Document:

exhibit10-2.htm

Exhibit 10.2

AGREEMENT

This Agreement (the “Agreement”) is entered into on July 21, 2010, by and among Hyperdynamics Corporation, a Delaware corporation (the “Company”) and the stockholders whose names are listed on the Signature Page and Exhibit A hereto (referred to herein as the “Holders”).  The Company and the Holders may also be referred to collectively herein as the “Parties.”

 

Recitals

WHEREAS, the Parties entered into a Letter Agreement in September 2009 (the form of which is included as Exhibit B hereto (the “September 2009 Agreement”)) and desire to enter into this Agreement and to terminate the September 2009 Agreement.

 

NOW THEREFORE, the Parties agree as follows:

 

Agreement

1. TERM.

 

The term of this Agreement shall begin on July 21, 2010 and end on July 1, 2012 (the “Term”).

 

2. LOCK-UP.

 

An aggregate of 7,500,000 shares of Common Stock of the Company and Warrants to purchase 2,240,000 shares of Common Stock of the Company that are owned by the Holders as set forth on Exhibit A to this Agreement (the shares of Common Stock and shares underlying the Warrants are collectively referred to as the “Securities”) shall be subject to this Agreement.  The Holders agree that during the period beginning on July 21, 2010 and ending nine months later on April 21, 2011 (the “Restriction Period”), except as set forth in Section 3 below, without the written consent of the Company (which may be withheld in the Company’s sole discretion), they will not (i) sell, offer to sell, contract or agree to sell, hypothecate, hedge, pledge, grant any option to purchase, make any short sale or otherwise dispose of or agree to dispose of, directly or indirectly, any of the 7,500,000 Shares of Common Stock held by them or the 2,240,000 Shares that may be acquired pursuant to exercise of the Warrants, or any of the 2,240,000 Warrants or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of these securities, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise.

 

3. EXCEPTIONS TO RESTRICTION PERIOD.

 

The following are exceptions to the Restriction Period pursuant to Section 2 above:

 

(a) Any donations of the Securities to the American Friends of Guinea as provided in Section 4 herein.

 

(b) Any Securities that are pledged as collateral to secure repayment of a loan(s) made to a Holder or an affiliate of Holder that is commercially reasonable and in which repayment terms exceed the expiration date of the Restriction Period, subject to the consent of the Company (which shall not be unreasonably withheld).

 

(c) During the Restriction Period, if the share price of the Common Stock of the Company closes at a price greater than $3 for five consecutive trading days, then 15% of each Holder’s shares of Common Stock that still have sales restrictions in effect, shall no longer be restricted in any way pertaining to any terms of this Agreement.

 

(d) During the Restriction Period, if the share price of the Common Stock of the Company closes at a price greater than $5 for five consecutive trading days, then 50% of each Holder’s shares of Common Stock shall no longer be restricted in any way pertaining to any terms of this Agreement.

 

(e) During the Restriction Period, if the share price of the Common Stock of the Company closes at a price greater than $9 for five consecutive trading days, all remaining shares of Common Stock that still have certain restrictive terms in effect pursuant to Section 2 herein shall no longer be restricted in any way pertaining to any terms of this Agreement.

 

(f) If there is a “Change of Control” of the Company during the Restriction Period, all restrictions pursuant to Section 2 shall immediately cease.

 

A “Change of Control” shall be deemed to occur if and when:

 

(i)           there occurs a reorganization, merger, consolidation or other corporate transaction involving the Company (a “Transaction”), in each case, with respect to which the stockholders of the Company immediately prior to such Transaction do not, immediately after the Transaction, own more than 50 percent of the combined voting power of the Company or other corporation resulting from such Transaction in substantially the same respective proportions as such stockholders’ ownership of the voting power of the Company immediately before such Transaction.

