U.S. Geothermal Inc.: Exhibit 10.3 - Filed by newsfilecorp.com





Exhibit 10.3

EMPLOYMENT AGREEMENT

THIS AGREEMENT made as of the 31st day of
December, 2010

BETWEEN:

U.S. Geothermal Inc., a body
corporate having an office at 1505 
Tyrell Lane, Boise, Idaho 83706 
(the
"Company")

AND:

Jonathan Zurkoff, an individual
having a residence at 2413 N 25th 
Stree, Boise,
ID 83702 
(the "Employee")

WHEREAS:

	(A) 	
      the Company is in the business of developing and
      acquiring geothermal power projects;

	 	 
	(B) 	
      the Company wishes to engage the Employee as Vice
      President, Finance; and

	 	 
	(C) 	
      the parties hereto wish to enter into this Agreement for
      the purpose of fixing the compensation and terms applicable to the
      employment of the Employee during the period hereinafter set
  out.



NOW THEREFORE THIS AGREEMENT WITNESSES that the parties
hereto, in consideration of the respective covenants and agreements on the part
of each of them herein contained, do hereby covenant and agree as follows:

	1. 	
      Employment



The Company hereby engages the Employee as Vice President,
Finance of the Company, and the Employee hereby accepts such employment,
upon the terms and conditions hereinafter set out.

	2. 	
      Term



This Agreement will be effective from December 31, 2010
and will remain in full force and effect until March 31, 2013 or
until terminated as hereinafter provided. The term of this Agreement may be
extended for one or more additional annual periods by written agreement signed
by Employee and Company prior to the end of the term or any renewal of the term.





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	3. 	
      Responsibility



The Employee will devote one hundred percent of his working
time to his Employment hereunder, and while engaged in his employment will have
the authority and duty to perform and carry out such duties and responsibilities
as are customarily carried out by persons holding similar positions in other
geothermal companies comparable in size to the Company and such additional and
related duties as may from time to time be assigned, delegated, limited or
determined by the Chief Executive Officer.

	4. 	
      Other Business Activities



For the term of the engagement, the Employee may not engage in
any other business activities which will significantly interfere with his
performance of the duties contemplated in this contract.

	5. 	
      Compensation



In consideration of the performance by the Employee of his
responsibilities and duties as Vice President, Finance
hereunder:

	 	(a) 	
      the Company will pay Employee the sum of US$160,000.00
      per annum, payable in monthly installments. Such salary may be
      adjusted annually on the anniversary date of this agreement;

	 	 	 
	 	(b) 	
      the Company will provide a 401K retirement benefit as is
      available to the other employees of the Company; and,

	 	 	 
	 	(c) 	
      the Company will provide the Employee and his immediate
      family (consisting of spouse and children) with medical, dental and
      related coverages as are or may become available to the other employees of
      the Company;




	6. 	
      Expenses



The Company will reimburse the Employee for any and all
reasonable and documented expenses actually and necessarily incurred by the
Employee in connection with the performance of his duties under this Agreement.
The Employee will furnish the Company with an itemized account of his expenses
in such form or forms as may reasonably be required by the Company and at such
times or intervals that may be required by the Company.

	7. 	
      Vacation



The Employee will be entitled to a paid vacation of 20
days within each 12-month period under the terms of this Agreement, to be
calculated from the date of commencement of employment set forth in Section 2 herein. This vacation must be taken on dates
that do not adversely compromise the Employee’s performance of his duties under
this Agreement.




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	8. 	
      Termination



This Agreement and the Employee's employment may be terminated
by the Company summarily and without notice, payment in lieu of notice,
severance payments, benefits, damages or any sums whatsoever, except those
already earned, on the occurrence of any one or more of the following
events:

	 	(a) 	
      the Employee’s failure to carry out his duties hereunder
      in a competent and professional manner;

	 	 	 
	 	(b) 	
      the Employee’s appropriation of corporate opportunities
      for the Employee’s direct or indirect benefit or his failure to disclose
      any material conflict of interest;

	 	 	 
	 	(c) 	
      the Employee’s plea of guilty to, or conviction of, an
      indictable offence once all appeals (if any) have been completed without
      such conviction having been reversed;

	 	 	 
	 	(d) 	
      the existence of cause for termination of the Employee at
      common law including but not limited to cause related to fraud,
      dishonesty, illegality, breach of statute or regulation, or gross
      incompetence;

