EXHIBIT 10.4

 
 
 
 
 
 
 
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EMPLOYMENT AGREEMENT

Jeffrey L. Minch
President, Chief Executive Officer, Director

1 January 2012

Created: 1 December
2005                                                      Revised: 2 November
2011
 
 
 
 
 
 

 
 
 
 

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EMPLOYMENT AGREEMENT

Jeffrey L Minch
President, Chief Executive Officer, Director

1 January 2012

This Employment Agreement is made to be effective 1 January 2012 by and between

Littlefield Corporation (“Littlefield Corporation” or the “Company”) and

Jeffrey L. Minch (“Minch” or the “Employee”)

and, except as specifically set forth in this Agreement, supersedes the previous
Employment Agreement between the parties, a copy of which is attached as Exhibit
A.

WHEREAS, Littlefield Corporation and Minch currently have an employer-employee
relationship which expired on 31 December 2011; and,

WHEREAS, Littlefield Corporation and Minch mutually desire to enter into this
new written Employment Agreement (“Agreement”) upon the terms and conditions set
forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, Littlefield Corporation and Minch hereby agree as follows:
 
ARTICLE 1
POSITION
 
1.01. Title.  The Company hereby appoints Minch, and Minch hereby accepts the
Company’s senior management position as President and Chief Executive Officer
reporting only to the Board of Directors of the Company.
 
1.02. Duties.  In the performance of his duties Minch agrees to comply with all
existing and future regulations applicable to the Company’s business.  Minch
agrees to faithfully and diligently perform the duties commensurate with his
position as set forth in the Company’s Bylaws together with such other duties as
the Board of Directors may reasonably designate from time to time.
 
 
 

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1.03. Exclusive Services.  Minch will devote substantially all of his
professional time to the responsibilities of his position as President and Chief
Executive Officer of the Company.  It is understood and agreed that Minch may
not engage in any other business activity during the Term, whether or not for
profit or other remuneration, without the prior written consent of the Company;
provided, however, that the Employee may make personal financial investments
which do not involve any material active participation on his part, and may
engage in charitable, philanthropic, education, religious, civic and similar
types of activities to the extent that such activities do not hinder or
otherwise interfere with the business of the Company, or the performance of his
duties under this Agreement.   The Company acknowledges that Minch is actively
involved in other philanthropic, civic, charitable, service, political and
personal interests including but not limited to serving as a Trustee of the VMI
Foundation; Austin Midnight Basketball, the VMI Alumni Association Centex
Chapter, and other organizations. Notwithstanding the foregoing, during the
Term, Minch shall not directly or indirectly acquire any stock (with the
exception of publicly held companies) or interest in any corporation,
partnership, or other business entity that competes, directly or indirectly,
with the business of the Company, without obtaining the prior written consent of
the Company.
 
1.04. Director.  The Company agrees to nominate Minch annually as a Director of
the Company during the Term of this Agreement.  Minch agrees to serve as a
Director of the Company during the Term of this Agreement, if elected.  Minch
will receive no additional compensation for his service as a Director of the
Company.
 

ARTICLE 2
COMPENSATION & BENEFITS
 
2.01. Salary.  The Company will pay to Minch, in accordance with the customary
payroll practices of the Company, a Salary of $25,000.00 monthly, which equates
to $300,000.00 annually (“Base Pay”).  Minch’s Base Pay will be reviewed
annually by the Board of Directors, using whatever objective criteria they shall
decide upon, on or before 31 December of each calendar year.
 
2.02. Deferred Compensation.
 
a. The Company will create a “Deferred Compensation” account for the benefit of
Minch and shall deposit into this account monthly Deferred Compensation in the
amount of $3,000 per month.  In addition, Minch may designate any amount up to
$50,000 annually of his Salary to be deposited into this Deferred Compensation
account.
 
b. The Deferred Compensation account will be a stock brokerage account held at
Charles Schwab in Austin, Texas and Minch will have the sole authority to make
trades in the account (not including any margin or option trading).
 
c. During the Term of this Agreement, the Deferred Compensation account will be
an asset of the Company and will be liable to claims of creditors as a Company
asset.  The Deferred Compensation account will be delivered to Minch upon the
termination of his employment with the Company; or, at such earlier date at the
complete discretion of the Board of Directors.
 
2.03. Annual Performance Bonus.  During the month of January, but no later than
one week after the Company reports its prior fiscal year earnings (the “Prior
Year”), the Board of Directors will present an annual written performance
appraisal of the performance of Minch in the discharge of his duties during the
Prior Year.
 
