Document:

cak_ex101.htm

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (“Employment Agreement”), effective September 21, 2010 is between CAMAC Energy Inc. (“Company”) and Byron A. Dunn, a resident of Texas (“Employee”), the terms and conditions of which are as follows:

WHEREAS, Employee wishes to enter into this Employment Agreement to receive the benefit of the provisions contained in it.

NOW THEREFORE, for good and valuable consideration, the sufficiency and receipt of which are acknowledged, the Company and Employee agree as follows:

1.  TERMS OF EMPLOYMENT.

Subject to the terms and conditions set forth in this Employment Agreement, your employment hereunder shall commence on October 1, 2010, and shall continue until Employee’s removal or resignation.

Employee understands that his employment with the Company is “at-will,” and may be terminated by Employee or the Company at any time and for any reason.  No provision of this Employment Agreement or any other agreement with the Company shall be construed to create an express or implied employment contract, or a promise of employment for any specific period of time.

 

2.  POSITION AND DUTIES.

(a)  Position.  Employee’s position shall be President and Chief Executive Officer of the Company, to serve at the pleasure of the Board of Directors of the Company (the “Board”), and Employee shall also serve in such other offices and positions with the Company’s subsidiaries and joint ventures as the Board requests from time to time.  In addition, Employee shall be appointed to serve on the Board effective as of commencement of Employee’s employment term hereunder, thereafter subject to election or removal by the Company’s stockholders or by the Company upon termination of Employee’s employment with the Company.

(b)  Duties and Responsibilities.  Employee’s duties and responsibilities shall be those normally associated with Employee’s position, plus any additional duties and responsibilities the Chairman or Board of Directors of the Company may assign orally or in writing to Employee initially and from time to time.  Employee shall undertake to perform all Employee’s duties and responsibilities for the Company and its affiliates in good faith and on a full-time basis and shall at all times act in the course of Employee’s employment under this Employment Agreement in the best interest of the Company and the Company’s affiliates.  Notwithstanding the forgoing, Employee may serve on boards of directors of entities unaffiliated with the Company that are not engaged in businesses competitive with the Company or materially adverse to the Company (as described in Section 5(d) below), provided Employee first provides the Company with prior written notification thereof.

3.  COMPENSATION AND BENEFITS

(a)  Base Salary.  During the term of Employee’s employment with the Company under this Employment Agreement, Employee’s yearly base salary shall be not less than $375,000.00, which yearly base salary shall be payable from the Company’s Houston offices to Employee in accordance with the Company’s standard payroll practices and policies, and shall be subject to such withholdings as required by U.S. Federal law and the State of Texas or as otherwise permissible under such practices or policies.  The Company shall annually review Employee’s base salary.

(b)  Annual Bonus.  Employee shall be eligible for an annual performance bonus with a target of 100% of base salary and a range of 0% - 100%.  Such bonus shall be based on Employee’s performance under the guidelines adopted by the Company, the Company’s overall performance and any special circumstances the Compensation Committee and the Company’s Board of Directors deem appropriate.  Any such bonus is to be determined based on reaching performance objectives as set by the Company’s Compensation Committee and/or the Company’s Board of Directors.

 

  

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(c)  Employee Benefits Plans.  Employee shall be eligible to participate in the employee benefit plans, programs and policies maintained by the Company for similarly situated employees in accordance with the terms and conditions to participate in such plans, programs, and policies as in effect from time to time.

(d)  Stock Options and Restricted Stock.  Upon hire, Employee shall be issued (i) 250,000 shares restricted stock subject to one (1) year vesting, subject to Employee’s continued employment with the Company (the “Stock Grant”), and (ii) 1.5 million option shares vesting one-third each on December 1, 2011; December 1, 2012; and December 1, 2013, subject to Employee’s continued employment with the Company, with strike price equal to FMV on date of hire (the “Option Grant”).  The Stock Grant and Option Grant shall each be issued under and in accordance with the Company’s 2009 Equity Incentive Plan, and shall be documented by standard restricted stock and option agreements as contemplated by the Plan.

(e)  Signing Bonus.  Employee shall receive a one-time cash sign-on bonus of $150,000.

(f)  Vacation.  Employee shall be entitled to five (5) weeks annual vacation.

(g)  Expenses.  The Company shall pay or reimburse Employee for all reasonable expenses actually incurred or paid by Employee in the performance of his services hereunder upon the presentation of expense statements or vouchers or such other supporting information as the Company may reasonable require of Employee.

(h)   Office Facilities and Services.  Employee shall be accorded such benefits and support services, including without limitation, office facilities, administrative assistant, communications, and such other perquisites as would normally be accorded by a corporation of the size and at the stage of development in the industry in which the Company is, to its President and Chief Executive Officer.

(i)  Indemnification.  Employee shall be entitled to the benefit of the indemnification provisions contained in the bylaws of the Company, as the same may be amended.

(j)  Perquisites.  Employee shall be entitled to Company-paid membership to the Petroleum Club and other club(s) agreed to by the Company, and a vehicle stipend of $750 per month.

 

4.  TERMINATION OF EMPLOYMENT.

(a)  Termination By The Company Other Than For Cause; Or By Employee For Good Reason.