 

(ii)           any plan or proposal for the dissolution or liquidation of the Company is adopted by the stockholders of the Company;

 

(iii)           individuals who, as of July 21, 2010, constituted the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to July 21, 2010 whose election, or nomination for election by the Company’s stockholders, was approved by a vote of a least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in SEC Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act of 1934) or such other actual or threatened solicitation of proxies or consents  by or on behalf of a person other than the Board; or

 

(iv)           all or substantially all of the assets of the Company are sold, transferred or distributed.

 

	
4.  

	
DONATIONS OF COMMON STOCK AND WARRANTS TO THE AMERICAN FRIENDS OF GUINEA.

 

The Holders will donate an aggregate of 1,000,000 shares of Common Stock (in the amounts by the Holder as provided in Exhibit A) to the American Friends of Guinea, a charitable organization that the Company is working with to help provide support to the people of Guinea, as follows: 100,000 shares on or before August 25, 2010; 570,000 shares on or before July 1, 2011, and 330,000 shares on or before July 1, 2012.  Warrants to purchase an aggregate of 500,000 shares (in the amounts by the Holder as provided in Exhibit A) will be donated by the Holders to the American Friends of Guinea from time to time at their discretion, but no later than July 1, 2012.  Notwithstanding the foregoing, if the share price of the Common Stock of the Company closes at a price greater than $3 for five consecutive trading days, then the Board of Directors of the American Friends of Guinea (the “AFG Board”) after review in the AFG Board’s discretion of the budget and anticipated requirements of such organization and the goal of providing support to the people of Guinea, shall have the right to require that some or all of the agreed upon donations be made by the Holders no later than 30 days after notice to the Holders by the AFG Board.

 

5. TERMINATION OF THE SEPTEMBER 2009 AGREEMENT.

 

The September 2009 Agreement is terminated.

 

6. OTHER PROVISIONS

 

(a) The certificates and agreements evidencing the Securities shall have imprinted on their face a restricted legend substantially as follows:

 

“The Securities represented by this certificate (warrant agreement) are restricted from transfer pursuant to the terms of the Agreement between the Holder and Hyperdynamics Corporation, dated July 21, 2010, and may only be transferred in compliance with that Agreement.”

 

(b) The Parties agree that this Agreement is irrevocable except for as herein provided and shall be binding upon their respective heirs, legal representatives, successors and assigns.

 

(c) The Parties agree that irreparable damage could result if this Agreement is not performed in accordance with its terms, and either party may be entitled to specific performance, in addition to any other remedy at law, or in equity.

 

(d) The terms of this Agreement shall be construed and interpreted in accordance with the laws of the State of Texas and shall be binding upon and inure to the benefit of the Company, the Holders, and their respective heirs, legal representatives, successors and assigns.  This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof. Each of the Holders acknowledges that he or she has had the opportunity to consult with an attorney prior to entering into this Agreement and that no part of this Agreement shall be construed against any Party on the basis of authorship. Each of the Parties represents and warrants to each other that each has the requisite authority to enter into and perform his or its obligations under this Agreement and that this Agreement constitutes his or its legal, valid and binding obligation.

 

(e) The execution of this Agreement, and the delivery of a copy thereof bearing a facsimile or a scanned signature, shall be valid and enforceable and shall, for all purposes, be treated as an original signature.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement on the date set forth above.

 

Agreed and Accepted:

 

KD NAVIGATION, INC.                                                                           HYPERDYNAMICS CORPORATION

 

 

/s/ Jeremy G. Driver                                                                __/s/ Ray Leonard____________________

Name: Jeremy G. Driver                                                                Ray Leonard

Title: President                                                                President and CEO

/s/ Michael E. Watts                                                                

Michael E. Watts, Individually                                                                           CW NAVIGATION, INC.

 

    /s/ Christopher M. Watts                                                                

Name:       Christopher M. Watts 

Title:           President                                                      

KW NAVIGATION, INC.

