Document:

ex4-3.htm

Exhibit 4.3

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

COMMON STOCK PURCHASE WARRANT

 STW RESOURCES HOLDING CORP.

 

Warrant Shares: ______                                                                Initial Exercise Date: xxxxxxx

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, NAME (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to the close of business on the two year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from STW RESOURCES HOLDING CORP., a Nevada corporation (the “Company”), up to _________ shares (the “Warrant Shares”) of Common Stock.  The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.                      Definitions.  Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Subscription Agreement (the “Subscription Agreement”), dated __________, among the Company and the purchasers signatory thereto.

 

Section 2.                      Exercise.

 

a) Exercise of Warrant.  Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto; and, within 3 Trading Days of the date said Notice of Exercise is delivered to the Company, the Company shall have received  payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within 3 Trading Days of the date the final Notice of Exercise is delivered to the Company.  Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases.  The Company shall deliver any objection to any Notice of Exercise Form within 1 Business Day of receipt of such notice.  In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

  

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b) Exercise Price.  The exercise price per share of the Common Stock under this Warrant shall be $___, subject to adjustment hereunder (the “Exercise Price”).

 

c) Mechanics of Exercise.

 

i. Delivery of Certificates Upon Exercise.  Certificates for shares purchased hereunder shall be transmitted by the Transfer Agent to the Holder by physical delivery to the address specified by the Holder in the Notice of Exercise within 3 Trading Days from the delivery to the Company of the Notice of Exercise Form, surrender of this Warrant (if required) and payment of the aggregate Exercise Price as set forth above (the “Warrant Share Delivery Date”).  This Warrant shall be deemed to have been exercised on the date the Exercise Price is received by the Company.  The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant to Section 2(e)(v) prior to the issuance of such shares, have been paid.

 

ii. Delivery of New Warrants Upon Exercise.  If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

iii. Rescission Rights.  If the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to Section 2(e)(i) by the Warrant Share Delivery Date, then, the Holder will have the right to rescind such exercise.

 

iv. No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

v. Charges, Taxes and Expenses.  Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

 

vi. Closing of Books.  The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

  

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Section 3.                      Certain Adjustments.

 

a)           Reorganization, Consolidation, Merger, etc.; Reclassification.  In case at any time or from time to time, the Company shall effect any merger, reorganization, restructuring, reverse stock split, consolidation, sale of all or substantially all of the Company’s assets or any similar transaction or related transactions (each such transaction, a “Fundamental Change”), then, in each such case, as a condition to the consummation of such a transaction, proper and adequate provision shall be made by the Company whereby the Holder of this Note, on the conversion hereof, at any time after the consummation of such Fundamental Change, shall receive, in lieu of the Conversion Shares issuable on such conversion prior to such consummation or such effective date, the stock and other securities and property (including cash) to which such Holder would have been entitled upon such consummation of a Fundamental Change if such Holder had so converted this Note, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 3(d).

 

If the Company at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes that may be issued or outstanding, this Note, as to the unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change.

b)           Dissolution.  In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, prior to such dissolution, shall at its expense deliver or cause to be delivered the stock and other securities and property (including cash, where applicable) receivable by the Holder of this Note after the effective date of such dissolution pursuant to this Article to a bank or trust company (a “Trustee”) as trustee for the Holder of this Note.

c)           Continuation of Terms. Upon any Fundamental Change or transfer (and any dissolution following any transfer) referred to in this Article, this Note shall continue in full force and effect and the terms hereof shall be applicable to any other securities and property receivable on the conversion of this Note after the consummation of such Fundamental Change or transfer or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any other securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Note as provided in Section 3(c). In the event this Note does not continue in full force and effect after the consummation of the transaction described in this Section 3, then only in such event will the Company’s securities and property (including cash, where applicable) receivable by the Holder of the Notes be delivered to the Trustee as contemplated by Section 3(b).

d)           Extraordinary Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of Common Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock, then, in each such event, the Exercise Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Exercise Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Exercise Price then in effect. The Exercise Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 3(d). The number of Warrant Shares that the Holder of this Warrant shall thereafter, on the exercise hereof as provided herein, be entitled to receive shall be adjusted to a number determined by multiplying the number of Warrant Shares that would otherwise (but for the provisions of this Section 3(d)) be issuable on such exercise by a fraction of which (a) the numerator is the Exercise Price that would otherwise (but for the provisions of this Section 3(d) be in effect, and (b) the denominator is the Exercise Price in effect on the date of such exercise.

