Form 8-K - Current report

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 17, 2023

 

HNR ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

 

Delaware		001-41278		85-4359124
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

3730 Kirby Drive, Suite 1200

Houston, Texas 77098

(Address of principal executive offices, including zip code)

 

[phone]

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class:		Trading symbol		Name of each exchange on which registered
Class A Common stock, par value $0.0001 per share		HNRA		NYSE American
Redeemable warrants, exercisable for three quarters of one share of Class A Common Stock at an exercise price of $11.50 per share		HNRAW		NYSE American

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Resignation of Diego (Dean) Rojas

 

On December 17, 2023, Diego (Dean) Rojas amicably resigned as Chief Executive Officer and member of the Board of Directors of HNR Acquisition Corp (the “Company” or “HNRA”). Mr. Rojas’ resignation was not as a result of any disagreement with the Company on any matter regarding the Company’s operations, policies, or practices.

 

In connection with Mr. Rojas’ resignation, he entered into a Separation and Release Agreement (the “Separation Agreement”) with the Company. Pursuant to the Separation Agreement, the Company agreed to pay to Mr. Rojas: (i) his base salary through December 31, 2023; and (ii) $96,000, payable in equal semi-monthly installments, beginning on January 1, 2024. In addition, the Company agreed to issue to Mr. Rojas 60,000 shares of the Company’s Class A Common Stock, par value $0.0001 per share.

 

The foregoing summary of the Separation Agreement is qualified in its entirety by reference to the text of the Separation Agreement, which is filed as Exhibit 10.1 to this Report and is incorporated herein by reference.

 

Appointment of Dante Caravaggio

 

On December 17, 2023, the Company’s Board of Directors appointed Dante Caravaggio, age 66, to fill the vacancy created by Mr. Rojas’ resignation. In addition, the Company’s Board of Directors appointed Mr. Caravaggio as the Company’s Chief Executive Officer and President.

 

Mr. Caravaggio will serve on the Board of Directors as a Class I Director until the Company’s 2024 annual stockholder meeting and until his successor has been duly appointed and qualified. Mr. Caravaggio will not serve on any committees of the Board of Directors.

 

Since April 2021, Mr. Caravaggio has served as Chairman of SWI Excavating, one of the leading regional underground utility contractors in Colorado. In addition, since January 2021, Mr. Caravaggio has served as a strategy consultant for Shuler Industries to advance proprietary renewable technologies. From January 2020 to April 2022, Mr. Caravaggio served on the board of directors of McCarl’s Inc., a leading energy constructor in the northeast United States. Prior to joining McCarl’s Inc., Mr. Caravaggio was Senior Vice President, Hydrocarbons Americas for KBR (US) since January 2018. Prior to his role with KBR (US), Mr. Caravaggio held a number of roles as an executive and project manager with Parsons Corp. and Jacobs Engineering, overseeing upstream and downstream hydrocarbon projects. Mr. Caravaggio received his MBA at Pepperdine University in Malibu, California and his BS and MS in Petroleum Engineering at the University of Southern California.

 

In connection with the appointment of Mr. Caravaggio as Chief Executive Officer and President, the Company and Mr. Caravaggio entered into an Executive Employment Agreement, effective as of December 18, 2023 (the “Employment Agreement”). The Employment Agreement is on the Company’s standard form for executives, and provides that the Company shall pay to Mr. Caravaggio an annual base salary of $250,000. In addition, the Company agreed to issue a one-time Equity Sign-On Incentive to Mr. Caravaggio under the 2023 HNR Acquisition Corp Omnibus Incentive Plan (the “Plan”), which consists of restricted stock units (“RSUs”), equal to 200% of base salary divided by $10 (i.e. 50,000 RSUs), subject to time-based vesting as follows: 1/3 on the first anniversary of the date of grant, 1/3 on the second anniversary of the date of grant, and 1/3 on the third anniversary of the date of grant. Mr. Caravaggio will be permitted to participate in any broad-based retirement, health and welfare plans that will be offered to all of the Company’s employees.

 

1

 

Pursuant to the Employment Agreement, if the Company terminates Mr. Caravaggio’s employment without Cause (as defined in the Employment Agreement) or Mr. Caravaggio terminates his employment for Good Reason (as defined in the Employment Agreement), then Mr. Caravaggio will be entitled to: (i) any accrued obligations as of the date of termination, including base salary, PTO and holidays, and continued benefits required by the Company’s employee benefit plans; (ii) continued base salary for 12 months following the date of termination, paid in accordance with the Company’s payroll practices; (iii) the total monthly cost of coverage for Mr. Caravaggio and his covered dependents under COBRA, if elected; and (iv) full vesting in all equity grants as of the date of termination. To receive such severance benefits, Mr. Caravaggio will be required to execute a non-competition agreement, non-solicitation agreement, or confidentiality agreement or invention assignment agreement and release of claims.

 

The foregoing summary of the Employment Agreement is qualified in its entirety by reference to the text of the Employment Agreement, which is filed as Exhibit 10.2 to this Report and is incorporated herein by reference.

 

Mr. Caravaggio will not receive any additional compensation as a member of the Company’s Board of Directors.

 

There are no family relationships between Mr. Caravaggio and any director or executive officer of the Company and he was not selected by the Board of Directors to serve as a director or as an executive officer pursuant to any arrangement or understanding with any person.

 

Since the January 1, 2022, Mr. Caravaggio has not engaged in any transaction that would be reportable as a related party transaction under Item 404(a) of Regulation S-K, except as follows:

 

●

On May 5, 2022, the Company entered into a Referral Fee and Consulting Agreement (the “Consulting Agreement”) with Alexandria VMA Capital, LLC (“Alexandria”), an entity controlled by Mr. Caravaggio. Pursuant to the Consulting Agreement, Alexandria provided information and contacts with suitable investments and acquisition candidates for the Company’s initial business combination. In addition, Alexandria provided due diligence, purchasing and negotiating strategy advice, organizational and operational advice, and such other services as requested by the Company. In consideration of the services provided by Alexandria, the Company paid to Alexander Capital a referral fee equal to 2% of the total value of the Company’s business combination, with ½ being paid in cash and the other ½ being paid by the issuance of 89,000 shares of the Company’s Class A Common Stock.

 

	●	On January 20, 2023, January 27, 2023, and February 14, 2023, Mr. Caravaggio entered into Note and Warrant Purchase Agreements with the Company (the “Purchase Agreements”). Pursuant to the Purchase Agreements, Mr. Caravaggio paid an aggregate amount of $179,000 and received promissory notes in the aggregate principal amount of $179,000, accruing interest at a rate of 15% per annum (the “Notes”), and Common Stock Warrants to purchase an aggregate of 179,000 shares of Class A Common Stock of the Company at an exercise price of $11.50 per share (the “Warrants”). The Warrants issued to Mr. Caravaggio are identical to the Company’s warrants that are publicly traded on the NYSE American under the symbol “HNRAQ” (the “Public Warrants”) in all material respects, except that the Warrants were not transferable, assignable or salable until 30 days after the Company’s initial business combination. The Warrants are exercisable on the same basis as the Public Warrants.
	●	As previously reported, on November 13, 2023, the Company entered into exchange agreements (“Exchange Agreements”) with certain holders of promissory notes issued by HNRA for working capital purposes, including the Notes mentioned above. Pursuant to one such Exchange Agreement, the Company agreed with Dante Caravaggio to exchange, in consideration of the surrender and forgiveness of an aggregate amount (including principal and interest accrued thereon) of $100,198 due under the Notes, for 20,040 shares of Class A Common Stock at a price per share equal to $5.00 per share.

 

●

As previously reported, in connection with the closing of the Company’s initial business combination, the Company entered into a Founder Pledge Agreement, dated November 15, 2023 (the “Founder Pledge Agreement”), by and between the Company and certain persons thereto. Pursuant to the Founder Pledge Agreement, the Company issued 30,000 shares of Class A Common Stock to Dante Caravaggio, LLC, an entity controlled by Mr. Caravaggio.

 

The foregoing summary of the Exchange Agreements is qualified in its entirety by reference to the text of the form of Exchange Agreement, which was filed as Exhibit 10.2 to the Current Report on Form 8-K filed by the Company on November 13, 2023, and is incorporated herein by reference.

 

2

 

The foregoing summary of the Founder Pledge Agreement is qualified in its entirety by reference to the text of the Founder Pledge Agreement, which was filed as Exhibit 10.7 to the Current Report on Form 8-K filed by the Company on November 21, 2023, and is incorporated herein by reference.

 

Item 8.01 Other Events.

 

On December 20, 2023, the Company issued a press release announcing the resignation of Mr. Rojas and the appointment of Mr. Caravaggio. A copy of the press release is filed as Exhibit 99.1 to this Report and is incorporated herein by reference.

 

Item 9.01. Financial Statements and Exhibits

 

(d) Exhibits

 

The following exhibits are being filed herewith:

 

Exhibit Number		Description
10.1		Separation and Release Agreement, dated December 17, 2023, by and between the Company and Diego Rojas
10.2		Executive Employment Agreement, effective December 18, 2023, by and between the Company and Dante Caravaggio
99.1		Press Release of the Company dated December 20, 2023
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

3

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

December 20, 2023	HNR Acquisition Corp
	By:	/s/ Mitchell B. Trotter
	Name:	Mitchell B. Trotter
	Title:	Chief Financial Officer

 

 

4

 

 

Exhibit 10.1

 

SEPARATION AND RELEASE AGREEMENT

 

This Separation and Release Agreement (the “Agreement”) is between Diego “Dean” Rojas (the “Individual”) and HNR Acquisition Corp and its affiliates (collectively, the “Company”).