 

/s/ Michael E. Watts 

Name:  Michael E. Watts 

Title:    Presidentexhibit10-3.htm

Exhibit 10.3

EMPLOYMENT AGREEMENT

 

 

THIS AGREEMENT is made and entered into this 22th day of July, 2010, by and between HYPERDYNAMICS CORPORATION, a Delaware corporation (the "Company"), and John O’Keefe ("Employee").

 

 

W I T N E S S E T H:

        WHEREAS, Employee and the Company deem it to be in their respective best interests to enter into an agreement providing for the Company's employment of Employee pursuant to the terms herein stated;

 

 

NOW, THEREFORE, in consideration of the premises and the mutual promises and agreements contained herein, it is hereby agreed as follows:

        1.     Effective Date. This Agreement shall be effective on the 22th day of July, 2010, which date shall be referred to herein as the "Effective Date".

        2.     Position and Duties:

               (a) Henceforth, the Company hereby employs Employee as its Executive Vice President and Chief Financial Officer, pursuant to the terms of this Agreement commencing as of the Effective Date for the "Term of Employment" (as herein defined below). Employee shall devote his best efforts and his full business time and attention to the performance of the services defined by the by-laws of the company, services customarily incident to such office and position and to such other services of a senior Employee nature as may be reasonably assigned by the Chief Executive Officer or requested by the Board of Directors (the "Board") of the Company which may include services for one or more subsidiaries or affiliates of the Company. Employee shall in his capacity as an employee of the Company be responsible to and obey the reasonable and lawful directives of the Chief Executive Officer and the Board of Directors of Hyperdynamics Corporation.

               (b) Employee shall devote his full time (as defined below) and attention to such duties, except for sick leave, periodic personal trips and vacations as determined not to conflict with the material operations of the Company, and excused leaves of absences otherwise. Employee shall use his best efforts during the Term of Employment to protect, encourage, and promote the interests of the Company.

Full time with respect to this agreement is understood to credit the Employee for his on-call status with regard to managing employees located around the world and recognizing that the Employee’s hours of specific work for the company are not limited to any specific range of time during a work day but can be accomplished around the clock and on weekends and/or holidays if deemed necessary by the Chief Executive Officer or the  Employee himself, and certain responsibilities of Employee’s responsibilities, as approved by the Chief Executive Officer, may be done at any physical location including Employee’s home.  As approved by the Chief Executive Officer, the company may establish full home computer system and access communications capabilities for Employee as deemed necessary by mutual agreement of the Chief Executive Officer and Employee.  The principal duties of the employee are described in Attachment A.

               (c) Notwithstanding paragraph 2(b), Employee shall be entitled to sit as a director on other boards of directors and contacts with certain companies so long as doing so presents no conflicts of interest with Employee's performance of his duties or his positions at the Company, as determined and approved by the board of directors.

        3.     Compensation:

               (a) Base Salary. The Company shall pay to Employee during the Term of Employment a minimum salary at the rate of two hundred thousand US dollars (US$200,000.00) per year.  Such salary shall be payable Bi-Weekly, Semi-monthly, or monthly in accordance with the Company's normal payroll procedures (Employee's annual salary, as set forth above or as increased from time to time as set forth herein, shall be referred to hereinafter as "Base Salary"). At no time during the Term of Employment shall Employee's Base Salary be decreased from the amount of Base Salary then in effect.

               (b) Performance Bonus. In addition to the compensation otherwise payable to Employee pursuant to this Agreement, Employee shall be eligible to receive performance bonus(es), as a cash sum in U.S. dollars, as determined and agreed to from time to time by the Chief Executive Officer and the Board of Directors. The performance bonus target shall be 50% with a maximum amount of 100%. The performance targets and weightings are listed in Attachment B.

               (c) Long-Term Incentive/Stock Options. Upon execution of this Agreement, and  once approved by the Compensation Committee and recommended to the board of directors and then approved by the board of directors, the board of directors will take action to grant Employee 200,000 S8 registered stock options to purchase the common stock of the Company.  These options are subject to the Company’s 2010 Equity Incentive Plan, 1/3 of such options shall vest on each of the first, second and third anniversaries of the date on which they are originally granted (Grant Date).  The employee will also be granted 100,000 options on the Grant Date which will vest if and when the Share price attains a closing market price of $3/share or more for five consecutive days. The strike price of both sets of options will be the share price at the close of business on July 20, 2010.

