Document:

exhibit101_10012012.htm

Exhibit 10.1

 

  

 

EXECUTION COPY

 

NORTHERN OIL AND GAS, INC.

SEPARATION AGREEMENT AND RELEASE

 

 

THIS SEPARATION AGREEMENT AND RELEASE (this "Agreement") is made and entered into by Northern Oil and Gas, Inc., a Minnesota corporation (the "Company"), and Ryan R. Gilbertson, an individual ("Employee") (each referred to collectively as the "Parties", and individually as "Party").

 

 

WHEREAS, Employee and the Company are parties to the Amended and Restated Employment Agreement effective as of January 30, 2009, as amended by Amendment No. 1, effective as of March 25, 2010, and Amendment No. 2, effective January 14, 2011 (collectively, the "Employment Agreement"), and pursuant to the Employment Agreement Employee serves as the President of the Company;

 

 

WHEREAS, Employee’s employment and service with the Company will end on October 1, 2012, (the "Termination Date");

 

 

WHEREAS, due to Employee’s knowledge and experience, and the necessity of a transition period to allow for the orderly transfer of information relating to ongoing business matters, the Company desires to engage Employee, and Employee has agreed to be engaged, as a consultant to the Company for a limited period of time after the Termination Date, as more fully set forth in a consulting agreement between the Parties entered into effective October 1, 2012 (the "Consulting Agreement");

 

 

WHEREAS, the Parties intend that the terms and conditions of this Agreement (and all documents attached hereto or referenced herein) shall govern all issues related to Employee’s employment, ending of employment, consulting relationship, and post-employment and post-consultancy obligations; and

 

 

NOW THEREFORE, in consideration of the mutual promises set forth in this Agreement and other valuable consideration, the Parties agree as follows:

 

 

1.   Termination of Employment.  Each of the Parties acknowledges and confirms that Employee’s employment with the Company terminated as of the Termination Date.  Employee permanently resigns all offices and positions in the Company and any of its affiliates as of the Termination Date.  From and after the Termination Date, Employee shall not hold himself out as an employee or agent of the Company or any of its affiliates.  The Employment Agreement shall be terminated as of the Termination Date.  Neither Party shall have any obligations under the Employment Agreement on and after the Termination Date, except as provided therein.

 

 

  

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2.   Termination Pay.  As a substitution for all amounts owed under the Employment Agreement, if any, and as consideration for this Agreement and the Consulting Agreement, the Company desires to: (i) provide Employee with an opportunity to continue vesting in his equity awards (in accordance with its original vesting schedule and subject to performance of services pursuant to the Consulting Agreement) that are outstanding unvested as of the Termination Date (a schedule of such outstanding and unvested awards are attached hereto as Exhibit A), provided Employee enters into and abides by the Consulting Agreement; (ii) provide Employee with the 2012 bonus that was previously awarded to him and that was based on pre-determined performance metrics set forth in or around April 2012, the amount of which shall be determined by the Compensation Committee of the Board of Directors in its reasonable discretion but only in accordance with the pre-determined performance-based metrics/formula; provided, however, that such bonus shall be pro rated through Employee’s Termination Date, and shall be subject to clawback as required under Section 304 of Sarbanes-Oxley Act and as may be required in the reasonable determination by the Company in order for it to comply with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act; (iii) the Company shall buy out the lease on the Company vehicle it provides to Employee and immediately transfer title of such vehicle to Employee, which has an approximate value as of the Termination Date of $44,000.00; and (iv) for the period beginning on the day immediately following the Termination Date and ending on the date that is eighteen (18) full months following the Termination Date (or, if earlier, the date on which the applicable continuation period under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA")), the Company shall reimburse Employee for the costs associated with continuation coverage pursuant to COBRA for Employee and his eligible dependents who were covered under the Company’s health plans as of the Termination Date (provided that Employee shall be solely responsible for all matters relating to his continuation coverage pursuant to COBRA, including, without limitation, his election of such coverage and his timely payment of premiums).  Collectively, the foregoing (i), (ii), (iii) and (iv) shall be the "Severance Payment".  The Severance Payment shall be subject to applicable withholding and deductions as required by local, state and federal law.  The Parties hereby agree that the Severance Payment shall be provided only if Employee does not rescind his acceptance of this Agreement within the fifteen (15) day rescission period set forth in Section 8 of this Agreement.  Employee hereby acknowledges and agrees that the promises of the Company in this Agreement satisfy any and all legal obligations owed to him as an employee and as a participant in the Company’s and its affiliates compensation plans and practices, including any and all obligations owed by the Company under the Employment Agreement.  Except as otherwise set forth in this Agreement, no additional amounts are owed by the Company or any of its affiliates to Employee by virtue of his relationship with the Company.

 

 

3.   Release of the Company.  Employee hereby releases, waives, acquits and forever discharges the Company, its predecessors, successors, parents, subsidiaries, assigns, agents, current and former directors, officers, employees, partners, representatives,  and attorneys, affiliated companies, and all persons acting by, through, under or in concert with the Company (collectively, the "Released Parties"), from any and all demands, rights, disputes, debts, liabilities, obligations, liens, promises, acts, agreements, charges, complaints, claims, controversies, and causes of action of any nature whatsoever, whether statutory, civil, or administrative, that Employee now has or may have against any of the Released Parties, arising in whole or in part at any time on or prior to the execution of this Release, in connection with his employment by the Company.

 

 

  

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This release specifically includes, but is not limited to, any claims of discrimination of any kind, breach of contract or any implied covenant of good faith and fair dealing, tortious interference with a contract, intentional or negligent infliction of emotional distress, breach of privacy, misrepresentation, defamation, wrongful termination, or breach of fiduciary duty; provided, however, that the foregoing release shall not release the Company from the performance of its obligations under this Agreement.