 

RECITALS

 

WHEREAS, the Individual currently serves as a Director and the Chief Executive Officer of the Company.

 

WHEREAS, the parties desire to amicably terminate the Individual’s employment and relationship with the Company in accordance with the terms and conditions of this Agreement.

 

WHEREAS, the parties desire to enter into this Agreement to reflect their mutual undertakings, promises, and agreements concerning the termination of the Individual’s employment and relationship with the Company and the payments and benefits to the Individual upon or by reason of such terminations.

 

NOW THEREFORE, in exchange for the valuable consideration paid or given under this Agreement, the receipt, adequacy, and sufficiency of which is acknowledged, the parties knowingly and voluntarily agree to the following terms:

 

TERMS

 

1.	Separation Date and Effect of Separation.

 

a.

Separation Date. The Individual’s employment and as a Director and Officer with the Company shall terminate on December 17, 2023 (the “Separation Date”) and he shall be permanently relieved of all further duties for the Company and its affiliates as of the Separation Date based upon the Individual’s voluntary and irrevocable resignation from employment and as a Director and Officer.

 

b.

Resignation from Board and Officer Positions; Separation from Service. Effective as of the Separation Date, the Individual shall and hereby does voluntarily resign without further action from all corporate, board, and other offices and positions he held with the Company or its affiliates and any employee benefit plans maintained by the Company or its affiliates. For purposes of this Agreement, “affiliate” means, with respect to the Company, any entity or person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the Company.

 

2.

Continuing Obligations. The parties further agree that their post-termination rights and obligations under this Agreement including Section 5 (Return of Property and Information, Section 7 (Confidentiality, Non-prosecution, Non-disparagement and Cooperation), Section 8 (Wavier of Certain Rights), Section 10 (Remedies), Section 12 (Jury Trial Waiver), and Section 14 (Governing Law, Venue; Severability; Interpretation) of this Agreement (collectively, the “Continuing Obligations”) shall survive the termination of the Individual’s employment with the Company and the execution of this Agreement.

 

-1-

 

 

3.

Final Pay and Benefits. The Individual shall receive the following payments and benefits in accordance with the existing policies of the Company, and pursuant to his employment with the Company and his participation in its employee benefit plans:

 

a.

Final Pay. The Individual shall be entitled to his regular base salary through December 31, 2023. This payment is subject to applicable taxes and withholdings and shall be delivered to the Individual in the customary payment by the Company of wages. Other than as provided in the previous sentence and below, the Individual shall not receive any commissions, bonuses, or other forms or remuneration or compensation in connection with his employment with the Company or any other arrangement with the Company or its affiliates after the Separation Date or any pay for accrued unused vacation or paid time off.

 

b.

401(k) Plan Benefits. The parties acknowledge that the Company does not have a 401(k) plan.

 

c.

Absence of Insurance Benefits. The parties acknowledge that the Company does not provide group health, dental, or vision insurance benefits, if any for HNR Acquisition Corp direct employees such as the Individual The Individual will provide insurance he may desire for himself and his dependents at his own expense.

 

d.

Reimbursement of Business Expenses. The Individual shall be entitled to receive reimbursement of reasonable business expenses properly incurred in accordance with Company policy before the Separation Date. Any such reimbursement must be based on substantiating documentation provided by the Individual within 30 days after the Separation Date.

 

4.

Severance Benefits. Contingent upon the Individual’s timely acceptance of this Agreement and compliance with the Continuing Obligations, the Company shall provide Individual with the following severance benefits (the “Severance Benefits”):

 

a.

Separation Pay. The Company shall pay the Individual an amount of Eight Thousand Dollars ($8,000.00) per calendar month beginning January 1, 2024, and continuing for twelve (12) months following the Separation Date minus applicable taxes and withholdings, as separation pay (the “Separation Pay”) paid in the normal and customary manner as wages would be paid by the Company being ½ the monthly amount each on (i) the 15th of each month, and (ii) the last day of the month.

 

b.

Class A Common Stock. The Company shall issue to Consultant sixty thousand (60,000) restricted shares of its Class A common stock with piggyback registration rights on the Effective Date, as herein defined, of this Agreement to bear the legend as set forth in the attached Exhibit A. The restrictive period, also called the lockup term, shall be for a period of twelve (12) months from the date of issuance.

 

-2-

 

 

5.

Return of Property and Information. The Individual shall on or within three days after the Separation Date return to the Company or the other Released Parties (as defined below) any and all items of its or their property, including without limitation keys, all copies of Confidential Information, business records, badge/access cards, computers, software, cellular telephones, iPhones, iPads, androids, blackberries, other personal digital assistants, equipment, credit cards, forms, files, manuals, correspondence, business records, personnel data, lists of employees, salary and benefits information, customer files, lists of suppliers and vendors, price lists, contracts, contract information, marketing plans, brochures, catalogs, training materials, computer tapes and diskettes or other portable media, computer-readable files and data stored on any hard drive or other installed device, and data processing reports, and any and all other documents or property which he has had possession of or control over during his employment with the Company. The Individual’s obligations under this paragraph supplement, rather than supplant, his post-termination obligations under the common law and the Continuing Obligations. The Individual’s obligations under this paragraph shall not apply to, and the Individual may retain copies of, personnel, benefit, or payroll documents concerning only him.

 

6.

General Release.

 

a.

Full and Final Release by Releasing Parties. The Individual, on behalf of himself and his spouse, other family members, heirs, successors, and assigns (collectively, the “Releasing Parties”), hereby voluntarily, completely, and unconditionally to the maximum extent permitted by applicable law releases, acquits, waives, and forever discharges any and all claims, demands, liabilities, and causes of action of whatever kind or character, whether known, unknown, vicarious, derivative, direct, or indirect (individually a “Claim” and collectively the “Claims”), that he or they, individually, collectively, or otherwise, may have or assert against the Released Parties (as defined below).

 

b.

Claims Included. This release includes without limitation any Claim arising out of or relating in any way to (i) the Individual’s employment or the termination of his employment with the Company or with the employment practices of any of the Released Parties and any compensation or benefits, including without limitation vacation, bonuses, commissions, or grants of equity, options, similar awards, and any other compensation or remuneration associated with his employment with the Company not provided for in this Agreement; (ii) any federal, state, or local statutory or common law or constitutional provision that applies, or is asserted to apply, directly or indirectly, to the formation, continuation, or termination of the Individual’s employment relationship with the Company, including but not limited to the Age Discrimination in Employment Act (“ADEA’’); (iii) any contract, agreement, or arrangement between, concerning, or relating to the Individual and any of the Released Parties, including without limitation the Bonus Agreement; and (iv) any other alleged act, breach, conduct, negligence, gross negligence, or omission of any of the Released Parties.

 

-3-

 

 

c.

Claims Excluded. Notwithstanding any other provision of this Agreement, this release does not (i) waive or release any Claim for breach or enforcement of this Agreement or the Continuing Obligations; (ii) waive or release any right or Claim that may not be waived or released by applicable law; (iii) waive or release any right or Claim under the ADEA or otherwise that may arise after the date this Agreement is signed by the Individual; (iv) prevent the Individual from pursuing any administrative Claim for unemployment compensation or workers’ compensation benefits; or (v) waive or release any right or Claim the Individual may have for indemnification under state or other law or the governing documents of the Company, or under any insurance policy providing directors’ and officers’ coverage for any lawsuit or Claim relating to the period when the Individual was a director, officer, or employee of the Company (if any); provided, however, that (A) the Individual’s execution of this Agreement is not a concession or guaranty that the Individual has any such right or Claim to indemnification, (B) this Agreement does not create any additional rights to indemnification, and (C) the Company retains any and all defenses it may have to such indemnification or coverage.

 

d.

Definition of Released Parties. The “Released Parties” include (i) the Company; (ii) any parent, subsidiary, or affiliate of the Company; (iii) any past or present officer, director, member, manager, or employee of the entities just described in (i)-(ii), in their individual and official capacities; and (iv) any past or present predecessors, parents, subsidiaries, affiliates, owners, shareholders, members, managers, benefit plans, operating units, divisions, agents, representatives, officers, directors, partners, employees, fiduciaries, insurers, attorneys, successors, assigns, equity holders, unit holders, warrant holders, debt holders, and other security holders of the entities just described in (i)-(iii).

 

e.

Permitted Activities. Notwithstanding any other provision of this Agreement but subject to the Individual’s waiver in subparagraph 8(a) below, nothing in this Agreement precludes the Individual from (i) contacting, filing a charge or complaint with, providing information to, or cooperating with an investigation conducted by, any governmental agency; (ii) providing information about this Agreement to his spouse, attorney, or accountant or tax advisor (if any); (iii) making disclosures or giving truthful testimony as required by law or valid legal process (such as by a subpoena); or (iv) engaging in concerted or other legally- protected activities.

 

7.

Confidentiality, Nonprosecution, Nondisparagement; and Cooperation.

 

a.

Confidentiality. Except as requested by the Company or the other Released Parties, as permitted above or by law that may supersede the terms of this Agreement, or as compelled by valid legal process, the Individual shall treat as confidential (i) any material non-public information regarding the Company or the Released Parties, and (ii) the fact and terms of this Agreement and shall not disclose such information to any party other than his spouse, attorney, and accountant or tax advisor, if such persons have agreed to keep such information confidential. Company may make the terms hereof publicly available as deemed necessary by the Company or to be compliant with SEC or NYSE American rules and regulations or governmental authorities.