        4.     Benefits During the Term of Employment:

               (a) Employee shall be eligible to participate in any life, health and long-term disability insurance programs, pension and retirement programs, any 401 (k) plans which may be put in place by the Company, stock option and other incentive compensation programs, paid Company holidays and other fringe benefit programs made available to senior employees of the Company from time to time, and Employee shall be entitled to receive such other fringe benefits as may be granted to him from time to time by the Company's Board of Directors. If the employee does not participate in the health/benefit plans, the amount that the company would have contributed will be reimbursed monthly.

               (b) The Company shall reimburse Employee for reasonable business expenses incurred in performing Employee's duties and promoting the business of the Company, including professional association fees, reasonable entertainment expenses, travel and lodging expenses, following presentation of documentation in accordance with the Company's business expense reimbursement policies.

 

 

        5. Term; Termination of Employment. As used herein, the phrase "Term of Employment" shall mean the period commencing on the Effective Date and ending on the same date three (3) years later; provided, however, that as of the expiration date of each of (i) the initial Term of Employment and (ii) if applicable, any Renewal Period (as defined below), the Term of Employment shall automatically be extended for a one (1) year period (each a "Renewal Period") unless either the Company or Employee provides 60 days (2) months' notice to the contrary. Notwithstanding the foregoing, the Term of Employment shall expire on the first to occur of the following:

	
(a)  

	
Termination by the Company. Notwithstanding anything to the contrary in this Agreement, whether express or implied, the Company may, at any time, terminate Employee's employment for any reason other than Cause, Death or Disability by giving Employee at least 60 days' prior written notice of the effective date of termination. Company may terminate Employee's employment for Cause, Death or Disability without prior notice, except that Employee may not be terminated for substantial and willful failure to perform specific and lawful directives of the Board, unless and until the Board has given him reasonable written notice of its intended actions and specifically describing the alleged events, activities or omissions giving rise thereto and with respect to those events, activities or omissions for which a cure is possible, a reasonable opportunity to cure such breach; and provided further, however, that for purposes of determining whether Cause is present, no act or failure to act by Employee shall be considered "willful" if done or omitted from being done by Employee in good faith and in the reasonable belief that such act or omission was in the best interest of the Company and/or required by applicable law.

	
(b)  

	
Termination of Employment following change of control. If the Employers’ common stock closing price is above $2.00 per share on a trading day that is within five trading days of the date of a Change of Control, Executive’s employment with Employer or an Affiliate or successor of Employer is terminated for any reason other than death, Inability to Perform, or Cause, Executive will be paid the Vacation Payment and any unreimbursed Business Expenses no later than 30 days after the Employee Termination Date.  In addition, if, within 45 days after the Employee Termination Date, Executive has signed a general release agreement and Executive does not evoke such release, Employer shall pay Executive a lump sum of either (A) equivalent of the salary he has received to date if he has been employed less than one year or (B) one year base salary if he has been employed one year or more. If the share price is between $1.25 per share and $2.00 per share the amounts in (A) or (B) where applicable will be reduced by 50%.

              (c) Termination by Employee. In the event that Employee's employment with the Company is voluntarily terminated by Employee, the Company shall have no further obligation hereunder from and after the effective date of termination. Employee shall give the Company at least 30 days' advance written notice of his intention to terminate his employment hereunder.

