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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"); effective as of December
1, 1999, by and between Gulf Exploration and Development Corporation, a Texas
corporation (the "Company"), with offices at 0000 Xxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxx 00000 and Xxxxxxx Xxxxxxxxx, ("Xxxxxxxxx"), who resides at 0000
Xxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxx 00000.
RECITALS
WHEREAS, the Company is engaged in the business of exploring for,
producing, and selling oil and gas (the "Business"), with its principal
Executive office in Dallas, Texas. For purposes of this Agreement, the term
"Company" shall include the Company, its subsidiaries, affiliates, and assignees
and any successors in interest of the Company and its subsidiaries and/or
affiliates;
WHEREAS, the Company desires to employ Xxxxxxxxx and Xxxxxxxxx desires
to be employed by the Company, on the terms set forth herein;
NOW, THEREFORE, in consideration of the foregoing the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Employment.
1.1 Engagement of Employee. The Company agrees to employ Xxxxxxxxx
and Xxxxxxxxx agrees to accept employment as President of the Company,
all in accordance with the terms and conditions of this Agreement.
1.2 Duties and Powers.
a. During the Employment Period (as defined herein),
Xxxxxxxxx shall serve as President of the Company, reporting
directly to the Board of Directors of the Company (the "Board"),
and will have such responsibilities, duties and authorities, and
will render such services of an administrative character, or act
in such other capacity for the Company as the Company's Board of
Directors (the "Board") shall from time to time direct.
Xxxxxxxxx shall devote his best efforts, energies and abilities
and his full business time, skill and attention (except for
permitted vacation periods and reasonable
EMPLOYMENT AGREEMENT - PAGE 1
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periods of illness or other incapacity) to the Business and
affairs of the Company.
x. Xxxxxxxxx acknowledges that his duties and
responsibilities will require his full-time business efforts and
agrees that during he Employment Period, he will not engage in
any other business activity or have any business pursuits or
interests which interfere or conflict with the performance of
his duties hereunder or which compete with the Company.
1.3 Employment Period. Xxxxxxxxx' employment under this Agreement
shall begin on the date hereof and shall continue through and until the
third anniversary of the date hereof (the "Initial Period") unless
extended as provided in this Section 1.3 or terminated as provided in
Section 1.4. The Company may renew this Agreement for additional one
(1) year periods (the "Renewal Periods") on terms that are mutually
acceptable to Xxxxxxxxx and the Company at least ninety (90) days prior
to the expiration of the Initial Period or any Renewal Period. The
Initial Period and the Renewal Period are collectively referred to
herein as the "Employment Period." Notwithstanding anything to the
contrary contained herein, the Employment Period is subject to
termination pursuant to Section 1.4 and Section 1.5 below.
1.4 Termination. The Company has the right to terminate Xxxxxxxxx'
employment hereunder, by notice to Xxxxxxxxx in writing at any time (i)
for "Cause," (ii) without Cause for any or no reason, and (iii) due to
the Disability of Xxxxxxxxx. Any such termination shall be effective
upon the date of service of such notice pursuant to Section 15. In
addition, this Agreement shall terminate automatically upon Xxxxxxxxx'
death.
"Cause", as used herein, means the occurrence of any of the
following events:
a. the failure of Xxxxxxxxx to perform his duties or
comply with reasonable directions of the Board;
b. the determination by the Board in the exercise of its
reasonable judgment that Xxxxxxxxx has committed an act or acts
constituting (i) a felony or other crime involving moral
turpitude, dishonesty or theft (ii) dishonesty or breach of duty
with respect to the Company; or (iii) fraud;
EMPLOYMENT AGREEMENT - PAGE 2
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c. the determination by the Board in the exercise of its
reasonable judgment that Xxxxxxxxx has committed an act that (i)
negatively affects the Company's business or reputation
(including its relationships with its customers, suppliers, or
employees), or (ii) indicates alcohol or drug abuse by Xxxxxxxxx
that adversely affects his performance hereunder;
d. a material breach by Xxxxxxxxx of any of the terms
and conditions of the Agreement; or
x. Xxxxxxxxx' xxxxx negligence in performance of his
duties hereunder.