 

b.

Nonprosecution. Except as requested by any of the Released Parties, as permitted above or by applicable law that may supersede the terms of this Agreement, or as compelled by valid legal process, the Individual shall not knowingly (i) assist, cooperate with, or supply information of any kind to any individual or private- party litigant or their agents or attorneys concerning (A) the employment, terms and conditions, or ending of the Individual’s or any other employee’s employment with the Company or any of the other Released Parties or the employment practices of any of the Released Parties; or (B) the business or operations of any of the Released Parties; or (ii) initiate or assist any other person in connection with any investigation, inquiry, or any other action of any kind with respect to any of the Released Parties’ employment practices, businesses, or operations.

 

-4-

 

 

c.

Nondisparagement. The Individual shall not make to any other party any statement (whether oral, written, electronic, anonymous, on the Internet, or otherwise), which directly or indirectly impugns the quality or integrity of the Company’s or any of the other Released Parties’ business or employment practices, or any other disparaging or derogatory remarks about the Company or any of the other Released Parties. In executing this Agreement, the Individual acknowledges and agrees that he has knowingly, voluntarily, and intelligently waived any free speech, free association, free press, or First Amendment to the United States Constitution (including, without limitation, any counterpart or similar provision or right under the Texas Constitution) rights to disclose, communicate, or publish any statements prohibited by this subparagraph.

 

d.

Cooperation. The Individual shall cooperate fully and completely with the Company and any of the other Released Parties, at their request, in all pending and future litigation, investigations, arbitrations, and/or other fact-finding or adjudicative proceedings, public or private, involving the Company or any of the other Released Parties. This obligation includes but is not limited to the Individual promptly meeting with counsel for the Company or the other Released Parties at reasonable times upon their request, and providing testimony in court, before an arbitrator or other convening authority, or upon deposition that is truthful, accurate, and complete, according to information known to the Individual. If the Individual provides cooperation under this subparagraph (including without limitation if the Individual appears as a witness in any pending or future litigation, arbitration, or other fact-finding or adjudicative proceeding at the request of the Company or any of the other Released Parties), the Company shall reimburse her, upon submission of substantiating documentation, for necessary and reasonable out-of-pocket expenses incurred by his as a result of such cooperation (not including attorneys’ fees).

 

8.

Waiver of Certain Rights.

 

a.

Right to Relief Not Provided in this Agreement. The Individual waives any right to monetary recovery from the Company or the other Released Parties, whether sought directly by his or in the event any administrative agency or other public authority, individual, or group of individuals should pursue any Claim on his behalf; and he shall not request or accept from the Company or the other Released Parties, as compensation or damages related to his employment or the termination of his employment with any of the Released Parties, anything of value that is not provided for in this Agreement.

 

b.

Right to Class- or Collective-Action Initiation or Participation. The Individual waives the right to initiate or participate in any class or collective action with respect to any Claim against the Company or the Released Parties, including without limitation any Claim arising from the formation, continuation, or termination of his employment relationship with any of the Released Parties.

 

-5-

 

 

9.

No Violations. The Individual represents and warrants that he has no knowledge that the Company or any of the Released Parties has committed or is suspected of committing any act which is or may be in violation of any federal or state law or regulation or has acted in a manner which requires corrective action of any kind. The Individual further represents and warrants that he has not informed the Company or any of the other Released Parties of, and that he is unaware of, any alleged violations of the Company’s standards of business conduct or personnel policies, of the Company’s integrity or ethics policies, or other misconduct by the Company or any of the other Released Parties, that have not been resolved satisfactorily by the Company or the other Released Parties.

 

10.

Remedies. Notwithstanding any other provision in this Agreement, the Company’s obligation to provide the Severance Benefits to the Individual is subject to the condition that he fully complies with his Continuing Obligations. The Company therefore shall have the right to cease providing the Severance Benefits, and the Employee shall immediately return to the Company any such Severance Benefits already provided to him, if any of the Continuing Obligations have been breached by the Individual but all other provisions of this Agreement shall remain in full force and effect. In the event of any breach of this Agreement by the Individual, the Company shall be entitled to equitable relief (without the need to post a bond or prove actual damages) by temporary restraining order, temporary injunction, or permanent injunction or otherwise, in addition to all other legal and equitable relief to which it may be entitled, including any and all monetary damages which it may incur as a result of such breach. The Company may pursue any remedy available to it concurrently or consecutively in any order as to any such breach and the pursuit of one of such remedies at any time shall not be deemed an election of remedies or waiver of the right to pursue any other of such remedies as to such breach.

 

11.

Nonadmission of Liability or Wrongdoing. The Individual acknowledges that (a) this Agreement shall not in any manner constitute an admission of liability or wrongdoing on the part of the Company or any of the other Released Parties; (b) the Company and the other Released Parties expressly deny any such liability or wrongdoing; and, (c) except to the extent necessary to enforce this Agreement, neither this Agreement nor any part of it may be construed, used, or admitted into evidence in any judicial, administrative, or arbitral proceedings as an admission of any kind by the Company or any of the other Released Parties.

 

12.

Jury Trial Waiver. THE INDIVIDUAL HEREBY WAIVES THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM AGAINST THE COMPANY OR ANY OF THE OTHER RELEASED PARTIES ARISING OUT OF OR RELATING TO THIS AGREEMENT, INCLUDING WITHOUT LIMITATION FOR BREACH OR ENFORCEMENT OF THIS AGREEMENT.

 

13.

Authority to Execute. The Individual represents and warrants that he has the authority to execute this Agreement on behalf of all the Releasing Parties.

 

-6-

 

 

14.

Governing Law; Venue; Severability; Interpretation. This Agreement and the rights and duties of the parties under it shall be governed by the laws of the State of Texas, without regard to any conflict-of-laws principles. Exclusive venue for any Claim between the parties or their affiliates arising out of or related this Agreement is in any state or federal court of competent jurisdiction that regularly conducts proceedings in Harris County, Texas. Nothing in this Agreement, however, precludes either party from seeking to remove a civil action from any state court to federal court. The provisions of this Agreement shall be severable. If any one or more provisions of this Agreement may be determined by a court of competent jurisdiction to be illegal or otherwise unenforceable, in whole or in part, such provision shall be considered separate, distinct, and severable from the other remaining provisions of this Agreement, such a determination shall not affect the validity or enforceability of such other remaining provisions, and in all other respects the remaining provisions of this Agreement shall be binding and enforceable and remain in full force and effect. If any provision of this Agreement is held to be unenforceable as written by a court of competent jurisdiction but may be made to be enforceable by limitation, then such provision shall be enforceable to the maximum limit permitted by applicable law. The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties.

 

15.

Assignment. The Individual’s obligations, rights, and benefits under this Agreement are personal to the Individual and shall not be assigned to any person or entity without written permission from the Company. This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, legal representatives, successors, and permitted assigns.

 

16.

Effective Date. This Agreement shall become effective and enforceable upon the date the Individual signs it (the “Effective Date”).

 

17.

Knowing and Voluntary Agreement. The Individual acknowledges that (a) he has been advised by this paragraph of his right to consult with an attorney and tax advisor of his choice before signing this Agreement; (b) he has had a reasonable period in which to consider whether to sign this Agreement; (c) he fully understands the meaning and effect of signing this Agreement; and (d) his signing of this Agreement is knowing and voluntary.

 

18.

Independent Consideration; Common-Law Duties. Whether expressly stated in this Agreement or not, all obligations the Individual assumes and undertakings he makes by signing this Agreement are understood to be in consideration of the mutual promises and undertakings in this Agreement and the Severance Benefits. In addition, the Individual acknowledges and agrees that neither the Company nor any of the other Released Parties has any legal obligation to provide the Severance Benefits to him outside of this Agreement.

 

-7-

 

 

19.

Entire Agreement. This Agreement contains and represents the entire agreement of the parties with respect to its subject matters, and supersedes all prior agreements and understandings, written and oral, between the parties with respect to its subject matters. Notwithstanding the preceding sentence, nothing in this Agreement shall be interpreted or construed as superseding or relieving the parties of their respective Continuing Obligations. The Individual agrees that neither the Company nor any of the other Released Parties has made any promise or representation to his concerning this Agreement not expressed in this Agreement, and that, in signing this Agreement, he is not relying on any prior oral or written statement or representation by the Company or any of the other Released Parties outside of this Agreement or the Memorandum but is instead relying solely on his own judgment and his attorney and tax advisor (if any).

 

20.

Modification; Waiver. No provision of this Agreement shall be amended, modified, or waived unless such amendment, modification, or waiver is agreed to in writing and signed by the Individual and a duly authorized representative of the Company.

 

21.

Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement. The delivery of this Agreement in the form of a clearly legible facsimile or electronically scanned version by e-mail shall have the same force and effect as delivery of the originally executed document.

 

22.

Internal Revenue Code Section 409A. The payments and benefits provided under this Agreement are intended to be exempt from Internal Revenue Code Section 409A and this Agreement shall be interpreted and administered in a manner consistent with that intent.

 

AGREED as of the dates signed indicated by electronic signature.

 

HNR ACQUISITION CORP			DIEGO “DEAN” ROJAS
By:	/s/ Mitchell B. Trotter		/s/ Dean Rojas
Mitchell B. Trotter,			Diego “Dean” Rojas
Chief Financial Officer

 

-8-

 

 

EXHIBIT A

 

CLASS A COMMON STOCK RESTRICTED LEGENDS

 

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCKUP AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM OF THE LOCKUP.