              (d) Salary, Benefits, and Severance Pay. Upon Termination. In the event of termination of employment, Employee shall receive all regular Base Salary due up to the date of termination, and if it has not previously been paid to Employee, Employee shall be paid any Bonus to which Employee had become entitled under Bonus(es) approved for Employee, prior to the effective date of such termination. The Company shall have no further obligation hereunder from and after the effective date of termination except as to policies put in place for severance pay in certain situations such as Change of Control (5b). Employee's stock options with respect to the Company's stock shall be subject to the terms of the Hyperdynamics’ Employee Stock and Stock Option Plan or any successor plan, which is a separate agreement. In the event of termination, Employee's rights to other benefits aside from severance shall be governed by the terms of the Company's retirement, insurance and other benefit plans and programs then in effect in accordance with the terms of such plans.

        6.     Confidential Information, Non-Solicitation and Non-Competition:  During the Term of Employment and at all times thereafter, Employee shall not, except as may be required to perform his duties hereunder or as required by applicable law, disclose to others or use, whether directly or indirectly, any Confidential Information regarding the Company. "Confidential Information" shall mean information about the Company, its subsidiaries and affiliates, and their respective clients and customers that is not available to the general public.

 

 

        7. Return of Company Documents: In the event Employee leaves the employment of Company for whatever reason, Employee agrees to deliver to Company any and all property situated on Company's premises and owned by Company including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time, with or without notice, for the purpose of protecting Company's rights and interests in its intellectual property.

        8. Taxes. All payments to be made to Employee under this Agreement will be subject to any applicable withholding of federal, state and local income and employment taxes. Any withholding regarding exercise of stock options will be determined by including an opinion of a third party tax attorney paid by the company as pertaining to any withholding which may or may not be required.

        9. Miscellaneous. This Agreement shall also be subject to the following miscellaneous considerations:

               (a) Employee and the Company each represent and warrant to the other that he or it has the authorization, power and right to deliver, execute, and fully perform his or its obligations under this Agreement in accordance with its terms.

               (b) This Agreement contains a complete statement of all the arrangements between the parties with respect to Employee's employment by the Company, this Agreement supersedes all prior and existing negotiations and agreements between the parties concerning Employee's employment, and this Agreement can only be changed or modified pursuant to a written instrument duly executed by each of the parties hereto.

               (c) If any provision of this Agreement or any portion thereof is declared invalid, illegal, or incapable of being enforced by any court of competent jurisdiction, the remainder of such provisions and all of the remaining provisions of this Agreement shall continue in full force and effect.

               (d) This Agreement shall be governed by and construed in accordance with the internal, domestic laws of the State of Texas.

               (e) Any rights of Employee hereunder shall be in addition to any rights Employee may otherwise have under benefit plans, agreements, or arrangements of the Company to which he is a party or in which he is a participant, including, but not limited to, any Company-sponsored employee benefit plans. Provisions of this Agreement shall not in any way abrogate Employee's rights under such other plans, agreements, or arrangements.

               (f) For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed to the named Employee at the address set forth below under his signature; provided that all notices to the Company shall be directed to the attention of the Board of Directors with a copy to the Secretary of the Company, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

               (g) Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

               (h) Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof shall not be deemed a waiver of such term, covenant, or condition, nor shall any waiver or relinquishment of, or failure to insist upon strict compliance with, any right or power hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times.

               (i) This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

(j) For the avoidance of doubt, the Employee represents, covenants and warranties that his employment by the Employer will not breach any confidentiality agreements, non-competition agreements or non-solicitation agreements that the Executive may entered into with others.

        10. Survival of Provisions: The executory provisions of this Agreement will survive the termination of this Agreement.

 

  

  

  

 

 

 

 

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as

of the day and year first above written.

EMPLOYEE                                                                   

 

 

BY:  /s/ John O'Keefe

JOHN O’KEEFE                                                                                 

TITLE:                      

EXECUTIVE VICE PRESIDENT

CHIEF FINANCIAL OFFICER 

 

 

 

COMPANY

HYPERDYNAMICS CORPORATION

BY: /s/ Ray Leonard

RAY LEONARD

TITLE:

CHIEF EXECUTIVE OFFICER

12012 Wickchester Lane

Houston, Texas 77041 Suite 475

Houston, Texas 77079

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