Document:

Sun Energy, Inc.: Exhibit 10.1 - Filed by newsfilecorp.com

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this
“Agreement”) is made and entered into between Sun River Energy,
Inc., a Colorado Corporation (the “Company”), and Judson F.
Hoover, a Texas resident (“Employee”) and shall be effective as of
January 12, 2011 (the “Effective Date”).

RECITALS:

The Company desires to employ Employee, and Employee desires to
be employed by the Company, on the terms and conditions hereinafter
provided.

AGREEMENT:

NOW, THEREFORE, in consideration of the foregoing, of the
mutual promises herein contained, and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, agree as follows:

Section 1. Term of Employment.

Subject to earlier termination in accordance with this
Agreement, this Agreement will remain in effect for a period of 3 years from the
Effective Date (the “Initial Term”). Provided that this Agreement
has not been terminated prior to the expiration of the Initial Term in
accordance with the terms contained herein, subsequent to such time, Employee’s
employment hereunder shall be automatically continued for successive additional
terms of one (1) year each unless written notice of non-renewal is given by
either party no less than 60 days prior to the end of the Initial Term or any
additional term, as applicable.

Section 2. Responsibilities of Employee.

	 	(a) 	
      During the Employment Period, Employee shall serve as
      Chief Financial Officer (“CFO”). Employee shall report directly to the CEO
      and as otherwise required by the CEO at his sole discretion. Employee
      shall perform the following duties:

	 	 	 	 
	 		(i) 	
      Create, coordinate, and evaluate the financial programs
      and supporting information systems of the company to include budgeting,
      tax planning, and conservation of assets.

	 	 	 	 
	 		(ii) 	
      Approve and coordinate changes and improvements in
      automated financial and management information systems for the
    company.

	 	 	 	 
	 		(iii) 	
      Ensure compliance with local, state, and federal
      reporting requirements.

	 	 	 	 
	 		(iv) 	
      Oversee the approval and processing of revenue,
      expenditure, and position control documents, department budgets, salary
      updates, ledger, and account maintenance and data entry.

	 	 	 	 
	 		(v) 	
      Coordinate the preparation of financial statements,
      financial reports, special analyses, and information
  reports.

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	 	(vi) 	
      Develop and implement finance, accounting, billing, and
      auditing procedures.

	 	 	 
	 	(vii) 	
      Design, maintenance, and evaluation of disclosure
      controls and procedures and internal control over financial
    reporting.

	 	 	 
	 	(viii) 	
      Interact with other managers to provide consultative
      support to planning initiatives through financial and management
      information analyses, reports, and recommendations.

	 	 	 
	 	(ix) 	
      Ensure records systems are maintained in accordance with
      generally accepted auditing standards.

	 	 	 
	 	(x) 	
      Develop and direct the implementation of strategic
      business and/or operational plans, projects, programs, and
  systems.

	 	 	 
	 	(xi) 	
      Analyze cash flow, cost controls, and expenses to guide
      business leaders.

	 	 	 
	 	(xii) 	
      Analyze financial statements to pinpoint potential weak
      areas.

	 	 	 
	 	(xiii) 	
      Establish and implement short- and long-range
      departmental goals, objectives, policies, and operating
  procedures.

	 	 	 
	 	(xiv) 	
      Serve on planning and policy-making committees.

	 	 	 
	 	(xv) 	
      Oversee financial management of operations to include
      developing financial and budget policies and procedures; and

	 	 	 
	 	(xvi) 	
      All other such duties as may be assigned from time to
      time by the CEO.

Upon approval by the Board of
Directors, Employee shall undertake and assume the responsibility of performing
for and on behalf of the Company any and all of the above duties and shall have
all other duties, functions, responsibilities and authority commensurate with
such office as are from time to time delegated to Employee by the Management of
the Company.

	 	(b) 	
      Except for activities permitted in connection with the
      investments and activities set forth on Schedule 7(b), during the
      Employment Period, Employee shall devote his full time, skill, and
      attention and his best efforts during normal business hours to the
      business and affairs of the Company to the extent necessary to discharge
      faithfully and efficiently the duties and responsibilities delegated and
      assigned to Employee herein or pursuant hereto, except for usual,
      ordinary, and customary periods of vacation and absence due to illness or
      other disability, and shall not be engaged (whether or not during normal
      business hours) in any other business or professional activity, whether or
      not such activity is pursued for gain, profit, or other pecuniary
      advantage; provided, however, that Employee may:

	 	 	 	 
	 		(i) 	
      serve or continue to serve in any capacity with any
      not-for-profit business or professional organization, association, or
      entity,

	 	 	 	 
	 		(ii) 	
      serve on the board of directors or comparable governing
      body of any business entity located in the same community as the Company’s
      headquarters and not engaged in a business or activity competitive with
      the business of the Company or any of its subsidiaries or Affiliates,
      and

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	 		(iii) 	
      deliver lectures, fulfill speaking engagements, or teach
      at educational institutions, so long as all activities conducted by
      Employee pursuant to clauses (i) through (iii) of this proviso do not
      unreasonably interfere with the performance and fulfillment of Employee’s
      duties and responsibilities as an Employee of the Company in accordance
      with this Agreement and are not in violation of then on-competition
      provisions of Section 7 of this Agreement. In the case of the activities
      described in clause (iii) of this proviso, Employee will give the Board at
      least ten (10) days prior notice of his intention to engage in any such
      activity, such notice to describe briefly the activities in which Employee
      proposes to be engaged.

	 	 	 	 
	 	(c) 	
      All services that Employee may render to the Company or
      any of its subsidiaries or Affiliates in any capacity during the
      Employment Period shall be deemed to be services required by this
      Agreement and consideration for the compensation provided for
    herein.

Section 3. Compensation.

	 	(a) 	
      As compensation for the services to be rendered by
      Employee for the Company under this Agreement, the Company shall pay
      Employee during the Employment Period an annual salary of $130,000.00
      (“Base Pay”). Effective on June 1, 2011, this Base Pay shall be increased
      to $170,000. Further, this Base Pay may be adjusted upward by the
      Management of the Company, in its sole discretion, from time to time. Such
      annual salary shall be earned and payable periodically in equal
      installments in accordance with the Company’s normal payroll practices,
      including applicable deductions and withholdings. Base Pay will be subject
      to annual review pursuant to the Company’s normal review policy for other
      similarly situated Employees of the Company and any changes in Base Pay
      will be communicated in writing to Employee.

	 	 	 
	 	(b) 	
      With respect to stock options, the Company shall issue to
      Employee Stock Options (“Stock Options”) exercisable, on a
      cashless basis, into Two Hundred Fifty Thousand (250,000) shares of Common
      Stock of the Company pursuant to the terms of the Sun River Energy, Inc.
      2010 Stock Incentive Plan (the “Stock Plan”). The Stock
      Options shall be issued to Employee on the Effective Date and shall vest
      1/36 each month thereafter (each a “Vesting Date”) so long
      as Employee is employed by the Company. The exercise price of the Stock
      Options shall equal the average fair market value of a share of the
      Company’s common stock on February 25, 2011, which is the date Employee
      began acting as CFO for the Company. Any unexercised vested options shall
      terminate within 30 days of Employees leaving the Company.

	 	 	 
	 	(c) 	
      At the sole discretion of the Management of the Company,
      the Employee may earn additional stock options and cash bonuses. These
      additional benefits will be subject to all applicable deductions and
      withholdings at the discretion of the Management of the
  Company.

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Section 4. Expenses.

The Company will advance, pay or reimburse Employee, in
accordance with the regular policies of the Company, for all pre-approved
reasonable and necessary business expenses incurred by Employee in furtherance
of or in connection with performing his obligations under this Agreement during
the Term and consistent with the Company’s annual budget. Such expenses shall be
reimbursed to the extent they are incurred and accounted for in accordance with
the policies and practices of the Company as in effect from time to time.