  

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e)                             

	
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

Section 4.                      Transfer of Warrant.

 

a) Transferability.  Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions of Section 4.1 of the Subscription Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.  The Warrant, if properly assigned, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Exercise Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Subscription Agreement.

 

Section 5.                      Miscellaneous.

 

a) No Rights as Stockholder Until Exercise.  This Warrant does not entitle the Holder to any voting rights or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(e)(i).

 

b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

  

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c) Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

 

d) Authorized Shares.

 

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.  The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Subscription Agreement.

 

f) Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.

 

g) Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date.  If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

  

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h) Notices.  Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Subscription Agreement.

 

i) Limitation of Liability.  No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

j) Remedies.  The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k) Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l) Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and Holders holding Warrants at least equal to 50% of the Warrant Shares issuable upon exercise of all then outstanding Warrants.

 

m) Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

n) Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

********************

(Signature Pages Follow)

  

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

 

	
STW RESOURCES HOLDING CORP.

 

 

	
By:__________________________________________

     Name:

     Title:

 

 

  

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NOTICE OF EXERCISE

TO:           STW RESOURCES HOLDING CORP.

(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2) Payment shall take the form of  lawful money of the United States.

 

(3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

(4)  Accredited Investor.  The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

  

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ASSIGNMENT FORM

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

Dated:  ______________, _______

Holder’s Signature:                                _____________________________

Holder’s Address:                                _____________________________

                _____________________________

                

Signature Guaranteed:  ___________________________________________

NOTE:  The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company.  Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.ex10-1.htm

Exhibit 10.1

            

EXECUTIVE EMPLOYMENT AGREEMENT

STW RESOURCES HOLDING CORP.

AND JOSHUA BROOKS

 

This Agreement, dated as of September 20, 2013 (the "Effective Date"), is between STW Resources Holding Corp., a Nevada corporation, (the "Company") and Joshua Brooks, an individual ("Employee").

 

1. Term:  The Company shall employ Employee for the period (the “Term”) commencing on the Effective Date and ending upon the earlier of (i) the first anniversary of the Effective Date; or (ii) the date upon which Employee’s employment is terminated in accordance with Section 4.; or (iii) the date upon which this Agreement is extend to by the Parties’ mutual written extension to this Agreement.

 

2. Position and Responsibilities

 

2.A.           Position:  Employee is employed by the Company to render services to the Company in the position of Vice President of Operations, primarily focusing on the Company’s oilfield construction, services and maintenance operations and to observe and learn the other activities that the company is involved in including water processing.  Employee shall perform such duties and responsibilities as are normally related to such position in accordance with the standards of the industry and any additional duties now or hereafter assigned to Employee by the Chief Executive Officer of the Company.  Employee shall abide by the Company's rules, regulations, and practices as they may from time-to-time be adopted or modified.

 

2.B. Other Activities:  During the Term, Employee shall devote as much time as he has available to the Company.

 

2.C.           No Conflict:  Employee represents and warrants that Employee's execution of this Agreement, his employment with the Company, and the performance of his proposed duties under this Agreement shall not violate any obligations Employee may have to any other employer, person or entity, including any obligations with respect to proprietary or confidential information of any other person or entity.

 

3. Compensation and Benefits

 

3.A.           Base Salary:  In consideration of the services to be rendered under this Agreement, the Company shall pay Employee a salary at the rate of one hundred and twenty thousand ($120,000) Dollars per year (“Base Salary”), which shall be paid at the end of each three month period of employment, and instead of being paid in cash, will be paid in kind (“PIK Payments”) by issuing Employee shares of the Company’s common stock at the price of the weighted average trading value over the three months leading up to the end of the three month pay period (currently at $0.06 per share).  The Base Salary shall be paid in accordance with the Company’s regularly established payroll practices. Employee’s Base Salary will be reviewed at least annually in accordance with the Company’s established procedures for adjusting salaries for similarly situated employees and may be increased in the sole discretion of the Company’s Compensation Committee. The Base Salary may not be decreased, except upon a mutual written agreement between the parties.