 

 

Additionally, this release specifically includes, but is not limited to, any claim or cause of action arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C.A. §§ 2000 et seq., as amended by the Civil Rights Act of 1991; the Americans With Disabilities Act, as amended, 42 U.S.C. §§ 12101 et seq.; 42 U.S.C. §§ 1981; the Civil Rights Act of 1991, as amended; the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §§ 621 et seq.; the Older Workers Benefit Protection Act of 1990; the Employment Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq.; the Family and Medical Leave Act, as amended; the Fair Labor Standards Act; the Minnesota Human Rights Act, Minn. Stat. § 363A.01, the Minnesota wage-hour and wage-payment laws; Minnesota’s Whistleblower Act, Minn. Stat. § 181.932; retaliation under Minn. Stat. § 176.82; Minnesota’s Workers’ Compensation Act; or any other federal, state or local statute or common law cause of action of similar effect regarding employment related causes of action of employees against their employer.

 

 

4.   Acknowledgements of Employee.

 

 

(a)           Employee represents and acknowledges that in executing this Agreement, Employee does not rely and has not relied upon any representation or statement made by the Company, or its agents, representatives, or attorneys regarding the subject matter, basis or effect of this Agreement or otherwise, and that Employee has engaged, and been represented by, an attorney of Employee's choosing in the negotiation and execution of this Agreement.  Employee acknowledges that Employee has been advised by the Company to consult with counsel of Employee's choosing with regard to the negotiation and execution of this Release, and has had an opportunity to do so.

 

 

(b)           EMPLOYEE UNDERSTANDS THAT BY SIGNING AND NOT RESCINDING THIS RELEASE, EMPLOYEE IS WAIVING ANY AND ALL RIGHTS OR CLAIMS WHICH EMPLOYEE MAY HAVE UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT AND/OR THE OLDER WORKERS' BENEFIT ACT FOR AGE DISCRIMINATION ARISING FROM EMPLOYMENT WITH THE COMPANY, INCLUDING, WITHOUT LIMITATION, THE RIGHT TO SUE THE COMPANY IN FEDERAL OR STATE COURT FOR AGE DISCRIMINATION.  EMPLOYEE FURTHER ACKNOWLEDGES THAT EMPLOYEE (1) DOES NOT WAIVE ANY CLAIMS OR RIGHTS THAT MAY ARISE AFTER THE DATE THIS AGREEMENT IS EXECUTED; (2) WAIVES CLAIMS OR RIGHTS ONLY IN EXCHANGE FOR CONSIDERATION IN ADDITION TO ANYTHING OF VALUE TO WHICH EMPLOYEE IS ALREADY ENTITLED; AND (3) AGREES THAT THIS AGREEMENT IS WRITTEN IN A MANNER CALCULATED TO BE UNDERSTOOD BY EMPLOYEE AND EMPLOYEE, IN FACT, UNDERSTANDS THE TERMS, CONTENTS, CONDITIONS AND EFFECTS OF THIS AGREEMENT AND HAS ENTERED INTO THIS AGREEMENT KNOWINGLY AND VOLUNTARILY.

 

 

  

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(c)           Employee acknowledges that he has been fully compensated for all labor and services performed for the Company and has been reimbursed for all business expenses incurred on behalf of the Company through the Termination Date, and that the Company does not owe Employee any expense reimbursement amounts, or wages, including vacation pay or paid time-off benefits.

 

 

5.   Company Property.

 

 

(a)           Employee represents that he has returned to the Company all information, documentation, or other property and proprietary material, in any form, belonging to the Company (including, without limitation, hardware, access cards, notes, forms, reference and training materials, memoranda, computer programs, disks, computer files), and that Employee no longer has any such property or material, including copies thereof, in his possession.

 

 

(b)           Employee represents that he has not taken, altered, destroyed, or deleted any files, documents, electronically stored information or other materials belonging to, or created by or on behalf of the Company, whether or not containing any trade secrets or Confidential Information (as defined below).

 

 

6.   Confidentiality.  Employee agrees to keep this Agreement, its terms, and the amount of the Severance Payment completely confidential; provided, however, that he may reveal such information to his attorney, accountants, financial advisor, spouse, or as required by a court of competent jurisdiction, or as otherwise required by law.  Employee further agrees that he will not, directly or indirectly, use or reveal, divulge, make known to or permit the use of by third parties, any "Confidential Information," unless required to do so by law, for a period of twenty four (24) months.  Employee agrees that he will continue to be obligated under this provision for so long as the Confidential Information is not publicly available in a manner other than by Employee’s breach of this Agreement.  "Confidential Information" includes, but is not limited to all information, knowledge or documents, in whatever form or medium (including interpretative materials, assumptions and analyses), obtained through employment with the Company, concerning: development, exploitation, production, exploration and recruitment strategies; geological,  geophysical, seismic, engineering and exploration data; current and prospective property location and economic data; reserve estimates and other forecasts (including any related formulas, concepts, diagrams, charts, assumptions and working papers); current and projected production data and information; current and prospective leasehold interests and lease agreements (including lease schedules and negotiated bonus and royalty rates); title work; current and projected financial information (including pricing indexes, drilling and operating expense and capital expenditures); short and long term business and development plans; current, anticipated and contemplated business ventures (including joint ventures, mergers, acquisitions and divestitures); trade secrets (whether licensed or owned by the Company) and related interpretive materials and analyses of Company's projects; information and manuals relating to internal procedures, methods of operation, training and marketing; personnel information (including employee lists, resumes and applications of prospective employees, employee or consultant compensation and benefits); current and prospective consultant lists and information; current and prospective operating partners lists and information; and other confidential or proprietary information that is competitively sensitive or otherwise of value to the Company; provided that Confidential Information shall not include any such information that is or becomes generally available to the public other than as a result of any breach of this Agreement or other unauthorized disclosure by Employee.  Employee acknowledges that all confidentiality, nondisclosure or other agreements relating to the Company's confidential information or trade secrets, and any non-compete or other agreement containing post-employment obligations shall remain in full force and effect, and nothing contained in this Agreement constitutes a release, modification or waiver of any of Employee’s obligations under any such prior agreement.