Section 5. Vacation and Other Benefits.

	 	(a) 	
      During the Employment Period, Employee shall be entitled
      to three (3) weeks of paid vacation during each twelve-month period
      commencing on the calendar year beginning January 1, 2011. These three (3)
      weeks shall vest equally over a 12 month period. Employee shall also be
      entitled to all paid holidays given by the Company to its employees.
      Employee agrees to utilize his vacation at such time or times as
    are:

	 	 	 	 
	 		i) 	
      (i) consistent with the proper performance of his duties
      and responsibilities under this Agreement, and

	 	 	 	 
	 		ii) 	
      (ii) mutually convenient for the Company and
    Employee.

	 	 	 	 
	 		
      Employee agrees only one (1) week of unused vacation
      shall carry forward and all other unused vacation shall be lost.

	 	 	 	 
	 	(b) 	
      During the Employment Period, Employee shall be entitled
      to participate in all employee welfare benefit plans, programs, and
      arrangements provided by the Company from time to time to its employees
      generally, subject to and on a basis consistent with the terms,
      conditions, and overall administration (including eligibility and vesting
      requirements) of such plans, programs, and arrangements. Such plans may
      include health, dental, retirement or other such programs which may be to
      the benefit of the Company’s employees.

Section 6. Business Opportunities and Intellectual
Property.

	 	(a) 	
      During the Employment Period, Employee shall promptly
      disclose to the Company all Business Opportunities and Intellectual
      Property (each as defined herein).

	 	 	 
	 	(b) 	
      Employee hereby assigns and agrees to assign to the
      Company, its successors, assigns or designees, all of Employee’s right,
      title and interest in and to all Business Opportunities and Intellectual
      Property, and further acknowledges and agrees that all Business
      Opportunities and Intellectual Property constitute the exclusive property
      of the Company.

	 	 	 
	 	(c) 	
      For purposes hereof, “Business
      Opportunities” shall mean all business ideas, prospects, proposals
      or other opportunities pertaining to the E&P Business (as defined
      herein), including the lease, acquisition, exploration, production,
      gathering, transporting, storing or marketing of hydrocarbons and related
      products (including becoming financially interested in any of the above)
      and the exploration potential of geographical areas on which hydrocarbon
      exploration prospects are located (other than those interests described on
      Schedule 7(b) and except for activities permitted pursuant to Section
      7(b)), which are:

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	 	(i) 	
      developed by Employee

	 	 	 	 	 
	 		(A) 	
      (A) during the Employment Period, or

	 	 	 	 	 
	 		(B) 	
      (B) before the Employment Period, but only to the
      extent

	 	 	 	 	 
	 			1. 	
      of Employee’s rights thereto,

	 	 	 	 	 
	 			2. 	
      it would not breach any duty or obligation of Employee to
      a third party during such period, and

	 	 	 	 	 
	 			3. 	
      it pertains to the E&P Business plays, prospects or
      areas of interest identified on Schedule 6(c) attached hereto;
or

	 	 	 	 	 
	 	(ii) 	
      originated by any third party and brought to the
      attention of Employee

	 	 	 	 	 
	 		(A) 	
      during the Employment Period, or

	 	 	 	 	 
	 		(B) 	
      before the Employment Period, but only to the
    extent

	 	 	 	 	 
	 			1. 	
      of Employee’s rights thereto,

	 	 	 	 	 
	 			2. 	
      it would not breach any duty or obligation of Employee to
      a third party during such period, and

	 	 	 	 	 
	 			3. 	
      it pertains to the E&P Business plays, prospects or
      areas of interest identified on Schedule 6(c) attached hereto; together,
      with information relating thereto, including, without limitation, any
      Business Records (as defined herein).

	 	 	 	 	 
	 	(iii) 	
      It is expressly understood that the term “Business
      Opportunities”, as used herein, shall not include any passive
      investments owned by Employee.

	 	(d) 	
      For purposes hereof “Intellectual Property”
      shall mean all ideas, inventions, discoveries, processes, designs,
      methods, substances, articles, computer programs and improvements relating
      to the E&P Business (including, without limitation, enhancements to or
      further interpretation or processing of such information, but excluding
      any of the same that result from activities permitted pursuant to Section
      7(b)), whether or not patentable or copyrightable, which do not fall
      within the definition of Business Opportunities, which are discovered,
      conceived, invented, created or developed by Employee, alone or with
      others:

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	 	(i) 	
      during the Employment Period if such discovery,
      conception, invention, creation, or development

	 	 	 	 
	 		(A) 	
      occurs in the course of Employee’s employment with the
      Company, or

	 	 	 	 
	 		(B) 	
      occurs with the use of any of the Company’s time,
      materials, facilities or other assets, or

	 	 	 	 
	 		(C) 	
      in the opinion of the Board, relates or pertains in any
      way to the Company’s purposes, activities or affairs, or

	 	 	 	 
	 	(ii) 	
      before the Employment Period, but only to the
    extent

	 	 	 	 
	 		(A) 	
      of Employee’s rights thereto and

	 	 	 	 
	 		(B) 	
      it would not breach any duty or obligation of Employee to
      a third party during such period and

	 	 	 	 
	 		(C) 	
      it pertains to the E&P Business plays, prospects or
      areas of interest identified on Schedule 6(c) attached
  hereto.

Section 7. Restrictive Covenants.

	 	(a) 	
      Non-Disclosure. Employee acknowledges that the services
      he is to render in the course of his employment by the Company are of a
      special and unusual character with unique value to the Company. Employee
      further acknowledges that during the Employment Period, the Company has
      agreed to provide him as one of its employees special training and
      knowledge, Business Opportunities, Intellectual Property and Confidential
      Information (as defined herein). Employee further acknowledges that the
      Company has agreed to provide him access to and simultaneous to the
      execution of this Agreement he shall receive from the Company certain
      Confidential Information (as defined herein). Employee covenants and
      agrees that he will not at any time, either during or subsequent to his
      employment, disclose to any third party or directly or indirectly make use
      of, except for business of the Company, any special training and
      knowledge, Business Opportunities, Intellectual Property or Confidential
      Information received from the Company or any of its subsidiaries.
      Ancillary to and in an effort to enforce Employee’s agreement to protect
      and not to disclose the Company’s or its subsidiaries’ information as set
      forth in this Section 7, Employee covenants and agrees to the restrictions
      and obligations set forth in this Section 7. This subsection is expressly
      subject to Section 7(f).

	 	 	 
	 	(b) 	
      Non-Competition During Employment. In consideration for
      Employee’s agreement under Sections 7(b) and (c), Employee shall receive
      $10,000.00 per year above his Base Pay which shall be earned and payable
      periodically in equal installments in accordance with the Company’s normal
      payroll practices, including applicable deductions and withholdings, plus
      the Company shall disclose to Employee proprietary information he does not
      currently have access to and which is not public information including,
      but not limited to, the scientific data for the properties in the Raton
      Basin owned by the Company and information concerning geology, engineering
      and leasehold operations of the Company now or in the future in East
      Texas. This subsection and following subparts are expressly subject to
      Section 7(f).

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	 	(i) 	
      Except for services related to the activities and
      interests described on Schedule 7(b), during the Employment Period,
      Employee shall not directly or indirectly be employed by or render
      advisory, consulting or other services in connection with any business
      enterprise or person, other than the Company, that is engaged in leasing,
      acquiring, exploring, producing, gathering, transporting, storing or
      marketing hydrocarbons and related products (the “E&P
      Business”).