(1)  The Company shall have the right to terminate Employee’s employment other than for Cause at any time and Employee shall have the right to resign for Good Reason at any time.

(2)  If (a) the Company or its successors terminate Employee’s employment with the Company other than for Cause or (b) Employee resigns for Good Reason, then:  (u) the Company shall pay to Employee within thirty (30) days after the termination or resignation an amount equal to twenty-four (24) months of Employee’s base salary plus target bonus as in effect immediately before Employee’s termination of employment or resignation; (v) the Company shall pay to Employee within thirty (30) days after the termination or resignation an amount equal to twenty-four (24) months of the maximum contribution the Company may make for Employee under the Company’s 401(k), profit sharing plan and pension plan as in effect immediately before Employee’s termination of employment or resignation; (w) any outstanding stock option(s) or restricted stock granted by the Company to Employee shall become fully vested and options shall remain exercisable for twelve (12) months following Employee’s termination pursuant to this Section 4(a)(2), or the tenth anniversary of the date(s) of the grant(s) specified in the relevant option agreement(s), whichever is the shorter period; (x) a certificate(s) representing such restricted shares will be delivered to Employee within thirty (30) days after the end of the applicable restriction period; (y) Employee shall be reimbursed for up to $20,000 of outplacement services with an outplacement service approved by the Company; and (z) the Company shall continue to provide Employee and Employee’s dependents with the same level of life, disability, accident, dental and health insurance benefits Employee and Employee’s dependents were receiving immediately before Employee’s termination for the shorter of (i) two (2) years following Employee’s termination or resignation or (ii) through the date that Employee commences employment with another employer that offers life, disability, accident, dental and health insurance benefits to Employee and Employee’s dependents similar to those received by Employee and Employee’s dependents on the date of termination or resignation.

 

  

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(3)  If the termination or resignation described in Section 4(a)(2) occurs within one (1) year after or six (6) months before a Change of Control, then (s) the Company shall pay to Employee, within thirty (30) days after the termination of employment or resignation an amount equal to 2.5 times the Employee’s annual base salary plus target bonus as in effect immediately before Employee’s termination of employment or resignation; (t) the Company shall pay to Employee within thirty (30) days after the termination or resignation an amount equal to 2.5 times the maximum contribution the Company may make for Employee under the Company’s 401(k), profit sharing plan and pension plan as in effect immediately before Employee’s termination of employment or resignation; (u) any outstanding stock option(s) or restricted stock granted by the Company to Employee shall become fully vested and, if applicable, options shall remain exercisable for twelve (12) months following Employee’s termination or resignation, or the tenth anniversary of the date(s) of the grant(s) specified in the relevant option agreement(s), whichever is the shorter period; (v) a certificate(s) representing such restricted shares will be delivered to Employee within thirty (30) days after the end of the applicable restriction period; (w) Employee shall be reimbursed for up to $20,000 of outplacement services with an outplacement service approved by the Company; and (x) the Company shall continue to provide Employee and Employee’s dependents with the same level of life, disability, accident, dental and health insurance benefits Employee and Employee’s dependents were receiving immediately before Employee’s termination or resignation for the shorter of (i) two (2) years following the later to occur of the termination or resignation, or (ii) through the date that Employee commences employment with another employer that offers life, disability, accident, dental and health insurance benefits to Employee and Employee’s dependents similar to those received by Employee and Employee’s dependents on the date of termination or resignation,   In the event the Change of Control occurs six (6) months following the termination or resignation and Employee has already received the benefits set forth in Sections 4(a)(2)(u) and (v) above (i.e., 2.0 times base salary and target bonus and 2.0 times Company contributions), the Company shall make an additional adjustment payment to Employee necessary to make the aggregate payments previously paid to Employee under Sections 4(a)(2)(u) and (v) equal those due under Sections 4(a)(3)(s) and (t) as a result of the Change of Control.

 

(b)  Termination By The Company For Cause; Or By Employee Other Than For Good Reason.

(1)  The Company shall have the right to terminate Employee’s employment at any time for Cause, and Employee shall have the right to quit or resign at any time other than for Good Reason.

(2)  If the Company terminates Employee’s employment for Cause, or Employee quits or resigns other than for Good Reason, the Company’s only obligation to Employee under this Employment Agreement shall be to pay Employee’s base salary (including accrued vacation) actually earned to the date the Employee’s employment terminates.

(c)  Termination for Disability or Death.

(1)  Notwithstanding anything to the contrary herein, the Company shall have the right to terminate Employee’s employment on or after the date Employee has a Disability, and Employee’s employment shall terminate at Employee’s death.

(2)    If Employee’s employment terminates under this Section 4(c), the Company shall pay Employee or, if Employee dies, Employee’s estate, no further compensation or benefits with respect to his employment, except those which have accrued due and those which may be provided to him pursuant to a group disability and insurance policies or the Company’s 401(k), profit sharing plan and pension plan will be paid.  The Employee or his estate will have 90 days from the date of termination to exercise stock options. The Employee’s vested restricted stock will be issued to him or his estate in thirty (30) days.

