EMPLOYMENT AGREEMENT
EXHIBIT 10(xix)
This Employment Agreement (the “Agreement”) is entered into as of this 15th day of June, 2007,
by and between American Oil & Gas, Inc., a Nevada corporation (the “Company”), and Xxxxx
Xxxxxxxx (“Employee”) to be effective commencing June 15, 2007 (the “Effective
Date”). Employee and Company are sometimes referred to individually as a “Party” and
collectively as the “Parties.”
In consideration of the mutual covenants, promises and agreements herein contained, the
Company and Employee hereby covenant, promise and agree to and with each other as follows:
1. Employment. The Company shall employ Employee and Employee shall perform services
for and on behalf of the Company upon the terms and conditions set forth in this Agreement.
2. Positions and Duties of Employment. Employee shall be required to devote his full
energy, skill and best efforts as required to the furtherance of his duties with the Company as the
Company’s Vice President of Exploration and Development.
Employee understands that his employment by the Company involves a high degree of trust and
confidence, that he is employed for the purpose of furthering the Company’s reputation and
improving the Company’s operations and profitability, and that in executing this Agreement he
undertakes the obligations set forth herein to accomplish such objectives. Employee agrees that he
shall serve the Company fully, diligently, competently and to the best of his ability. Employee
fully understands his right to discuss this Agreement with his attorney, that he has availed
himself of this right to the extent that he desires, that he has carefully read and fully
understands this entire Agreement, and that he is voluntarily entering into this Agreement.
3. Duties.
3.1 Employee shall serve as Vice President of Exploration and Development of the Company and
in that capacity shall work with the Company to pursue the Company’s plans as directed by the
Board. Employee shall have the responsibilities, duties, obligations, rights, benefits and
requisite authority as is customary for the position of Vice President of Exploration and
Development and as may be determined by the Board.
3.2 During the term of this Agreement, Employee shall devote substantially all of Employee’s
business time, attention, knowledge and skills solely to the business and interests of the Company
and to the performance of Employee’s duties under this Agreement. Without limiting the foregoing,
Employee shall perform services on behalf of the Company for 40 hours per week, and Employee shall
be available at the reasonable request of the Company at other times, including weekends and
holidays, to meet the oil and gas related operational requirements of the Company.
3.3 During the term of this Agreement, Employee shall office in Denver, Colorado or upon
authorization from the Board, a suburb of Denver.
4. Term. Unless terminated earlier as provided for in this Agreement, the term of
this Agreement shall commence on the Effective Date and end on the fifth anniversary of the
Effective Date (the “Term”). If the employment relationship is terminated by either Party,
Employee agrees to cooperate with the Company and with the Company’s new management with respect to
the transition of the new management in the operations previously performed by Employee. Upon
Employee’s termination, Employee agrees to return to the Company all non-public Company documents
(and all copies thereof), any other Company property in Employee’s possession or control, and any
materials of any kind that contain or embody any proprietary or confidential material of the
Company. The foregoing notwithstanding, the Employee may retain personal copies of his employment,
performance and benefit records, such as this Agreement.
5. Compensation. Employee shall receive the following as compensation:
(a) A salary at the annual rate of $165,000, subject to a performance review by the Board at
the initial six month anniversary of employment for purposes of potentially increasing salary.
Additional possible increases in salary could occur from time to time in the discretion of the
Board, or a committee selected by the Board, payable in accordance with the Company’s customary
payroll practices.
(b) At the discretion of the Board, or a committee selected by the Board, performance-based
bonus(es).
(c) Employee shall be entitled to participate in the Company’s 2006 Stock Incentive Plan.
Employee and the Company are concurrently entering into a Stock Option Agreement and a Restricted
Stock Agreement.
(d) Company shall include Employee, if otherwise eligible, in any profit sharing plan,
executive stock option plan, pension plan, retirement plan medical, dental and/or hospitalization
plans and any and all other benefit plans, which may be placed in effect by the Company for the
benefit of the Company’s employees during the Term.
(e) The Company shall provide Employee with four weeks vacation leave per each year of
Employee’s employment and with sick leave consistent with Company plans and policies in effect for
Employees from time to time.
(f) Any payments which the Company shall make to Employee pursuant to this Agreement shall be
reduced by standard withholding and other applicable payroll deductions, including but not limited
to federal, state or local income or other taxes, Social Security and Medicare Taxes, State
Unemployment Insurance, State Disability Insurance, and the like.
(g) During the term of his employment, Employee shall be reimbursed for reasonable expenses
that are authorized by the Company and that are incurred by Employee for the benefit of the Company
in accordance with the standard reimbursement practices of the Company. Any direct payment or
reimbursement of expenses shall be made only upon
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presentation of an itemized accounting conforming in form and content to standards prescribed
by the Internal Revenue Service relative to the substantiation of the deductibility of business
expenses.