	 	 	 	 
	 	(ii) 	
      Except as described on Schedule 7(b), during the
      Employment Period, Employee shall not, directly or indirectly, in any
      capacity (including, without limitation, as a proprietor, investor,
      director or officer or in any other individual or representative
      capacity), be financially interested in or engage in the E&P Business
      other than through the Company.

	 	 	 	 
	 	(iii) 	
      Except as described on Schedule 7(b), during the
      Employment Period, all investments made by Employee (whether in his own
      name or in the name of any Family Member or made by any of Employee’s
      Affiliates), which relate to the E&P Business shall be made solely
      through the Company; and Employee will not (directly or indirectly through
      any Family Member) in any capacity (including alone, as a member, partner,
      joint venture, equity holder, lender or in any other capacity), and will
      not permit any of his Affiliates to,

	 	 	 	 
	 		(A) 	
      invest or otherwise participate alongside the Company in
      any Business Opportunities, or

	 	 	 	 
	 		(B) 	
      invest or otherwise participate in any business or
      activity relating to a Business Opportunity, regardless of whether the
      Company ultimately participates in such business or
  activity.

	 	(c) 	
      Non-Competition After Employment. Except as related to
      the interests described on Schedule 7(b), upon termination of Employee’s
      employment by the Company pursuant to Sections 8(b) or 8(c), or by
      Employee without Good Reason, Employee agrees that for a period commencing
      upon the date of termination of Employee’s employment hereunder (the
      “Termination Date”) and ending upon the later to occur
    of

	 	 	 
	 		
      (i) 
	the first anniversary of the Termination Date, or

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	 	(ii) 	
      the third anniversary of the date hereof, Employee shall
      not, directly or indirectly (including, without limitation, as a
      proprietor, investor, director or officer or in any other individual or
      representative capacity)

	 	 	 	 
	 		(A) 	
      own, acquire, or solicit the acquisition of, or assist
      any other person to own, acquire or solicit the acquisition of, any Oil
      and Gas Interests (as defined herein), or any option or other right to
      acquire any Oil and Gas Interests, in any case pertaining to or covering,
      in whole or in part, the Lands (as defined herein); or

	 	 	 	 
	 		(B) 	
      engage in or assist any other person to engage in the
      E&P Business on or with respect to the Lands.

This subsection is expressly subject
to Section 7(f).

As used in this Section 7, the
term:

	 	(i) 	
      “Oil and Gas Interests” means all: (1) oil
      and gas leases, mineral interests, oil, gas and mineral leasehold
      interests, fee interests, royalty interests (including, without
      limitation, landowner royalty interests, nonparticipating royalty
      interests and overriding royalty interests), production payments, net
      profits interests, subleases, mineral servitudes, licenses, easements,
      pooling orders and other interests in oil, gas and other hydrocarbons, (2)
      contract rights, joint operating agreements, farm out agreements, pooling
      agreements, seismic agreements, cost sharing arrangements and other
      agreements relating to the interests under the foregoing clause (1) or the
      E&P Business, (3) wells, equipment, associated personal property,
      pipelines, fixtures and other assets related to the foregoing, and (4)
      other operations, rights, titles and interests relating directly or
      indirectly to the drilling, exploration, development, operation,
      marketing, sale or other disposal of the foregoing assets and
      interests.

	 	(ii) 	
      “Lands” means any and all lands lying upon
      or within three (3) miles of: (1) the boundary of any drilling or spacing
      unit within which a producing well lies in which the Company has or had an
      interest on or prior to the Termination Date; (2) the boundary of any
      other Oil and Gas Interest in which the Company has or had an interest on
      or prior to the Termination Date; or (3) the boundary of any Prospect (as
      defined herein).

	 	 	 
	 	(iii) 	
      “Prospect” means an area encompassing
      territory generally considered unproven or semi-proven in nature in
      accordance with generally accepted standards and practices in the oil and
      gas industry which 

	 	 	 
	 	 	(A) 	the Board has or had designated, on or prior to the Termination
    Date,

	 	1. 	
      as being prospective for the discovery of oil, gas, or
      other hydrocarbons, or

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	 			2. 	
      for the significant extension of a pool or deposit of
      oil, gas, or other hydrocarbons theretofore discovered, and

	 	 	 	 	 	 
	 		(B) 	
      the Company has acquired or generated proprietary
      geological and geophysical information in respect of such territory or has
      the right to review geological and geophysical information of a third
      party in respect of such territory.

	 	 	 	 	 	 
	 	 (d) 	
      During the Employment Period and thereafter until the
      date upon which the sale of the Company or substantially all of its assets
      is consummated, Employee will not disclose to any third party directly or
      indirectly or indirectly make use of, except for the business of the
      Company, any Confidential Information. For purposes of this Section 7, it
      is agreed that Confidential Information means any and all trade secrets
      and confidential or proprietary information pertaining to the Company (the
      “Confidential Information”). For purposes of this Section 7,
      it is agreed that Confidential Information includes, without limitation,
      any information heretofore acquired or acquired during the term hereof,
      developed or used by the Company relating to Business Opportunities or
      Intellectual Property or other geological, geophysical, economic,
      financial or management aspects of the business, operations, properties or
      prospects of the Company whether oral or in written form in a Business
      Record (as defined in Section 7(g) below). Notwithstanding the foregoing,
      no information of the Company will be deemed confidential for the purposes
      of this Section 7(d) if such information is or becomes public knowledge
      through no wrongful act of Employee or was previously known by Employee
      prior to entering into this Agreement and has not been utilized by the
      Company. This subsection is expressly subject to Section 7(f).

	 	 	 	 	 	 
	 	 (e) 	
      Non Solicitation. Except in the event of the termination
      of Employee’s employment by Employee for Good Reason or as provided in the
      next sentence, during the period commencing upon the Termination Date and
      ending upon the later to occur of

	 	 	 	 	 	 
	 	(i) 	
      the first anniversary of the Termination Date,
  or

	 	 	 	 	 	 
	 	(ii) 	
      the third anniversary of the date hereof, Employee may
      not

	 	 	 	 	 	 
	 		(A) 	
      solicit, raid, entice or induce, directly or indirectly,
      any employee (or person who was previously an employee within one (1) year
      of the Termination Date) of the Company (other than secretarial or
      similarly-positioned personnel) or any other person who is under contract
      with or rendering services to the Company in an employee-like capacity,
      to

	 	 	 	 	 	 
	 			1. 	
      terminate his employment by, or contractual relationship
      with, the Company,

	 	 	 	 	 	 
	 			2. 	
      refrain from extending or renewing the same (upon the
      same or new terms),

	 	 	 	 	 	 
	 			3.	
      refrain from rendering services to or for the
    Company,

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	 		4. 	
      become employed by or to enter into contractual relations
      with any persons other than the Company, or

	 	 	 	 
	 		5. 	
      enter into a relationship with a competitor of the
      Company or

	 	 	 	 
	 	(B) 	
      divert or attempt to divert, any person, concern or
      entity from doing business with the Company, or attempt to induce any such
      person, concern or entity to cease being a customer or supplier of the
      Company. Notwithstanding any other provision of this Agreement, none of
      the restrictions set forth in this Section 7(e) shall apply from or after
      the date of the consummation of the sale of the Company or substantially
      all of its assets, or a Company Sale.

This subsection is expressly subject
to Section 7(f).

	 	(f) 	
      Remedies for Breach and Injunctive Relief. Employee
      acknowledges and agrees that the services to be rendered by him to the
      Company as one of its employees are of a special, unique and extraordinary
      character and, in connection with such services, he will have access to
      Business Opportunities, Intellectual Property and Confidential Information
      vital to the Company’s businesses. By reason of this, Employee consents
      and agrees that if he violates any of the provisions of this Section 7,
      the Company would sustain irreparable harm and, therefore, in addition to
      any other remedies which the Company may have under this Agreement or
      otherwise, the Company shall be entitled to an injunction restraining
      Employee from committing or continuing any such violation of this
      Agreement. Such right to an injunction shall be cumulative and in addition
      to, and not in lieu of, any other remedies to which the Company may show
      itself justly entitled. Further, Employee expressly acknowledges and
      agrees that such injunction may be obtained without notice to Employee or
      bond and that in the event a court of competent jurisdiction requires a
      bond, it shall not exceed One Thousand Dollars ($1,000.00).