(d)  Cause.  The term “Cause” shall mean Employee’s (1) conviction of, or plea of nolo contendere to, a felony or any other crime involving moral turpitude; (2) fraud on or misappropriation of any funds or property of the Company or any of its affiliates, customers or vendors; (3) act of material dishonesty, willful misconduct, willful violation of any law, rule or regulation, or breach of fiduciary duty involving personal profit, in each case made in connection with Employee’s responsibilities as an employee, officer or director of the Company and which has, or could reasonably be deemed to result in, a Material Adverse Effect upon the Company (a defined below); (4) illegal use or distribution of drugs; (5) material violation of any policy or code of conduct of the Company; or (6) material breach of any provision of this Employment Agreement or any other employment, non-disclosure, non-competition, non-solicitation or other similar agreement executed by Employee for the benefit of the Company or any of its affiliates, all as determined by the Board of Directors of the Company. However, an event that is or would constitute “Cause” shall cease to be “Cause” if Employee reverses the action or cures the default that constitutes “Cause” within 10 days after the Company notifies Employee in writing that Cause exists.

 

  

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No act or failure to act on Employee’s part will be considered “willful” unless it is done, or omitted to be done, by Employee in bad faith or without reasonable belief that such action or omission was in the best interests of the Company.  Any act or failure to act that is based on authority given pursuant to a resolution duly passed by the Board, or the advice of counsel to the Company, shall be conclusively presumed to be done, or omitted to be done, in good faith and in the best interests of the Company.

 

For purposes of this section, “Material Adverse Effect” means any event, change or effect that is materially adverse to the condition (financial or otherwise), properties, assets, liabilities, business, operations or results of operations of the Company or its subsidiaries, taken as a whole.

 

(e)  Good Reason.  “Good Reason” means the occurrence of any of the following without Employee’s written consent: (a) the assignment to Employee of duties substantially inconsistent with this Employment Agreement or a material adverse change in Employee’s titles or authority; (b) any failure by the Company to comply with Section 3 hereof in any material way; (c) any material breach of this Employment Agreement by the Company; or (d) the relocation of Employee more than fifty (50) miles from the location of the Company’s principal office located at 1330 Post Oak Blvd., Houston, Texas 77056.  However, an event that is or would constitute “Good Reason” shall cease to be “Good Reason” if:  (i) Employee does not terminate employment within 45 days after the event occurs; (ii) before Employee terminates employment, the Company reverses the action or cures the default that constitutes “Good Reason” within 10 days after Employee notifies it in writing that Good Reason exists; or (iii) Employee was a primary instigator of the “Good Reason” event and the circumstances make it inappropriate for Employee to receive “Good Reason” termination benefits under this Employment Agreement (e.g., Employee agrees temporarily to relinquish his position on the occurrence of a merger transaction Employee assists in negotiating).

 

(f)  Disability.  Employee shall have a “disability” under this Employment Agreement on the date the Company receives written notice from a physician selected by the Company that Employee has a “disability,” as defined in Section 22(e)(3) of the Internal Revenue Code, as amended).

(g)  Change of Control.  A “Change of Control” shall mean:  (i) a merger, consolidation or sale of capital stock by existing holders of capital stock of the Company that results in more than 50% of the combined voting power of the then outstanding capital stock of the Company or its successor changing ownership; (ii) the sale, or exclusive license, of all or substantially all of the Company's assets; or (iii) the individuals constituting the Company’s Board as of the date of the Employment Agreement (the “Incumbent Board”) cease for any reason to constitute at least 1/2 of the members of the Board; provided, however, that if the election, or nomination for election by the Company’s stockholders, of any new director was approved by a vote of the Incumbent Board, such new director shall be considered a member of the Incumbent Board. Notwithstanding the foregoing and for purposes of clarity, a transaction shall not constitute a Change in Control if: (w) its sole purpose is to change the state of the Company’s incorporation; (x) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction; (y) it is a transaction effected primarily for the purpose of financing the Company with cash (as determined by the Board in its discretion and without regard to whether such transaction is effectuated by a merger, equity financing or otherwise); or (z) the individual, entity or group (within the meaning of Section 13(d)(3) or (14(d)(2) of the Securities Exchange Act of 1934) that is the acquiring or surviving party in a transaction described in subsections (g)(1) and g(2) above is, as of the date of the Employment Agreement, in control of, shares common control of, or is an affiliate of, CAMAC Energy Holdings Limited.

(h)  Benefits. Employee shall have the right to receive any benefits payable under the Company’s employee benefits plans, programs and policies (other than a termination and separation or severance plan that the Company may adopt at a future date that may be applicable to executives and/or employees of the Company (a “Severance Plan”)) which Employee otherwise has a non-forfeitable right to receive under the terms of such plans, programs and policies (other than severance benefits) independent of Employee’s rights under this Employment Agreement upon a termination of employment in addition to any other benefits under this Section 4 without regard to the reason for such termination of employment.  Employee acknowledges and agrees that until the termination of this Employment Agreement, he shall not be entitled to participate in a Severance Plan.

 

  

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(i)  Notice of Termination.  Any termination by the Company or by Employee for any reason shall be communicated by a notice of termination to the other party hereto and shall be given in accordance with Section 6(a).  Such notice shall state the specific termination provision in the Employment Agreement upon which the termination relies, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provisions so indicated, to the extent applicable.