 

 

-9-

 

Exhibit 10.2

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) dated as of the first date set forth on the signature page hereof, is entered by and between HNR Acquisition Corp, a Delaware corporation (the “Company”), and Dante Caravaggio, an individual residing in Katy, Texas (“Executive”), must be approved by a majority of the Board of Directors of the Company in order to be binding upon the Company prior to the Effective Date of December 18, 2023 (the “Effective Date”). Each of the Company and Executive are a “Party,” and collectively, they are the “Parties.”

 

WHEREAS, the Company wishes to employ Executive as of the Effective Date; and

 

WHEREAS, Executive wishes to be employed by the Company as of the Effective Date;

 

NOW THEREFORE, in consideration of the above recitals, which are incorporated herein, the mutual covenants and mutual benefits set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the Company and Executive agree as follows:

 

1. Representations and Warranties. Executive represents and warrants to the Company that Executive is not bound by any restrictive covenants or other obligations or commitments of any kind that would in any way prevent, restrict, hinder or interfere with Executive’s acceptance of employment under the terms and conditions set forth herein or the performance of all duties and services hereunder to the fullest extent of Executive’s ability and knowledge. Executive understands and acknowledges that Executive is not expected or permitted to use or disclose confidential information belonging to any prior employer in the course of performing Executive’s duties for the Company.

 

2. Term of Employment. As of the Effective Date, the Company will employ Executive and Executive accepts employment by the Company on the terms and conditions herein that shall commence on the Effective Date and shall continue until terminated pursuant to Section 5 (the “Employment Period”). Notwithstanding anything set forth in Section 5 and for the avoidance of doubt, Executive’s employment is on an at-will basis, meaning that Executive or the Company can terminate Executive’s employment at any time for any reason or no reason, with or without notice. The at-will nature of Executive’s employment cannot be changed except by written agreement signed by Executive and the Company.

 

3. Duties and Functions.

 

(a) Executive shall be employed as the Chief Executive Officer and President and shall report to the Board of Directors (the “Supervisor”). Executive’s primary place of employment shall be in a yet to be established HNRA office (“Primary Place of Employment”). Notwithstanding the foregoing, (i) Executive must obtain advance written approval from Executive’s Supervisor if Executive desires to move Executive’s Primary Place of Employment to a different state, (ii) the Company and Executive shall periodically reevaluate Executive’s Primary Place of Employment, and (iii) the Company and Executive shall reevaluate Executive’s Primary Place of Employment if circumstances change, including if the COVID-19 pandemic materially changes or ends. Notwithstanding the foregoing, Executive agrees that, as a result of these periodic evaluations or changes in circumstance, the Company may request that Executive consent to work primarily or partially from the Company’s facilities, which consent may not be unreasonably withheld.

 

1

 

 

(b) Executive agrees to undertake the duties and responsibilities inherent in the position, which may encompass different or additional duties as may, from time to time, be assigned by Executive’s Supervisor, or the Supervisor’s designee, and the duties and responsibilities undertaken by Executive may be altered or modified from time to time by Supervisor, or by the Supervisor’s designee. Executive agrees to abide by the rules, regulations, instructions, personnel practices and policies of the Company and any change thereof which may be adopted at any time by the Company. Notwithstanding the foregoing, during the COVID-19 pandemic, business related travel will be subject to the Supervisor’s and Executive’s good faith determination that business related travel is necessary. All applicable COVID-19 travel restrictions, state, local and federal health and safety guidelines, and Company policies should be considered in connection with any travel activities.

 

(c) During the Employment Period, Executive will devote Executive’s full time and efforts to the business of the Company and will not, without the consent of the Company, engage in consulting work or any trade or business for Executive’s own account or for or on behalf of any other person, firm or corporation that competes, conflicts or interferes with the performance of Executive’s duties hereunder in any way, with the exception of SWI Excavating Business. Executive will be allowed a reasonable period of time to wind down existing business affairs to facilitate the transition to full time employment with Company. During the Employment Period, Executive is prohibited from engaging in fundraising or pursuing company mergers, acquisitions, or sale of companies or asset sales except in service of Company. In the event that the executive violates this restriction and in addition to other remedies at law or in equity Company may have, damages will include any fees, commissions, or other payments obtained by the executive or to which Executive may become entitled in connection with such transactions which may be rightfully retained by Company.

 

4. Compensation.

 

(a) Base Salary: As compensation for Executive’s services hereunder, the Company agrees to pay Executive a base salary at an annual rate of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00), payable in accordance with the Company’s normal payroll schedule, but in no event less frequently than monthly. Executive’s base salary shall be reviewed annually by the Board or the Compensation Committee thereof which may be increased from time to time in the Board’s and/or the Compensation Committee’s sole discretion. The Compensation committee, at their sole discretion may vote to temporarily defer the base salary or any equity awards as needed for the following reasons: to meet short term cashflow limitations as identified by the CFO; or to accommodate limitations on the number of shares that can be awarded pursuant to an Company equity plan; or meet the requirement of a lender who limits the Company’s administrative budget as a condition of a loan (for example, the first several months following an acquisition). Executive will not receive any additional compensation if Executive serves on the Board of Directors.

 

(b) Equity Compensation: On the Effective Date, in accordance with the employment inducement grant rules set forth in Section 711(a) of the NYSE American LLC Company Guide, Executive shall be granted an equity award covering the Company’s common stock (collectively, the “Equity Sign-On Incentive”) which will consist of the number of RSUs equal to 200% of base salary divided by ten dollars of restricted stock units (“RSUs”), which will include piggyback registration rights and which will be subject to time-based vesting. The Equity Sign-On Incentive will vest 1/3 on the first anniversary of the applicable date of grant, 1/3 on the second anniversary of the applicable date of grant, and 1/3 on the third anniversary of the applicable date of grant, so long as Executive remains continuously employed by us through such vesting date. Vesting of the Grant will accelerate in full upon a termination by us of the recipient’s employment without cause or, following a change in control of us, by the recipient for Good Reason (Defined below).

 

2

 

 

(c) Options: Commencing in 2023, Executive may be eligible to receive stock options “Options”) under the applicable equity incentive plan of the Company as then in effect, as determined by the Compensation Committee based on Executive’s performance.

 

(d) Other Expenses: In addition to the compensation provided for above, the Company agrees to pay or to reimburse Executive during Executive’s employment for all reasonable, ordinary and necessary, properly documented, business expenses incurred in the performance of Executive’s services hereunder in accordance with Company policy in effect from time to time; provided, however, that the amount available to Executive for such travel, entertainment and other expenses may require advance approval from his Supervisor. Executive shall submit vouchers and receipts for all expenses for which reimbursement is sought.

 

(e) Paid Time Off and Paid Holidays: Executive shall accrue days of paid time off (“PTO”) annually for every year of employment, which shall expire at the end of each calendar year if unused. PTO shall accrue pro rata in the Company’s regular payroll on a calendar basis and shall be subject to the Company’s PTO policies in place from time to time and all applicable state and local law.

 

In addition to the PTO, Executive shall also be entitled to up to eight (8) paid holidays per calendar year. Executive may also be entitled to additional paid or unpaid leave under Company policy and applicable law.

 

(f) Fringe Benefits. In addition to Executive’s compensation provided by the foregoing, Executive shall be entitled to all benefits available generally to Company employees pursuant to Company programs which may now or, if not terminated, shall hereafter be in effect, or that may be established by the Company, as and to the extent any such programs are or may from time to time be in effect, as determined by the Company and the terms hereof, subject to the applicable terms and conditions of the benefit plans in effect at that time. Nothing herein shall affect the Company’s ability to modify, alter, terminate or otherwise change any benefit plan it has in effect at any given time, to the extent permitted by law.

 

(g) Reimbursements. With respect to any reimbursement of expenses of Executive, such reimbursement of expenses shall be subject to the following conditions: (i) the expenses eligible for reimbursement in one taxable year shall not affect the expenses eligible for reimbursement in any other taxable year; (ii) the reimbursement of an eligible expense shall be made no later than the end of the year after the year in which such expense was incurred; and (iii) the right to reimbursement shall not be subject to liquidation or exchange for another benefit.

 

3

 

 

5. Termination.

 

(a) Termination by Executive. Executive may terminate the employment relationship at any time by giving the Company written notice, with such termination taking effect upon written notice of the termination being provided to the Company. If Executive chooses to terminate the employment relationship other than for Good Reason (defined below), Executive will not be entitled to and shall not receive any compensation or benefits of any type following the effective date of termination, other than (i) payment of base salary through the last day of employment, (ii) payment for any accrued but unused PTO and holidays consistent with this agreement and applicable law, (iii) reimbursement for unreimbursed business expenses properly incurred by Executive, which shall be subject to and paid in accordance with the Company’s expense reimbursement policy, and (iv) any right to continued benefits required by law or under the Company’s employee benefit plans and vested as of the termination date (the “Accrued Obligations”). If Executive terminates the employment relationship for Good Reason (defined below), Executive will be entitled to the Accrued Obligations and the Termination Compensation, as applicable and described below, subject to the terms, conditions and restrictions set forth in Section 5(c)(ii).