	 	 	 
	 	(e) 	
      failure on the part of the Employee to disclose material
      facts concerning his business interests or employment outside of his
      employment by the Company, provided such facts are, in the opinion of the
      Company, detrimental to the Employee’s duties hereunder;

	 	 	 
	 	(f) 	
      refusal on the part of the Employee to follow the
      reasonable and lawful directions of the Company;

	 	 	 
	 	(g) 	
      breach of fiduciary duty to the Company on the part of
      the Employee; or

	 	 	 
	 	(h) 	
      material breach of this Agreement or gross negligence on
      the part of the Employee in carrying out his duties under this
      Agreement.



8.1          
In the event of the early termination of the Agreement for any reason set
out in Section 8 above, the Employee shall only be entitled to such compensation
as would otherwise be payable to the Employee hereunder up to and including such
date of termination, as the case may be.

8.2          
This Agreement and the Employee's employment may be terminated on notice by
the Company to the Employee for any reason other than for the reasons set out in
Section 8 above of this Agreement upon one month notice to the Employee. In
such event, the Employee will be entitled to payment of salary up to and
including such date of termination and the pro-rata monetary equivalent of any
unused vacation days earned to the date of termination. Expenses incurred up to
and including such date of termination shall be reimbursed only in accordance
with Section 6.




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8.3         
 This Agreement and the Employee's employment may be terminated on
notice by the Employee to the Company for any reason upon one month notice to
the Company. In such event, the Employee will be entitled to payment of salary
up to and including such date of termination and the pro-rata monetary
equivalent of any unused vacation days accrued to the date of termination.
Expenses incurred up to and including such date of termination shall be
reimbursed only in accordance with Section 6.

	
      8.4 
	
      In the event that (i) Employee’s employment is terminated
      either by Company without Cause or by Employee for Good Reason (as defined
      below), and (ii) a Change of Control (as defined below) has occurred
      within the twelve (12) month period preceding the date of such
      termination, the Employee shall be entitled to receive a lump sum payment
      in an amount equal to eighteen (18) monthly installments of the Employee’s
      base annual salary as set forth under Section 5(a). Any payments made
      under this Section 8.4, in all events, will be paid within 60 days of the
      date of termination. For purposes of this Section 8.4, the Employee shall
      be considered to have had a termination of employment as of the date that
      the facts and circumstances indicate that it is reasonably anticipated
      that the Employee will perform no further services for the Company and its
      affiliates after such date or that the level of bona fide services for the
      Company and its affiliates that the Employee is expected to perform is
      expected to decrease permanently to no more than 20% of the average level
      of bona fide services that the Employee performed over the immediately
      preceding 36-month period. Whether the Employee has had a termination of
      employment will be determined in a manner consistent with the definition
      of “separation from service” under Code section 409A. 

	  	  
	
      8.5 
	
      If this Agreement is terminated in accordance with
      Section 8.4, the benefits provided to the Employee pursuant to Section
      5(c) of this Agreement shall continue for the number of months of
      compensation the Employee is entitled to following the termination of
      employment pursuant to Section 8.4 or until the Employee commences
      alternative employment, whichever occurs first; provided that, if such
      continued participation is not permissible under applicable law, Company
      or its successor shall provide Employee with benefits substantially
      similar to those to which Employee would have been entitled under those
      plans in which Employee’s continued participation is not permissible. The
      percentage of the contributions by the Company for the cost of the
      benefits provided pursuant to this Section 8.5 shall be at the same level
      as the Company’s contribution for such benefits during the Employee’s
      employment. 







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“Good Reason” shall mean any one of the conditions set forth
below, provided that Employee must provide notice to the Company within sixty
(60) days of the existence of such condition and the Company will have thirty
(30) days from receipt of such notice to remedy the condition. If the condition
is not remedied within such 30 day period, the following conditions will
constitute “Good Reason”:

	 	a) 	
      A material diminution in the Employee’s base
      compensation; or

	 	 	 
	 	b) 	
      A material diminution in the Employee’s authority,
      duties, or responsibilities; or

	 	 	 
	 	c) 	
      A material diminution in the authority, duties, or
      responsibilities of the supervisor to whom the Employee is required to
      report, including a requirement that an Employee report to a corporate
      officer or employee instead of reporting directly to the board of
      directors of a corporation (or similar governing body with respect to an
      entity other than a corporation); or

	 	 	 
	 	d) 	
      A material diminution in the budget over which the
      Employee retains authority; or

	 	 	 
	 	e) 	
      A material change in the geographic location at which the
      Employee must perform the services.