 

 

  

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7.   Non-Disparagement.  Employee agrees that except as otherwise required by law, or as reasonably necessary to enforce his rights under this Agreement in a proper judicial proceeding, he shall not at any time make false, misleading, or disparaging statements or representations, whether written or oral, regarding the Company, its  products, services, management, directors, employees, or customers.  Further, the Company agrees to instruct its officers and directors to not disparage or defame any Party hereto.

 

 

8.   Time Period for Enforceability/Rescission of Agreement.  The Company's obligations under this Agreement are contingent upon Employee executing and delivering this Agreement to the Company.  Employee may take up to twenty one (21) days from receipt (the "Consideration Period") to consider this Agreement prior to executing it.  Employee may execute and deliver this Agreement at any time during the Consideration Period.  Any changes made to this Agreement after receipt will not restart the running of the Consideration Period.  Any execution and delivery of this Agreement by Employee after the expiration of the Consideration Period shall be unenforceable, and the Company shall not be bound thereby.  Upon executing this Agreement during the Consideration Period, Employee shall have fifteen (15) days thereafter to rescind Employee's consent to this Agreement by executing and delivering a written notice of rescission to the Company.  Upon delivery of a notice of rescission to the Company, the obligations of the Parties under this Agreement shall be void and unenforceable, with the exception of Employee’s obligation to keep this Agreement confidential under Section 6 above.

 

 

9.   Notice of Rescission.  An executed copy of this Agreement, or rescission of this Agreement pursuant to Section 8 above, shall be delivered by certified registered mail to:

 

Northern Oil and Gas, Inc.

Attn: Compensation Committee of the Board of Directors

315 Manitoba Avenue, Suite 200

Wayzata, Minnesota 55391

 

 

10.   Effective Date.  This Agreement shall become effective as of the date on which it is executed and delivered by Employee, provided that it is also signed by the Company and provided that Employee does not rescind this Agreement in accordance with Section 8.

 

 

  

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11.   Governing Law, Jurisdiction & Venue.  This Agreement, and any and all interactions between the Parties arising under or resulting from this Agreement, is governed by and construed in accordance with the laws of the State of Minnesota, exclusive of its choice of law principles.  The state and federal courts located in Hennepin County, Minnesota have exclusive jurisdiction and venue over any dispute arising out of or relating to this Agreement.  Each Party consents to the personal jurisdiction and venue of these courts.

 

 

12.   Injunctive Relief.  Notwithstanding any other term of this Agreement, it is expressly agreed that a breach of this Agreement will cause irreparable harm to the Company and that a remedy at law would be inadequate.  Therefore, in addition to any and all remedies available at law, the Company will be entitled to injunctive and/or other equitable remedies in the event of any threatened or actual violation of any of the provisions of this Agreement.

 

 

13.   Entire Agreement.  This Agreement (along with the Release contained herein) and the Consulting Agreement are the entire agreement between the Parties pertaining to the matters encompassed within it, and supersedes any other agreement, written or oral, that may exist between them relating to the matters encompassed herein, except that this Agreement does not in any way supersede or alter any provisions of the Employment Agreement that are intended to survive Employee’s termination of employment with the Company.

 

 

14.   Severability.  If any provision of this Agreement is found to be illegal or unenforceable, such finding shall not invalidate the remainder of this Agreement, and that provision shall be deemed to be severed or modified to the minimum extent necessary to equitably adjust the Parties’ respective rights and obligations under this Agreement.

 

 

15.   Execution.  This Agreement may be executed in multiple counterparts, each of which will be deemed an original for all purposes.  Facsimile copies of signature to this Agreement are as valid as original signatures.

 

 

[SIGNATURES ON NEXT PAGE]

 

 

 

  

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EXECUTION COPY

 

 

EMPLOYEE'S SIGNATURE BELOW MEANS THAT EMPLOYEE HAS READ THIS AGREEMENT AND AGREES AND CONSENTS TO ALL THE TERMS AND CONDITIONS CONTAINED HEREIN.

 

 

	
NORTHERN OIL AND GAS, INC.

 

 

	 	 	 EMPLOYEE	 
	
/s/  Lisa Bromiley-Meier

	 	 	
/s/ Ryan R. Gilbertson

	 
	
Name:  Lisa Bromiley-Meier

	 	 	
Signature of Ryan R. Gilbertson

	 
	
Title:    Chair of the Compensation Committee

Date:   October 1, 2012

	 	 	
Date:    October 1, 2012    

	 

 

  

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EXHIBIT A

 

 

OUTSTANDING AND UNVESTED EQUITY AWARDS

 

 

Pursuant to Section 2 of the Separation Agreement and Release entered into by and between Northern Oil and Gas, Inc., a Minnesota corporation, and Ryan R. Gilbertson, an individual, that became effective October 1, 2012, Mr. Gilbertson’s outstanding and unvested equity awards as of the Termination Date (defined in such Separation Agreement), including the applicable vesting schedule for such awards, is as follows:

 

 

 

 