 

(i) “Good Reason” means the occurrence of any of the following without Executive’s express written consent: (A) a material reduction in Executive’s base salary; (B) a relocation of Executive to a facility or location that is more than fifty (50) miles from Executive’s Primary Place of Employment as of the Effective Date and represents a material increase in Executive’s commuting distance; (C) a material diminution in Executive’s authority, position, duties, or responsibilities individually or taken as a whole and including any such diminution that takes place following a Change in Control; or (D) a material breach by the Company of the terms of this Agreement or any other agreement between the Company and Executive; provided, that no such event described above will constitute Good Reason unless: (x) Executive gives notice to the Company specifying the condition or event relied upon for such termination within sixty (60) days of the initial existence of such event; and (y) the Company fails to cure the condition or event constituting Good Reason within thirty (30) days following receipt of such notice (the “Cure Period”). If the Company fails to remedy the condition constituting Good Reason during the applicable Cure Period, Executive’s termination of employment must occur, if at all, within ninety (90) days following the last day of such Cure Period in order for such termination as a result of such condition to constitute a termination for Good Reason. A “Change of Control” shall be deemed to have occurred if, after the Effective Date, (i) the beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of securities representing more than 50% of the combined voting power of the Company is acquired by any “person” as defined in sections 13(d) and 14(d) of the Exchange Act (other than the Company, any subsidiary of the Company, or any trustee or other fiduciary holding securities under an employee benefit plan of the Company), (ii) the merger or consolidation of the Company with or into another corporation where the shareholders of the Company, immediately prior to the consolidation or merger, would not, immediately after the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, shares representing in the aggregate 50% or more of the combined voting power of the securities of the corporation issuing cash or securities in the consolidation or merger (or of its ultimate parent corporation, if any) in substantially the same proportion as their ownership of the Company immediately prior to such merger or consolidation, or (iii) the sale or other disposition of all or substantially all of the Company’s assets to an entity, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned directly or indirectly by shareholders of the Company, immediately prior to the sale or disposition, in substantially the same proportion as their ownership of the Company immediately prior to such sale or disposition.

 

4

 

 

(b) Termination by Company for Cause.

 

(i) At any time during the Employment Period, the Company may terminate Executive’s employment for Cause (defined below), with such termination taking effect upon the later of written notice of the termination for Cause being provided to Executive or the expiration of any applicable cure period related thereto (provided that Executive may be relieved from his duties hereunder during such cure period in the reasonable direction of the Board). If Executive’s employment is terminated for Cause, Executive will not be entitled to and shall not receive any compensation or benefits of any type following the effective date of termination, other than the Accrued Obligations, and shall forfeit the Grant and Options, whether vested or unvested.

 

(ii) “Cause” shall be defined as: (A) in connection with Executive’s services hereunder, Executive commits a material act of fraud or material act of dishonesty with respect to the Company, which act causes (or could reasonably be expected to cause) material economic or material reputational harm to the Company; (B) Executive is convicted of (or pleads guilty or nolo contendere to) a felony or a crime involving moral turpitude, which demonstrably causes material economic or material reputational harm to the Company; (C) Executive engages in negligence or willful misconduct in the performance of his duties hereunder that materially violates the Company’s policies and which misconduct causes (or could reasonably be expected to cause) material economic or material reputational harm to the Company; (D) Executive willfully refuses to follow the lawful written directions of his Supervisor, the Supervisor’s designee, or the Board; (E) Executive materially breaches any material provision of any proprietary information and inventions agreement with the Company; or (F) Executive breaches any Restrictive Covenant as defined in Section 5(c)(ii).  Notwithstanding Section 5(b)(ii)(D), if Executive refuses to follow the Company’s request that Executive work primarily or partially from the Company’s facilities or another location, such refusal will only give the Company Cause to terminate the Executive if the facilities are located 50 miles or less from Executive’s Primary Place of Employment as of the Effective Date and represents a material increase in Executive’s commuting distance. Notwithstanding anything in this Agreement or elsewhere to the contrary, if an event or occurrence that is alleged to constitute Cause is curable (as determined by the Board in good faith), the Company may terminate Executive’s employment for Cause only if (x) the Company gives Executive notice of termination prior to the termination and within thirty (30) days after the Board learns of the event or occurrence that is alleged to constitute Cause, specifying the grounds upon which Cause is alleged, (y) Executive fails to cure such grounds for Cause within thirty (30) days after Executive receives such notice, and (z) the termination occurs within sixty (60) days after such event or occurrence.  For purposes of this Agreement, no act or failure to act, on Executive’s part, will be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s action or omission was in the best interests of the Company.

 

5

 

 

(c) Termination by Company Without Cause.

 

(i) The Company may terminate Executive without Cause immediately by giving Executive written notice of such termination. Subject to the conditions set forth in Section 5(c)(ii), if Executive’s employment is terminated by the Company without Cause, in addition to the Accrued Obligations, Executive shall be entitled to (i) continued base salary for twelve (12) months following date of such termination (the “Severance Period”) paid pursuant to the Company’s normal payroll practices; and (ii) if Executive and/or Executive’s covered dependents timely elect(s) to receive health care continuation coverage pursuant to COBRA, the total monthly cost of coverage for Executive (and such covered dependents) during the Severance Period, provided, for the avoidance of doubt, that such covered dependents participated in the Company’s health plans prior to such termination, and provided, further, that if at any time the Company determines that its payment of Executive’s (or Executive’s eligible dependents’) premiums would result in a violation of law, then in lieu of providing the premiums described above, the Company will instead pay Executive a fully taxable monthly cash payment in an amount equal to the applicable premiums for such month, with such monthly payment being made on the last day of each month for the remainder of the Severance Period; and (iii) Executive shall become fully vested in the Grant or any Options. (together, the “Termination Compensation”). The Termination Compensation shall, as applicable and in each case, be subject to the terms, conditions and restrictions set forth below in Section 5(c)(ii).

 

(ii) Executive shall not be entitled to Termination Compensation unless (A) Executive complies with all surviving provisions of any non-competition agreement, non-solicitation agreement, or confidentiality agreement or invention assignment agreement signed by Executive, including those contained in this Agreement (the “Restrictive Covenants”) and (B) Executive executes and delivers to the Company, and does not revoke a separation agreement and general release in form and substance reasonably acceptable to the Company within thirty (30) days after Executive’s separation date, by which Executive releases the Company from any obligations and liabilities of any type whatsoever, except for the Company’s obligations with respect to, as applicable, the Termination Compensation (the “Release”). Such Release shall not affect Executive’s right to indemnification, if any, for actions taken within the scope of Executive’s employment. The Termination Compensation, as applicable, shall begin, or if lump-sum, be paid on the first payroll following the Release becoming irrevocable; provided, however, if the thirty (30) day period during which Executive has discretion to execute or revoke the Release straddles two taxable years of Executive, then the Company shall pay the Termination Compensation, as applicable, starting in the second of such taxable years, regardless of which taxable year Executive actually delivers the executed Release to the Company. The Parties hereto acknowledge that the Termination Compensation, as applicable, to be provided under Section 5(c)(i) is to be provided in consideration for the above-specified Release. If Executive breaches any of the Restrictive Covenants at any time during the Severance Period, (1) the Company will have no further obligation to pay Executive any unpaid Termination Compensation, as applicable, (2) Executive must repay any portion of the Termination Compensation, as applicable, already paid to him, to the extent permitted by law, and (3) the Company may take any additional action to enforce its rights under the Restrictive Covenants. Finally, if Executive becomes employed during the Severance Period, Executive will no longer be entitled to receive his continued base salary from the Company.

 

6

 

 

(iii) Disqualification for Other Severance. The Termination Compensation described in this Section 5(c) is intended to supersede any other similar compensation provided by any Company policy, plan or practice. Therefore, Executive shall be disqualified from receiving any similar compensation under any other Company severance policy, plan or practice, if any. Notwithstanding the foregoing, Executive shall continue to be eligible for any benefits pursuant to the terms of any health or retirement plan sponsored by the Company, subject to and in accordance with the terms of the applicable plan.

 

(d) Termination for Executive’s Permanent Disability. To the extent permissible under applicable law, in the event Executive becomes permanently disabled during employment with the Company, the Company may terminate this Agreement by giving thirty (30) days’ notice to Executive of its intent to terminate, and unless Executive resumes performance of the duties set forth in Section 3 within five (5) days of the date of the notice and continues performance for the remainder of the notice period, this Agreement shall terminate at the end of the thirty (30) day period. For purposes of this Agreement, “permanently disabled” shall mean if Executive is considered totally disabled under any group disability plan maintained by the Company and in effect at that time, or in the absence of any such plan, under applicable Social Security regulations, to the extent not inconsistent with applicable law. In the event of any dispute under this Section 5(d), Executive shall submit to a physical examination by a licensed physician mutually satisfactory to the Company and Executive, the cost of such examination to be paid by the Company, and the determination of such physician shall be determinative. In the event the Executive is terminated pursuant to this Section 5(d), Executive will be entitled to the Accrued Obligations and the Termination Compensation, subject to the terms, conditions and restrictions set forth in Section 5(c)(ii).

 

(e) Termination Due to Executive’s Death. This Agreement will terminate immediately upon Executive’s death and the Company shall not have any further liability or obligation to Executive, Executive’s executors, heirs, assigns or any other person claiming under or through Executive’s estate, except that Executive’s estate shall receive any Accrued Obligations. In addition, Executive’s estate shall be entitled to accelerated vesting of the portion of the Grant and Options that would have otherwise vested during the twelve (12) months period following such termination.

 

(f) Continuing Obligations. The obligations imposed on Executive with respect to non-competition, non-solicitation, confidentiality, non-disclosure and assignment of rights to inventions or developments in this Agreement or any other agreement executed by the Parties shall continue, notwithstanding the termination of the employment relationship between the Parties and regardless of the reason for such termination.