(j)  Officer and Directorship.  In the event Employee is terminated or resigns for any reason, Employee agrees to resign, effective the same date, from any office or directorship held with the Company or any of its subsidiaries or affiliate companies.

(k)  No Mitigation.  Employee shall not be required to mitigate the amount of any severance payment contemplated by this Employment Agreement, nor shall any such payment be reduced by any earnings that Employee may receive from any other source, except and to the extent expressly provided herein.

(l)  Stock Award Agreements.  In the event of a conflict adverse to Employee between the terms of this Employment Agreement and the terms of any agreement granting Employee stock options or restricted stock, the conflicting terms of this Employment Agreement shall govern, unless otherwise required by applicable law.

5.  COVENANTS BY EMPLOYEE

(a)  Property of the Company.

(1)  Employee covenants and agrees that upon the termination of Employee’s employment for any reason or, if earlier, upon the Company’s request Employee shall promptly return all Property which has been entrusted or made available to Employee by the Company or any of its subsidiaries.

(2)  The term “Property” shall mean all records, files, presentations, agreements, memoranda, reports, price lists, drawing, plans, sketches, keys, codes, computer hardware and software and other property of any kind or description prepared, used or possessed by Employee during Employee’s employment by the Company and during any period Employee was a director of the Company (and any duplicates of any such property) together with any and all information, ideas, concepts, discoveries, and inventions and the like conceived, made, developed or acquired at any time by Employee individually or with others during Employee’s employment which relate to the business, products or services of the Company or any of its subsidiaries.

(b)  Trade Secrets.

(1)  In consideration for the promises made in Section 5(d) of this Employment Agreement, the Company promises that it shall provide and make available to Employee certain confidential, proprietary information and trade secrets.

(2)  Employee covenants and agrees that Employee shall hold in a fiduciary capacity for the benefit of the Company and each of its affiliates, and shall not directly or indirectly use or disclose, any Trade Secret that Employee may have acquired pursuant to Section 5(b)(1) above during the term of Employee’s employment by the Company for so long as such information remains a trade secret.

(3)  The term “Trade Secret” shall mean information, including, but not limited to, technical or non-technical data, a formula, a patent, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, or that (a) derives economic value, actual or potential, from not being generally known to, and not being generally readily ascertainable by proper means by other persons who can obtain economic value from its disclosures or use and (b) is the subject of reasonable efforts by the Company and its affiliates to maintain its secrecy.

(4)  This Section 5(b) is intended to provide rights to the Company and its subsidiaries which are in addition to those rights the Company and its subsidiaries have under the common law or applicable statutes for the protection of trade secrets.

 

  

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(c)  Confidential Information

(1)  Employee covenants and agrees while employed under this Employment Agreement and thereafter during the Restricted Period he shall hold in a fiduciary capacity for the benefit of the Company and each of its affiliates, and shall not directly or indirectly use or disclose, any of the Company’s or the Company’s affiliates’ Confidential or Proprietary Information that Employee may have acquired (whether or not developed or compiled by Employee and whether or not Employee is authorized to have access to such information) during the term of, and in the course of, or as a result of Employee’s employment by the Company or its affiliates, except as may be necessary in the ordinary course of performing Employee’s duties as an employee of or consultant to the Com­pany and except as required by law (subject to providing the Company with an opportunity to seek a protective order or other such remedy).

(2)  All Confidential or Proprietary Information shall be the sole property of the Company and its assigns or a third party, as appli­cable, and the Company and its assigns or such third party shall be the sole owner of all patents and other rights in connection with such Confidential or Proprietary Information.  Employee hereby assigns to the Company any rights he may have or acquire in any or all Confidential or Proprietary Information.  Employee recog­nizes that the Company has received and in the future will receive infor­ma­tion from third parties which is private or proprietary information, subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes.  Employee agrees, during the term of his employment or consulting relationship with the Company and thereafter, to hold all such private or proprietary infor­mation received from third parties in the strictest confidence and not to disclose or use it, except as neces­sary in carrying out his work for the Company consistent with the Com­pany’s agreement with such third party and except as required by law (subject to providing the Company with an opportunity to seek a protective order or other such remedy).

(3)  As part of the con­sideration for Employee’s employment or consulting relationship with the Company, Employee has not brought and will not bring to the Company, or use or disclose in the performance of his respon­sibilities any equipment, supplies, facility, electronic media, software, trade secret or other infor­mation or property of any former employer or any other person or entity which are not generally available to the public, unless Employee has obtained their written authorization for its possession and use.

(4)  The term “Confidential or Proprietary Information” shall mean any secret, confidential or proprietary information of the Company or an affiliate (not otherwise included in the definition of a Trade Secret under this Employment Agreement) that has not become generally available to the public by the act of one who has the right to disclose such information without violation of any right of the Company or its affiliates.