	
Date of Grant

	 	
Original # Shares

Granted

	 	
Type of Award

	
Underlying Security

	
Vesting Schedule

	
3/17/2010

	 	 	250,000	 	
Restricted Stock under 2009 Plan

	
Common Stock

	
12,500 on each of 3/17/10, 7/1/10, 10/1/10, 1/1/11

15,625 on each of 4/1/11, 7/1/11, 10/1/11, 1/1/12, 4/1/12, 7/1/12, 10/1/12, 1/1/13

18,750 on each of 4/1/13, 7/1/13, 10/1/13, 1/1/14

	
1/14/2011

	 	 	150,000	 	
Restricted Stock under 2009 Plan

	
Common Stock

	
Initial 50,000 as of 1/14/11

Additional 16,670 on 7/1/11 and

16,666 on each of 1/1/12, 7/1/12, 1/1/13, 7/1/13 and 1/1/14

	
1/14/2011

	 	 	162,000	 	
Restricted Stock under 2009 Plan

	
Common Stock

	
Initial 6,500 as of 1/14/11,

 6,500 on the first day of each secceeding month commencing 2/1/11 and continuing up to and including 12/1/11, and

3,500 on the first day of each succeeding month commencing 1/1/12 until 12/1/13

	
11/7/2011

	 	 	18,000	 	
Restricted Stock under 2009 Plan

	
Common Stock

	
4,500 shares as of 1/1/12

4,500 shares as of 4/1/12

4,500 shares as of 7/1/12

4,500 shares as of 10/1/12

	
1/1/2012

	 	 	168,000	 	
Restricted Stock under 2009 Plan

	
Common Stock

	
21,000 shares on each of 1/1/12, 4/1/12, 7/1/12 and

10/1/12

10,500 shares of each of 1/1/13, 4/1/13, 7/1/13, 10/1/13, 1/1/14, 4/1/14, 7/1/14 and 10/1/14exhibit102_10012012.htm

Exhibit 10.2

 

  

 

  

EXECUTION COPY

NORTHERN OIL AND GAS, INC.

CONSULTING AGREEMENT

 

THIS CONSULTING AGREEMENT (this "Agreement") is made and entered into by Northern Oil and Gas, Inc., a Minnesota corporation (the "Company"), and Ryan R. Gilbertson, an individual ("Consultant"), as of October 1, 2012 (the "Effective Date").

 

WHEREAS, the Company desires to retain Consultant's services as an independent contractor, to provide services of the type set forth on Schedule A;

 

WHEREAS, Consultant represents that he is skilled in the provision of services contemplated by this Agreement, and is available from time to time to provide the type of services required by the Company;

 

WHEREAS, Consultant agrees and acknowledges that contemporaneous with the execution of this Agreement the Company is providing Consultant with Confidential Information, which Consultant agrees and acknowledges was developed at great cost and expense to the Company, and which Consultant would not otherwise have access to or be entitled to receive, and which  constitute valuable consideration to Consultant, as this information will foster Consultant’s ability to perform his or her consulting assignments and enhance Consultant’s potential income; and

 

WHEREAS, Consultant desires to enter into this Agreement with the Company pursuant to all of the terms and conditions set forth below.

 

NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties agree as follows:

 

1. Purpose.  The Company desires that Consultant provide, and Consultant agrees to provide, certain advisory and consulting services to the Company as requested by the Company during the term of this Agreement, with respect to such matters as set forth in Schedule A-1 hereto (the "Services").  Consultant will discharge the duties set forth herein faithfully, diligently, to the best of Consultant's ability and in a manner consistent with any and all policies established by the Company from time to time.  Both parties acknowledge that this Agreement is non-exclusive, in that the Company may utilize the services of other consultants, and Consultant may provide services to others, subject to Section 13 of this Agreement.  Furthermore, the Company and Consultant understand and agree that the manner in which the Services are to be performed and the specific hours to be worked by Consultant shall be determined by Consultant.  The Company will rely on Consultant to work the hours as may be reasonably necessary to fulfill Consultant's obligations under this Agreement.

 

2. Definitions.  For the purposes of this Agreement, the following words shall have the following meanings:

 

 

  

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(a) "Confidential Information" means information (i) disclosed to or known by the undersigned Consultant as a consequence of providing services to the Company; (ii) not generally known outside the Company; and (iii) which relates to any aspect of the Company.  "Confidential Information" includes, but is not limited to all information, knowledge or documents, in whatever form or medium, concerning: development, exploitation, production, exploration and recruitment strategies; geological,  geophysical, seismic, engineering and exploration data; current and prospective property location and economic data; reserve estimates and other forecasts (including any related formulas, concepts, diagrams, charts, assumptions and working papers); current and projected production data and information; current and prospective leasehold interests and lease agreements (including lease schedules and negotiated bonus and royalty rates); title work; current and projected financial information (including pricing indexes, drilling and operating expense and capital expenditures); short and long term business and development plans; current, anticipated and contemplated business ventures (including joint ventures, mergers, acquisitions and divestitures); trade secrets (whether licensed or owned by the Company) and related interpretive materials and analyses of Company's projects; information and manuals relating to internal procedures, methods of operation, training and marketing; personnel information (including employee lists, resumes and applications of prospective employees, employee or consultant compensation and benefits); current and prospective consultant lists and information; current and prospective operating partners lists and information; methods, techniques, research, sources of reserve information, ideas, or any other material that assists the Company with its business operations and that the Company would not want disclosed to third parties; information provided to the Company by a third  party under restrictions against disclosure or use by the Company, or others; and other business information disclosed to or made known to Consultant as a consequence of or through Consultant's provision of independent contractor services to or on behalf of the Company either directly or indirectly (whether or not reduced to writing, whether or not marked as "confidential," and whether or not patentable or protectable by copyright).