“Change of Control” means an event
occurring after the effective date of this Agreement pursuant to which:

	 	a) 	
      a merger, amalgamation, arrangement, consolidation,
      reorganization or transfer takes place in which securities of the Company
      possessing more than 50% of the total combined voting power of the
      Company’s outstanding voting securities are acquired by a person or
      persons different from the person holding those voting securities
      immediately prior to such event, and the composition of the board of
      Directors of the Company following such event is such that the directors
      of the Company prior to the transaction constitute less than 50% of the
      Board membership following the event;

	 	 	 
	 	b) 	
      any person or any combination of persons acting jointly
      or in concert by virtue of an agreement, arrangement, commitment or
      understanding acquires, directly or indirectly, 50% or more of the voting
      rights attached to all outstanding voting securities;

	 	 	 
	 	c) 	
      any person, or combination of persons, acting jointly or
      in concert by virtue of an agreement, arrangement or commitment or
      understanding acquires, directly or indirectly, the right to appoint a majority of the
  directors of the Company; or







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	 	d) 	
      the company sells, transfers or otherwise disposes of all
      or substantially all of its assets, except that no Change of Control will
      be deemed to occur if such sale or disposition is made to a subsidiary or
      subsidiaries of the Company.





	9. 	
      Confidential Information



The Employee agrees to keep the affairs and Confidential
Information (as defined below) of the Company strictly confidential and shall
not disclose the same to any person, company or firm, directly or indirectly,
during or after his employment by the Company except as authorized in writing by
the Board. "Confidential Information" includes, without limitation, the
following types of information or material, both existing and contemplated,
regarding the Company or its parent, affiliated or subsidiary companies:
corporate information, including contractual licensing arrangements, plans,
strategies, tactics, policies, resolutions, patent, trade-mark and trade name
applications; any litigation or negotiations; information concerning suppliers;
marketing information, including sales, investment and product plans, customer
lists, strategies, methods, customers, prospects and market research data;
financial information, including cost and performance data, debt arrangements,
equity structure, investors and holdings; operational and scientific
information, including trade secrets; technical information, including technical
drawings and designs; any information relating to any mineral projects in which
the Company has an actual or potential interest; and personnel information,
including personnel lists, resumes, personnel data, organizational structure and
performance evaluations. The Employee agrees not to use such information,
directly or indirectly, for his own interests, or any interests other than those
of the Company, whether or not those interests conflict with the interests of
the Company during or after his employment by the Company. The Employee
expressly acknowledges and agrees that all information relating to the Company,
whether financial, technical or otherwise shall, upon execution of this
Agreement and thereafter, as the case may be, be the sole property of the
Company, whether arising before or after the execution of this Agreement. The
Employee expressly agrees not to divulge any of the foregoing information to any
person, partnership, Company or other legal entity or to assist in the
disclosure or divulging of any such information, directly or indirectly, except
as required by law or as otherwise authorized in writing by the Board. The
provisions of this Section 9 and Section 9.1 below shall survive for two years
the termination of this Agreement. 

9.1          
The Employee agrees that all documents of any nature pertaining to the
activities of the Company or its related corporate entities, including
Confidential Information, in the Employee's possession now or at any time during
the Employee's period of employment, are and shall be the property of the
Company and that all such documents and copies of them shall be surrendered to
the Company when requested by the Company.

9.2          
 The Company agrees to keep confidential the terms of this Agreement
and any disclosures made herein.




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	10. 	
      Non-Competition



During the Non-Competition Period (as defined below), the
Employee shall not, either individually or in partnership or jointly or in
conjunction with any other person, entity or organization, as principal, agent,
consultant, lender, contractor, employer, employee, investor, shareholder or in
any other manner, directly or indirectly, advise, manage, carry on, establish,
control, engage in, invest in, offer financial assistance or services to, or
permit the Employee's name or any part thereof to be used by, any business in
geothermal resources that is in direct competition with the business of the
Company, its parent, affiliated or subsidiary companies, or any business in
which the Company, its parent, affiliated or subsidiary companies is engaged.
Competition, for purposes of this paragraph, is defined as a 10-mile radius
around any and all geothermal properties acquired by the company up to and
inclusive of the date of termination. For purposes of this Agreement,
“Non-Competition Period” means a period ending twelve (12) months after the end
of the termination of this Agreement. The Company agrees to waive this
requirement upon request in the event that the Company agrees that an activity
will have no significant adverse effect on the Company.