	 	 	 
	 	(g) 	
      Return of Business Records. Employee agrees to promptly
      deliver to the Company, upon the expiration of the Employment Period, or
      at any other time when the Company so requests, all material relating to
      the business of the Company, including, without limitation: all geological
      and geophysical reports and related data such as maps, charts, logs,
      seismographs, seismic records and other reports and related data,
      calculations, summaries, memoranda and opinions relating to the foregoing,
      production records, electric logs, core data, pressure data, lease files,
      well files and records, land files, abstracts, title opinions, title or
      curative matters, contract files, notes, records, drawings, manuals,
      correspondence, financial and accounting information, customer lists,
      statistical data and compilations, patents, copyrights, trademarks, trade
      names, inventions, formulae, methods, processes, agreements, contracts,
      manuals or any other materials relating to the business of the Company (in
      this Section 7, collectively called the “Business Records”),
      and all copies thereof and therefrom, provided that the Employee
      shall not be required to deliver to the Company any Business Records
      relating to the interests and activities described on Schedule 7(b).
      Employee confirms that all of the Business Records (and all copies thereof
      and therefrom) that are required to be delivered to the Company pursuant
      to this Section 7 constitute the property of the Company. The obligation
      of confidentiality set forth in this Section 7 shall continue
      notwithstanding Employee’s delivery of any such documents to the Company.
      This subsection is expressly subject to Section
7(f).

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	 	(h) 	
      Employee represents and covenants that the execution,
      delivery and performance by Employee of this Agreement and the services he
      is to render to the Company as contemplated by this Agreement will
    not:

	 	 	 	 
	 		(i) 	
      be in contravention of or result in any breach or
      constitute a default under any applicable law, rule, regulation, judgment,
      license, permit or order or any material loan, note or other agreement or
      instrument to which Employee is a party or by which he or any of his
      properties are bound,

	 	 	 	 
	 		(ii) 	
      result in the Employee disclosing or utilizing any trade
      secret or proprietary information or documentation of any Person,
  or

	 	 	 	 
	 		(iii) 	
      violate any confidential relationship which Employee may
      have had with any Person.

	 	 	 	 
	 		
      This subsection is expressly subject to Section
    7(f).

	 	 	 	 
	 	(i) 	
      The existence of any claim or cause of action of Employee
      against the Company or any officer, manager, or member of the Company,
      whether predicated on this Agreement or otherwise, shall not constitute a
      defense to the enforcement by the Company of the covenants of Employee
      contained in this Section 7. This subsection is expressly subject to
      Section 7(f). In addition, the provisions of this Section 7 shall continue
      to be binding upon Employee in accordance with their terms,
      notwithstanding the termination of Employee’s employment hereunder for any
      reason.

	 	 	 	 
	 	(j) 	
      The parties to this Agreement agree that the limitations
      contained in this Section 7 with respect to time, geographical area, and
      scope of activity are reasonable. However, if any court should determine
      that the time, geographical area, or scope of activity of any restriction
      contained in this Section 7 is unenforceable, it is the intention of the
      parties that such restrictive covenants set forth herein shall not thereby
      be terminated but shall be deemed amended to the extent required to render
      it valid and enforceable.

	 	 	 	 
	 	(k) 	
      Nothing contained in this Section 7 shall be construed to
      prohibit Employee from investing in stock or other securities listed on a
      national securities exchange or actively traded in the over-the-counter
      market of any corporation or other entity engaged in a business or
      activity competitive with the business of the Company or any of its
      subsidiaries, provided that Employee, his Family Members and each
      of their respective Affiliates shall not, directly or indirectly, hold
      more than a total of three percent (3%) of all such shares of stock or
      other securities issued and outstanding, and provided further that
      Employee shall not perform any services on behalf of, or in the operation
      of the affairs of, such corporation or other
entity.

Page 11 of 20

Initial: JH

	 	(l) 	
      During any period in which Employee is in breach of any
      of the covenants set forth in this Section 7, the time period with respect
      to such covenant shall be extended for an amount of time that Employee is
      in breach thereof.

Section 8. Termination of Employment.

	 	(a) 	
      Employee’s employment hereunder shall terminate
      automatically upon his death.

	 	 	 	 
	 	(b) 	
      If the Company determines in good faith that the
      Disability (as defined herein) of Employee has occurred during the
      Employment Period, the Company may notify Employee of the Company’s
      intention to terminate Employee’s employment hereunder for Disability. In
      such event, Employee’s employment hereunder shall terminate effective on
      the fifth day following the date such notice of termination is given to
      Employee. For purposes of this Agreement, the “Disability”
      of Employee shall be deemed to have occurred if Employee shall have been
      unable to perform his essential duties hereunder for a period consisting
      of 90 continuous days within any given period of 365 consecutive days,
      (excluding any leaves of absence approved by the Board and the number of
      days of accrued vacation of Employee) as a result of his physical or
      mental incapacity; provided that, if Employee has a physical or
      mental impairment that substantially limits one or more major life
      activities, as defined under the Americans with Disabilities Act, the
      Company may extend the 90-day period to reasonably accommodate Employee’s
      impairment.

	
	 
	 	 	 	 
	 	(c) 	
      The Company may terminate Employee’s employment hereunder
      at any time for Cause. For purposes of this Agreement,
      “Cause” shall mean any of the following:

	 	 	 	 
	 		(i) 	
      the breach by Employee of his duties as an employee of
      the Company, which breach is materially detrimental to the Company,
      monetarily or otherwise, 

	 	 	 	 
	 	 	 (ii) 	the failure of Employee to comply in any material
      respect with any written or oral direction of the CEO which reasonably
      relates to the performance of his duties that he is physically able to
      perform and which would not require him to perform an illegal act or
      breach any agreement to which the Company is a party, 
	 	 	 	 
	 	 	(iii)  	the failure of Employee to substantially perform his
      duties as an employee after demand for substantial performance is
      delivered by the Company to Employee that specifically identifies the
      manner in which the Company believes that Employee has not substantially
      performed his duties, 
	 	 	 	 
	 	 	(iv)  	the commission by Employee of any criminal act that
      constitutes a felony or involves fraud, dishonesty, or moral
  turpitude,

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Initial: JH

	 	(v) 	
      Employee’s failure to render the services to the Company
      as contemplated under this Agreement as a result of alcohol or drug
      use,

	 	 	 
	 	(vi) 	
      the taking by Employee of any action, knowing or with
      reckless disregard that it is adverse in a material respect to the
      interests of the Company, its members, or its assets,

	 	 	 
	 	(vii) 	
      the willful, material violation by Employee of any
      employer policies of the Company or its Affiliates, and

	 	 	 
	 	(viii) 	
      the material breach by Employee of any of his material
      covenants and agreements contained in this Agreement, including but not
      limited to non-disclosure as set forth in Section 7(a) and non-compete as
      set forth in Section 7(b).

With respect to clauses (i), (ii),
(iii) and (v), Cause shall only exist if Employee fails to cure such matter
within ten (10) days after receiving written notice from the Company. 

	 	(d) 	
      The Company may terminate Employee’s employment hereunder
      at any time without Cause upon thirty (30) days notice to
  Employee.