 

(b) "Restrictive Period" means the period of time which shall begin on the first day that Consultant provides Services to the Company under this Agreement, and end on October 1, 2014.  Notwithstanding anything in this Agreement to the contrary, in the event Consultant engages in conduct that is in violation of this Agreement, the Restricted Period shall be extended for a period of time equal to the time in which Consultant engaged in activity that was prohibited by this Agreement.

 

3. Duration.  This Agreement shall commence as of the Effective Date and shall continue until the earlier of (i) the date the Company or Consultant terminates this Agreement in accordance with the provisions of Section 11, below, or (ii) October 1, 2014.

 

4. Consideration for Consulting Services.  In consideration of and subject to the Services to be performed by Consultant hereunder, Consultant shall continue to vest in his equity awards (in accordance with the original vesting schedule of such awards) that are outstanding and unvested as of the day immediately prior to the Effective Date (a schedule of such outstanding and unvested awards are attached hereto as Schedule B), subject to applicable withholding and deductions as required by local, state and federal law, as the sole consideration for the Services to be rendered under this Agreement.  Consultant hereby agrees that if he voluntarily terminates this Agreement or if this Agreement is terminated for Cause pursuant to Section 11, below, then all outstanding and unvested equity awards shall automatically and immediately terminate.  Consultant hereby represents and covenants that the consideration described herein was negotiated at arms-length and represents the going rate that would be set between two unrelated and independent third parties given the terms and conditions of this Agreement.

 

 

  

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5. Duties of Consultant. The parties agree that Consultant shall work independently for the Company and exercise his own judgment in performing work, without official hours or a prescribed minimum number of hours worked per week.  The parties agree that Consultant shall be responsible for the provision, maintenance and related expenses of (i) the space from which Consultant works and which shall be separate from the premises of the Company, and (ii) all equipment and supplies necessary to perform the Services.  The Company shall have no control over the means or methods of Consultant's work, except that Consultant shall provide services in a professional and workmanlike manner consistent with the standards of its trade, and shall comply with all applicable local, state and federal laws, rules and regulations.  The Services to be performed pursuant to this Agreement shall be performed by Consultant personally, with no delegation to any employees/contractors of Consultant.

 

6. Taxes. The Company shall not be responsible for and shall not withhold or pay any federal, state or local income or payroll tax of any kind on behalf of Consultant or any employees of Consultant, except as required by law.  Consultant shall not be treated as an employee with respect to the services performed hereunder for federal or state tax purposes.  As an independent contractor, Consultant agrees to pay all applicable taxes and agrees to indemnify the Company and all entities to whom Consultant may be assigned against any and all liability should Consultant be deemed an employee of the Company, or any affiliate by any government agency.

 

7. Reimbursement for Expenses.  All expense reimbursements under this Section 7 are subject to a limit of twenty-five thousand dollars ($25,000.00) per year.  Provided the following is pre-approved in writing by the Company after disclosure of sufficient facts for the Company to make an informed decision (whether disclosure is sufficient being in the sole discretion of the Company), the Company shall reimburse all actual expenses reasonably incurred for air travel to and from the primary work location in furtherance of services requested by the Company, and for ground transportation, hotel and meals while Consultant is away from Consultant's work location in the performance of the duties, functions and responsibilities under this Agreement.  All other expenses incurred by Consultant in the performance of the duties, functions and responsibilities under this Agreement shall be borne by Consultant unless approved in advance in writing by the Company.  Requests by Consultant for reimbursement of any expenses must be accompanied by an itemization of such expenses (in form and substance reasonably acceptable to the Company, including a receipt for any expenses over Twenty-Five U.S. Dollars (US $25.00) and such request to the Company must occur no later than the month following the month in which the expense was incurred by Consultant.  All compensation and expense reimbursements, whether as a result of specific or general prior approval by the Company, are subject to audit by the Company upon request by the Company and Consultant agrees to cooperate fully with the Company in the event of such a request.

 

8. Benefits/Workers' Compensation.  As an independent contractor, Consultant is not eligible for, and shall not participate in, any employee pension, health, or other fringe benefit plans of the Company.  The Company is not responsible for and shall not provide workers' compensation insurance for Consultant or any employees of Consultant.  This Section 8 shall apply irrespective of whether Consultant is subsequently and/or retroactively reclassified as a common law employee of the Company.

 

 

  

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9. Unemployment Tax. Consultant understands that the Company shall not make contributions on Consultant's behalf for unemployment compensation, and agrees to make whatever contributions are required by federal, state or local law, if any.

 

10. Insurance. Consultant agrees to carry comprehensive liability insurance covering all automobiles used by Consultant in connection with or incident to the performance of this Agreement.

 

11. Termination.

 

(a) The Company may terminate this Agreement if Consultant, due to a physical or mental impairment (as reasonably determined to exist by the Company), is unable to perform his or her requested duties for any period of time reasonably deemed significant by the Company.

 

(b) The Company may also terminate this Agreement immediately for "Cause."  For this purpose the term Cause shall be determined exclusively by the Company and defined to include any of the following acts engaged in by Consultant during the Term or during his prior employment with the Company:

 

(i)           an intentional act of fraud, embezzlement, theft or any other material violation of law;

 

(ii)           intentional damage to the Company or its assets;

 

(iii)           willful conduct that is demonstrably and materially injurious to the Company, materially or otherwise;

 

(iv)           any breach or threatened breach of Sections 12, 13, 14 or 15 of this Agreement; and

 

(v)           any material breach of this Agreement.