Xxxxxxxxx shall be deemed to have a "Disability" for purposes of this
Agreement if he shall be unable, by reason of illness or physical or mental
incapacity or disability to perform his duties hereunder, with or without
reasonable accommodation by the Company, in substantially the manner and to the
extent required hereunder prior to the commencement of such Disability for a
total period of ninety (90) days in any one hundred eighty (180) day period.
2. Compensation and Benefits
2.1 Base Compensation. During the Employment Period, the Company
will pay Xxxxxxxxx a base salary at a rate of $150,000 per annum (the
"Base Salary"). The Board shall perform an annual review of Xxxxxxxxx'
Base Salary based on Xxxxxxxxx' performance of his duties and the
Company's other compensation policies.
2.2 Bonuses. During the Employment Period, Xxxxxxxxx shall be
eligible for bonuses of up to 20% of his base salary of $150,000 each
time the Company completes a major acquisition, funding, or financing.
2.3 Options. At the inception of the Employment Period, Xxxxxxxxx
shall receive stock options good for three years from the date of
issuance to purchase up to 500,000 shares of the Company's common stock
a year at a price which shall not be greater than 50% of the average
bid price for the shares during the previous year.
2.4 Benefits. In addition to the Base Salary, Xxxxxxxxx will be
entitled to the following benefits during the Employment Period if
offered by the Company, unless otherwise altered by the Board with
respect to all Executives of the Company:
EMPLOYMENT AGREEMENT - PAGE 3
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a. hospitalization, disability, life and health
insurance, to the extent offered by the Company, and in amounts
consistent with Company policy, for all key management
employees, as reasonably determined by the Board;
b. up to two (2) weeks paid vacation each year with
salary, consistent with Company policy for all senior employees
and provided that unused vacation time shall not be carried over
to subsequent years;
c. reimbursement for reasonable, ordinary and necessary
out-of-pocket expenses incurred by Xxxxxxxxx in the performance
of his duties, subject to the Company's policies in effect from
time to time with respect to travel, entertainment and other
expenses, including, without limitation, requirements with
respect to reporting and documentation of such expenses;
d. a $500 a month car allowance;
e. other benefit arrangements, including a 401(k) or
similar tax deferral plan, to the extent made generally
available by the Company to its Executives and key management
employees.
2.5 Compensation After Termination.
a. If the Employment Period is terminated (i) by the
Company for Cause or due to the death or Disability of
Xxxxxxxxx, (ii) by Xxxxxxxxx or (iii) through expiration of the
Employment Period, then the Company shall have no further
obligations hereunder or otherwise with respect to Xxxxxxxxx'
employment from and after the termination or expiration date
(except payment of Xxxxxxxxx' Base Salary accrued through the
date of termination or expiration and the Company shall continue
to have all other rights available hereunder (including, without
limitation, all rights under Section 3 hereof at law or in
equity).
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b. If the Employment Period is terminated by the Company
without Cause, Xxxxxxxxx shall be entitled to receive the
payment of the Base Salary through the remainder of the Initial
Period or, at the option of the Company, in lieu of such Base
Salary a lump sum payment other payments in a mutually agreeable
amount. The Company shall have no other obligations hereunder or
otherwise with respect to Xxxxxxxxx' employment from and after
the termination of his employment or expiration of this
Agreement, and the Company shall continue to have all rights
available hereunder (including, without limitation, all rights
under Sections 3, 4, 5 and 6 hereof, at law or in equity).
2.6 Profit Sharing, Pension and Salary Deferral Benefits. It is
understood by the parties to this Agreement that, during the Employment
Period, Xxxxxxxxx shall be entitled to participate in or accrue
benefits under any pension, salary deferral or profit sharing plan now
existing or hereafter created for employees of the Company upon terms
and conditions equivalent to those which the Company may provide for
other senior Executive employees. The termination of this Agreement
shall not result in forfeiting vested benefits such as pension or
401(k) plan benefits that have vested in Xxxxxxxxx as of the date of
termination.