  

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3.A.1           Incentive Bonus:  As a further incentive for Employee to develop the operations and profitability of the Company’s subsidiaries, STW Oilfield Construction, LLC and STW Pipeline Construction and Maintenance. Employee shall be entitled to receive the following incentive bonuses in addition to Base Salary related to improving the business of STW Oilfield Construction LLC (all references to the “Company” refers to the parent company, STW Resources Holding Corp.) :

 

3.A.1(a)                      Upon achieving $400,000 or more in gross sales, Employee shall be entitled to 1,000,000 shares of the Company’s common stock.

 

3.A.1(b)                      Upon achieving three consecutive months of net profits, Employee shall be entitled to 1,000,000 shares of the Company’s common stock.

 

3.A.1(c)                      Upon achieving three consecutive months of $750,000 or more in gross sales, Employee shall be entitled to 1,000,000 shares of the Company’s common stock.

 

3.A.1(d)                      Upon achieving three consecutive months of $750,000 or more in gross sales and a 25% profit margin or greater in those three months, Employee shall be entitled to 1,000,000 shares of the Company’s common stock.

 

3.B.           Signing Bonus:  As a signing bonus, within thirty (30) days of the execution of this Agreement, the Company shall transfer to Employee 2,000,000 shares of the Company’s Common Stock, which shall be considered fully earned when transferred into Employee’s name.  Employee shall, as a condition to the receipt of such shares, pay the Company the amount of all required withholding taxes thereon.  Notwithstanding the foregoing, if Employee voluntarily resigns his employment with the Company before March 20, 2014, he will be obligated to promptly return the 2,000,000 block of the Company’s stock issued to him on a pro-rata basis, based on the percentage of the year elapsed.

3.C.           Regular Bonus:  Employee shall be eligible for any bonus program or plan that is established by the Company for similarly situated employees. The Company’s Compensation Committee, in its sole discretion, may establish a bonus program or plan for Employee.

3.D.           Stock and Stock Options:  Employee will own Common Stock and/or Preferred Stock in the Company. The Company’s Compensation Committee, in its sole discretion, may grant Employee one or more stock options or other equity rights.

3.D(1). Employee Representations:  In connection with the shares of the Company’s Common Stock to be granted to Employee pursuant to Section 3.B and any future grants of stock or options pursuant to this Section 3.D, Employee represents and warrants that:

3.D(1)(a)                      Employee is an “accredited investor” within the meaning of Rule 501 of the General Rules and Regulations under the Securities Act of 1933, as amended;

3.D(1)(b)                      Employee has sufficient knowledge and experience in financial and investment matters so that Employee is able to evaluate the risks and merits of Employee’s investment in the Company’s stock and is able financially to bear the economic risks thereof;

3.D(1)( c)                      Employee will acquire the shares of the Company stock for Employee’s own account and not with a view to or for sale in connection with any distribution thereof in violation of any securities laws, and Employee has no present or future intention of selling or distributing any of such securities in violation of any securities laws; and

3.D(1)(d)                      Employee is familiar with the business and financial condition, properties and operations and prospects of the Company and has reviewed its most recent public filings with the U.S. Securities and Exchange Commission (“SEC”), and has been afforded the opportunity to ask questions and receive answers from the Company’s officers and directors concerning the business and financial condition, properties, operations and prospects of the Company, and has asked such questions as Employee desires to ask and all such questions have been answered to  Employee’s full satisfaction.

  

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3.D(2)                      Stock Certificate Legend:  The Company may, at its option, cause to conspicuously appear on all stock certificates representing the Company’s stock which are issued and delivered to Employee pursuant to the provisions of Section 3.B or this Section 3.D, the legend set forth below, the provisions of which are agreed to by Employee:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL (I) SUCH OFFERING AND SALE OR OTHER TRANSFER HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, OR (II) THE HOLDER HEREOF PROVIDES THE COMPANY WITH (A) A WRITTEN OPINION OF LEGAL COUNSEL, WHICH COUNSEL AND OPINION (IN FORM AND SUBSTANCE) SHALL BE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT THE PROPOSED TRANSFER OF SUCH SECURITY MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT, OR (B) SUCH OTHER EVIDENCE AS MAY BE REASONABLY SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER OF THIS SECURITY MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT.

