Attached files

file filename
EXCEL - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.Financial_Report.xls
10-K - FORM 10-K - Petron Energy II, Inc.tenk.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R2.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R9.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R1.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R6.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R4.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R8.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R5.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R7.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R3.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R11.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R14.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R15.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R18.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R16.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R17.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R10.htm
XML - IDEA: XBRL DOCUMENT - Petron Energy II, Inc.R13.htm
EX-31 - EXHIBIT 31 - Petron Energy II, Inc.exhibit31.htm
EX-32 - EXHBIT 32 - Petron Energy II, Inc.exhibit32.htm
v2.4.0.6
RELATED PARTY TRANSACTIONS
12 Months Ended
Dec. 31, 2011
Notes to Financial Statements  
NOTE 6 - RELATED PARTY TRANSACTIONS

Petron Energy, Inc. is a company controlled by the Company’s majority shareholder.  In 2011 and 2010, the Company paid Petron Energy, Inc. $312,510 and $196,575, respectively.  These amounts have been reflected in the accompanying consolidated financial statement as charges from a related party and are included in general and administrative expenses for the respective years.

 

Effective August 31, 2011, the Company entered into an Executive Employment Agreement with Floyd L. Smith.  Pursuant to the employment agreement, Mr. Smith agreed to serve as President and Chief Executive Officer of the Company for a term of five years, renewable thereafter for additional one year periods if not terminated by either party.  The employment agreement provides for Mr. Smith to receive a salary of $200,000 per year; reimbursement for reasonable business expenses; the ability to earn a yearly bonus in the sole discretion of the Board of Directors of the Company; co-investment rights, providing Mr. Smith the right to participate in the amount of up to 20% of any acquisition, transaction or funding undertaken by the Company during the term of the employment agreement; stock options to purchase 12,000,000 shares of the Company’s common stock at an exercise price of $0.0039 per share, with cashless exercise rights and a five year term, which vested immediately upon the parties’ entry into the employment agreement; and 1,000 shares of Series A Preferred Stock which give Mr. Smith Super Majority Voting Rights.

 

The employment agreement includes a non-competition provision, prohibiting Mr. Smith from competing against the Company in Texas, Louisiana, Oklahoma or New Mexico for a term of 12 months following the termination of the employment agreement.

 

The employment agreement can be terminated by the Company for cause (as defined in the agreement), without cause, or by Mr. Smith for good reason (as defined in the agreement) or without good reason.  If the employment agreement is terminated due to Mr. Smith’s death, disability, with cause by the Company or without good reason by Mr. Smith, he is due the consideration earned by him up until the date of termination of the agreement.  If the employment agreement is terminated by the Company without cause or by Mr. Smith for good reason, Mr. Smith is due the consideration earned by him up until the date of termination, plus the lesser of six months of salary due to Mr. Smith under the employment agreement and the remaining amount of consideration due pursuant to the terms of the employment agreement in a lump sum.

 

Mr. Smith also agreed to assign the Company rights to any intellectual property and inventions which he creates or conceives during the term of the employment agreement relating to the Company’s business pursuant to the employment agreement.