3. Covenant Not to Compete.
3.1 Xxxxxxxxx' Acknowledgment. Xxxxxxxxx agrees and acknowledges
that in order to assure the Company that it will retain its value as a
going concern, it is necessary that Xxxxxxxxx undertake not to utilize
his knowledge of the Business and his relationships with customers and
suppliers to compete with the Company. Xxxxxxxxx further acknowledges
that:
a. the Company is and will be engaged in the Business;
x. Xxxxxxxxx occupies a position of trust and confidence
with the Company and, during employment under this Agreement,
Xxxxxxxxx will be familiar with the Company's trade secrets and
with other proprietary and confidential information concerning
the Company;
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c. the agreements and covenants contained in this
Section 3 are essential to protect the Company and the goodwill
of the Business; and
x. Xxxxxxxxx' employment with the Company has special,
unique and extraordinary value to the Company and the Company
would be irreparably damaged if Xxxxxxxxx were to provide
services to any person or entity in violation of the provisions
of this Agreement.
3.2 Competitive Activities. The following terms have the following
meanings for the purposes of this Section 3.2:
"Restricted Period" means the longer of: (i) the period during which
Xxxxxxxxx is employed by the Company, or (ii) the period of twelve (12)
months from and after the date hereof.
"Territory" means each and every city and county in each state in
which the Company conducted business on or prior to the date hereof
and/or in which the Company conducts business. A complete list of those
counties is attached as Exhibit X.
Xxxxxxxxx hereby agrees that during the Restricted Period he will
not, directly or indirectly, as employee, agent, consultant,
stockholder, director, co-partner or in any other individual or
representative capacity, own, operate, manage, control, engage in,
invest or participate in any manner in, act a consultant or advisor to,
render services for (alone or in association with any person, firm,
corporation or entity), or otherwise assist any person or entity (other
than the Company) that engages in or owns, invests in, operate, manages
or controls any venture or enterprise that directly or indirectly
engages or proposes to engage in the business of (i)exploring for,
producing, or selling oil and gas at the time of termination to be
provided by the Company, anywhere in the Territory. With respect to the
Territory, Xxxxxxxxx specifically acknowledges that the Company has
conducted the Business throughout those areas comprising the Territory
and that the Company intends to continue to expand the Business
throughout the Territory.
3.3 Solicitation of Employees. Without limited the generality of the
provisions of Section 3.2 above, Xxxxxxxxx hereby agrees that during
the Restricted Period he will not (except on behalf of the Company),
directly or indirectly, solicit or participate as employee, agent,
consultant, stockholder, director, partner or in any other individual
or representative capacity in any business which solicits, business
from any person, firm, corporation or other entity
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which is or was a customer or supplier of the Company during the term
of this Agreement.
4. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one the same Agreement.
5. Descriptive Headings; Interpretation. The descriptive headings in
this Agreement are inserted for convenience of reference only, and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement. The use of the word "including" in this Agreement shall be by way of
example rather than by limitation.
6. Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been duly given if (i) delivered personally
to the recipient, (ii) sent to the recipient by reputable express courtier
service (charges prepaid) or mailed to the recipient by certified or registered
mail, return receipt requested and postage prepaid, or (iii) transmitted by
telecopy to the recipient with a confirmation copy to follow the next day to be
delivered by overnight carrier. Such notices, demands and other communications
shall be sent to these addresses indicated below:
If to Xxxxxxxxx:
Xxxxxxx Xxxxxxxxx
0000 Xxxxx Xxxxxx
Xxxxxx Xxxxx, Xxxxx 00000
If to the Company:
Gulf Exploration and Development Corporation
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
with a copy to:
Xxxxxxx X. Xxxxxx, P.C.
Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxx 00000
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
COMPANY:
GULF EXPLORATION AND DEVELOPMENT
CORPORATION
By:
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Xxxxxxx May, President
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Xxxxxxxxx Xxxxx, Secretary / Treasurer
EMPLOYEE:
By:
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Xxxxxxx Xxxxxxxxx
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
COMPANY:
GULF EXPLORATION AND DEVELOPMENT CORPORATION
By:
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Xxx Xxxxxxxxx, Chairman of the Board
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Xxxxxxxxx Xxxxx, Secretary / Treasurer
EMPLOYEE:
By:
-----------------------------------------
Xxxxxxx May
EMPLOYMENT AGREEMENT - EXHIBIT A
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
COMPANY:
GULF EXPLORATION AND DEVELOPMENT
CORPORATION
By:
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Xxxxxxx May, President
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Xxxxxxxxx Xxxxx, Secretary / Treasurer
EMPLOYEE:
By:
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Xxxx XxXxxxxx
EMPLOYMENT AGREEMENT - PAGE 10