3.E.           Benefits:  The Company will provide Employee with benefits in accordance with the benefit plans established by the Company for similarly-situated executives from time to time in the Company’s sole discretion.  The Company will seek to establish a medical and dental insurance plan, long term disability program, Company-paid life insurance program, Company-paid excess liability umbrella policy coverage, and  a 401K Plan as promptly as practicable after the Effective Date.   The Company shall also provide Employee with at least four weeks of paid vacation leave annually, which shall accrue monthly and shall be governed by the Company’s regular policies and practices regarding vacation leave (as may be established and amended from time to time in the Company’s sole discretion, including no more than a week of vacation taken at one time without Company permission).

3.F.           Expenses:  The Company shall reimburse Employee for all reasonable business expenses incurred in the performance of his duties hereunder in accordance with the Company’s expense reimbursement guidelines.  As soon as it is available to Company, the Company will provide Employee with a Company credit or debit card to use for business-related expenses.

3.G.           Company Vehicle:  N/A.  The Company shall reimburse Employee for the use of his personal vehicle used on Company business at standard mileage rates.

3.H.            Laptop Computer/Cellular Telephone:  If Employee requires a laptop computer or cellular phone in addition to those personally owned by him, the Company may provide Employee with a laptop computer, with normal business software installed, and a cellular phone PDA.

3.I.           Indemnification:  The Company agrees to defend and indemnify Employee against any liability that Employee incurs within the scope of his employment with the Company to fullest extent permitted by the Company’s articles and by-laws and Nevada’s corporation’s law.

 

4. Termination of Employment; Severance

4.A.           Termination By the Company:  The Company may terminate Employee’s employment with the Company for Cause prior to the scheduled expiration date of the Term.

4.B.           Severance:  If Employee’s employment is terminated by the Company prior to the scheduled expiration date of the Term (other than a termination by the Company for Cause or as a result of Employee’s Disability (as defined below)), Employee will be eligible to receive the following: (i) an amount equal to two (2) months of Employee’s then-current Base Salary (“Severance”) payable as follows: 50% of the Severance shall be paid as a lump sum within a reasonable period not to exceed sixty (60) days following the termination date and 50% of the Severance will be paid as salary continuation for two (2) months following the termination date; and (ii) reimbursement for any COBRA payments made by Employee for COBRA coverage during the two (2) months following the termination date. Employee shall not be entitled to any Severance payments or benefit continuation unless Employee executes a general release in favor of the Company in customary form to be provided by the Company.  Employee shall not be entitled to any other payments or benefits upon termination of his employment pursuant to this Section 4.B, except as provided in Section 5.E and Section 3.I.

  

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4.C.           Termination For Cause:  For purposes of this Agreement, “Cause” shall mean: (i) Employee commits a crime involving dishonesty, breach of trust, or physical harm to any person; (ii) Employee willfully engages in conduct that is in bad faith and materially injurious to the Company, including but not limited to, misappropriation of trade secrets, fraud or embezzlement; (iii) Employee commits a material breach of this Agreement, which breach is not cured within twenty (20) days after written notice to Employee from the Company; (iv) Employee willfully fails to implement or follow a reasonable and lawful policy or directive of the Company, which breach is not cured within twenty (20) days after written notice to Employee from the Company; or (v) Employee engages in a pattern of failure to perform job duties diligently and professionally, which pattern is not cured within twenty (20) days after written notice to Employee from the Company.  Prior to the date of any termination for Cause, the Company’s CEO shall meet and the Employee shall have an opportunity to present to the Company’s CEO any information relevant to the event constituting Cause, unless waived by Employee.  The Company may terminate Employee’s employment For Cause at any time, without any advance notice.  Upon any termination for Cause pursuant to this Section 4.C, the Company shall pay to Employee all compensation to which Employee is entitled up through the date of termination, and thereafter, all of the Company’s obligations under this Agreement shall cease, except as provided in Section 5.E and Section 3.I.

