CONSULTING AGREEMENT
--------------------
AGREEMENT effective as of the 1st of June, 2002, by and between GulfWest
Energy Inc., hereinafter called the Employer, and Xxxxxxxx X. Xxxxx III,
hereinafter called the Consultant.
1. Employment. Employer hereby employs the Consultant and the Consultant
hereby accepts employment upon the terms and conditions hereinafter set forth.
2. Term. Subject to the provisions for termination as hereinafter provided,
the term of this Agreement shall be for a period commencing on the 1st day of
June, 2002 and ending the 30th day of September, 2004.
3. Compensation. For all services rendered by the Consultant under this
Agreement, the Employer shall pay the Consultant $150,000 annually, increasing
as deemed appropriate by the Employer's compensation committee. Also, the
Consultant will receive $25,000 annual contribution to a life insurance account
and this will be paid monthly, beginning June 1, 2002.
4. Stock Options/Warrants. The Consultant will be awarded stock
options/warrants based upon performance and with the approval of the Employer's
Board of Directors.
5. Medical Insurance. The Consultant shall be entitled to coverage pursuant
to the terms and provisions of Employer's Medical/Hospitalization insurance
coverage and such other prerequisites as are generally available to Employees of
the Employer.
6. Duties. The Consultant is engaged by the Employer to provide the
following services:
a. Acquisitions: Contact professionals in the oil and gas business on
behalf of Employer, seeking oil and gas properties and drilling
opportunities for Employer to acquire.
b. Negotiations: Under terms approved by Employer, negotiate
acquisitions as required in order to define terms of a pending acquisition,
without committing the Employer to any deal, fee or other commitment of any
kind without first obtaining the approval of the Employer's Board of
Directors.
c. Financial Consulting: Work with Employer's representatives and
Board of Directors to review debt and equity financing proposals; negotiate
with Employer on terms of specific, potential financing; and, advise
Employer on such financial arrangements, as Employer deems appropriate.
d. The precise services of the Consultant may be specified or changed
from time to time at the direction of the Board of Directors of Employer.
7. Extent of Services. The Consultant shall devote as much of his time,
attention and energies to the business of the Employer as shall be necessary in
the reasonable determination of the Board of Directors of Employer, to carry out
the duties and responsibilities delegated to Consultant by Employer, but
Consultant shall not be precluded from engaging in other business activities so
long as such additional business activities do not, in the reasonable
determination of the Board of Directors of Employer, conflict with the interests
of Employer, whether or not such business activity is pursued for gain, profit
or other pecuniary advantages.
8. Disclosure of Information. Consultant will make no unauthorized
disclosure of any Employer's trade secrets or confidential information, the
disclosure of which would be detrimental to Employer. In the event of a breach
or threatened breach by the Consultant of the provisions of this paragraph, the
Employer shall be entitled to an injunction restraining the Consultant from
disclosing such information, in whole or in part, or from rendering any services
to any person, firm, corporation, association or other entity to whom such
information, in whole or in part, has been disclosed or is threatened to be
disclosed. Nothing herein shall be construed as prohibiting the Employer from
pursuing any other remedies available to the Employer for such breach or
threatened breach, including the recovery of damages from the Consultant.
9. Expenses. The Consultant is authorized to incur reasonable expenses for
promoting the business of the Employer, including an automobile allowance,
entertainment, travel and similar items. The Employer will reimburse the
Consultant for all such expenses upon the presentation by the Consultant, from
time to time, of an itemized account of such expenditures and its approval by
the Employer.
10. Vacations. Not applicable.
11. Disability. If the Consultant is unable to perform his services by
reason of illness or incapacity for a continuous period of more than three
months, the compensation otherwise payable to him shall cease during the
continued period of such illness or incapacity. The Consultant's full
compensation shall be reinstated upon his return and the discharge of his full
duties hereunder. Notwithstanding anything herein to the contrary, the Employer
may terminate this Agreement at any time after the Consultant shall be absent
from his employment, for whatever cause, for a continuous period of more than
three months, and all obligation of the Employer hereunder shall cease upon any
such termination.