 

6. Company Property. All correspondence, records, documents, software, promotional materials, and other Company property, including all copies, which come into Executive’s possession by, through or in the course of Executive’s employment, regardless of the source and whether created by Executive, are the sole and exclusive property of the Company, and immediately upon the termination of Executive’s employment, or at any time the Company shall request, Executive shall return to the Company all such property of the Company, without retaining any copies, summaries or excerpts of any kind or in any format whatsoever. Executive shall not destroy any Company property, such as by deleting electronic mail or other files, other than in the normal course of Executive’s employment. Executive further agrees that should Executive discover any Company property or Confidential Information in Executive’s possession after the return of such property has been requested, Executive agrees to return it promptly to Company without retaining copies, summaries or excerpts of any kind or in any format whatsoever.

 

7

 

 

7. Non-Competition and Non-Solicitation.

 

(a) Executive agrees and acknowledges that for one (1) year period following the end of Executive’s employment for any reason, Executive shall not, either on Executive’s own behalf or on behalf of any third party (A) directly or indirectly hire any employee, independent contractor, or consultant or any person who was an employee, independent contractor, or consultant of the Company within the preceding six (6) months, or (B) directly or indirectly encourage, induce, attempt to induce, solicit or attempt to solicit (on Executive’s own behalf or on behalf of any other business, enterprise, or individual) any employee, independent contractor, or consultant to leave or curtail his or her employment or engagement with the Company or any of its affiliates; provided, however, that notwithstanding the foregoing, this Section 7(a) shall not prevent Executive from undertaking general solicitations of employment not targeted at employees, independent contractors, or consultants of the Company or any of its affiliates (so long as Executive does not, directly or indirectly, hire any such employee, independent contractor, or consultant).

 

(b) The Parties agree that the relevant public policy aspects of post-employment restrictive covenants have been discussed, and that every effort has been made to limit the restrictions placed upon Executive to those that are reasonable and necessary to protect the Company’s legitimate interests. Executive acknowledges that, based upon Executive’s education, experience, and training, the restrictions set forth in this Section 7 will not prevent Executive from earning a livelihood and supporting Executive and Executive’s family during the relevant time period. Executive further acknowledges that, because the Company markets its products and services throughout the Restricted Territory, a more narrow geographic limitation on the restrictive covenants set forth above would not adequately protect the Company’s legitimate business interests.

 

(c) If any restriction set forth in this Section 7 is found by any court of competent jurisdiction or arbitrator to be unenforceable because it extends for too long a period of time or over too great a range of activities or geographic area, it shall be interpreted to extend over the maximum period of time, range of activities or geographic area as to which it may be enforceable.

 

(d) The restrictions contained in Section 7 are necessary for the protection of the business and goodwill of the Company and/or its affiliates and are considered by Executive to be reasonable for such purposes. Executive agrees that any material breach of Section 7 will result in irreparable harm and damage to the Company and/or its affiliates that cannot be adequately compensated by a monetary award. Accordingly, it is expressly agreed that in addition to all other remedies available at law or in equity (including, without limitation, money damages from Executive), the Company and/or such affiliate shall be entitled to a temporary restraining order, preliminary injunction or such other form of injunctive or equitable relief as may be issued by any court of competent jurisdiction or arbitrator to restrain or enjoin Executive from breaching any such covenant or provision or to specifically enforce the provisions hereof, without the need to post any bond or other security.

 

8

 

 

(e) The existence of a claim, charge, or cause of action by Executive against the Company shall not constitute a defense to the enforcement by the Company of the foregoing restrictive covenants.

 

(f) The provisions of this Section 7 shall apply regardless of the reason for the termination of Executive’s employment.

 

8. Non-Circumvention/Non-Interference. Executive acknowledges and agrees that during the Employment Period, other than acting on behalf of the Company in his capacity as an employee of the Company, Executive shall not, and shall not authorize or permit any of Executive’s Representatives to, directly or indirectly, interfere, discuss, contact, initiate, or engage, encourage, solicit, initiate, facilitate or continue inquiries to any third parties concerning any business opportunities related to the Company. It is understood that, during the Employment Period, without previous written consent from the Company, the Executive will not enter, either directly or indirectly, into any discussions, solicit or accept offers, enter into any agreements, conduct negotiations with or otherwise engage in any other independent communications unrelated to the Company’s business with: any third party to whom Executive was introduced to by any member, shareholder, officer, director, employee, agent, customer, supplier, vendor, or other representative of the Company, Factor Bioscience, or Novellus, Inc.; any third party to whom Executive was informed of by any member, shareholder, officer, director, employee, agent, customer, supplier, vendor, or other representative of Company, Factor Bioscience, or Novellus, Inc. or any employee, financial partner, investor, contractor of the Company. For purposes of this Agreement, “Representatives” means, as to Company, its affiliates, and respective consultants (including attorneys, financial advisors and accountants). Further, after termination of Executive’s employment with the Company, Executive will not take any action or omit to take an action intended to interfere with existing contractual and or business relationships with the Company in a manner prohibited by law.

 

9. Protection of Confidential Information.

 

(a) Executive agrees that all information, whether or not in writing, relating to the business, technical or financial affairs of the Company and that is generally understood in the industry as being confidential and/or proprietary information, is the exclusive property of the Company. Executive agrees to hold in a fiduciary capacity for the sole benefit of the Company all secret, confidential and/or proprietary information, knowledge, and data, including trade secrets, relating to the Company or any of its affiliates obtained during Executive’s employment with the Company or any of its predecessors or affiliates, including but not limited to any trade secrets, confidential or secret designs, website technologies, content, processes, formulae, plans, manuals, devices, machines, know-how (including without limitation the manufacturing of IRX-2), methods, compositions, ideas, improvements, financial and marketing information, costs, pricing, sales, sales volume, salaries, methods and proposals, customer and prospective customer lists, customer identities, customer volume, or customer contact information, identity of key personnel in the employ of customers and prospective customers, amount or kind of customer’s purchases from the Companies or their affiliates, manufacturer lists, manufacturer identities, manufacturer volume, or manufacturer contact information, identity of key personnel in the employ of manufacturers, amount or kind of the Companies’ or their affiliates’ purchases from manufacturers, system documentation, hardware, engineering and configuration information, computer programs, source and object codes (whether or not patented, patentable, copyrighted or copyrightable), related software development information, inventions or other confidential or proprietary information (including without limitation information relating to IRX-2 and its intellectual property that has not yet issued) belonging to the Companies or their affiliates or directly or indirectly relating to the Companies’ or their affiliates’ business and affairs (“Confidential Information”). Executive agrees that Executive will not at any time, either during the Employment Period or the Confidentiality Period (as defined below), disclose to anyone any Confidential Information, or utilize such Confidential Information for Executive’s own benefit, or for the benefit of third parties without written approval by an officer of the Company. For purposes of this section, the “Confidentiality Period” means so long as such information, data, or material remains confidential. Executive further agrees that all memoranda, notes, records, data, schematics, sketches, computer programs, prototypes, or written, photographic, magnetic or other documents or tangible objects compiled by Executive or made available to Executive during the Employment Period concerning the business of the Company and/or its clients, including any copies of such materials, shall be the property of the Company and shall be delivered to the Company on the termination of Executive’s employment, or at any other time upon request of the Company.

 

9

 

 

(b) In the event Executive is questioned by anyone not employed by the Company or by an employee of or a consultant to the Company not authorized to receive such information, in regard to any Confidential Information or any other secret or confidential work of the Company, or concerning any fact or circumstance relating thereto, or in the event that Executive becomes aware of the unauthorized use of Confidential Information by any party, whether competitive with the Company or not, Executive will promptly notify an executive officer of the Company.

 

(c) Court-Ordered Disclosure. In the event that, at any time during Executive’s employment with the Company or at any time thereafter, Executive receives a request to disclose any Confidential Information under the terms of a subpoena or order issued by a court or by a governmental body, Executive agrees to notify the Company immediately of the existence, terms, and circumstances surrounding such request, to consult with the Company on the advisability of taking legally available steps to resist or narrow such request; and, if disclosure of such Confidential Information is required to prevent Executive from being held in contempt or subject to other penalty, to furnish only such portion of the Confidential Information as, in the written opinion of counsel satisfactory to the Company, Executive is legally compelled to disclose, and to exercise Executive’s best efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to the disclosed Confidential Information.

 

(d) Defend Trade Secrets Act. Pursuant to the Defend Trade Secrets Act of 2016, Executive acknowledges that Executive shall not have criminal or civil liability under any federal or state trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, if Executive files a demand for arbitration alleging retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney and may use the trade secret information in the arbitration proceeding, if Executive (X) files any document containing the trade secret under seal and (Y) does not disclose the trade secret, except pursuant to an order of the arbitrator.

 

10

 

 

10. Intellectual Property.

 

(a) Disclosure of Inventions. Executive will promptly disclose in confidence to the Company all inventions, improvements, processes, products, designs, original works of authorship, formulas, processes, compositions of matter, computer software programs, Internet products and services, e-commerce products and services, e-entertainment products and services, databases, mask works, trade secrets, product improvements, product ideas, new products, discoveries, methods, software, uniform resource locators or proposed uniform resource locators (“URLs”), domain names or proposed domain names, any trade names, trademarks or slogans, which may or may not be subject to or able to be patented, copyrighted, registered, or otherwise protected by law (the “Inventions”) that Executive makes, conceives or first reduces to practice or creates, either alone or jointly with others, during the Employment Period, whether or not in the course of Executive’s employment (i) that result from any work performed by the Executive for the Company; (ii) that are developed from using the Company’s equipment, supplies, facilities or trade secret information; or (iii) that relate at the time of conception or reduction to practice of the invention to the Company’s business, or actual or demonstrably anticipated research or development of the Company. 