4.D.           By Disability:  If Employee becomes eligible for the Company’s long term disability benefits or if, in the reasonable opinion of the Company’s Board of Directors, Employee shall be unable to carry out the responsibilities and functions of the position held by Employee by reason of any physical or mental impairment for more than forty-five (45) consecutive days or more than sixty (60) days in any twelve-month period, then, to the extent permitted by law, the Company may terminate Employee’s employment for “Disability”.  Upon any termination for Disability pursuant to this Section 4.D, the Company shall pay to Employee all compensation to which Employee is entitled up through the date of termination, and thereafter, all of the Company’s obligations under this Agreement shall cease, except as provided in Section 5.E and Section 3.I.  Nothing in this Section shall affect Employee’s rights under any disability plan in which he is a participant.

4.E.           Termination By Employee:   Employee may terminate his/her employment with the Company at any time for any reason, including no reason at all, upon thirty (30) days advance written notice. The Company shall have the option, in its sole discretion, to make Employee’s termination effective at any time prior to the end of such notice period as long as the Company provides Employee with all compensation to which he is entitled up through the last day of the thirty (30) day notice period. Thereafter, all obligations of the Company under this Agreement shall cease, except as provided in Section 5.E and Section 3.I.

4.F.           By Death:  Employee’s employment shall terminate automatically upon his death.  The Company shall pay to Employee’s beneficiaries or estate, as appropriate, any compensation then due and owing through the date of death. Thereafter, all obligations of the Company under this Agreement shall cease, except as provided in Section 5.E and Section 3.I.  Nothing in this Section shall affect any entitlement of Employee’s heirs to the benefits of any life insurance plan or other applicable benefits.

 

5. Additional Termination Obligations

5.A.           Employee agrees that all property, including, without limitation, all equipment, tangible proprietary information, documents, records, notes, contracts, and computer-generated materials provided to or prepared by Employee incident to his or her employment belong to the Company and shall be promptly returned to the Company upon termination of Employee’s employment.

5.B.           Upon termination of Employee’s employment, Employee shall be deemed to have resigned from all offices and directorships then held with the Company. Following any termination of employment, Employee shall cooperate with the Company in the winding up or transferring to other employees of any pending work and shall also cooperate with the Company in the defense of any action brought by any third party against the Company that relates to Employee’s employment by the Company.

5.C.           Employee agrees that following termination of his or her employment, Employee shall not access or use any of the Company’s computer systems, e-mail systems, voicemail systems, intranet system or other system, except as authorized by the Company in writing.

  

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5.D.           The Company agrees that immediately following termination of Employee’s employment, the Company will take all steps reasonably necessary to release Employee from all personal guarantees or other personal obligations, if any, that Employee made with respect to any debts of the Company.

5.E.           Upon any termination of Employee’s employment with the Company, including as a result of the expiration of the Term, Employee shall be entitled to all benefits as provided in applicable Company benefit plans, any salary earned through the date of such termination, and reimbursement of all expenses incurred through the date of termination in accordance with the Company’s policies.

 

6. Inventions and Proprietary Information;

6.A.           Employee agrees to execute and be bound by the terms of the Company’s Proprietary Information and Inventions Agreement, which is attached as Exhibit “A”.

6.B.           Employee acknowledges that because of his/her position in the Company, Employee will have access to intellectual property and confidential information. During the term of his employment (plus any period in which the Company is paying the Employee Severance) and for one (1) year thereafter, Employee shall not, for Employee or any third party, directly or indirectly, (i) interfere with any business of any kind in which the Company (or any affiliate) is engaged, including, without limitation, diverting or attempting to divert or conducting business with any of its suppliers or customers, or (ii) solicit, induce, recruit, hire or encourage any person employed by the Company during the preceding six months to leave their employment with the Company.

6.C.           If any one or more provisions of this Section 6 or the referenced Exhibit “A” shall for any reason be held invalid or unenforceable, it is the specific intent of the parties that such provisions shall be modified to the minimum extent necessary to make it or its application valid and enforceable.

