EMPLOYMENT AGREEMENT
EXHIBIT
10.1
THIS
EMPLOYMENT AGREEMENT, dated as of September 25, 2007 (the “Effective
Date”) is entered into by and between TIDELANDS OIL & GAS
CORPORATION, a Nevada limited liability company (the
“Company”), and XXXXXX X. XXXXXX
(“Executive”).
RECITAL
The
Company desires to employ Executive, and Executive desires to be employed by
the
Company, in accordance with and subject to the terms and conditions set forth
herein.
AGREEMENT
Accordingly,
the parties hereby agree as follows:
1. Term. Subject
to Section 4, the Company hereby employs Executive, and Executive
hereby accepts employment by the Company, to render services on behalf of the
Company in the position and with the duties and responsibilities described
in
Section 2 for the period commencing on the date of this Agreement
and continuing in effect for a period of three (3) years (the
“Term”). The Company and
Executive may extend the Term of this Agreement by mutual written
agreement.
2. Position,
Duties, Responsibilities. Executive shall be employed by the
Company as Vice President reporting directly to the President of the
Company. Executive shall devote Executive’s best efforts and
Executive’s full time and attention to the performance of the services
customarily incident to such offices (collectively, the
“Services”). Executive acknowledges that
the Services may include services for other entities, as directed by the Board
of Directors. Executive specifically agrees to be bound by the covenants
contained in Sections 4, 9 and 11 of the Independent Consulting Agreement
between Company and Frontera Pipeline, LLC as described in said agreement.
Executive shall be based at such place(s) as mutually agreed between the Company
and Executive.
3. Compensation,
Benefits, Expenses.
3.1. Salary. In
consideration of the Services to be rendered hereunder, Executive shall receive
an annual salary in the amount of One Hundred Fifty Thousand Dollars ($150,000),
payable in accordance with the Company’s standard payroll policies including
compliance with applicable withholding requirements. At the request of Executive
but subject to the approval of the Board of Directors, the Company may increase
the cash salary payable under this Section 3.1 with commensurate decrease in
the
equity compensation payable for the respective annual period under Section
3.2. The first and last payment by the Company to Executive will be
adjusted, if necessary, to reflect a commencement or termination date other
than
the first or last working day of a pay period.
3.2. Equity
Compensation. The first year during the term of this Agreement,
the Company will issue Executive shares of S-8 common stock with a
value of Fifty Thousand Dollars ($50,000), valued as of September 25
of each year of this Agreement or the next closest trading day if September
25
falls on a weekend or holiday. In each succeeding annual period of
this Agreement, the Company will issue Executive of shares of S-8 common stock
with values as follows:
Year
Two: $100,000 – valued on the
date of annual grant,
Year
Three: $150,000 – valued on the date of
annual grant.
The
Executive may also be eligible to
receive stock option grants from time to time in the sole discretion of the
Board of Directors. The Company shall also issue Executive 50,000 shares of
restricted stock as consideration for the early termination of Executive’s
previous employment agreement dated October 18, 2004.
3.3. Benefits. The
Company shall provide Executive with the right to participate in and to receive
benefits from all present and future life, accident, disability, medical,
pension, stock and savings plans and all similar benefits made available
generally to all employees of the Company. Executive shall be
entitled to the twenty (20) days of vacation annually, which shall accrue in
equal monthly installments. .
3.4. Expenses. The
Company shall reimburse Executive for reasonable and properly documented travel,
entertainment and other business expenses incurred by Executive in the
performance of his duties hereunder in accordance with the Company’s general
policies, as they may be amended from time to time during the course of this
Agreement.
4. Termination
of Employment.
4.1. By
Death. The Term shall terminate automatically upon the death of
Executive. The Company shall pay to Executive’s beneficiaries or
estate, as appropriate, the compensation to which Executive is entitled pursuant
to Section 3.1 (including any accrued vacation), and reimburse
Executive for any expenses properly incurred by Executive pursuant to
Section 3.4. Thereafter, the Company’s obligations
hereunder shall terminate. Nothing in this Section 4.1
shall affect any entitlement of Executive’s heirs to any vested benefits of
Executive or to the benefits of any life insurance plan.
