Exhibit 10.8

 



Energy

 

STRICTLY PRIVATE AND CONFIDENTIAL

 

January 4, 2017

 

Mr. Henry Clanton

4805 Spring Meadow Lane #4

Midland, TX

79705

 

Dear Mr. Clanton:

 

Further to our recent discussions, we are pleased to confirm the following employment arrangements in connection with the terms of your employment with Epsilon Energy USA, Inc. effective January 4, 2017.

 

	
Position:
    	
 
    	
Vice President Operations and Chief Operations   Officer - Epsilon Energy USA, Inc. (“Epsilon”).
    
	
 
    	
 
    	
 
    
	
Responsibilities:
    	
 
    	
You will be generally responsible for all matters   typical of those for a Vice President Operations and Chief Operations Officer   and shall report to the CEO of Epsilon. In addition, you shall generally   undertake and perform the following duties and responsibilities on behalf of   Epsilon:

 

·                       Conduct   and direct reserve and economic analysis.

 

·                       Support   management in decision making and production processes.

 

·                       Manage and direct company   field operations to meet budget and other financial goals.

 

·                       Develop,   establish, and direct the execution of operating policies to support overall   company objectives.

 

·                       Perform special projects as   directed.

 

You will devote all your time and attention to Epsilon   affairs. As an employee of Epsilon, you shall not, without the prior consent   of Epsilon, undertake any other employment related activities, including   serving as an officer or director of any other private or public corporation   or business enterprise.
    


 

	
Epsilon Energy USA, Inc.

16701 Greenspoint Park D
   Suite 195

Houston, Texas 77060
   Phone: 281.670.0002
   Fax: 281.668.0985
    	
PLEASE DIRECT ALL CORRESPONDENCE TO THE HOUSTON   OFFICE.
    	
Epsilon Energy Ltd.

Centennial Place. West Tower
   250 - 5th Street SW
   Suite 2110
   Calgary, AB T2P 0R4
    


 











 

	
 
    	
 
    	
You will serve at all times with loyalty and honesty   in the best interest of Epsilon and ensure that the fullest of professional   standards and ethics are maintained, and comply with all applicable laws and   corporate policies.
    
	
 
    	
 
    	
 
    
	
Base Salary:
    	
 
    	
$250,000 per annum (less statutorily required   deductions), paid bi-weekly. You shall receive annual base salary and bonus   reviews.
    
	
 
    	
 
    	
 
    
	
Options:
    	
 
    	
Upon your first date of employment at Epsilon, you   will be granted 60,000 Epsilon Energy Ltd. Stock options exercisable at the   closing price on the 5th trading day following commencement of your   employment, in accordance with Epsilon’s Stock Option Plan (a copy of which   will be provided to you at the commencement of your employment). The option   term will be seven (7) years from the date of grant and shall vest   331/3% per annum, beginning one year from the date of grant, being fully   vested at the end of three (3) years. Additional stock grants, including   the terms therein, may be issued to you in the future entirely at the   discretion of Epsilon Energy Ltd’s Board of Directors.
    
	
 
    	
 
    	
 
    
	
Inconsistency Between Other Agreements and this   Agreement:
    	
 
    	
In the event of any inconsistency between other   agreements and this agreement the terms of this Agreement shall prevail.
    
	
 
    	
 
    	
 
    
	
Benefits:
    	
 
    	
1.     Travel   and Entertainment Budget
   You will be reimbursed for all reasonable documented and pre-approved   business expenses incurred on behalf of Epsilon in carrying out your duties.



2.     Vacation
   You will be entitled to four weeks vacation per annum pro-rated for your   first year based on your starting date.



3.     Statutory   Holidays
   You will be entitled to time off for holidays in a manner that is consistent   with the applicable policies of Epsilon energy USA, Inc. as in effect   from time to time.



4.     Insurance
   You will be provided with health insurance through a reputable carrier. You   shall also be provided with a Health Savings Account or Health 
    
	
 
    	
 
    	
 
    


 











 

	
 
    	
 
    	
Flex Account funded by Epsilon. Any other insurance   provided shall be comparable with the level of insurance provided by Epsilon   Energy USA, Inc. to other employees in accordance with the terms of   future plans and any revisions thereto.



5.     Bonus

Epsilon pays the preceding year’s Annual Bonus with   the second payroll processed the following February, provided the individual   is still with the company on the payment date; unless the reason for the   departure is a termination by Epsilon for reasons other than cause. Then, any   remaining Annual Bonus will be paid with the employee’s final payroll.



6.     401(k)

Epsilon has a 401(k) plan as defined by the IRS   which employees are strongly encouraged to participate in. The employee can   designate any amount to be withheld from their salary in even percentages up   to the statutory annual IRS dollar limits. Epsilon will match on a   dollar-for-dollar basis the first 5% withheld from the employees payroll and   contribute on their behalf to the plan.
    
	
 
    	
 
    	
 
    
	
Office location:
    	
 
    	
Houston, Texas. You will be paid a miscellaneous   lump sum non- accountable bonus of $15,000 upon your successful relocation to   Houston. This bonus is meant to be a re-imbursement of your actual moving and   settlement expenses related to your move from Midland, TX to Houston, TX.
    