 

(c) The Company may terminate this Agreement without Cause upon thirty (30) days written notice to Consultant.  In the event this Agreement is terminated pursuant to this provision, the Company can either require Consultant to remain the duration of the thirty (30) days, or terminate this Agreement effective immediately.  If the Company terminates this Agreement without Cause, all of Consultant’s unvested equity awards set forth on Schedule B shall immediately become vested.

 

(d) Consultant may terminate this Agreement upon thirty (30) days written notice to the Company.  In the event Consultant terminates this Agreement in this manner, Consultant shall continue performing the services agreed to, subject to all terms and conditions of this Agreement, for the entire thirty (30) day period, unless instructed otherwise by the Company.

 

 

  

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12. Confidential Information.  Consultant agrees that he will not for the duration of the Restrictive Period, directly or indirectly, use or reveal, divulge, make known to or permit the use of by third parties, any Confidential Information unless required to do so by law.  Consultant agrees that he will continue to be obligated under this provision for so long as the Confidential Information is not publicly available in a manner other than by Consultant’s breach of this Agreement. 

 

13. Non-Solicitation and Conflicts of Interest.  Consultant recognizes and agrees that a portion of the compensation he is to receive under this Agreement is provided in consideration for the restrictive covenants contained in this Section 13.

 

(a) Conflicts of Interest.  Consultant agrees that for the duration of the Restrictive Period, Consultant shall not engage, either directly or indirectly, in any activity which might adversely affect the Company, including ownership of a material interest in any operating partner, supplier, contractor, distributor, subcontractor, customer or other entity with which the Company does business or accepting any payment, service, loan, gift, trip, entertainment, or other favor from an operating partner, supplier, contractor, distributor, subcontractor, customer or other entity with which the Company does business (a "Conflict of Interest").  Consultant agrees to promptly inform a corporate officer of the Company as to each offer received by Consultant that would give rise to a Conflict of Interest.  This Section 13(a) shall not apply to the scope of investments and activities by Consultant that were previously approved by the Board of Directors of the Company, a complete and detailed list of which are attached hereto as Schedule C.

 

(b) Non-Solicitation of Lessors or Operating Partners.  For the duration of the Restrictive Period, without regard to the cause or lack of cause for such termination, Consultant shall not, directly or indirectly, as an agent, proprietor, owner, partner, broker, shareholder, officer, joint venture or otherwise, render any services to, solicit or attempt to solicit requests for services from, attempt to render any services to, communicate with, accept business from or enter into any contracts with any lessor or operating partner of the Company or any employee, agent, subsidiary or affiliate of any such lessor or operating partner to whom Consultant provided services, was given access to Confidential Information about, or that Consultant otherwise dealt with in any way while performing services for the Company.

 

(c) Non-Solicitation of Employees or Other Consultants.  For the duration of the Restrictive Period, Consultant agrees that he shall not directly or indirectly, on Consultant's own behalf or on behalf of others, solicit, attempt to hire, hire, or contract with any person who was employed by the Company or who performed consulting services for the Company at any time during the last six (6) months of Consultant's engagement with the Company, to work for Consultant or for another person or entity with whom Consultant is or becomes associated.

 

(d) Reaffirm Obligations.  Upon termination of this Agreement, Consultant, if requested by the Company, shall reaffirm in writing Consultant's recognition of the importance of maintaining the confidentiality of the Company's Confidential Information, disclose the identity of his or her new company or business ventures, and reaffirm any other obligations set forth in this Agreement.

 

 

  

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(e) Prior Disclosure.  Consultant represents and warrants that he or she has not used or disclosed any Confidential Information obtained from the Company prior to signing this Agreement, in any way inconsistent with the provisions of this Agreement.

 

(f) Confidential Information of Third Parties.  Consultant agrees not to disclose or use during the period of this Agreement any proprietary or Confidential Information which Consultant may have acquired through a third party, whether such information is in Consultant's memory or embodied in a writing or other physical form.

 

14. Non-Competition. Consultant agrees to refrain from competing with the Company, or otherwise engaging in Restricted Activities, as defined below, anywhere within the States of Minnesota, Montana or North Dakota, for the duration of the Restrictive Period.  "Restricted Activities" are the engagement, directly or indirectly, alone or as a shareholder (other than as a hold of less than ten percent (10%) of the common stock of any publicly traded corporation), partner, officer, director, employee, consultant or advisor, or otherwise in any way participate in or become associated with, any other business organization that is engaged or becomes engaged in any business that acquires, leases, develops, produces or invests in the exploration of crude oil and natural gas properties in Minnesota, Montana and North Dakota, or is directly competitive with, any business activity that the Company is conducting at the time Consultant ceases to provide Services to the Company or has notified Consultant that it proposes to conduct and for which the Company has, prior to the time of such cessation, expended substantial resources.  The parties agree that the provisions of this Section 14 shall survive any termination of this Agreement, Consultant shall continue to be bound by the provisions of this Section 14 until their expiration and Consultant shall not, except as provided herein, be entitled to any compensation from the Company with respect thereto.  Consultant acknowledges that the provisions of this Section 14 are essential to protect the business and goodwill of the Company.  If at any time the provisions of this Section 14 shall be determined to be invalid or unenforceable by reason of being vague or unreasonable as to area, duration or scope of activity, this Section 14 shall be considered divisible and shall become and be immediately amended to only such area, duration and scope of activity as shall be determined to be reasonable and enforceable by the court or other body having jurisdiction over the matter; and Consultant agrees that this Section 14 as so amended shall be valid and binding as though any invalid or unenforceable provision had not been included herein.