In addition, the Board will award to Minch with the written performance
appraisal a bonus equal to the greater of:
 
a.  $100,000; or,
 
b.  Ten percent (10%) of EBITDA for the Prior Year up to a maximum amount not to
exceed Minch’s Base Pay.
 
 
 

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If at any time the Board of Directors should observe that Minch’s performance is
not consistent with his prior performance, the Board will notify Minch of the
inconsistency in writing noting the desired corrective action and provide
counseling as to how to correct any shortcomings.  If Minch should fail to
correct the inconsistency within a reasonable period of time, then the Board of
Directors may elect, at their sole discretion, not to pay the Annual Performance
Bonus.
 
For any partial year of performance, the Board of Directors may, in its sole
discretion, elect to award Minch a pro-rated performance bonus, but is not
obligated to do so.
 
2.04. Stock Options.
 
a. At the first meeting of the Board of Directors Compensation Committee that
takes place after the execution of this Agreement, Minch shall be granted an
option to purchase up to 1,500,000 shares of common stock at a purchase price of
110% of the fair market value of the Company’s common stock on the date of grant
(determined according to 110% of the closing market price of the Company’s,
common stock on the OTCBB on the date of grant), vesting in accordance with the
following schedule.
 
 
Amount:
options to purchase 1,500,000 shares of common stock

 
Vesting:
Options for 300,000 shares – 31 December 2012

 
Options for 300,000 shares – 31 December 2013

 
Options for 300,000 shares – 31 December 2014

 
Options for 300,000 shares – 31 December 2015

 
Options for 300,000 shares – 31 December 2016

b. The options shall expire if not exercised on or before 5:00 p.m., Austin,
Texas, time, on 31 December 2021.
 
c. The stock options granted would be based upon the Company having
approximately 17,937,600 shares outstanding of an authorized 40,000,000
shares.  In the event that the Company should issue more shares (i.e. more
shares are “outstanding”), then the amount of the stock award (both vested and
unvested shares) shall be proportionately increased to maintain the same
relationship as 1,500,000 bears to 17,937,600.
 
d. In the event that the Employee is terminated for Cause under Section 3.02 or
the Employee voluntarily terminates this Agreement under Section 3.04, All
options granted under this Section which have not yet vested shall terminate
immediately.
 
e. The form of option agreement to be entered between the Employee and Company
is attached to this Agreement and incorporated herein by reference as Exhibit B.
 
2.05. Benefits.  Minch will be entitled to receive the same benefits as all
Company employees who are similarly situated with the exception of vacation
benefits.  Minch shall be entitled to take up to 25 paid vacation days per
year.  Vacation will be taken only at times which will not disrupt the normal
business activities of the Company.  Unused vacation will not carry over to the
following year and will not be paid upon separation from employment.
 
2.06. Expense Reimbursement.
 
a. The Company will reimburse Minch for all reasonable, necessary and
appropriate business expenses incurred on behalf of the Company upon
presentation of proper expense statements or vouchers or such other written
supporting documents as the Company may reasonably require.  In addition, the
Company will provide Minch with an American Express credit card to be used by
him solely for legitimate Company expenses.
 
b. In addition, the Company shall reimburse Minch for any business related
travel in his personal airplane by paying the prorated cost of fuel, routine
maintenance (oil changes and annual inspection but not including any replacement
of aircraft systems), insurance and hanger fees.  
 
 
 

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c. Minch shall be entitled to make unlimited personal phone calls during and
after business hours.
 
2.07. Executive Assistant.  The Company will employ an executive assistant who
reports to Minch whose duties shall include providing administrative support to
Minch in the discharge of his duties for the Company, in his civic and
philanthropic activities, as well as in the management of his individual
financial and business affairs.  At all times this employee shall be an employee
of Littlefield Corporation.
 
ARTICLE 3
TERM & TERMINATION
 
3.01. Term.  The “Term” of this Agreement will commence on 1 January 2012 and
will automatically terminate on 31 December 2016 unless extended or terminated
sooner as provided for herein.  This Agreement shall be automatically extended
during any time period in which its provisions are being renegotiated.
 
3.02. Termination of Minch for “Cause.”   The Company may immediately terminate
this Agreement for “Cause” upon a vote by the majority of the Board of
Directors.  “Cause” for termination shall exist upon:
 
a. Employee’s willful and continued failure after written notice to
substantially perform his duties with the Company (other than such failure
resulting from his incapacity due to physical or mental illness or disability);
 
b. Employee’s willful engagement in misconduct, as reasonably determined by a
majority vote of the Board of Directors, which is materially injurious to the
Company; or,
 
c. Employee’s conviction of either a felony or an act of fraud against the
Company or its affiliates.
 