	
 
    	
 
    	
 
    
	
Change of Control
    	
 
    	
In the event that there is a change of control event   prior to January 4, 2018, you will be paid a one-time severance of   $125,000.
    
	
 
    	
 
    	
 
    
	
Termination before July 4, 2018
    	
 
    	
If Epsilon terminates your employment prior to   July 4, 2018, you will be paid a one-time severance of $125,000.
    
	
 
    	
 
    	
 
    
	
Confidentiality:
    	
 
    	
The terms of this agreement shall be kept   confidential, to the extent permitted by applicable law.
    
	
 
    	
 
    	
 
    
	
Resignation:
    	
 
    	
You may, by providing 15 days prior notice, in   writing, terminate this Agreement and your employment with Epsilon. If you   provide such notice, Epsilon may request that you cease duties prior to the   expiry of this notice period, and Epsilon shall, in such event, pay you an   amount equal to the difference between the amount you would have received had   your employment been continued throughout the notice period and 
    


 











 

	
 
    	
 
    	
the amount actually paid by Epsilon to you during   the notice period.
    
	
 
    	
 
    	
 
    
	
Intellectual Property, Confidentiality:
    	
 
    	
You hereby acknowledge as reasonable and agree that   you shall abide by the following terms and conditions:

 

(i)             Technology, Know-How, Inventions,   Patents: That all designs, devices, improvements, intentions and ideas made   or conceived by you resulting from your access to the business of Epsilon   shall be exclusive property of Epsilon and you and your estate agree to take   all necessary steps to ensure that such property rights are protected; and



(ii)          Confidentiality, You shall keep   confidential, at any time during your employment, and for 1 year after   cessation of employment, any proprietary or confidential information about   the business and affairs of, or belonging to, Epsilon or any affiliate or   associate thereof, including information which, though technically not trade   secrets, the dissemination of knowledge whereof might prove prejudicial to   any of them.
    
	
 
    	
 
    	
 
    
	
Legal Advice:
    	
 
    	
You acknowledge and agree you have had the   opportunity to seek independent legal advice prior to the execution and   delivery of this Agreement.
    
	
 
    	
 
    	
 
    
	
General:
    	
 
    	
Any notice or other communication required or   permitted to be given hereunder shall be in writing and shall be delivered in   person, transmitted by telecopy or similar means of recorded electronic   communication or sent by registered mail, charges prepaid, addressed as   follows or to such other



address as the relevant party may specify from time   to time:



(a)                                 if   to Epsilon Energy USA, Inc.:
   Attention: Michael Raleigh
   16701 Greenspoint Park Dr, Ste 195
   Houston, TX 77060, USA

 

(b)                                 if   to Henry Clanton:
   4805 Spring Meadow Lane #4
   Midland, TX 79705, USA



Any such notice or other communication shall be   deemed to have been
    


 











 

	
 
    	
 
    	
given and received on the day on which it was delivered   or transmitted (or, if such day is not a business day, on the next following   business day) or, if mailed, on the third business day following the date of   mailing; provided, however, that if at the time of mailing or within three   (3) business days thereafter there is or occurs a labor dispute or other   event which might reasonably be expected to disrupt the delivery of documents   by mail, any notice or other communication hereunder shall be delivered or   transmitted by means of recorded electronic communications as aforesaid



This Agreement shall inure to the benefit of and   shall be binding upon and enforceable by the parties hereto, and your heirs,   executors, administrators and legal personal representatives and the   successors and assigns of Epsilon. This Agreement is personal to you and may   not be assigned by you.
    
	
 
    	
 
    	
 
    
	
Entire Agreement:
    	
 
    	
This Agreement constitutes the entire agreement   between you and Epsilon with respect to the subject matter hereof and   supersedes all prior agreements, understandings, negotiations and   discussions, whether written or oral. There are no covenants, conditions,   agreements, representations, warranties or any other terms or provisions,   express or implied, collateral, statutory or otherwise, relating to the   subject matter hereof, except as herein provided.
    
	
 
    	
 
    	
 
    
	
Governing Law:
    	
 
    	
This Agreement shall be construed, interpreted and   enforced in accordance with, and the respective rights and obligations of you   and Epsilon and shall be governed by, the laws of the State of Texas.
    
	
 
    	
 
    	
 
    
	
Waiver:
    	
 
    	
No amendment or waiver of any provision of this   Agreement shall be binding on you and Epsilon unless consented to in writing   by such party. No waiver of any provision of this Agreement shall constitute   a waiver of any other provision nor shall any waiver constitute a continuing   waiver unless otherwise provided.
    


 

If you are in agreement with the terms of employment as contained in this letter, please confirm your acceptance of same by signing below and returning this letter in confidence to me.

 











 

Yours very truly,

 

	
EPSILON   ENERGY USA, INC.
    	
 
    
	
 
    	
 
    
	
/s/   Michael Raleigh
    	
 
    	
 
    
	
Michael   Raleigh, CEO
    	
 
    
	
 
    	
 
    
	
Date:
    	
January 4,   2017
    	
 
    	
 
    
	
 
    	
I   hereby accept the terms of this offer.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
/s/   Henry Clanton
    
	
Witness
    	
Henry   Clanton
    
	
 
    	
 
    
	
 
    	
Date:   
    	
January 5,   2017