 

15. Defense of Claims.  Consultant hereby agrees to reasonably cooperate with the Company in the investigation, defense or prosecution of any claims, actions or matters now in existence or that may be brought in the future against or on behalf of the Company by any third party against the Company or by the Company against any third party and with respect to which Consultant has personal knowledge.  Consultant also agrees that his reasonable cooperation in connection with such claims or actions shall include, but not be limited to, being reasonably available to meet with Company’s counsel to prepare for discovery, any mediation, arbitration, trial, administrative hearing or other proceeding, and to act as a witness when requested by the Company at reasonable times and locations designated by the Company.  Moreover, unless otherwise prohibited by law, Consultant agrees to notify the Company’s counsel if he is asked by any person, entity or agency to assist, testify or provide information in any proceeding or investigation.  Such notice shall be in writing and sent by overnight mail within five business days of the time Consultant receives the request for assistance, testimony or information.  If Consultant is not legally permitted to provide such notice, he agrees that he shall request that the person, entity or agency seeking assistance, testimony or information provide notice consistent with this Section 15.  The Company agrees to reimburse Consultant for his reasonable out-of-pocket costs in providing cooperation under this Section 15, including travel expenses, meals and lodging.

 

 

  

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16. Additional Remedies.  Consultant agrees that a breach of any of the provisions of Sections 12, 13, 14 or 15 of this Agreement would cause material and irreparable harm to the Company that would be difficult or impossible to measure, and that damages or other legal remedies available to the Company for any such injury would therefore be an inadequate remedy for any such breach.  Accordingly, Consultant agrees that if he breaches any of the provisions of Sections 12, 13, 14 or 15 of this Agreement, the Company shall be entitled, in addition to and without limitation, all other remedies the Company may have under this Agreement, at law or otherwise, including to obtain injunctive or other appropriate equitable relief, without bond or other security, to restrain such breach.

 

17. Relationship of Parties.  Consultant, in furnishing services to the Company, is providing such Services only as an independent contractor.  The parties expressly understand and agree that this Agreement does not create an employer-employee relationship, a partnership relationship or a joint venture relationship among or between any of the parties.  Consultant shall not be deemed an agent of the Company or of any other affiliate of the Company.  Consultant shall dictate the manner in which the services are performed, provided that such services are completed in a satisfactory and timely manner.  Further, Consultant shall not have the right, power or authority to create any contract or obligation, express or implied, on behalf of, in the name of or binding on the Company or its affiliates.

 

18. Survivability.  The termination or expiration of this Agreement shall not affect the parties’ obligations under Sections 4, 7, 12, 13, 14, 15, 16, 18, 19, 20, 22, 24 and 28 of this Agreement.

 

19. Notices.  Any notices, consents, demands, requests, approvals and other communications to be given under this Agreement by either party to the other shall be in writing and shall be either (i) delivered in person, (ii) mailed by registered or certified mail, postage prepaid with return receipt requested, (iii) delivered by overnight express delivery service or same-day local courier service or (iv) delivered by facsimile transmission, to the addresses set forth in Schedule A-5 hereto.  Notices delivered personally, by overnight express delivery, local courier or facsimile, shall be deemed communicated as of actual receipt; mailed notices shall be deemed communicated as of three days after mailing.

 

20. Entire Agreement.  This Agreement and the Separation Agreement entered into between the parties as of October 1, 2012, contain the entire agreement and understanding between Consultant and the Company with respect to the matters addressed herein and shall supersede any prior or contemporaneous agreements, understandings, communications, offers, representations, warranties, or commitments by or on behalf of the Company and its affiliates (oral or written).

 

 

  

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21. Modification.  No change or modification of this Agreement shall be valid or binding upon the parties hereto, nor shall any waiver of any term or condition in the future be so binding, unless such change or modification or waiver shall be in writing and signed by the parties hereto.

 

22. Governing Law and Venue.  This Agreement shall be governed by, and construed in accordance with, the procedural and substantive laws of the State of Minnesota.  The Company and Consultant irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the state and federal courts located in Wayzata, Hennepin County, Minnesota as the sole venue and location for any actions, suits, or proceedings arising out of or relating to any aspect of this Agreement and all issues arising out of or relating to the relationship between the Company and Consultant.  The Company and Consultant further agree that service of process, summons, or notice by U.S. registered mail to the applicable addresses set forth in Schedule A shall be effective service of process of any such action, suit, or proceeding.

 

23. Counterparts.  This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which shall constitute one document.

 

24. Costs.  If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which he or it may be entitled.

 

25. Assignment.  This Agreement is binding upon and shall inure to the benefit of the parties hereto, together with their respective executors, administrators, successors, personal representatives, heirs and assigns.  Notwithstanding the foregoing, the rights, duties and benefits to Consultant hereunder are personal to Consultant, and no such right or benefit may be assigned by it.  The Company shall have the right to assign or transfer this Agreement to its successors or assigns.  The terms "successors" and "assigns" shall include any person, corporation, partnership or other entity that buys all or substantially all of the Company’s assets or all of its stock, or with which the Company merges or consolidates.  Any purported assignment of this Agreement, other than as provided above, shall be void.

 

26. Severability.  It is the intent and agreement of the parties to this Agreement that, in case any one or more of the provisions of this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein except that this shall not prohibit any modification allowed or agreed upon pursuant to the terms of this Agreement or any right of reformation.

 

27. Construction.  This Agreement is the product of the efforts of both parties and shall not be interpreted in favor of or against either the Company or Consultant merely because of its effort in preparing it.