4.2. By
Disability. If, in the sole and reasonable opinion of the Board
of Directors, Executive shall be prevented from properly performing his duties
hereunder by reason of any physical or mental incapacity for a period of more
than ninety (90) days in the aggregate in any twelve-month (12-month)
period, then, to the extent permitted by law, the Term shall terminate on,
and
the Company shall pay to Executive the compensation to which Executive is
entitled pursuant to Section 3.1 (including any accrued vacation),
and reimburse Executive for any expenses properly incurred by Executive pursuant
to Section 3.4, in each case through the last day of the month in
which the 90th day of incapacity occurs. Thereafter the
Company’s obligations hereunder shall terminate. Nothing in this
Section 4.2 shall affect Executive’s rights to any vested benefits
of Executive or under any disability plan in which he is a
participant.
4.3. By
the
Company with Cause. The Company may terminate, without liability,
the Term with Cause (as defined below) solely pursuant to this
Section 4.3. In the event the Company intends to
terminate Executive with Cause, the Company may thereupon terminate Executive’s
employment with Cause immediately upon notice to Executive. In such
event, the Company shall (i) pay Executive the compensation to which Executive
is entitled pursuant to Section 3.1 (including any accrued
vacation); and (ii) reimburse Executive for any expenses properly incurred
by
Executive pursuant to Section 3.4, in each case through the end of
the day on which the Company terminates Executive. Thereafter
the Company’s obligations hereunder shall terminate. Nothing in this
Section 4.3 shall affect Executive’s rights to any benefits vested
as of the date of termination.
Termination
shall be with “Cause” if:
(a) Executive
willfully engages in conduct that is in bad faith and materially injurious
to
the Company, including but not limited to, misappropriation of trade secrets,
fraud, or embezzlement;
(b) Executive
engages in malfeasance demonstrated by a pattern of failure to perform job
duties diligently and professionally;
(c) Executive
willfully refuses to implement or follow a reasonable and lawful policy or
directive of the Company, which breach is not cured within thirty (30) days
after written notice to Executive from the Company; or
(d) Executive
materially breaches any term of this Agreement which breach is not cured within
thirty (30) days after written notice to Executive from the
Company.
4.4. Without
Cause. At any time, either the Company or Executive may terminate
the Term for any reason, without Cause, by giving fifteen (15) days’
advance written notice to the other party. In the event that
Executive’s employment is terminated by either party pursuant to this
Section 4.4, the Company shall: (i) pay Executive
the compensation to which Executive is entitled pursuant to
Section 3.1 (including any accrued vacation) through the end of the
day on which Executive’s employment is terminated; and (ii) reimburse
Executive for any expenses properly incurred by Executive pursuant to
Section 3.4 through the end of the day on which Executive’s
employment is terminated. In the event that Executive’s employment is
terminated by the Company without Cause pursuant to this
Section 4.4, the Company shall also pay Executive the severance
payment as set forth in Section 5. Thereafter the
Company’s obligations hereunder shall terminate. Nothing in this
Section shall affect Executive’s rights to any benefits vested as of the date of
termination (including, without limitation, stock options that have
vested).
5. Severance.
5.1. Without
Cause. In the event Executive’s employment with the Company is
terminated by the Company without Cause as set forth in Section 4.4 above,
the
Company shall continue to pay Executive (i) his base salary on a semi-monthly
basis plus (ii) the annual equity grant of shares as set froth in Section 3.2
for the remainder of the Term (or the remainder of any written extension of
the
Term) as severance in return for a written release of any and all claims against
the Company. Executive shall be under no obligation to mitigate
severance and any income or future employment of Executive with another company
shall not offset or reduce the severance payments due under this Section
5.
6. Assignment;
Successors and Assigns. Each party agrees that such party will
not assign, sell, transfer, delegate or otherwise dispose of, whether
voluntarily or involuntarily, or by operation of law, any rights or obligations
under this Agreement, nor shall such party’s rights be subject to encumbrance or
the claims of creditors. Any purported assignment, transfer, or
delegation thereof shall be null and void. Nothing in this Agreement
shall prevent the consolidation of the Company with, or its merger into, any
other corporation, or the sale by the Company of all or substantially all of
its
properties or assets, or the assignment by the Company of this Agreement and
the
performance of its obligations hereunder to any successor in
interest. Subject to the foregoing, this Agreement shall be binding
upon and shall inure to the benefit of the parties and their respective heirs,
legal representatives, successors, and permitted assigns, and shall not benefit
any person or entity other than those enumerated above.