12. Death During Employment. If the Consultant dies during the term of his
employment, the Employer shall pay to the estate of the Consultant the
compensation which would otherwise be payable to the Consultant up to the end of
the month in which the Consultant's death occurs.
13. Notices. Any notice of termination of the Agreement shall be sufficient
if in writing, and if sent by certified mail to his residence in the case of the
Consultant, or to its principal offices in the case of the Employer.
14. Termination. The Employer shall have the right to terminate the
employment of Consultant at any time for cause. As used herein, the term "Cause"
is defined to mean (a) willful action intended by the Consultant to adversely
impact the Employer or (b) the conviction of Consultant of a felony. Consultant
may terminate this agreement at any time by the giving of ninety (90) days'
prior written notice to Employer, in which case Employer shall be obligated to
pay Consultant all compensation accrued through the effective date of the
termination of the employment, after which neither party shall have any further
rights or obligations except the obligation of Consultant described in paragraph
7 and 13 hereof.
15. Waiver of Breach. The waiver by the Employer of a breach of any
provision of this Agreement by the Consultant shall not operate or be construed
as a waiver of any subsequent breach by the Consultant.
16. Assignment. The rights and obligations of the Consultant under this
Agreement shall not be assignable without the prior written consent of the
Employer, which consent may be withheld at the discretion of the Employer.
17. Attorney's Fees. If either party hereto is required to retain the
services of legal counsel to enforce its rights hereunder, the party prevailing
in any such proceeding shall be entitled to reimbursement of its reasonable
legal expenses incurred.
18. Additional Compensation to Consultant in the Event of the Change of
Control of the Board of Directors of Employer. In the event of a change of
control, the Consultant will have the option to continue as a Consultant of the
Company under the terms of the Agreement or receive a lump-sum cash severance
payment equal to 200% of his annual fee for the year following the change of
control, it being understood by Employer that Consultant would not otherwise
commit to provide his services to Employer upon the Terms and conditions set
forth herein. Such additional sums shall be paid to Consultant within fifteen
(15) business days from the written demand therefor by Consultant. Any stock
options or warrants held by the Consultant will become vested in the Event of a
Change of Control and will remain valid for their duration.
A "change of control" is defined as: (i) an acquisition (other than from
the Company) by an individual, entity or a group (excluding the Company, its
subsidiaries, a related Consultant benefit plan or a corporation the voting
stock of which is beneficially owned following such acquisition 50% or more by
the Company's stockholders in substantially the same proportions as their
holdings in the Company prior to such acquisition) of beneficial ownership of
50% or more of the Company's voting stock; (ii) a change in a majority of the
Board of Directors (excluding any persons approved by a vote of at least a
majority of the incumbent Board other than in connection with a proxy contest);
(iii) the approval by the stockholders of a reorganization, merger or
consolidation (other than a reorganization, merger or consolidation in which all
or substantially all of the stockholders of the Company receive 50% or more of
the voting stock of the surviving company); or (iv) a complete liquidation or
dissolution of the Company or the sale of all, or substantially all, of its
assets.
19. Entire Agreement. This instrument contains the entire agreement of the
parties. It may not be changed orally but only by an agreement in writing signed
by the party against whom enforcement or any waiver, change, modification or
discharge is sought.
IN WITNESS WHEREOF, the parties have executed this Agreement the 30the day
of May, 2002, but effective the 1st day of June, 2002.
EMPLOYER:
GULFWEST ENERGY INC.
By: \s\ Xxxx X. Xxxxx
---------------------------------------------
Xxxx X. Xxxxx
On behalf of the Compensation Committee of
the Board of Directors
GULFWEST ENERGY INC.
By: \s\ Xxxxxx X.Xxxxxxx
------------------------------------------------
Xxxxxx X.Xxxxxxx
President and Chief Executive Officer
CONSULTANT:
\s\ Xxxxxxxx X. Xxxxx III