	 	 	 	 
	 	(e) 	
      Employee may terminate his employment hereunder at any
      time for Good Reason or without Good Reason upon thirty (30) days advance
      notice to the Company. For purposes of this Agreement, “Good
      Reason” means:

	 	 	 	 
	 		(i) 	
      the Company’s failure to timely pay any compensation due
      to Employee under this Agreement, including failure to provide any stock
      or stock options due under Section 3 or

	 	 	 	 
	 		(ii) 	
      a reduction in Employee’s compensation without Employee’s
      written consent.

	 	 	 	 
	 		(iii) 	
      the Company’s failure to timely provide resources
      necessary for the Employee to perform his duties under this agreement,
      other than (i) a purely monetary failure with respect to an amount less
      than $5,000, (ii) a failure within Executive’s control or (iii) an
      isolated, insubstantial or inadvertent failure that is not taken in bad
      faith;

	 	 	 	 
	 		(iv) 	
      any action by the Company, except as required by law or
      applicable government regulations, which is specific to the Executive that
      adversely affects Executive’s ability to perform his duties, or
      participation in bonus or incentive plans or the Other Benefits.

	 	 	 	 
	 		
      Notwithstanding anything herein to the contrary, Good
      Reason shall exist only if the Company fails to cure the matter described
      in clauses (i), (ii), (iii), and (iv) of this Section 8(e) within 30 days
      after written notice from Employee.

Page 13 of 20

Initial: JH

	 	(f) 	
      In the event of the termination of Employee’s employment
      hereunder (for any reason other than the death of Employee), Employee
      agrees that if at such time he is a manager or officer of the Company or
      any of its subsidiaries, he will promptly deliver to the Company his
      written resignation from all such positions, such resignation to be
      effective as of the date of termination.

Section 9. Obligations of Company Upon Termination of
Employment.

	 	(a) 	
      If Employee’s employment hereunder is terminated pursuant
      to Sections 8(a), 8(b) or 8(c), or if Employee terminates his employment
      without Good Reason, the Company shall pay to Employee, or his estate,
      trust or similar Person if applicable, on the sixth (6th) day following
      the Termination Date or the next regularly scheduled pay day of the
      Company following the Termination Date, (i) any accrued but unpaid Base
      Salary provided for in Section 3 hereof for services rendered through the
      Termination Date, (ii) any accrued but unpaid expenses required to be
      reimbursed under Section 4 and (iii) any vacation accrued to the
      Termination Date.

	 	 	 	 	 
	 	(b) 	
      If Employee’s employment hereunder is terminated by the
      Company for any reason (other than for death or Disability or pursuant to
      Section 8(c)) or by Employee for Good Reason, the Company shall pay to
      Employee:

	 	 	 	 	 
	 		(i) 	
      on the sixth (6th) day following the
      Termination Date or the next regularly scheduled pay day of the Company
      following the Termination Date, respectively,

	 	 	 	 	 
	 			(A) 	
      any accrued but unpaid Base Salary provided for in
      Section 3 hereof for services rendered through the Termination
  Date,

	 	 	 	 	 
	 			(B) 	
      any accrued but unpaid expenses required to be reimbursed
      under Section 4, and

	 	 	 	 	 
	 			(C) 	
      any vacation accrued to the Termination Date,
  and

	 	 	 	 	 
	 		(ii) 	
      severance pay in an amount equal to Employee’s Base
      Salary pursuant to Section 3 for a period beginning on the Termination
      Date and ending one (1) year from the Termination Date or if the
      Termination Date occurs in the third (3rd ) year of this
      Agreement then Employee shall receive his pro- rata Base Salary until the
      third (3rd ) anniversary of the date of this Agreement.
      Payments shall be payable in equal monthly installments beginning on the
      last day of the first month following the Termination Date; provided,
      however, that none of the benefits payable under Section 9(b)(ii) will
      be payable unless, and the obligation to pay any severance pursuant to
      Section 9(b)(ii) shall not accrue until, the Employee has signed and
      delivered an executed general release, which has become irrevocable,
      satisfactory to the Company in its reasonable discretion, releasing the
      Company and its Affiliates and their respective officers, directors,
      managers, members, partners and employees from any and all claims or
      potential claims arising from or related to the Employee’s employment or
      termination of employment.

Page 14 of 20

Initial: JH

	 	(iii) 	
      For the avoidance of doubt, if Employee is terminated
      without Cause or Employee terminates his employment for Good Reason, and
      thereafter Employee engages in the activities that are within the scope of
      the restrictions described in Section 7, Employee shall not be entitled to
      the severance payment described in clause (ii) of this Section
  9(b).

Section 10. Withholding Taxes.

The Company shall withhold from any payments to be made to
Employee hereunder such amounts (including social security contributions and
federal income taxes) as shall be required by federal, state, and local
withholding tax laws.

Section 11. Attorneys’ Fees and Costs.

In the event there is any litigation between the parties hereto
with respect to this Agreement, the prevailing party in such litigation shall be
entitled to recover all attorneys’ fees and costs incurred by such party in
connection with such litigation.

Section 12. Notices.

All notices, requests, or consents provided for or permitted to
be given under this Agreement must be in writing and must be given either by
depositing that writing in the United States mail, addressed to the recipient,
postage paid, and registered or certified with return receipt requested or by
delivering that writing to the recipient in person, by courier, by electronic
transmission, or by facsimile transmission; and a notice, request, or consent
given under this Agreement is effective on receipt by the person to receive it.

Section 13. Governing Law.

It is understood and agreed that the construction and
interpretation of this Agreement shall at all times and in all respects be
governed by the laws of the State of Texas.

Section 14. Assistance in Litigation.

During the Employment Period and for a period of four (4) years
thereafter, Employee shall, upon reasonable notice, furnish such information and
proper assistance to the Company as may reasonably be required by the Company in
connection with any litigation in which the Company, or any of its subsidiaries
or Affiliates is, or may become, a party. The Company shall reimburse Employee
for 

	 	(i) 	
      all reasonable, documented out-of-pocket expenses
      incurred by Employee in rendering such assistance subject to the Company’s
      reasonable policies regarding the reimbursement of expenses
  and

Page 15 of 20

Initial: JH

	 	(ii) 	
      reasonable compensation for Employee’s time in rendering
      such assistance if such assistance occurs after the Employment
    Period.

Section 15. Severability.

The invalidity or unenforceability of any one provision or more
of the provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect to the fullest extent permissible by law. Should any one
or more of the provisions of this Agreement be held to be excessive,
unreasonable, or otherwise unenforceable, then that provision shall be construed
by limiting and reducing it so as to be reasonable and enforceable to the
fullest extent compatible with applicable law.

Section 16. Survival.

Neither the expiration nor the termination of the term of
Employee’s employment hereunder shall impair the rights or obligations of either
party hereto which shall have accrued hereunder prior to such expiration or
termination. The provisions of Sections 6, 7, 9, and 14 and the rights and
obligations of the parties thereunder, shall survive the expiration or
termination of the term of Employee’s employment hereunder.

Section 17. Entire Agreement.

This Agreement, including the schedules attached hereto,
contains the entire agreement and understanding by and between the Company and
Employee with respect to the employment of Employee, and no representations,
promises, agreements, or understandings, written or oral, not contained herein
shall be of any force or effect. No waiver of any provision of this Agreement
shall be valid unless it is in writing and signed by the party against whom the
waiver is sought to be enforced. No valid waiver of any provision of this
Agreement at any time shall be deemed a waiver of any other provision of this
Agreement at such time or any other time.

Section 18. Modification.

No amendment, alteration or modification to any of the
provisions of this Agreement shall be valid unless made in writing and signed by
both parties.

Section 19. Binding Effect; Assignment; No Third Party
Benefit. 