	11. 	
      Acknowledgement



The Employee acknowledges that damages would be an insufficient
remedy for a breach by him of this Agreement and agrees that the Company may
apply for and obtain any relief available to it in a court of law or equity,
including injunctive relief, to restrain breach or threat of breach of this
Agreement by the Employee or to enforce the covenants contained therein and, in
particular, the covenants contained in Sections 9 and 10, in addition to rights
the Company may have to damages arising from said breach or threat of breach.
The Company acknowledges that in seeking remedy in a court of law or equity, it
is not attempting to deny the Employee, if in good faith he is seeking to
improve his financial well being. The Company agrees not to seek consequential
damages and, in any event, the Company agrees not to seek damages in excess of
the amounts paid to the Employee pursuant to this agreement. 

	12. 	
      Representations and
Warranties



The Employee represents and warrants to the Company that the
execution and performance of this Agreement will not result in or constitute a
default, breach, or violation, or an event that, with notice or lapse of time or
both, would be a default, breach, or violation, of any understanding, agreement
or commitment, written or oral, express or implied, to which the Employee is
currently a party or by which the Employee or Employee's property is currently
bound.

The Company represents and warrants to the Employee that the
execution and performance of this Agreement will not result in or constitute a
default, breach, or violation, or an event that, with notice or lapse of time or
both, would be a default, breach or violation, of any understanding, agreement
or commitment, written or oral, express or implied, to which the Company is currently a party or by which the Company or
Company’s property is currently bound.




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Employee agrees to indemnify Company and to hold it harmless
against any and all liabilities or claims arising out of any unauthorized act or
acts by Employee that, the foregoing representation and warranty to the contrary
notwithstanding, are in violation, or constitute a breach, of any such contract,
commitment, arrangement or understanding.

Employee acknowledges and agrees that Company has made no
representations or warranties with respect to the tax consequences of any
payments or other consideration provided by Company to Employee under the terms
of this Agreement, and that Employee is solely responsible for Employee’s
compliance with any and all laws applicable to such payments or other
consideration.

Company may take such action as it deems appropriate to insure
that all applicable federal, state, city and other payroll, withholding, income
or other taxes arising from any compensation, benefits or any other payments
made pursuant to this Agreement, or any other contract, agreement or
understanding that relates, in whole or in part, to Employee’s employment with
Company, are withheld or collected from Employee.

	13. 	
      Governing Law



This Agreement shall be construed and enforced in accordance
with the laws of the State of Idaho, USA.

	14. 	
      Entire Agreement



This Agreement constitutes the entire agreement between the
parties hereto with respect to the relationship between the Company and the
Employee and supersedes all prior arrangements and agreements, whether oral or
in writing between the parties hereto with respect to the subject matter
hereof.

	15. 	
      Amendments



No amendment to or variation of the terms of this Agreement
will be effective or binding upon the parties hereto unless made in writing and
signed by both of the parties hereto.

	16. 	
      Assignment



This Agreement is not assignable by the Employee. This
Agreement is assignable by the Company to any other company that controls, is
controlled by, or is under common control with the Company. This Agreement shall
enure to the benefit of and be binding upon the Company and its successors and
permitted assigns and the Employee and his heirs, executors and
administrators.




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	17. 	
      Severability



Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of the prohibition or unenforceability and shall be severed from
the balance of this Agreement, all without affecting the remaining provisions of
this Agreement or affecting the validity or enforceability of such provision in
any other jurisdiction.

	18. 	
      Headings



The division of this Agreement into Sections and the insertion
of headings are for convenience or reference only and shall not affect the
construction or interpretation of this Agreement.

	19. 	
      Time of Essence



Time shall be of the essence in all respects of this
Agreement.

	20. 	
      Independent Legal Advice



The Employee agrees that he has had, or has had the opportunity
to obtain, independent legal advice in connection with the execution of this
Agreement and has read this Agreement in its entirety, understands its contents
and is signing this Agreement freely and voluntarily, without duress or undue
influence from any party.