 

(b) Assignment of Company Inventions; Work for Hire. Executive agrees that all Inventions that (i) are developed using equipment, supplies, facilities or trade secrets of the Company, (ii) result from work performed by Executive for the Company, or (iii) relate to the Company’s business or current or anticipated research and development (the “Company Inventions”), will be the sole and exclusive property of the Company and the Executive hereby agrees to irrevocably assign to the Company any such Company Inventions.  Executive further acknowledges and agrees that any copyrightable works prepared by Executive within the scope of Executive’s employment are “works for hire” under the Copyright Act and that the Company will be considered the author and owner of such copyrightable works from the moment of their creation and fixation in tangible media.

 

(c) Assignment of Other Rights. In addition to the foregoing assignment of Company Inventions to the Company, Executive hereby irrevocably transfers and assigns to the Company: (i) all worldwide patents, patent applications, copyrights, mask works, trade secrets and other intellectual property rights in any Company Invention; and (ii) any and all “Moral Rights” (as defined below) that Executive may have in or with respect to any Company Invention. Executive also hereby forever waives and agrees never to assert any and all Moral Rights Executive may have in or with respect to any Company Invention, even after termination of Executive’s work on behalf of the Company. “Moral Rights” means any rights to claim authorship of an Company Invention, to object to or prevent the modification of any Company Invention, or to withdraw from circulation or control the publication or distribution of any Company Invention, and any similar right, existing under judicial or statutory law of any country in the world, or under any treaty, regardless of whether or not such right is denominated or generally referred to as a “moral right.”

 

11

 

 

(d) Assistance. Executive agrees to assist the Company in every proper way to obtain for the Company and enforce patents, copyrights, mask work rights, trade secret rights and other legal protections for the Company Inventions in any and all countries. Executive will execute any documents that the Company may reasonably request for use in obtaining or enforcing such patents, copyrights, mask work rights, trade secrets and other legal protections. Executive’s obligations under this section will continue beyond the termination of Executive’s employment with the Company, provided that the Company will compensate Executive at a reasonable rate after such termination for time or expenses actually spent by Executive at the Company’s request on such assistance. Executive appoints the Secretary of the Company as Executive’s attorney-in-fact to execute documents on Executive’s behalf for this purpose.

 

11. Publicity; Non-disparagement. Neither Party shall issue, without consent of the other Party, any press release or make any public announcement with respect to this Agreement or the employment relationship between them, or the ending of such relationship. Following the date of this Agreement and regardless of any dispute that may arise in the future, Executive agrees that Executive will not disparage, criticize or make statements which are negative, detrimental or injurious to Company or any of its affiliates, or any of their affiliates to any individual, company or client, including within the Company. This Section 11 does not, in any way, restrict or impede the parties hereto from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order. Nothing contained herein shall prevent Executive from providing true testimony to the extent required within any legal proceeding (or in any discovery in connection therewith) or investigation by a governmental authority.

 

12. Binding Agreement. This Agreement shall be binding upon and inure to the benefit of the Parties hereto, their heirs, personal representatives, successors and assigns. Executive acknowledges and agrees that the Company may, in its sole discretion, assign this Agreement (i) to an affiliate of the Company at any time, or (ii) in the event the Company is acquired, is a non-surviving party in a merger, or transfers substantially all of its assets, to the transferee or surviving company, in each case without being required to obtain Executive’s consent. The Parties understand that the obligations of Executive are personal and may not be assigned by him.

 

13. Entire Agreement. This Agreement contains the entire understanding of Executive and the Company with respect to employment of Executive. This Agreement may not be amended, waived, discharged or terminated orally, but only by an instrument in writing, specifically identified as an amendment to this Agreement, and signed by all Parties. By entering into this Agreement, Executive certifies and acknowledges that Executive has carefully read all of the provisions of this Agreement and that Executive voluntarily and knowingly enters into said Agreement.

 

12

 

 

14. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be deemed severable from the remainder of this Agreement, and the remaining provisions contained in this Agreement shall be construed to preserve to the maximum permissible extent the intent and purposes of this Agreement.

 

15. Tax Consequences. If any payment or benefit the Executive would receive pursuant to this Agreement (“Payment”) would (a) constitute a “Parachute Payment” within the meaning of Section 280G of the Code, and (b) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (i) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (ii) the largest portion, up to and including the total of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Executive’s receipt, on an after-tax basis, of the greatest economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting Parachute Payments is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the manner that results in the greatest economic benefit for Executive to the extent permitted by Section 409A of the Code, to the extent applicable, and Section 280G of the Code. Except as otherwise specifically provided in this Agreement, the Company will have no obligation to any person entitled to the benefits of this Agreement with respect to any tax obligation any such person incurs as a result of or attributable to this Agreement, including all supplemental agreements and employee benefits plans incorporated by reference therein, or arising from any payments made or to be made under this Agreement or thereunder. All determinations under this Section 15 will be made by an actuarial firm, accounting firm, law firm, or consulting firm experienced and generally recognized in 280G matters (the “280G Firm”) that is chosen by the Company prior to a change in ownership or control of a corporation (within the meaning of Treasury regulations under Section 280G of the Code). The 280G Firm shall be required to evaluate the extent to which payments are exempt from Section 280G as reasonable compensation for services rendered before or after the Change in Control. All fees and expenses of the 280G Firm shall be paid solely by the Company or its successor. The Company and Executive shall furnish the tax firm such information and documents as the tax firm may reasonably request in order to make its required determination. The 280G Firm will provide its calculations, together with detailed supporting documentation, to the Company and Executive as soon as practicable following its engagement. Any good faith determinations of the 280G Firm made hereunder will be final, binding and conclusive upon the Company and Executive.

 

16. Withholding. The Company shall have the right to withhold from any amount payable hereunder any federal, state, local and foreign taxes in order for the Company to satisfy any withholding tax obligation it may have under any applicable law or regulation. Notwithstanding any other provision of this Agreement, the Company does not guarantee any particular tax result for Executive with respect to any payment provided to Executive hereunder, and Executive shall be solely responsible for any taxes imposed on Executive with respect to any such payment.

 

13

 

 

17. Section 409A.

 

(a) This Agreement is intended to comply with, or otherwise be exempt from, Section 409A of the Code and any regulations and Treasury guidance promulgated thereunder (“Section 409A of the Code”) and shall be construed and administered in accordance with such intent. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A of the Code or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A of the Code either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A of the Code to the maximum extent possible. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Executive on account of non-compliance with Section 409A of the Code.

 

(b) For purposes of Section 409A of the Code, the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. In no event may Executive, directly or indirectly, designate the calendar year of payment.

 

(c) With respect to any reimbursement of expenses of, or any provision of in-kind benefits to, Executive, as specified under this Agreement, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (1) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year, except for any medical reimbursement arrangement providing for the reimbursement of expenses referred to in Section 105(b) of the Code; (2) the reimbursement of an eligible expense shall be made no later than the end of the year after the year in which such expense was incurred; and (3) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.

 

(d) “Termination of employment,” “resignation,” or words of similar import, as used in this Agreement means, for purposes of any payments under this Agreement that are payments of deferred compensation subject to Section 409A of the Code, Executive’s “separation from service” as defined in Section 409A of the Code.

 

(e) If a payment obligation under this Agreement arises on account of Executive’s separation from service while Executive is a “specified employee” (as defined under Section 409A of the Code and determined in good faith by the Company), any payment of “deferred compensation” (as defined under Treasury Regulation Section 1.409A-1(b)(1), after giving effect to the exemptions in Treasury Regulation Sections 1.409A-1(b)(3) through (b)(12)) that is scheduled to be paid within six (6) months after such separation from service shall accrue without interest and shall be paid within fifteen (15) days after the end of the six-month period beginning on the date of such separation from service or, if earlier, within fifteen (15) days after the appointment of the personal representative or executor of Executive’s estate following Executive’s death.

 

14

 

 

18. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the state of Texas, without giving effect to the principles of conflicts of law thereof.

 

19. Notices. Any notice provided for in this Agreement shall be provided in writing. Notices shall be effective from the date of service, if served personally on the Party to whom notice is to be given, or on the second day after mailing, if mailed by first class mail, postage prepaid. Notices shall be properly addressed to the Parties at their respective addresses or to such other address as either Party may later specify by notice to the other.