This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, legal representatives,
successors, and assigns; provided, however, that the duties and
responsibilities of Employee hereunder may not be assumed by, or delegated to,
any other person. Nothing in this Agreement, express or implied, is intended to
or shall confer upon any person other than the parties hereto, and their
respective heirs, legal representatives, successors, and permitted assigns, any
rights, benefits, or remedies of any nature whatsoever under or by reason of
this Agreement.

Page 16 of 20

Initial: JH

Section 20. Counterparts.

This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute but one and the same instrument.

Section 21. Voluntary Agreement.

Each party to this Agreement has read and fully understands the
terms and provisions hereof, has had an opportunity to review this Agreement
with legal counsel, has executed this Agreement based upon such party’s own
judgment and advice of counsel (if any), and knowingly, voluntarily, and without
duress, agrees to all of the terms set forth in this Agreement. The parties have
participated jointly in the negotiation and drafting of this Agreement. If an
ambiguity or question of intent or interpretation arises, this Agreement will be
construed as if drafted jointly by the parties and no presumption or burden of
proof will arise favoring or disfavoring any party because of authorship of any
provision of this Agreement.

Section 22. Directly or Indirectly.

Where any provision of this Agreement refers to action to be
taken by any person, or which such person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such person, including actions taken by or on behalf of any
Affiliate of such person.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

Page 17 of 20

Initial: JH

SIGNATURE PAGE —HOOVER EMPLOYMENT AGREEMENT

IN WITNESS WHEREOF, executed this 31 day of March, 2011.

COMPANY:
Sun River Energy, Inc.

 

	By:	/s/Donal R. Schmidt, Jr. 	 
	 	Donal R. Schmidt, Jr.,
      President and CEO 	 

 

EMPLOYEE:
Judson F. Hoover

 

	By: 	/s/Judson F. Hoover 	 
	 	Judson F. Hoover 	 

Page 18 of 20

Initial: JH

EXHIBIT B

TERMS OF RIGHT OF FIRST REFUSAL (“RIGHTS OF FIRST
REFUSAL”)

1. First Refusal on Sale of Shares. If the Executive or
a transferee or assignee of Executive (the "Selling Shareholder") proposes to
sell all or part of his shares of common stock, the following provisions shall
apply:

     (a)
Notice: The Selling Shareholder shall first give written notice (the
"Option Notice") to the Company, which notice shall identify the prospective
purchaser and shall set forth in reasonable detail the terms and conditions upon
which such sale is proposed to be made, and shall be accompanied by copies of
the bona fide offer and any other information furnished to or by the prospective
purchaser(s). Such notice shall automatically grant to the Company an option to
purchase that portion of the Shares of the Selling Shareholder proposed to be
assigned or sold upon the same terms and conditions as contained in the bona
fide offer.

     (b)
Shares Covered by Option: The option granted herein to the Company must
be exercised by the Company as to the entire interest being offered (the
"Offered Shares"), unless the Selling Shareholder consents to a sale or transfer
of less than the entire interest.

     (c)
Exercise of Option: The Company, at its sole discretion, may, within
thirty (30) days after receipt of the Option Notice (the "Option Period"), give
written notice to the Selling Shareholder (the "Acceptance Notice"), signed by
the Company, that the Company elects to exercise such option, evidencing its
agreement to purchase the Offered Shares.

     (d)
Closing of Sale: Closing on the sale of the Offered Shares to the Company
shall take place at the principal place of business of the Company ten (10) days
after the expiration of the Option Period or at such other place and time as
agreed to by the Selling Shareholder and the Company.

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Initial: JH

     (e)
Failure to Exercise Option: If the option is not exercised within the
Option Period as to the Offered Shares, the Selling Shareholder may sell or
transfer the Offered Shares within thirty (30) days thereafter to the
prospective purchaser named in the Option Notice at a price and on terms no more
favorable than described in the Option Notice.

     (f)
Subsequent Transfers: The Selling Shareholder shall not otherwise sell or
transfer the Offered Shares to any person after the termination of said sixty
(60) day period without again complying with this Section. 

     (g) No
Pledges: The Executive and each transferee or assignee of the Executive
further agrees and covenants not to pledge, lend, hypothecate or otherwise grant
any interest in the shares of the common stock, without the prior written
consent of the Company, in its sole discretion. The Company shall be entitled to
redeem the shares of common stock at the purchase price thereof in the event of
any breach of this section.

Page 20 of 20

Initial: JHSun Energy, Inc.: Exhibit 10.2 - Filed by newsfilecorp.com

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this
“Agreement”) is made and entered into between Sun River Energy,
Inc., a Colorado Corporation (the “Company”), and James E.
Pennington, a Texas resident (“Employee”) and shall be effective
as of January 1, 2011 (the “Effective Date”).

RECITALS:

The Company desires to employ Employee, and Employee desires to
be employed by the Company, on the terms and conditions hereinafter
provided.

AGREEMENT:

NOW, THEREFORE, in consideration of the foregoing, of the
mutual promises herein contained, and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, agree as follows:

Section 1. Term of Employment.

Subject to earlier termination in accordance with this
Agreement, this Agreement will remain in effect for a period of 3 years from the
Effective Date (the “Initial Term”). Provided that this Agreement
has not been terminated prior to the expiration of the Initial Term in
accordance with the terms contained herein, subsequent to such time, Employee’s
employment hereunder shall be automatically continued for successive additional
terms of one (1) year each unless written notice of non-renewal is given by
either party no less than 60 days prior to the end of the Initial Term or any
additional term, as applicable.

Section 2. Responsibilities of Employee.

During the Employment Period, Employee shall serve as General
Counsel to the Company. Employee shall report to the CEO and as otherwise
required by the Board of Directors. During the Term, Employee shall faithfully,
diligently and to the best of his ability perform such duties as are mutually
agreed by Employee and the Board of the Company from time to time (which duties
shall be consistent with Employee’s role as General Counsel), and shall devote
the time necessary to fulfill his duties. Employee shall undertake and assume
the responsibility of performing for and on behalf of the Company any and all
duties of General Counsel and shall have the duties, functions, responsibilities
and authority commensurate with such office as are from time to time delegated
to Employee by the CEO and/or the Board of Directors.

All services that Employee may render to the Company or any of
its subsidiaries or Affiliates in any capacity during the Employment Period
shall be deemed to be services required by this Agreement and consideration for
the compensation provided for herein.

Page 1 of 9

Initial: JP

Section 3. Compensation.

	 	(a) 	
      As compensation for the services to be rendered by
      Employee for the Company under this Agreement, the Company shall pay
      Employee during the Employment Period an annual salary of $225,000.00
      (“Base Pay”), which amount may be adjusted upward by the Management of the
      Company, in its sole discretion, from time to time. Such annual salary
      shall be earned and payable periodically in equal installments in
      accordance with the Company’s normal payroll practices, including
      applicable deductions and withholdings. Base Pay will be subject to annual
      review pursuant to the Company’s normal review policy for other similarly
      situated Employees of the Company and any changes in Base Pay will be
      communicated in writing to Employee.

	 	 	 
	 	(b) 	
      With respect to stock options, the Company shall issue to
      Employee Stock Options (“Stock Options”) exercisable into
      Three Hundred Thousand (300,000) shares of Common Stock of the Company
      pursuant to the terms of the Sun River Energy, Inc. 2010 Stock Incentive
      Plan (the “Stock Plan”). The Stock Options shall be cashless
      and shall be issued to Employee on the Effective Date and shall vest 1/36
      each month thereafter (each a “Vesting Date”) so long as
      Employee is employed by the Company. The exercise price of the Stock
      Options shall equal the average fair market value of a share of the
      Company’s common stock on January 12, 2011, the date that Employee began
      serving as General Counsel to the Company. Further, all 300,000 shares of
      Common Stock under the Stock Plan shall vest in either of the following
      events: (i) Employee’s employment with the Company is terminated by the
      Company for any reason other than Cause; or (ii) a Change in Control (as
      that term is defined in the Stock Plan) occurs during the Term. Finally,
      the Company shall cause common stock obtained through the Stock Options to
      be registered pursuant to the terms of the Stock Plan on Form
  S-8.