7. Notices. Unless
otherwise agreed to, all notices, requests, instructions or other documents
to
be given hereunder shall be in writing or by written telecommunication, and
shall be deemed to have been duly given if: (a) delivered personally (effective
upon delivery); (b) mailed by certified mail, return receipt requested, postage
prepaid (effective five (5) business days after dispatch); (c) sent by a
reputable, established courier service that guarantees next business day
delivery (effective the next business day); or (d) sent by facsimile (effective
upon electronic confirmation of valid transmission of the
facsimile).
All
notices and other documents hereunder shall be given to the Company
at:
Tidelands
Oil & Gas Corporation
0000
X.
Xxxxxxx Xx.
Xxx
Xxxxxxx, XX 00000
and
to
the Executive at the address of record on file with the Company.
Notice
of
change of address shall be effective only when done in accordance with this
Section 7.
8. Governing
Law. The validity, interpretation, enforceability, and
performance of this Agreement shall be governed by and construed in accordance
with the law of the State of Texas, without giving effect to its conflict of
laws rules.
9. Outside
Activities of Executive. The Company acknowledges that Executive
has commitments and business activities not related to the Company and that
certain of these commitments and business affairs involve activities in the
oil,
gas and real estate industries. There shall be no restriction on Executive’s
ability to fulfill such commitments or engage in such business
activities.
10. Confidentiality. Executive
agrees that all confidential and proprietary information relating to the
business of the Company shall be kept and treated as confidential both during
and after the term of this Agreement, except as may be permitted in writing
by a
Company's Board of Directors or as such information is within the public domain
or comes within the public domain without any breach of this
Agreement.
11. Indemnification.
In addition to any rights to indemnification to which Executive is entitled
to
under the Company's Articles of Incorporation and Bylaws, the Company shall
indemnify Executive at all times during and after the term of this Agreement
to
the maximum extent permitted under Nevada Revised Statutes or any successor
provision thereof and any other applicable state law, and shall pay Executive's
expenses in defending any civil action, suit, or proceeding in advance of the
final disposition of such action, suit or proceeding, to the maximum extent
permitted under such applicable state laws.
12. Entire
Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to the
employment of Executive by the Company and may not be contradicted by evidence
of any prior or contemporaneous agreement. The parties further intend
that this Agreement shall constitute the complete and exclusive statement of
its
terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative, or other legal proceeding involving this
Agreement.
13. Amendments;
Waivers. This Agreement may not be modified, amended, or
terminated except by an instrument in writing, signed by Executive and by a
duly
authorized representative of the Company other than Executive. By an
instrument in writing similarly executed, either party may waive compliance
by
the other party with any provision of this Agreement that such other party
was
or is obligated to comply with or perform; provided, however, that such
waiver shall not operate as a waiver of, or estoppel with respect to, any other
or subsequent failure. No failure to exercise and no delay in
exercising any right, remedy, or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, or
power
hereunder preclude any other or further exercise thereof or the exercise of
any
other right, remedy, or power provided herein or by law or in
equity.
14. Severability;
Enforcement. If any provision of this Agreement, or the
application thereof to any person, place, or circumstance, shall be held by
a
court of competent jurisdiction or by arbitrator(s) to be invalid,
unenforceable, or void, the remainder of this Agreement and such provisions
as
applied to other persons, places, and circumstances shall remain in full force
and effect.
15. Executive
Acknowledgment. Executive acknowledges (i) that Executive
has consulted with or has had the opportunity to consult with independent
counsel of his own choice concerning this Agreement and has been advised to
do
so by the Company, and (ii) that Executive has read and understands the
Agreement, is fully aware of its legal effect, and has entered into it freely
based on Executive’s own judgment.
16. Counterparts. This
Agreement may be signed in multiple counterparts, each of which shall be deemed
an original but all of which together shall be deemed one and the same
instrument. Facsimile signatures shall create a valid and binding
obligation of the party executing this Agreement with the same force and effect
as if such facsimile signature page were an original thereof.
*******************
IN
WITNESS WHEREOF, the parties hereto have duly executed this Employment Agreement
as of the date first written above.
TIDELANDS
OIL & GAS CORPORATION, a Nevada limited liability company
/s/ Xxxxx X. Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
President
EXECUTIVE:
/s/ Xxxxxx X.
Xxxxxx
Xxxxxx
X.
Xxxxxx, an individual