Upon termination for Cause, Minch shall not be eligible for the “Severance
Package” as defined in Section 3.08.b herein.

3.03. Termination of Minch Without Cause.   The Company may terminate this
Agreement without Cause upon a vote by the majority of the Board of Directors
and ninety (90) days written notice of such termination.  Upon termination
without Cause, Minch will receive the Severance Package as defined in Section
3.08.b. herein.
 
3.04. Termination by Minch.  Minch may terminate this Agreement on or after 31
December 2012, in his sole and absolute discretion, by delivering to the
Chairman of the Board of Directors a ninety (90) day written notice.  Upon
termination by Minch, Minch will not receive the Severance Package as defined in
Section 3.08.b. herein.
 
3.05. Termination for Good Reason.  Employee may terminate his employment for
“Good Reason” within sixty (60) days after Employee has actual knowledge of the
occurrence, without the written consent of Employee, of the Company’s requiring
the Employee to be based at any office or location more than fifty (50) miles
away from that at which the Employee is based as of the date of this Agreement;
provided, however, the Company may require travel in the performance of the
Employee’s responsibilities; a material and adverse diminution of Employee’s
authority or duties with respect to his current position (other than such
diminution as a result of his incapacity due to physical, mental illness or
Disability); a decrease in Employee’s compensation below the Base Salary.  Upon
termination for Good Reason, Employee will receive the Severance Package as
defined in Section 3.08.b herein.
 
 
 

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3.06. Change of Control.
 
a. In the event that the Company undergoes a “Change of Control,” this Agreement
shall automatically terminate and Minch shall receive the Severance Package as
defined in Section 3.08.b herein. A “Change of Control” occurs if:
 
i. there is a consummation of a merger or sale in which the Company’s then
current stockholders do not retain at least 50% of the surviving entity’s stock;
 
ii. there is an acquisition of more than 50% of the voting stock by a single
stockholder or multiple shareholders acting in concert;
 
iii. There is an acquisition by any one party, or by one or more affiliated
parties, as defined in Rule 12b-2 under the Securities Exchange Act of 1934, of
more than 50% of the outstanding voting stock of the Company;
 
iv. there is a consummation of a sale of more than fifty percent (50%) of the
Company’s assets; or
 
v. there is a finalization of the Company’s liquidation.
 
b. If the Change of Control will result in the selling shareholders receiving
consideration in any form equal to or greater than $2.25 per share, the Company
will issue 500,000 shares of common stock to Minch (or such other party as he
may designate) prior to the consummation of the transaction.
 
3.07. Death or Disability.  In the event of the death or “Disability” of Minch,
this Agreement shall automatically terminate and Minch shall be eligible for the
Severance Package.  A “Disability” occurs when Minch shall be unable by reason
of physical or mental illness to continue the proper performance of his duties
hereunder for a period of 180 consecutive days.  Upon death, any and all
payments due under this Agreement shall be made to:
 
Tempe C. Minch
1402 Ethridge Avenue
Austin, Texas 78703

3.08. Effect of Termination.
 
a. In the event of termination of Minch’s employment, regardless of
circumstances, the Company shall pay Minch:
 
i. his then current Salary, accrued as of his last date of employment;
 
ii. all monies, if any, in the Deferred Compensation account; and
 
iii. any properly documented business expenses not yet reimbursed.
 
b. In addition, if the circumstances of the termination make Minch eligible for
a Severance Package, then Minch shall receive a “Severance Package” to include:
 
i. Twelve (12) months of his then current monthly Base Salary plus the cash
equivalent of Minch’s benefits described herein under paragraph 2.05 for a
12-month period excluding any vacation benefits, less applicable payroll
deductions;
 
 
 

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ii. The value of Minch’s Deferred Compensation Account or the securities and
cash held in the Deferred Compensation Account; and
 
iii. All unvested stock options promised or granted to Minch shall become fully
vested.
 
c. Termination of employment shall not excuse the performance of any obligation
which is required hereunder to be performed after termination, and any such
obligation shall survive the termination of employment and this Agreement.
 
3.09. Return of Property.   Upon termination of employment, and at the request
of the Company, Minch agrees to promptly deliver to the Company all memoranda,
notes, records, reports, manuals, drawings, designs, computer files in any
media, and other documents (including extracts and copies thereof) relating to
the Company,, and Minch expressly agrees that Company may withhold from any sums
due to him, any personal expenses charged to the Company.
 