 

7. Dispute Resolution

7.A.           The parties agree that any suit, action, or proceeding between Employee (and his or her attorneys, successors, and assigns) and the Company (and its affiliates, shareholders, directors, officers, employees, members, agents, successors, attorneys, and assigns) relating in any manner whatsoever to Employee’s employment or termination that employment shall be brought in either the United States District Court for the Western District of Texas or in a Texas state court in the County of Midland and that the parties shall submit to the jurisdiction of such court.  The parties irrevocably waive, to the fullest extent permitted by law, any objection they may have to the laying of venue for any such suit, action or proceeding brought in such court.

7.B.           Employee acknowledges that he is obligated under this Agreement to render services of a special, unique, unusual, extraordinary and intellectual character, thereby giving this Agreement peculiar value so that the loss thereof cannot be reasonably or adequately compensated in damages in an action at law. Accordingly, in addition to other remedies provided by law, the Company shall have the right to injunctive relief for any actual or threatened violation of Section 6 of this Agreement in addition to any other remedies it may have.

 

8. Entire Agreement:  This Agreement is intended to be the final, complete, and exclusive statement of the terms of Employee’s employment by the Company and may not be contradicted by evidence of any prior or contemporaneous statements or agreements, except for agreements specifically referenced herein (including the Company’s Proprietary Information and Inventions Agreement, attached as Exhibit A, and any agreements related to the stock currently held by Employee).

 

9. Amendments; Waivers:  This Agreement may not be amended except by a writing signed by Employee and by a duly authorized representative of the Company other than Employee.  Delay or failure of either party to exercise any right under this Agreement shall not constitute a waiver of such right by such party.

  

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10. Assignment:  Employee agrees that Employee will not assign any rights or obligations under this Agreement. Nothing in this Agreement shall prevent the consolidation, merger or sale of the Company or a sale of all or substantially all of its assets.

 

11. Severability:  If any provision of this Agreement shall be held by a court or arbitrator to be invalid, unenforceable, or void, such provision shall be enforced to fullest extent permitted by law, and the remainder of this Agreement shall remain in full force and effect. In the event that the time period or scope of any provision is declared by a court or arbitrator of competent jurisdiction to exceed the maximum time period or scope that such court or arbitrator deems enforceable, then such court or arbitrator shall reduce the time period or scope to the maximum time period or scope permitted by law.

 

12. Taxes:  All amounts paid to Employee under this Agreement (including, without limitation, Base Salary, Signing Bonus and Severance) shall be paid to Employee, less all applicable state and federal tax withholdings.

 

13. Governing Law:  This Agreement shall be governed by and construed in accordance with the laws of the State of Texas.

 

14. Interpretation:  This Agreement shall be construed as a whole, according to its fair meaning, and not in favor of or against any party. Captions are used for reference purposes only and should be ignored in the interpretation of the Agreement.

 

15. Binding Agreement:  Each party represents and warrants to the other that the person(s) signing this Agreement below has authority to bind the party to this Agreement and that this Agreement will legally bind both the Company and Employee. This Agreement will be binding upon and benefit the parties and their heirs, administrators, executors, successors and permitted assigns. To the extent that the practices, policies, or procedures of the Company, now or in the future, are inconsistent with the terms of this Agreement, the provisions of this Agreement shall control.  Any subsequent change in Employee’s duties or compensation will not affect the validity or scope of the remainder of this Agreement.

 

16. Employee Acknowledgment:  Employee acknowledges Employee has had the opportunity to consult legal counsel concerning this Agreement, that Employee has read and understands the Agreement, that Employee is fully aware of its legal effect, and that Employee has entered into it freely based on his own judgment and not on any representations or promises other than those contained in this Agreement.

 

17. Date of Agreement:  The parties have duly executed this Agreement as of the date first written above.

IN WITNESS WHEREOF the undersigned have executed this Agreement as of the day and year first written above.  The parties hereto agree that facsimile signatures shall be as effective as if originals.

STW Resources Holding Corp.                                                                Joshua Brooks

___________________                                                                            _________________

By: Stanley T. Weiner

Its:  CEO

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