(d)  Non-Competition.  During the period of Employee’s employment with the Company and thereafter during the Restricted Period, Employee covenants and agrees that, in connection with the business operations and prospective interests of the Company on the date of Employee’s termination as an employee of the Company, which prospective interests are disclosed or known to Employee prior to or on the date of Employee’s termination as an employee of the Company, he shall not, directly or indirectly, own any interest in, manage, control, participate in, consult with, render services for, or in any manner engage in any businesses in competition with the Company or materially adverse to the Company (unless the Company’s Board of Directors shall have authorized such activity and the Company shall have consented thereto in writing).  Investments in less than 5% of the outstanding securities of any class of the Company subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, shall not be prohibited by this section.  For purposes of this Section 5(d), the term “Company” shall include CAMAC Energy Inc. and any of its affiliates or subsidiaries or any company in which it is a minority shareholder or a joint venture partner.  For purposes of this Section 5(d), the term “businesses” shall mean any enterprise, commercial venture, or project involving oil and gas exploration, development, production or distribution activities in the same geographic areas as the Company’s activities during the period of Employee’s employment.

Further, during the period of Employee’s employment with the Company and thereafter during the Restricted Period, Employee covenants and agrees that he will not directly or indirectly through another entity induce or otherwise attempt to influence any employee of the Company to leave the Company’s employment or in any way interfere with the relationship between the Company and any employee thereof.  Further, Employee will not induce or attempt to induce any customer, supplier, licensee, joint venture partner, shareholder, licensor or other business relation of the Company to cease doing business with the Company or in any way interfere with the relationship between any such customer, supplier, licensee, joint venture partner, shareholder, licensor or business relation of the Company.

 

  

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If (i) pursuant to the arbitration process described in Section 6(c) of this Employment Agreement (or such other process as to which the Company and Employee may agree upon in writing), it is determined that Employee has violated the provisions of this Section 5(d), and (ii) Employee has received a payment from the Company pursuant to Section 4(a)(2)(v), Section 4(a)(3)(s), Section 4(a)(3)(t), Section 4(a)(4)(s) or Section 4(a)(4)(t) of this Employment Agreement (the “Lump Sum Severance Amount”), then, in addition to any other remedies that the Company may have, Employee shall be obligated, and hereby agrees, to pay the Company, as liquidated damages, an amount (but not less than zero) equal to the product of (x) the Lump Sum Severance Amount and (y) a fraction whose numerator is the excess of twenty-four (24) over the number of calendar months that have elapsed since the last day of Employee’s termination of employment under Section 4 of this Employment Agreement and whose denominator is twenty-four (24).

(e)  Employment Restriction – Conflict of Interest.  Employee covenants and agrees that he will not receive and has not received any payments, gifts, or promises and Employee will not engage in any employment or business enterprises that in any way conflict with his service and the interests of the Company or its affiliates.  In addition, Employee agrees to comply with the laws or regulations of any country, including, without limitation, the United States of America, having jurisdiction over Employee, the Company or any of the Company’s subsidiaries.

Employee shall not make any payments, loans, gifts or promises or offers of payments, loans or gifts, directly or indirectly, to or for the use or benefit of any official or employee of any government or to any other person if Employee knows, or has reason to believe, that any part of such payments, loans or gifts or promise or offer, would violate the laws or regulations of any country, including, without limitation, the United States of America, having jurisdiction over Employee, the Company or any of the Company’s subsidiaries.

By signing this Employment Agreement, Employee acknowledges that he has not made and will not make any payments, loans, gifts, promises of payments, loans or gifts to or for the use or benefit of any official or employee of any government or to any other person which would violate the laws or regulations of any country, including, without limitation, the United States of America, having jurisdiction over Employee, the Company or any of the Company’s subsidiaries.

(f)  Restricted Period.  The term “Restricted Period” shall mean the two-year period which starts on the date Employee’s employment terminates with the Company.

(g)  Reasonable and Continuing Obligations.  Employee agrees that Employee’s obligations under this Section 5 are obligations which will continue beyond the date Employee’s employment terminates and that such obligations are reasonable and necessary to protect the Company’s legitimate business interests.  The Company additionally shall have the right to take such other action as the Company deems necessary or appropriate to compel compliance with the provisions of this Section 5.

6.  MISCELLANEOUS

(a)  Notices.  Notices and all other communications shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail.  Notices to the Company shall be sent to 1330 Post Oak Blvd., Suite 2575, Houston, Texas 77056, Attention:  Secretary.  Notices and communications to Employee shall be sent to Employee’s home address as indicated by the records of the Company.

(b)  No Waiver.  Except for the notice described in Section 4(f), no failure by either the Company or Employee at any time to give notice of any breach by the other of, or to require compliance with, any condition or provision of this Employment Agreement shall be deemed a waiver of any provisions or condition of this Employment Agreement.