ARTICLE 4
CONFIDENTIALITY & RESTRICTIVE COVENANTS
 
4.01. Detrimental Statements.  For so long as this Agreement remains in effect
and for a period of 12 months after the date of termination or expiration of
this Agreement, whether with or without cause or for any reason (the "Applicable
Period"), Employee will not, directly or indirectly, in any individual or
representative capacity whatsoever, make any statement, oral or written, or
perform any act or omission which is or could be detrimental in any material
respect to the goodwill of Company, and the Company will not, directly or
indirectly, in any individual or representative capacity whatsoever, make any
statement, oral or written, or perform any act or omission which is or could be
detrimental in any material respect to the goodwill of Employee.
 
4.02. Confidential information.
 
a. Covenant of Confidentiality.
 
i. The Company promises to provide, and Employee recognizes and acknowledges
that he will be provided, confidential information and trade secrets of Company
relating to research, development, manufacturing, marketing, financial, and
other business-related activities or may discover, conceive, perfect, or
develop, solely or jointly with others, discoveries, improvements, know-how, or
other technical, manufacturing, marketing, customer, and/or financial data and
information, including, without limitation, access to information regarding the
upgrading of current Company products and services and the development of new
products and services (hereinafter "Confidential Information").
 
ii. Confidential Information includes not only written information, but
information transferred orally, visually, electronically or by any other means,
but does not include information which (i) is or was already in the possession
of Employee prior to its disclosure to Employee by the Company, (ii) is or
becomes generally available to the public other than as a result of disclosure
in breach of this Agreement by Employee, or (iii) is or becomes available to
Employee on a non-confidential basis from a source other than the Company or any
of its representatives, provided that such information is not known by the
Employee to be subject to another confidentiality agreement or other legal
obligation of secrecy.
 
iii. Such Confidential Information constitutes valuable, special, and unique
property of Company.  In consideration of the Company’s provision of such
Confidential Information, Employee will not, during or for one year after the
term of his employment by Company, make any use of, or disclose any of such
Confidential Information to any person or firm, corporation, association, or
other entity for any reason or purpose whatsoever, except as is generally
available to the public or as specifically allowed in writing by an authorized
representative of Company.
 
 
 

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b. Ownership.  Employee acknowledges and agrees that all writing or works of
authorship, including material developed by Employee either individually or
jointly with other Company employees during the course of Employee’s employment
by the Company, together with any copyrights in those writings or works of
authorship, will be works made for hire and the property of the Company.  To the
extent that any such writings or works of authorship which apply to the business
of the Company may not, by operation of law, be works made for hire, this
agreement constitutes an irrevocable assignment by Employee to the Company of
all of his rights, title and interest in and to, including all rights of
copyright and patent in, such writings or works of authorship.  Employee agrees
that the Company will have the right to obtain and hold in its own name rights
of copyright, copyright registrations, patents and similar protections which may
be available in the writings or works of authorship.  Employee agrees to give
the Company or its designee(s) all assistance reasonably required to perfect
such rights at the Company’s expense.
 
c. Return of Confidential Information.  Upon the expiration of the term or
termination of this Agreement for any reason, Employee will surrender to Company
all tangible Confidential Information in the possession of, or under the control
of, Employee, including, but without limitation, the originals and all copies of
all software, drawings, manuals, letters, reports, and all other media (except
for the Employee’s personal notebooks), material, and records of any kind, and
all copies thereof pertaining to Confidential Information acquired or developed
by Employee during the term of Employee's employment (including the period
preceding the Effective Date).
 
4.03. Non-Solicitation.  During the term of this Agreement and throughout the
Applicable Period Employee shall not, individually or on behalf of another
person, company, or other entity, directly or indirectly, solicit or encourage
any employee of the Company or any affiliate of the Company to terminate his or
her employment with the Company.
 
4.04. Restrictions; Non-Competition.  The restrictions on use of confidential
information, competition with the Company, and solicitation of employees on the
part of Minch, contained in the Section of the Employment Agreement effective as
of January 1, 2005 (attached for reference purposes only as Exhibit A), shall
not be affected by the entry of this agreement but shall continue in full force
and effect.
 
4.05. Remedies.  Employee agrees that Company shall be entitled as a manner of
right to an injunction, out of any court of competent jurisdiction restraining
any violation or further violation of such agreements by Employee; such right to
an injunction, however, shall be cumulative and in addition to whatever other
remedies Company may have.  The terms and agreements set forth in Article 4
shall survive the expiration of the term or termination of this Agreement for
any reason.  The existence of any claim of Employee, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by
Company of the agreements contained in Article 4.  The prevailing party in
arbitration will be awarded attorneys’ fees, all costs and expenses of
arbitration, the arbitration filing fee and the cost and expenses of the
arbitrator.  No consequential, exemplary or punitive damages shall be awarded.
 