	21. 	
      Notice



Any notice required or permitted to be made or given under this
Agreement to either party shall be in writing and shall be sufficiently given if
delivered personally, by electronic transmission, or if sent by prepaid
registered mail to the intended recipient of such notice at their respective
addresses set forth below or to such other address as may, from time to time, be
designated by notice given in the manner provided in this Section:

	 	in the case of Company: 
	 	  
	 	U.S. Geothermal Inc. 
	 	1505 Tyrell Lane 
	 	Boise, Idaho 83706 
	 	Attention: Corporate Secretary 
	 	Fax No.: 208 424 1030 
	 	  
	 	in the case of Employee: 
	 	  
	 	Jonathan Zurkoff 
	 	2413 N 25th
      Street 
	 	Boise, ID 83702 






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Phone No: 208-343-8052

Any notice delivered to the party to whom it is addressed shall
be deemed to have been given and received on the day it is so delivered or, if
such day is not a business day, then on the next business day following any such
day. Any notice mailed shall be deemed to have been given, and received on the
10th business day following the date of mailing. In the case of facsimile
transmission, notice is deemed to have been given or served on the party to whom
it was sent at the time of dispatch if, following transmission, the sender
receives a transmission confirmation report or, if the sender’s facsimile
machine is not equipped to issue a transmission confirmation report, the
recipient confirms in writing that the notice has been received.

IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the day and year first above written.

U.S. GEOTHERMAL INC.

	By: 	/s/
      Daniel Kunz 	 
	  	           
             Authorized Signatory 	 


SIGNED by the Employee in the presence of:

	/s/ Nancy Brown
	 	/s/
      Jonathan Zurkoff 
	Witness 	 	Employee 
	  	 	  
	  	 	  
	  	 	  
	Nancy Brown	 	  
	Printed Name of Witness 	 	  



    

    
    
    AMENDMENT 

      TO

    EMPLOYMENT AGREEMENT

         THIS AMENDMENT TO THE EMPLOYMENT
      AGREEMENT (the “Amendment”) is effective as of March 31, 2013 (the “Effective
      Date”), by and between U.S. Geothermal Inc., a Delaware corporation (the
  “Company”), and Jonathan Zurkoff (“Employee”).

    RECITALS

         WHEREAS, the Company and Employee
      entered into an Employment Agreement with a term from December 31, 2010 until
      March 31, 2013 (the “Agreement”).

         WHEREAS, the Company and Employee
      desire to amend and extend the Agreement on the terms and conditions set forth
      below.

         NOW, THEREFORE, in consideration
      of  the mutual covenants contained in the Agreement and this Amendment, the
      parties hereby agree as follows:

         1. Title. Section 1 of the
      Agreement is hereby amended to reflect that the Employee is employed as the
      Executive Vice President, Finance.

         2. Term. The term of the
      Agreement as set forth in Section 2 of the Agreement, is hereby extended and
      will remain in full force and effect until March 31, 2014.

         3. Expenses. Section 6 of
      the Agreement will be amended by the addition of the follow provision at the end
      of the second sentence thereof:

    
      	“and reimbursement by the Company will be made as soon as
            administratively practicable thereafter but in no event later than the
            earlier of (i) three (3) months after the date of termination and (ii) and
            no later than the end of the calendar year in which the expense was
            incurred.” 



    

         4. Termination Payment under
      Section 8.4. The second sentence of Section 8.4 of the Agreement is hereby
      amended and restated as follows: “Any payments made under this Section 8.4, in
      all events, will be paid on the 30th day following of the date of termination.” 

         5. Savings Clause. Except
      as modified by this Amendment, the Agreement shall remain in full force and
      effect, and is hereby ratified and confirmed in all respects.

    [signature page follows]

    1

    

    
    
         IN WITNESS WHEREOF, the
      undersigned have executed this Amendment on July 26, 2013.

    U.S. Geothermal Inc. 

    a Delaware corporation

    	By:	/s/ Dennis J. Gilles	 
	 	Name: Dennis J. Gilles	 
	 	Title: Chief Executive Officer	 


    SIGNED by the Employee in the presence of:

    	/s/ Kerry D. Hawkley	 	/s/ Jonathan Zurkoff
	Witness 	 	Jonathan Zurkoff 
	 	 	 
	Kerry D. Hawkley	 	 
	Printed Name of Witness 	 	 


    2