 

  

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(c)  Arbitration and Governing Law.  ANY UNRESOLVED DISPUTE OR CONTROVERSY BETWEEN EMPLOYEE AND THE COMPANY ARISING UNDER OR IN CONNECTION WITH THIS EMPLOYMENT AGREEMENT SHALL BE SETTLED EXCLUSIVELY BY ARBITRATION, CONDUCTED IN ACCORDANCE WITH THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION THEN IN EFFECT.  THE COMPANY WILL BEAR THE ADMINISTRATIVE COSTS OF ANY ARBITRATION UNDER THIS EMPLOYMENT AGREEMENT, INCLUDING THE ARBITRATOR’S FEES.  THE ARBITRATOR SHALL NOT HAVE THE AUTHORITY TO ADD TO, DETRACT FROM OR MODIFY ANY PROVISION HEREOF.  THE ARBITRATOR SHALL HAVE THE AUTHORITY TO ORDER REMEDIES WHICH EMPLOYEE COULD OBTAIN IN A COURT OF COMPETENT JURISDICTION.  A DECISION BY THE ARBITRATOR SHALL BE IN WRITING AND WILL BE FINAL AND BINDING.  JUDGMENT MAY BE ENTERED ON THE ARBITRATOR’S AWARD IN ANY COURT HAVING JURISDICTION.  THE ARBITRATION PROCEEDING SHALL BE HELD IN HOUSTON, TEXAS, UNITED STATES OF AMERICA.  NOTWITHSTANDING THE FOREGOING, THE COMPANY SHALL BE ENTITLED TO SEEK INJUNCTIVE OR OTHER EQUITABLE RELIEF FROM ANY COURT OF COMPETENT JURISDICTION, WITHOUT THE NEED TO RESORT TO ARBITRATION IN THE EVENT THAT EMPLOYEE VIOLATES SECTIONS 5(b), 5(c), 5(d) OR 5(e) OF THIS EMPLOYMENT AGREEMENT.  THIS EMPLOYMENT AGREEMENT SHALL IN ALL RESPECTS BE CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF TEXAS.

(d)  Assignment by the Company; Meaning of “Company.”  This Employment Agreement shall be binding upon and inure to the benefit of the Company and any successor to all or substantially all of the business or assets of the Company.  The Company may assign this Employment Agreement to any affiliate or successor, and no such assignment shall be treated as a termination of Employee’s employment under this Employment Agreement; provided, however, that in the case of an assignment to an affiliate, the Company shall not be relieved of its obligations under this Employment Agreement.  The Company will require any successor corporation (whether direct or indirect, and whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to expressly assume and to agree to perform this Employment Agreement in the same manner and to the same extent as the Company, as if no such succession had taken place.  Failure of the Company to obtain such assumption and agreement prior to, or effective upon, the effectiveness of any such succession shall be a material breach of this Employment Agreement.  As used in this Employment Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business or assets as aforesaid which assumes and agrees to perform this Employment Agreement by operation of law, or otherwise.

(e)  Assignment by Employee.  Employee’s rights and obligations under this Employment Agreement are personal, and they shall not be assigned or transferred without the Company’s prior written consent.

(f)  Other Agreements.  With the exception of the Company’s stock option plans (and related agreements), restricted stock plan (and related agreements) and incentive plans, and the guidelines referred to in Section 3(b), this Employment Agreement replaces and merges any and all previous agreements and understandings regarding all the terms and conditions of Employee’s employment relationship with the Company, and this Employment Agreement constitutes the entire agreement of the Company and Employee with respect to such terms and conditions.

(g)  Amendment.  No amendment to this Employment Agreement shall be effective unless it is in writing and signed by the Company and by Employee.

(h)  Invalidity.  If any provision of this Employment Agreement is held to be invalid illegal or otherwise unenforceable, the remaining provisions shall be unaffected and shall continue in full force and effect, and there shall be deemed substituted for the provision at issue a valid, legal and enforceable provision as similar as possible to the provision at issue.

(i)  Enforceability by Beneficiaries.  This Employment Agreement shall inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal or personal representatives and successors and if Employee should die while any amount would still be payable to him hereunder if he had continued to live, all such amounts shall be paid in accordance with the terms of this Employment Agreement to Employee’s devisee, legatee or other designee or, if there is no such designee, to his estate.

(j)  Reimbursement of Certain Expenses.  To the extent Employee shall prevail in any arbitration proceeding pursuant to Section 6(c) to resolve any dispute or controversy between Employee and the Company arising under or in connection with this Employment Agreement, then the Company shall reimburse Employee, or pay on Employee’s behalf, all of Employee’s reasonable expenses, including without limitation attorneys’ fees, incurred by Employee in connection with the arbitration.

 

  

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AGREED:

	 	 	 	 	 
	
/s/ Byron Dunn

	 	 	
/s/ Lee P. Brown

	 
	
Signature 

	 	 	
Company Representative

	 
	
 

	 	 	
 

	 
	 	 	 	 	 
	Byron Dunn	 	 	Lee P. Brown	 
	Print Name 	 	 	Print Name	 
	 	 	 	 	 
	 	 	 	 	 
	Date _September 21, 2010	 	 	Date _ September 21, 2010	 

 

 

9cak_ex102.htm

EXHIBIT 10.2

 

September 1, 2010

 

Mr. Abiola Lawal

CAMAC Energy Inc.

250 East Hartsdale Avenue

Suite 47

Hartsdale, New York 10530.