	 	 	 
	 	(c) 	
      At the sole discretion of the Management of the Company,
      the Employee may earn additional stock options and cash bonuses. These
      additional benefits will be subject to all applicable deductions and
      withholdings at the discretion of the Management of the Company.

	 	 	 
	 	(d) 	
      Further, in consideration for the compensation in
      paragraphs (a) and (b) commencing on the Effective Date, the Company shall
      not be obligated to pay for any legal fees invoiced by the Law Offices of
      James E. Pennington for the months of January or February, 2011; however,
      the Company shall be required to pay for any expenses invoiced during the
      aforementioned period.

Section 4. Expenses.

The Company will advance, pay or reimburse Employee, in
accordance with the regular policies of the Company, for all pre-approved
reasonable and necessary business expenses incurred by Employee in furtherance
of or in connection with performing his obligations under this Agreement during the Term and consistent with the Company’s
annual budget. Such expenses shall be reimbursed to the extent they are incurred
and accounted for in accordance with the policies and practices of the Company
as in effect from time to time.

Page 2 of 9

Initial: JP

Section 5. Vacation and Other Benefits.

	 	(a) 	
      During the Employment Period, Employee shall be entitled
      to three (3) weeks of paid vacation during each twelve-month period
      commencing on the calendar year beginning January 1, 2011. These three (3)
      weeks shall vest equally over a 12 month period. Employee shall also be
      entitled to all paid holidays given by the Company to its employees.
      Employee agrees to utilize his vacation at such time or times as
    are:

	 	 	 	 
	 		i) 	
      (i) consistent with the proper performance of his duties
      and responsibilities under this Agreement, and

	 	 	 	 
	 		ii) 	
      (ii) mutually convenient for the Company and
    Employee.

	 	 	 	 
	 	(b) 	
      During the Employment Period, Employee shall be entitled
      to participate in all employee group health insurance plans, or other
      welfare benefit plans, programs, and arrangements provided by the Company
      from time to time to its employees generally, subject to and on a basis
      consistent with the terms, conditions, and overall administration
      (including eligibility and vesting requirements) of such plans, programs,
      and arrangements. Such plans may include health, dental, retirement or
      other such programs which may be to the benefit of the Company’s
      employees.

Section 6. This section was intentionally omitted. 

Section 7. This section was intentionally omitted. 

Section 8. Termination of Employment.

	 	(a) 	
      Employee’s employment hereunder shall terminate
      automatically upon his death.

	 	 	 
	 	(b) 	
      If the Company determines in good faith that the
      Disability (as defined herein) of Employee has occurred during the
      Employment Period, the Company may notify Employee of the Company’s
      intention to terminate Employee’s employment hereunder for Disability. In
      such event, Employee’s employment hereunder shall terminate effective on
      the fifth day following the date such notice of termination is given to
      Employee. For purposes of this Agreement, the “Disability”
      of Employee shall be deemed to have occurred if Employee shall have been
      unable to perform his essential duties hereunder for a period consisting
      of 90 continuous days within any given period of 365 consecutive days,
      (excluding any leaves of absence approved by the Board and the number of
      days of accrued vacation of Employee) as a result of his physical or
      mental incapacity; provided that, if Employee has a physical or
      mental impairment that substantially limits one or more major life
      activities, as defined under the Americans with Disabilities Act, the
      Company may extend the 90-day period to reasonably accommodate Employee’s
      impairment.

Page 3 of 9

Initial: JP

	 	(c) 	
      The Company may terminate Employee’s employment hereunder
      at any time for Cause. For purposes of this Agreement,
      “Cause” shall mean any of the following:

	 	 	 	 
	 		(i) 	
      the breach by Employee of his duties as an employee of
      the Company, which breach is materially detrimental to the Company,
      monetarily or otherwise,

	 	 	 	 
	 		(ii) 	
      the failure of Employee to comply in any material respect
      with any written or oral direction of the Board which reasonably relates
      to the performance of his duties that he is physically able to perform and
      which would not require him to perform an illegal act or breach any
      agreement to which the Company is a party,

	 	 	 	 
	 		(iii) 	
      the failure of Employee to substantially perform his
      duties as an employee after demand for substantial performance is
      delivered by the Company to Employee that specifically identifies the
      manner in which the Company believes that Employee has not substantially
      performed his duties,

	 	 	 	 
	 		(iv) 	
      the commission by Employee of any criminal act that
      constitutes a felony or involves fraud, dishonesty, or moral
    turpitude,

	 	 	 	 
	 		(v) 	
      Employee’s failure to render the services to the Company
      as contemplated under this Agreement as a result of alcohol or drug
      use,

	 	 	 	 
	 		(vi) 	
      the taking by Employee of any action, knowing or with
      reckless disregard that it is adverse in a material respect to the
      interests of the Company, or its assets,

	 	 	 	 
	 		(vii) 	
      the willful, material violation by Employee of any
      employer policies of the Company or its Affiliates, and

	 	 	 	 
	 		(viii) 	
      the material breach by Employee of any of his material
      covenants and agreements contained in this Agreement.

	 	 	 	 
	 		
      With respect to clauses (i), (ii), (iii), and (viii),
      Cause shall only exist if Employee fails to cure such matter within ten
      (10) days after receiving written notice from the Company.

	 	 	 	 
	 	(d) 	
      The Company may terminate Employee’s employment hereunder
      at any time without Cause upon thirty (30) days notice to
  Employee.

	 	 	 	 
	 	(e) 	
      Employee may terminate his employment hereunder at any
      time for Good Reason or without Good Reason upon thirty (30) days advance
      notice to the Company. For purposes of this Agreement, “Good
      Reason” means:

Page 4 of 9

Initial: JP

	 	(i) 	
      the Company’s failure to timely pay any compensation due
      to Employee under this Agreement, including failure to provide any stock
      or stock options due under Section 3;

	 	 	 
	 	(ii) 	
      a reduction in Employee’s compensation without Employee’s
      written consent;

	 	 	 
	 	(iii) 	
      the Company’s failure to timely provide resources
      necessary for the Employee to perform his duties under this agreement,
      other than (i) a purely monetary failure with respect to an amount less
      than $5,000, (ii) a failure within Executive’s control or (iii) an
      isolated, insubstantial or inadvertent failure that is not taken in bad
      faith;

	 	 	 
	 	(iv) 	
      any action by the Company, except as required by law or
      applicable government regulations, which is specific to the Executive that
      adversely affects Executive’s ability to perform his duties, or
      participation in bonus or incentive plans or the Other Benefits;
  or

	 	 	 
	 	(v) 	
      the occurrence of a “Change in Control” as that term is
      defined in the Company’s 2010 Stock Incentive Plan. Notwithstanding the
      foregoing, in the event any compensation or benefit provided to the
      Employee as a result of a Change in Control is subject to Section 409A of
      the Internal Revenue Code of 1986, as amended (the “Code”), then, in lieu
      of the foregoing definition and to the extent necessary to comply with the
      requirements of Section 409A of the Code, the definition of “Change in
      Control” for purposes of such Award shall be the definition provided by
      Section 409A of the Code.

Notwithstanding anything herein to the
contrary, Good Reason shall exist only if the Company fails to cure the matter
described in clauses (i), (ii), (iii), and (iv) of this Section 8(e) within 30
days after written notice from Employee.

	 	(f) 	
      In the event of the termination of Employee’s employment
      hereunder (for any reason other than the death of Employee), Employee
      agrees that if at such time he is a manager or officer of the Company or
      any of its subsidiaries, he will promptly deliver to the Company his
      written resignation from all such positions, such resignation to be
      effective as of the date of termination.