ARTICLE 5
DISPUTE RESOLUTION
 
Minch and the Company mutually consent to the resolution by binding arbitration
of any and all disputes between them during the Term of this Agreement and any
applicable period thereafter. Such arbitration shall be before a single
arbitrator to be mutually selected by the parties or, if they are unable to
agree upon a single arbitrator, by the American Arbitration Association.  The
arbitration shall be conducted in accordance with the then-current rules of the
American Arbitration Association (the “AAA”). The arbitrator shall abide by
applicable substantive law, shall have the authority to grant summary judgment,
and shall issue a written decision and award stating the supporting
reasons.  The decision and award shall be final, unappealable and binding on
both parties, their heirs, executors, administrators, successors, and
assigns.  The arbitration filing fee and the costs and expenses of the
arbitrator shall be borne equally by the parties.
 
 
 

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ARTICLE 6
GENERAL PROVISIONS
 
6.01. Entire Agreement.  This Agreement is the entire agreement between the
Company and Minch and supersedes all prior agreements between the parties,
except for the restrictions on use of confidential information, competition with
the Company, and solicitation of employees on the part of Minch, contained in
Exhibit A, which remain in effect.  This Agreement may not be changed, modified
or amended in any manner except by an instrument in writing signed by Minch and
the Company.
 
6.02. Assignment.  This Agreement may not be assigned by the Company or
Minch.  This Agreement shall be binding upon and inure to the benefit of the
parties only and their respective successors, heirs and legal representatives.
 
6.03. Governing law.  This Agreement will be governed by the laws of the State
of Texas and is performable in Travis County, Texas.
 
6.04. Notices.  Notices will be considered delivered when hand delivered or
three (3) business days after being deposited in the United States mail
Registered Return Receipt Requested addressed to the following:
 

Littlefield Corporation Jeffrey L Minch 2501 North Lamar Boulevard     1402
Ethridge Avenue Austin, Texas 78705 Austin, Texas 78703

 
6.05. Severability.  If one or more of the provisions of this Agreement are
deemed voided or otherwise unenforceable by law, then the remaining provisions
will continue in full force and effect.
 
6.06. Indemnification.  The Company will unconditionally and irrevocably
indemnify and hold harmless Minch, to the maximum extent permissible by law,
from any and all costs or expenses, as incurred, from any actions or omissions
by him in the course of his employment by Littlefield Corporation including the
payment of any sums guaranteed by Minch to third parties.
 
6.07. Time. In all matters related to this Agreement, time is of the essence.
 
IN WITNESS WHEREOF, Littlefield Corporation and Jeffrey L Minch have executed
this Agreement to be effective as of 1 January 2012.

LITTLEFIELD
CORPORATION                                                               JEFFREY
L. MINCH

_______________________                                                                    _______________________
Chairman of the Board
Littlefield Corporation

Date:__________,
201__                                                                           Date:__________,
201__
 
 
 
 

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EXHIBIT A

CONFIDENTIALITY & RESTRICTIVE COVENANTS

Confidential Information: Immediately upon execution of this Agreement, and in
the course of employment with the Company, Minch will be provided certain
confidential, proprietary, and/or trade secret information of the Company and
its subsidiaries (hereinafter “Confidential Information”). During and for one
year after termination from employment with the Company, Minch will not make any
use of, disseminate or disclose any Confidential Information to any person or
entity, except in the course of performing his duties as an employee of the
Company. These restrictions do not apply to information that is in the public
domain through no violation of Minch’s obligations herein.

Restrictions.  During the Term and for a period of one (1) year after
termination from the Company, Minch will not, either directly or indirectly, on
his own behalf or in the service or on behalf of others, as an investor,
partner, owner, manager, supervisor, administrator, consultant, director,
employee, or in any other capacity:

(i)  
engage in any business in which his knowledge of Confidential Information, is or
may be used, directly or indirectly, in competition with the Company;

(ii)  
engage in the catering, tent event, or party rental equipment business in Travis
County Texas

(iii)  
engage in the charitable bingo business in any county in which the Company has
been granted a license, permit, or other official authorization to engage in the
charitable bingo business; or

(iv)  
solicit, divert or hire away, or attempt to solicit, divert or hire away, any
person employed by the Company or its subsidiaries.

Remedies. In the event of a breach by Minch of the provisions of this Section of
this Agreement, the Company shall be entitled to an injunction, without bond, as
well as reimbursement of the attorney’s fees and expenses incurred to enforce
this Agreement. Nothing herein shall be construed as prohibiting Company from
pursuing such other remedies available to Company for such breach, including the
recovery of damages from Minch, direct and consequential.