Re: Offer of Employment as Executive Vice President and Chief Financial Officer

Dear Mr. Lawal:

 

It is our pleasure to extend to you on behalf of CAMAC Energy Inc. (the “Company”), an offer of employment as the Company’s Executive Vice President and Chief Financial Officer, commencing as of  September 1, 2010, in accordance with the terms and conditions contained in this letter agreement (the “Agreement”), the adequacy and sufficiency of which are hereby acknowledged:

 

1.  DUTIES. The Company requires that you be available to perform the duties of Executive Vice President (“EVP”)  and Chief Financial Officer (“CFO”) customarily related to these functions as may be determined and assigned by the Board of Directors of the Company and as may be required by the Company’s constituent instruments, including its certificate or articles of incorporation, bylaws and its corporate governance, each as amended or modified from time to time, and by applicable law, including the Delaware General Corporation Law.  You will report to the Chief Executive Officer and the Board of Directors and you agree to devote as much time as is necessary to discharge and perform completely the duties as the EVP and CFO of the Company, including but not limited to all usual and customary duties of the principal financial and accounting officer of a U.S. public company, and perform such other duties as the Chief Executive Officer and the Board may from time to time assign to you.

 

2.  TERM. The term of this Agreement shall commence on September 1, 2010, and shall continue until your removal or resignation.

 

3.  COMPENSATION. For all services to be rendered by you to the Company in any capacity hereunder, the Company agrees to pay you the following compensation:

 

  

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a.  

	
The Company will pay you a one-time cash promotion bonus of $50,000, and during the continuance in force of your employment hereunder, the Company will pay you a base salary of $315,000 per annum, monthly in arrears.

 

	
b.  

	
You will receive an option to purchase 116,000 shares of the Company’s common stock (the “Option”) under the Company’s 2009 Equity Incentive Plan (the “Plan”).  The Option will be evidenced by an Option Agreement as contemplated by the Plan, which will govern the Option, notwithstanding any other provision in this Agreement.  The exercise price of the Option will be the closing price of the Company’s common stock on September 1, 2010.  The Option will vest in 36 equal monthly installments, with the first portion vesting on September 1, 2010.

 

	
c.  

	
You will be reviewed by the Board of Directors, not less than annually, and in connection with such review, will be eligible for a discretionary cash performance bonus each year targeted at between 25% to 50% of your then-current annual base salary, based on defined targets determined by the Board of Directors.  You shall also be considered for additional grants of restricted stock and options in the Board of Director’s sole discretion.

 

You will be responsible for your own salary and/or income tax liabilities wherever and whenever imposed upon or resulting from your employment and in respect of all your income hereunder.

 

4.  EMPLOYEE BENEFITS

 

	
a.  

	
You will participate in the Company’s Health, Dental, Vision, Life and Travel Insurance, and 401k programs, to the extent available, and subject to the terms and conditions governing such schemes.

 

	
b.  

	
You will be covered under the Company’s Directors and Officers Insurance Policy, subject to the terms and conditions governing such scheme.

 

	
c.  

	
When travelling for and on behalf of the Company, you will travel in Business Class (or First Class if not available), on all international flights and domestic flights of 5 hours or more in duration. In the case of international travel, you will covered under the Company’s Kidnap and Ransom Insurance Policy for international travel (to the extent available), and will be eligible for SOS or similar international medical or evacuation coverage, in the event of an emergency, to the extent available.

 

  

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5.  VACATION.  You will be entitled to up to five weeks of paid vacation per annum (pro-rated for partial years of service) in addition to the normal statutory holidays, provided, however, that vacation is to be taken at such times and intervals as may be agreed by the Company having regard to your workload and needs of the Company.

 

6.  EXPENSES. In addition to the compensation provided in paragraph 3 hereof, the Company will reimburse you for pre-approved reasonable business related expenses incurred in good faith in the performance of your duties hereunder for the Company. Such payments will be made by the Company upon your submission to the Company of a signed statement itemizing the expenses incurred. Such statement will be accompanied by sufficient documentary matter to support the expenditures.  During international business travel, the Company will also provide you with a daily cash per diem to cover reasonable business related expenses incurred during such travel, provided, however, that you submit a signed statement to the Company itemizing the expenses incurred during such travel.

 

7.  CONFIDENTIALITY. You acknowledge that, in order for the intents and purposes of this Agreement to be accomplished, you will necessarily be obtaining access to certain confidential information concerning the Company and its affairs, including, but not limited to business methods, information systems, financial data and strategic plans which are unique assets of the Company (“Confidential Information”). In accepting this offer, you covenant not to, either directly or indirectly, in any manner, utilize or disclose to any person, firm, corporation, association or other entity any Confidential Information.  The obligations set forth in this paragraph shall survive any termination of your employment relationship with the Company.

 

8.  NON-SOLICIT; NON-COMPETE.  You agree that, while this Agreement is in effect and for 12 months after its termination: (i) as to any customer or supplier of the Company with whom you had dealings or about whom you acquired Confidential Information during your employment, you will not solicit or attempt to solicit (or assist others to solicit) the customer or supplier to do business with any person or entity other than the Company; and (ii) you will not solicit or attempt to solicit (or assist others to solicit) for employment any person who is, or within the preceding 6 months was, an officer, manager, employee or consultant of the Company.  In addition, you agree that, while this Agreement is in effect and for 12 months after its termination, you will not accept any employment or engage in any activity, without the written consent of the Board, if the loyal and complete fulfillment of your duties in such employment would inevitably require you to reveal or utilize Confidential Information, as reasonably determined by the Board.