6. Confidentiality. Employee hereby warrants, covenants and agrees that, Employee may
not disclose confidential information, including but not limited to (a) information, memoranda,
plans or other documents concerning Company’s business or development plans, customers or
suppliers, (b) Company’s development, or sales and marketing methods or techniques, or (c)
Company’s trade secrets and other “know-how” or information not of a public nature, regardless of
how such information came to the custody of Employee. For purposes of this Agreement, such
information shall include, but not be limited to, information, including a prospect, property,
formula, pattern, compilation, program, device, method, technique or process, that (i) derives
independent economic value, present or potential, from not being generally known to, and not being
readily ascertainable by proper means by, other persons who can obtain economic value from its
disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy. The warranty, covenant and agreement set forth in this paragraph shall
not expire, shall survive this Agreement, and shall be binding upon Employee without regard to the
passage of time or other events.
7. Non-Compete.
(a) Employee acknowledges and recognizes the highly competitive nature of the Company’s
business and that Employee’s duties hereunder justify restricting Employee’s further employment.
The Employee agrees that so long as the Employee is employed by the Company, Employee, except when
acting at the request of the Company on behalf of or for the benefit of the Company, (i) will not
induce customers, agents or other sources of distribution of the Company’s business under contract,
doing business with the Company, or in negotiations to do business with the Company to terminate,
reduce, alter or divert business with or from the Company, (ii) will not, directly or indirectly,
solicit or induce, or enter into any discussions that would have the effect of soliciting or
inducing, any individual that is, or was, within ninety days prior to the termination of this
Agreement, an employee of Company or any of Company’s affiliates to leave the Company or such
affiliate of the Company, (iii) will not, directly or indirectly, employ any individual that is, or
was, within ninety days prior to the termination of this Agreement, an employee of either the
Company or an affiliate of the Company, and (iv) shall not, directly or indirectly, either as a
principal, agent, employee, employer, consultant, partner, member or manager of a limited liability
company, shareholder of a company that does not have securities registered under the Securities
Exchange Act of 1934, as amended (the “1934 Act”), or shareholder in excess of one percent
of a company that has securities registered under the 1934 Act, corporate officer or director, or
in any other individual or representative capacity, engage or otherwise participate in any manner
or fashion in any business that is engaged in the oil and gas industry or is otherwise engaged in
competition in any manner whatsoever with the business activities of Company, including, without
limitation, involvement with areas in which the Company is developing a property or properties and
in areas that the Company is analyzing or has analyzed to determine if development and exploration
is feasible in such areas. Employee further covenants and agrees that the restrictive covenant set
forth in this paragraph is reasonable as to duration, terms, and geographical area and that the
same protects the legitimate interests of Company, imposes no undue hardship on Employee, and is
not injurious to the public.
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Ownership by Employee, for investment purposes only, of less than one percent of any class of
securities of a corporation if said securities are listed on a national securities exchange or
registered under the 1934 Act shall not constitute a breach of the covenant set forth under (iv)
above. It is the desire and intent of the Parties that the provisions of this paragraph be
enforced to the fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any particular portion of this
paragraph shall be adjudicated to be invalid or unenforceable, this paragraph shall be deemed
amended to apply in the broadest allowable manner and to delete therefrom the portion adjudicated
to be invalid or unenforceable, such amendment and deletion to apply only with respect to the
operation of paragraph in the particular jurisdiction in which that adjudication is made.
(b) In the event that Employee’s employment with Company is terminated pursuant to Section
8(a) below, the provisions in Section 7(a) above shall continue to apply for a period of 12 months
following the date of termination, however, such provisions will be limited geographically to any
areas that Company is currently developing, or any areas that Company has, during the 12 month
period prior to the date of termination, analyzed to determine if development and exploration is
feasible in such area. Company shall, no later than thirty days after the termination of
Employee’s employment pursuant to Section 8(a) below, provide Employee with a list of areas to
which Section 7(a) is limited.
8. Termination.
(a) In the event that Employee’s employment with the Company is terminated for Cause, by
reason of Employee’s death or disability, or due to Employee’s resignation or voluntary
termination, then all compensation and benefits will cease as of the effective date of such
termination, and Employee shall receive no severance benefits, or any other compensation; provided
that Employee, or his estate, shall be entitled to receive all compensation earned and all benefits
and reimbursements due through the effective date of termination.
For purposes of this Agreement, “Cause” shall mean that the Board, acting in good faith based
upon the information then known to the Company, determines that Employee has engaged in or
committed any of the following: willful misconduct, gross negligence, theft, fraud, or other
illegal conduct; refusal or unwillingness to perform Employee’s duties; performance by Employee of
Employee’s duties determined by the Board to be inadequate in a material respect; breach of any
applicable non-competition, confidentiality or other proprietary information or inventions
agreement between Employee and the Company; inappropriate conflict of interest; insubordination;
failure to follow the directions of the Board or any committee thereof; or any other material
breach of this Agreement. Indictment or conviction of any felony, or any entry of a plea of nolo
contendre in a felony proceeding, under the laws of the United States or any State shall also be
considered “Cause” hereunder.
