and by a duly authorized representative of
the Company.

 

19. Governing Law. This is a New York contract and shall be construed under and
be governed in all respects by the laws of New York for contracts to be
performed in that State and without giving effect to the conflict of laws
principles of New York or any other State.

 

20. Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be taken to be an original;
but such counterparts shall together constitute one and the same document.

 

IN WITNESS WHEREOF, the parties have executed this Agreement effective on the
date and year first above written.

 

  PETRO RIVER OIL CORP         By: /s/ Scot Cohen   Name: Scot Cohen   Title:
Executive Chairman

 

    RUBEN ALBA           /s/ Ruben Alba     Individually

 

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Schedule A

 

Outside Activities

 

●   The Executive provides consulting services to Glen Rose Partners 1, LLC a
company in which Iroquois Capital Opportunity Fund LP (or ICO Fund) owns stock.
●   The Executive has a minority membership interest in Petro River Partners I
LLC, which has a three percent overriding royalty interest in all leaseholds
PROC is acquiring from Petro River Oil LLC. ●   The Executive is an authorized
signatory of Petro River Operating LLC, a wholly owned subsidiary of Petro River
Oil LLC. ●   The Executive is an authorized signatory of Banyan Operating LLC,
an operator operating assets for Glen Rose Partners I, LLC, ●   The Executive
may provide services to special purpose vehicles associated with ICO Fund or
with Petro River Oil LLC.

 

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Exhibit A

 

All options vested as set forth in this Exhibit A will have a ten year exercise
period unless otherwise provided in this employment agreement.

 

Initial Award

 

Upon the Effective Date or within 15 days thereafter, the Company shall grant
the Executive options to purchase 12,500,000 shares of Common Stock the granted
options shall have an exercise price equal to the fair market value of the
Common Stock on the date of grant. The granted options shall be subject to a
four -year vesting schedule with 20% to vest upon the grant date, and the
balance to grant ratably on an annual basis for the next 4 years.

 

Treatment upon termination of employment

 

Death or Disability Granted awards shall continue and vest for 12 months
following the death or disability date. Awards set to vest therein are awarded.
Awards set to vest thereafter are cancelled. Vested options exercisable for the
full ten year term.     Voluntary quit Granted unvested awards cancelled. Yet to
be granted awards cancelled.       Vested options exercisable for the full ten
year term.     Termination for Cause Granted unvested awards cancelled. Yet to
be granted awards cancelled.       Vested options exercisable for the full ten
year term.     Termination without Cause/
Quit for Good Reason Granted unvested awards cancelled. Yet to be granted awards
cancelled.   Vested options exercisable for the full ten year term.

 

The terms of any award under this section shall be more fully set forth in an
award agreement. It is expressly acknowledged and agreed that this Exhibit A is
a summary of the contemplated terms of the award agreements.

 

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PETRO RIVER OIL CORP.

STOCK OPTION GRANT NOTICE

 

Petro River Oil Corp. (the “Company”), hereby grants to Ruben Alba (the “Option
holder”) an option to purchase the number of shares of the Company’s common
stock, par value $0.00001 per share (the “Common Stock”), as set forth below
(the “Option”). The Option is granted pursuant to the terms of the Company’s
2012 Equity Compensation Plan (the “Plan”). The Option is subject to all the
terms and conditions as set forth in this grant notice (this “Grant Notice”),
the Plan and the Notice of Exercise of Stock Option attached hereto as Exhibit A
(the “Notice of Exercise”), all of which are incorporated herein by reference in
their entirety.

 

Optionholder Ruben Alba Date of Grant November 22, 2013 Number of Shares Subject
to Option 12,500,000 Exercise Price (per share) $0.059 Expiration Date November
22, 2023

 

Vesting Schedule: The Option shall vest in five equal installments, with the
first installment vesting on November 22, 2013. The next four installments will
vest, subject to certain conditions, on November 22, 2014, November 22, 2015,
November 22, 2016, and November 22, 2017, upon the Option holder’s continuation
in service with the Company through each of the vesting dates. The contingent
vestings are subject to the amendment of the Plan, approved by a vote of the
shareholders of the Company, to increase the number of shares permitted to be
granted under the Plan, and to put in place a stock option grant limitation in
accordance with §162(m) of the Internal Revenue Code of 1986, as amended.

 

Payment: Payment can be made by one or more of the items checked below:

 

[X] By cash or check

[X] Pursuant to a Regulation T Program, if the Shares are publicly traded

[X] By delivery of already-owned shares,if the Shares are publicly traded

 

To the maximum effect permitted by law, the Options are intended to qualify as
incentive stock options (the “Incentive Stock Options”) within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder. To the extent that the aggregate fair market
value (determined at the Date of Grant) of Common Stock with respect to which
the Incentive Stock Options are exercisable for the first time by the Option
holder during any calendar year exceeds $100,000, the Options, or portions
thereof that exceed such limit, shall be treated as nonstatutory stock options.

 

petro river oil corp.         By: /s/ Scot Cohen     Scot Cohen     Executive
Chairman           Date: November 22, 2013  

 

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EXHIBIT A

 

PETRO RIVER OIL CORP.

Notice of Exercise of Stock Option

 

TO: Petro River Oil Corp. (the “Company”)

 

The undersigned hereby exercises the Stock Option, dated November 22, 2013,
granted by the Company pursuant to its 2012 Equity Compensation Plan, to
purchase ________ shares of common stock of the Company at a price of $0.059 per
share, for a total purchase price of $______.

 

Payment method (Choose one or more of the following methods): Notify the Company
if you wish to pay other than by cash or check as these alternatives may be
subject to special conditions or may not be available under certain
circumstances.

 

[  ] Cash or Check

[  ] By Regulation T Program (cashless exercise)

[  ] Delivery of already-owned shares

 

Details: By this Notice of Exercise, the undersigned agrees to provide for the
payment by the undersigned to the Company (in the manner designated by the
Company) of applicable tax withholding obligation, if any, relating to the
exercise of the foregoing Stock Option.

 

      Date   Ruben Alba

 

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