 

9.  AT-WILL EMPLOYMENT.  You should understand that your employment with the Company is “at-will,” and may be terminated by you or the Company at any time and for any reason.  No provision of this offer letter or any other agreement with the Company shall be construed to create an express or implied employment contract, or a promise of employment for any specific period of time.  This offer letter supersedes in its entirety any and all prior agreements and understandings concerning your employment relationship with the Company, whether written or oral.

 

  

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10.  TERMINATION. With or without cause, you and the Company may each terminate this Agreement at any time upon thirty (30) days written notice, and the Company will be obligated to pay you the compensation and expenses due up to the date of the termination.  Notwithstanding the foregoing sentence, the Company will be obligated to continue payments of your base salary and benefits for a period of 12 months following your termination if you are terminated without “Cause” or if you resign for “Good Reason.”  For purposes of this provision, “Cause” means your (i) conviction of, or plea of nolo contendere to, a felony or any other crime involving moral turpitude; (ii) fraud on or misappropriation of any funds or property of the Company or any of its affiliates, customers or vendors; (iii) personal dishonesty, incompetence, willful misconduct, willful violation of any law, rule or regulation (other than minor traffic violations or similar offenses), or breach of fiduciary duty which involves personal profit; (iv) willful misconduct in connection with your duties to the Company or willful failure to perform your responsibilities in the best interests of the Company or any of its affiliates; (v) illegal use or distribution of drugs; (vi) material violation of any rule, regulation, procedure or policy of the Company or any of its affiliates; or (vii) material breach of any provision of this Agreement or any other employment, non-disclosure, non-competition, non-solicitation or other similar agreement executed by you for the benefit of the Company or any of its affiliates, all as determined by the Board of Directors of directors of the Company or its affiliate (as the case may be), which determination will be conclusive.   “Good Reason” means the occurrence of any of the following without your written consent: (a) the assignment to you of duties substantially inconsistent with this Agreement or a material adverse change in your titles or authority; (b) any failure by the Company to comply with Section 3 hereof in any material way; or (c) any material breach of this Agreement by the Company.  However, an event that is or would constitute “Good Reason” shall cease to be “Good Reason” if:  (i) you do not terminate employment within 45 days after the event occurs; (ii) before you terminate employment, the Company reverses the action or cures the default that constitutes “Good Reason” within 10 days after you notify it in writing that Good Reason exists; or (iii) you were a primary instigator of the “Good Reason” event and the circumstances make it inappropriate for you to receive “Good Reason” termination benefits under this Agreement (e.g., you agree temporarily to relinquish your position on the occurrence of a merger transaction you assist in negotiating).

 

     11.  INDEMNIFICATION. The Company shall indemnify, defend and hold you harmless, to the full extent allowed by the law of the State of Texas, and as provided by, or granted pursuant to, any charter provision, bylaw provision, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in your official capacity and as to action in another capacity while holding such office.

 

     12.  EFFECT OF WAIVER. The waiver by either party of the breach of any provision of this Agreement shall not operate as or be construed as a waiver of any subsequent breach thereof.

 

     13.  NOTICE. Any and all notices referred to herein will be sufficient if furnished in writing at the addresses specified on the signature page hereto or, if to the Company, to the Company’s address as specified in filings made by the Company with the U.S. Securities and Exchange Commission.

 

     14.  GOVERNING LAW. This Agreement will be interpreted in accordance with, and the rights of the parties hereto will be determined by, the laws of the State of Texas without reference to that state’s conflicts of laws principles.

 

     15.  ASSIGNMENT. The rights and benefits of the Company under this Agreement will be transferable, and all the covenants and agreements hereunder shall inure to the benefit of, and be enforceable by or against, its successors and assigns.  Your duties and obligations under this Agreement are personal and therefore you may not assign any right or duty under this Agreement without the prior written consent of the Company.

 

  

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     16.  MISCELLANEOUS. If any provision of this Agreement will be declared invalid or illegal, for any reason whatsoever, then, notwithstanding such invalidity or illegality, the remaining terms and provisions of the this Agreement shall remain in full force and effect in the same manner as if the invalid or illegal provision had not been contained herein.

 

     17.  ARTICLE HEADINGS. The article headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

     18.  COUNTERPARTS. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one instrument. Facsimile execution and delivery of this Agreement is legal, valid and binding for all purposes.

 

     19.  ENTIRE AGREEMENT. Except as provided elsewhere herein, this Agreement sets forth the entire agreement of the parties with respect to its subject matter and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party to this Agreement with respect to such subject matter.

 

[Remainder of Page Left Blank Intentionally]

 

  

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If you are in agreement with the above outline, please sign below. This offer is in effect until September 1, 2010.

 

	 	Yours truly,	 
	 	 	 
	 	
CAMAC ENERGY INC.

	 
	 	 	 	 
	
 

	
By: 

	/s/ William E. Dozier 	 
	 	 	William E. Dozier	 
	 	 	Interim Chief Executive Officer	 

 

Agreed and Accepted this 1st day of September, 2010

 

/s/ Abiola L. Lawal

_________________________________

Abiola L. Lawal

 

 

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