(b) In the event that the Board determines, in its sole discretion, that it is in the best
interests of the Company to terminate the Employee’s employment with the Company, and the Board
does not desire to base such termination on the provisions of Section 8(a) regardless of whether it
is unable or does not desire to do so, then, subject to compliance with Section 8(c), Employee
shall continue to be paid compensation at his salary on the date of termination and benefits for a
period of six months after the date of such termination. Employee
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shall receive no other severance benefits, and payments shall be made in accordance with the
Company’s regular customary payroll practices.
(c) Employee agrees that the payments contemplated by this Agreement shall constitute the
exclusive and sole remedy for any termination of employment, and Employee covenants not to assert
or pursue any other remedies, at law or in equity, with respect to any termination of employment.
Prior to payment of severance pursuant to Section 8(b) Employee shall execute and deliver to
Company a release agreement provided by Company to the Employee.
(d) Any party terminating this Agreement shall give prompt written notice (“Notice of
Termination”) to the other party hereto advising such other party of the termination of this
Agreement stating in reasonable detail the basis for such termination.
9. Remedies. If there is a breach or threatened breach of any provision of Section 6
or Section 7 of this Agreement, the Company will suffer irreparable harm and shall be entitled to
an injunction restraining Employee from such breach. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies for such breach or threatened breach.
10. Severability. It is the clear intention of the Parties to this Agreement that no
term, provision or clause of this Agreement shall be deemed to be invalid, illegal or unenforceable
in any respect, unless such term, provision or clause cannot be otherwise construed, interpreted,
or modified to give effect to the intent of the Parties and to be valid, legal or enforceable. The
Parties specifically charge the trier of fact to give effect to the intent of the Parties, even if
in doing so, information of a specific provision of this Agreement is required consistent with the
foregoing stated intent. In the event that such a term, provision, or clause cannot be so
construed, interpreted or modified, the validity, legality and enforceability of the remaining
provisions contained herein and other application(s) thereof shall not in any way be affected or
impaired thereby and shall remain in full force and effect.
11. Waiver of Breach. The waiver by the Company or Employee of the breach of any
provision of this Agreement by the other Party shall not operate or be construed as a waiver of any
subsequent breach by that Party.
12. Entire Agreement. This document contains the entire agreement between the Parties
and supersedes all prior oral or written agreements, if any, concerning the subject matter hereof
or otherwise concerning Employee’s employment by the Company. This Agreement may not be changed
orally, but only by agreement in writing signed by the Parties.
13. Governing Law. This Agreement, its validity, interpretation and enforcement,
shall be governed by the laws of the State of Colorado, excluding conflict of laws principles.
Employee hereby expressly consents to personal jurisdiction in the state and federal courts located
in Denver County, Colorado for any lawsuit filed there against him by the Company arising from or
relating to this Agreement, and Employee agrees that any action brought by him against the Company
will be brought in the state or federal courts located in Denver County, Colorado.
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14. Notices. Any notice pursuant to this Agreement shall be validly given or served
if that notice is made in writing and delivered personally or sent by certified mail or registered,
return receipt requested, postage prepaid, to the following addresses:
If to Company: | American Oil & Gas, Inc. 0000 00xx Xxxxxx, Xxxxx 0000 Xxxxxx, XX 00000 Attention: Xxxx Xxxxxxxx, President |
If to Employee: | To the address for Employee set forth below his signature. |
All notices so given shall be deemed effective upon personal delivery or, if sent by certified
or registered mail, five business days after date of mailing. Either party, by notice so given,
may change the address to which his or its future notices shall be sent.
15. Assignment and Binding Effect. This Agreement shall be binding upon Employee and
the Company and shall benefit the Company and its successors and assigns. This Agreement shall not
be assignable by Employee.
16. Headings. The headings in this Agreement are for convenience only; they form no
part of this Agreement and shall not affect its interpretation.
17. Construction. Employee represents he has (a) read and completely understands this
Agreement and (b) had an opportunity to consult with any legal and other advisers as he has desired
in connection with this Agreement. This Agreement shall not be construed against any one of the
Parties.
* * * * * *
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IN WITNESS WHEREOF, the parties have executed this Agreement to be effective on the day and
year first above written.
EMPLOYEE |
AMERICAN OIL & GAS, INC. |
|
/s/ Xxxxx Xxxxxxxx |
/s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx |
|
0000 X. Xxxxxx Xxxxx Xxxxx
|
Title: President and Director | |
Xxxxxxxxx, XX 00000 |
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