 

 

  

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28. Agreement to Arbitrate Claims.  In the event any dispute arises out of this Agreement or its termination which cannot be resolved by the parties to this Agreement, such dispute shall be submitted to final and binding arbitration.  The arbitration shall be conducted in accordance with the American Arbitration Association ("AAA").  If the parties cannot agree on an arbitrator, a list of seven (7) arbitrators will be requested from AAA, and the arbitrator will be selected using alternate strikes with Consultant striking first.  The cost of the arbitration will be shared equally by Consultant and the Company.  Arbitration of such disputes is mandatory and in lieu of any and all civil causes of action and lawsuits either party may have against the other arising out of this Agreement or termination thereof; provided, however, that any claim the Company has for breach of the covenants contained in Sections 12, 13 and 14 of this Agreement shall not be subject to mandatory arbitration, and may be pursued in a court of law or equity.  In any arbitration brought to enforce or interpret the terms of this Agreement, or any action at law or in equity brought to enforce the obligations of Sections 12, 13 and 14 of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief recoverable in such action.

 

29. Waiver of Breach.  The waiver by the Company of a breach of any provision of this Agreement by Consultant shall not operate or be construed as a waiver of any subsequent breach by Consultant.

 

[SIGNATURES ON NEXT PAGE]

 

  

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EXECUTION COPY

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

 

	
 NORTHERN OIL AND GAS, INC.

 

 

	 	 	 CONSULTANT	 
	
/s/ Lisa Bromiley-Meier

	 	 	
/s/ Ryan R. Gilbertson

	 
	
Name:  Lisa Bromiley-Meier

	 	 	
Signature of Ryan R. Gilbertson

	 
	
Title:    Chair of Compensation Committee

	 	 	
Date:    October 1, 2012

	    
	Date:    October 1, 2012	 	 	 	 

 

  

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EXECUTION COPY

SCHEDULE A

	
A-1      Services

	
Serve as an advisor to the Board of Directors of the Company on matters relating to capital markets, prior transactions, contemplated future transactions and overall corporate strategy.

	
A-2      Term

	
Twenty four (24) months and one day, ending on October 1, 2014.

	
A-3      Pay

	
$0.00 cash compensation; instead, Consultant shall receive the consideration set forth in Section 4 of the Agreement.

	
A-4

	
Benefits

	
No benefits, (i.e. 401(k), health insurance, and vacation time) are available to Consultant.

A-5     Notice Addresses:                    Company               Northern Oil and Gas, Inc.

315 Manitoba Avenue, Suite 200

Wayzata, MN 55391

Tele: 952-476-9800

Fax: 952-476-9801

Consultant             Ryan R. Gilbertson

[Address]

Tele: [Phone]

Fax: [Fax]

  

  

  

EXECUTION COPY

SCHEDULE B

OUTSTANDING AND UNVESTED EQUITY AWARDS

 

Pursuant to Section 4 of the Consulting Agreement entered into by and between Northern Oil and Gas, Inc., a Minnesota corporation, and Ryan R. Gilbertson, an individual, that became effective October 1, 2012, Mr. Gilbertson’s outstanding and unvested equity awards as of the Termination Date (defined in such Separation Agreement), including the applicable vesting schedule for such awards, is as follows:

 

	
Date of Grant

	
Original # Shares

Granted

	
Type of Award

	
Underlying Security

	
Vesting Schedule

	
3/17/2010

	
250,000

	
Restricted Stock under 2009 Plan

	
Common Stock

	
12,500 on each of 3/17/10, 7/1/10, 10/1/10, 1/1/11

15,625 on each of 4/1/11, 7/1/11, 10/1/11, 1/1/12, 4/1/12, 7/1/12, 10/1/12, 1/1/13

18,750 on each of 4/1/13, 7/1/13, 10/1/13, 1/1/14

	
1/14/2011

	
150,000

	
Restricted Stock under 2009 Plan

	
Common Stock

	
Initial 50,000 as of 1/14/11

Additional 16,670 on 7/1/11 and

16,666 on each of 1/1/12, 7/1/12, 1/1/13, 7/1/13 and 1/1/14

	
1/14/2011

	
162,000

	
Restricted Stock under 2009 Plan

	
Common Stock

	
Initial 6,500 as of 1/14/11,

 6,500 on the first day of each secceeding month commencing 2/1/11 and continuing up to and including 12/1/11, and

3,500 on the first day of each succeeding month commencing 1/1/12 until 12/1/13

	
11/7/2011

	
18,000

	
Restricted Stock under 2009 Plan

	
Common Stock

	
4,500 shares as of 1/1/12

4,500 shares as of 4/1/12

4,500 shares as of 7/1/12

4,500 shares as of 10/1/12

	
1/1/2012

	
168,000

	
Restricted Stock under 2009 Plan

	
Common Stock

	
21,000 shares on each of 1/1/12, 4/1/12, 7/1/12 and

10/1/12

10,500 shares of each of 1/1/13, 4/1/13, 7/1/13, 10/1/13, 1/1/14, 4/1/14, 7/1/14 and 10/1/14

 

  

  

  

EXECUTION COPY

SCHEDULE C

CONFLICTS OF INTEREST

 

Pursuant to Section 13(a) of the Consulting Agreement entered into on October 1, 2012, by and between Northern Oil and Gas, Inc., a Minnesota corporation (the "Company"), and Ryan R. Gilbertson, an individual, the scope of investments and activities by Mr. Gilbertson that were previously approved by the Board of Directors of the Company are as follows, which Mr. Gilbertson represents is a full, complete and detailed list: (i) Dakota Plains Holdings, Inc., (ii) Southern Plains Resources, Inc, (iii) Great Plains LLC, and (iv) ND oil field infrastructure such as salt water disposal, waste elimination, trucking or water supply; however, (i) through (iv) shall apply only to the extent such do not conflict with the Company’s interests in the Bakken or Three Forks within the Williston Basin.

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