Section 9. Obligations of Company Upon Termination of
Employment.

	 	(a) 	
      If Employee’s employment hereunder is terminated pursuant
      to Sections 8(a), 8(b) or 8(c), or if Employee terminates his employment
      without Good Reason, the Company shall pay to Employee, or his estate,
      trust or similar Person if applicable, on the sixth (6th) day following
      the Termination Date or the next regularly scheduled pay day of the
      Company following the Termination Date, (i) any accrued but unpaid Base
      Salary provided for in Section 3 hereof for services rendered through the
      Termination Date, (ii) any accrued but unpaid expenses required to be
      reimbursed under Section 4, (iii) any vacation accrued to the Termination
      Date, and (iv) any accrued vested Stock Options provided for in Section 3
      hereof through the Termination Date. Additionally, Employee may exercise
      any such options within 90 days of Termination
Date.

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	 	(b) 	
      If Employee’s employment hereunder is terminated by the
      Company for any reason (other than for death or Disability or pursuant to
      Section 8(c)) or by Employee for Good Reason, the Company shall pay to
      Employee:

	 	 	 	 	 
	 		(i) 	
      on the sixth (6th) day following the
      Termination Date or the next regularly scheduled pay day of the Company
      following the Termination Date, respectively,

	 	 	 	 	 
	 			(A) 	
      any accrued but unpaid Base Salary provided for in
      Section 3 hereof for services rendered through the Termination
  Date,

	 	 	 	 	 
	 			(B) 	
      any accrued but unpaid expenses required to be reimbursed
      under Section 4, and

	 	 	 	 	 
	 			(C) 	
      any vacation accrued to the Termination Date,
  and

	 	 	 	 	 
	 		(ii) 	
      severance pay in an amount equal to Employee’s Base
      Salary pursuant to Section 3 for a period beginning on the Termination
      Date and ending one (1) year from the Termination Date or if the
      Termination Date occurs in the third (3rd ) year of this
      Agreement then Employee shall receive his pro- rata Base Salary until the
      third (3rd ) anniversary of the date of this Agreement.
      Payments shall be payable in equal monthly installments beginning on the
      last day of the first month following the Termination Date; provided,
      however, that none of the benefits payable under Section 9(b)(ii) will
      be payable unless, and the obligation to pay any severance pursuant to
      Section 9(b)(ii) shall not accrue until, the Employee has signed and
      delivered an executed general release, which has become irrevocable,
      satisfactory to the Company in its reasonable discretion, releasing the
      Company and its Affiliates and their respective officers, directors,
      managers, members, partners and employees from any and all claims or
      potential claims arising from or related to the Employee’s employment or
      termination of employment, and

	 	 	 	 	 
	 		(iii) 	
      all 300,000 shares of common stock under the Stock
      Option.

Section 10. Withholding Taxes.

The Company shall withhold from any payments to be made to
Employee hereunder such amounts (including social security contributions and
federal income taxes) as shall be required by federal, state, and local
withholding tax laws.

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Section 11. Attorneys’ Fees and Costs.

In the event there is any litigation between the parties hereto
with respect to this Agreement, the prevailing party in such litigation shall be
entitled to recover all attorneys’ fees and costs incurred by such party in
connection with such litigation.

Section 12. Notices.

All notices, requests, or consents provided for or permitted to
be given under this Agreement must be in writing and must be given either by
depositing that writing in the United States mail, addressed to the recipient,
postage paid, and registered or certified with return receipt requested or by
delivering that writing to the recipient in person, by courier, by electronic
transmission, or by facsimile transmission; and a notice, request, or consent
given under this Agreement is effective on receipt by the person to receive it.

Section 13. Governing Law.

It is understood and agreed that the construction and
interpretation of this Agreement shall at all times and in all respects be
governed by the laws of the State of Texas.

Section 14. Assistance in Litigation.

During the Employment Period and for a period of four (4) years
thereafter, Employee shall, upon reasonable notice, furnish such information and
proper assistance to the Company as may reasonably be required by the Company in
connection with any litigation in which the Company, or any of its subsidiaries
or Affiliates is, or may become, a party. The Company shall reimburse Employee
for 

	 	(i) 	
      all reasonable, documented out-of-pocket expenses
      incurred by Employee in rendering such assistance subject to the Company’s
      reasonable policies regarding the reimbursement of expenses and

	 	 	 
	 	(ii) 	
      reasonable compensation for Employee’s time in rendering
      such assistance if such assistance occurs after the Employment
    Period.

Section 15. Severability.

The invalidity or unenforceability of any one provision or more
of the provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect to the fullest extent permissible by law. Should any one
or more of the provisions of this Agreement be held to be excessive,
unreasonable, or otherwise unenforceable, then that provision shall be construed
by limiting and reducing it so as to be reasonable and enforceable to the
fullest extent compatible with applicable law.

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Section 16. Survival.

Neither the expiration nor the termination of the term of
Employee’s employment hereunder shall impair the rights or obligations of either
party hereto which shall have accrued hereunder prior to such expiration or
termination. The provisions of Sections 6, 7, 9, and 14 and the rights and
obligations of the parties thereunder, shall survive the expiration or
termination of the term of Employee’s employment hereunder.

Section 17. Entire Agreement.

This Agreement, including the schedules attached hereto,
contains the entire agreement and understanding by and between the Company and
Employee with respect to the employment of Employee, and no representations,
promises, agreements, or understandings, written or oral, not contained herein
shall be of any force or effect. No waiver of any provision of this Agreement
shall be valid unless it is in writing and signed by the party against whom the
waiver is sought to be enforced. No valid waiver of any provision of this
Agreement at any time shall be deemed a waiver of any other provision of this
Agreement at such time or any other time.

Section 18. Modification.

No amendment, alteration or modification to any of the
provisions of this Agreement shall be valid unless made in writing and signed by
both parties.

Section 19. Binding Effect; Assignment; No Third Party
Benefit. 

This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, legal representatives,
successors, and assigns; provided, however, that the duties and
responsibilities of Employee hereunder may not be assumed by, or delegated to,
any other person. Nothing in this Agreement, express or implied, is intended to
or shall confer upon any person other than the parties hereto, and their
respective heirs, legal representatives, successors, and permitted assigns, any
rights, benefits, or remedies of any nature whatsoever under or by reason of
this Agreement.

Section 20. Counterparts.

This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute but one and the same instrument.

Section 21. Voluntary Agreement.

Each party to this Agreement has read and fully understands the
terms and provisions hereof, has had an opportunity to review this Agreement
with legal counsel, has executed this Agreement based upon such party’s own
judgment and advice of counsel (if any), and knowingly, voluntarily, and without
duress, agrees to all of the terms set forth in this Agreement. The parties have
participated jointly in the negotiation and drafting of this Agreement. If an
ambiguity or question of intent or interpretation arises, this Agreement will be
construed as if drafted jointly by the parties and no presumption or burden of
proof will arise favoring or disfavoring any party because of authorship of any
provision of this Agreement.

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Section 22. Directly or Indirectly.

Where any provision of this Agreement refers to action to be
taken by any person, or which such person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such person, including actions taken by or on behalf of any
Affiliate of such person.

SIGNATURE PAGE — PENNINGTON EMPLOYMENT AGREEMENT

 

IN WITNESS WHEREOF, executed this __ day of March, 2011.

COMPANY:
Sun River Energy, Inc.

 

	By:	/s/Donal R. Schmidt, Jr. 	 
	 	Donal R. Schmidt, Jr.,
      President and CEO 	 

 

EMPLOYEE:
James E. Pennington

 

	By:	By:/s/James E. Pennington 	 
	 	James E. Pennington 	 

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