 

20. Dispute Resolution.

 

(a) Executive and the Company mutually agree that any controversy or claim arising out of or relating to this Agreement or the employment relationship between Executive and the Company, including any dispute regarding the scope or enforceability of this arbitration provision, shall be settled by individual arbitration administered by Judicial Arbitration and Mediation Services (JAMS) in accordance with the JAMS Employment Arbitration Rules and Procedures in effect as of the date of this Agreement (“JAMS Rules”), to the extent the JAMS Rules are consistent with the terms of this provision. Judgment on the award may be entered in any court having jurisdiction thereof. The parties also mutually agree that, except as otherwise required by enforceable law, arbitration shall be the sole and exclusive forum for resolving such disputes (including any dispute with the Company, any related parties, and any of their respective employees, officers, owners or agents, who shall be third-party beneficiaries of this provision), and both parties agree that they are hereby waiving any right to have their disputes resolved in civil litigation by a court or jury trial, including but not limited to any disputes arising under statutes such as Title VII of the Civil Rights Act or the Age Discrimination in Employment Act. The arbitrator’s decisions on such matters shall be final and binding on the parties to the fullest extent permitted by law. The JAMS Rules are incorporated herein by reference, to the extent they are consistent with the terms of this provision, and may be found at available at https://www.jamsadr.com/rules-employment-arbitration/. The place of arbitration shall be in Houston, Harris County, Texas or an alternate location selected by the parties. Any arbitration hereunder shall be conducted only on an individual basis and not in a class, consolidated, or representative action. The Company shall pay the administrative costs and fees directly related to the arbitration, including the fees of the arbitrator. Each party shall otherwise bear its own respective attorneys’ fees and costs, including the costs of any depositions or for expert witnesses, unless any applicable law provides otherwise to the prevailing party, in which case the arbitrator shall have the authority to award costs and attorneys’ fees to the prevailing party in accordance with the applicable law. Neither a party nor the arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both parties, unless otherwise provided by law. The parties’ agreement to arbitrate does not apply to claims that, pursuant to applicable law, cannot be subject to mandatory arbitration, including claims under the Private Attorney General Act; provided that, in the event of a dispute regarding whether, or the extent to which, any dispute is subject to arbitration, the parties agree that no underlying dispute or any facts regarding such dispute shall be submitted to a court until and unless a declaratory judgment is issued by the duly appointed arbitrator that allows a dispute to proceed in court based on a claim by a party that this arbitration provision is unenforceable as a matter of law as to an asserted claim. Moreover, nothing in this Agreement prevents Executive from filing or prosecuting a charge with any government agency (such as the Equal Employment Opportunity Commission) over which such agency has jurisdiction, or from participating in an investigation or proceeding conducted by any such agency. Any matter required to be arbitrated under this Section 20 shall be submitted to mediation in a manner agreed to by Executive and the Company. Executive and the Company agree to use mediation to attempt to resolve any such matter prior to filing for arbitration. Executive and the Company will select a mediator agreeable to both parties. The costs of the mediation and fees of the mediator will be borne entirely by the Company.

 

15

 

 

By agreeing to arbitration, the parties acknowledge that they waive the right to bring and/or participate in any class or collective action. The arbitrator shall have no power to arbitrate any class and/or collective claims. BY AGREEING TO ARBITRATION, THE PARTIES ACKNOWLEDGE THAT THEY ARE WAIVING THEIR STATUTORY AND COMMON LAW RIGHTS TO SEEK RELIEF IN A COURT OF LAW AND ARE WAIVING THEIR RIGHTS TO A TRIAL BY JURY.

 

(b) Notwithstanding the provisions of Section 20(a), the Parties further acknowledge and agree that, due to the nature of the confidential information, trade secrets, and intellectual property belonging to the Company to which Executive has or will be given access, and the likelihood of significant harm that the Company would suffer in the event that such information was disclosed to third parties, the Company shall have the right to file suit in a court of competent jurisdiction to seek injunctive relief to prevent Executive from violating the obligations established in Sections 7, 8, 9 or 10 of this Agreement without first submitting the claim, controversy, or dispute to JAMS mediation or arbitration.

 

21. Indemnification. The Company shall indemnify and hold harmless Executive for any liability to any third-party incurred by reason of any act or omission performed by Executive while acting in good faith on behalf of the Company and within the scope of the authority of Executive pursuant to this Agreement and under the rules and policies of the Company, except that Executive must have in good faith believed that such action was in the best interest of the Company and such course of action or inaction must not have constituted gross negligence, fraud, willful misconduct, or breach of a fiduciary duty.

 

22. Miscellaneous.

 

(a) Compensation Recovery Policy. Executive acknowledges and agrees that, to the extent the Company adopts any claw-back or similar policy pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act or otherwise, and any rules and regulations promulgated thereunder, he or she shall take all action necessary or appropriate to comply with such policy (including, without limitation, entering into any further agreements, amendments or policies necessary or appropriate to implement and/or enforce such policy with respect to past, present and future compensation, as appropriate).

 

(b) No delay or omission by the Company in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.

 

(c) The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement.

 

(d) The language in all parts of this Agreement will be construed, in all cases, according to its fair meaning, and not for or against either Party hereto. The Parties acknowledge that each Party and its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Party will not be employed in the interpretation of this Agreement.

 

(e) The obligations of Company under this Agreement, including its obligation to pay the compensation provided for in this Agreement, are contingent upon Executive’s performance of Executive’s obligations under this Agreement.

 

(f) This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which shall constitute one agreement.

 

(g) The Parties agree that the digital signatures of the parties included in this Agreement are intended to authenticate this writing and to have the same force and effect as the use of manual signatures.

 

16

 

 

IN WITNESS WHEREOF, Executive and the undersigned duly authorized representative of the Company have executed this Agreement as of the date first written below.

 

	EXECUTIVE
	/s/ Dante Caravaggio
	Dante Caravaggio
	HNR ACQUISTION CORP
	By:	/s/ Mitchell B. Trotter
		Mitchell B. Trotter, Chief Financial Officer

 

[Signature Page to Executive Employment Agreement]

 

 

17

Exhibit 99.1

 

HNR Acquisition Corp Names

Dante Caravaggio Chief Executive Officer, President

and Member of the Board of Directors

 

HOUSTON, TX / December 20, 2023 / HNR Acquisition Corp (NYSE American: HNRA) (the “Company” or “HNRA”) is an independent oil and natural gas company focused on the acquisition, development, exploration and production of oil and gas properties in the Permian Basin. The Company’s assets include its interest in the Grayburg-Jackson oil field in the prolific Permian Basin in Eddy County, New Mexico.

 

Today, HNRA announced that Dante Caravaggio has been named Chief Executive Officer and will join the Company’s Board of Directors. In connection with the appointment of Mr. Caravaggio as Chief Executive Officer and member of the Company’s Board of Directors, Diego (Dean) Rojas resigned as the Company’s Chief Executive Officer, President and member of the Board of Directors.

 

Mr. Caravaggio is a proven, results-driven executive with experience at large cap public companies focused on energy market growth strategies. He brings a petroleum industry background with an emphasis on secondary recovery methods to HNRA, including waterflood reservoir engineering and project management. His collaborative management style embraces stakeholders at all levels and addresses community and regulatory needs.

 

“We appreciate the tremendous efforts by Dean Rojas to achieve DeSPAC when most other SPACs were liquidating,” said Joseph V. Salvucci, Sr., Chairman of the Board. “Dante Caravaggio brings executive public and private company experience delivering high growth in the energy space.” Since October 2021, Mr. Caravaggio has led HNRA’s target search to find the right foundational acquisition that would deliver solid predictable returns.

 

Prior to joining HNRA, Mr. Caravaggio served as an executive on the leadership teams at KBR (US), Parsons Corporation, and Jacobs Engineering. He began his career as a project manager leading billion-dollar upstream and downstream hydrocarbon projects for Shell, Aramco, BP, Chevron, Kuwait Oil Company and Yukong in the USA, Saudi Arabia, Kuwait, South Korea, and the Philippines. Mr. Caravaggio received his MBA at Pepperdine University in Malibu, CA and his BS and MS in Petroleum Engineering at the University of Southern California.

 

“I look forward to working with the HNRA team and stakeholders to deliver on all our promises,” said Mr. Caravaggio.

 

 

 

 

About HNR Acquisition Corp

 

HNRA is a publicly traded energy company traded on the NYSE American exchange. The company successfully completed its initial business combination on November 15, 2023. HNRA’s operating subsidiary, LH Operating, LLC, operates 550 oil and gas wells on 13,700 contiguous acres within the Permian Basin in New Mexico. HNRA’s stock trades on the NYSE American Stock Exchange.

 

For more information on HNRA, the acquisition and the transaction, please visit the Company website: https://www.hnra-nyse.com/

 

Forward-Looking Statements

 

This press release includes “forward-looking statements” that involve risks and uncertainties that could cause actual results to differ materially from what is expected. Words such as “expects,” “believes,” “anticipates,” “intends,” “estimates,” “seeks,” “may,” “might,” “plan,” “possible,” “should” and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Such forward-looking statements relate to future events or future results, based on currently available information and reflect the Company’s management’s current beliefs. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements. Important factors - including the availability of funds, the results of financing efforts and the risks relating to our business - that could cause actual results to differ materially from the Company’s expectations are disclosed in the Company’s documents filed from time to time on EDGAR (see www.edgar-online.com) and with the Securities and Exchange Commission (see www.sec.gov). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

 

Investor Relations

 

Michael J. Porter, President

PORTER, LEVAY & ROSE, INC.

[e-mail]

 

 

 

 

Cover	Dec. 17, 2023
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 17, 2023
Entity File Number	001-41278
Entity Registrant Name	HNR ACQUISITION CORP.
Entity Central Index Key	0001842556
Entity Tax Identification Number	85-4359124
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	3730 Kirby Drive
Entity Address, Address Line Two	Suite 1200
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77098
City Area Code	713
Local Phone Number	834-1145
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Class A Common stock, par value $0.0001 per share
Title of 12(b) Security	Class A Common stock, par value $0.0001 per share
Trading Symbol	HNRA
Security Exchange Name	NYSEAMER
Redeemable warrants, exercisable for three quarters of one share of Class A Common Stock at an exercise price of $11.50 per share
Title of 12(b) Security	Redeemable warrants, exercisable for three quarters of one share of Class A Common Stock at an exercise price of $11.50 per share
Trading Symbol	HNRAW
Security Exchange Name	NYSEAMER

---