EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
EMPLOYMENT AGREEMENT,
dated
as of March 15, 2007 (the Effective Date) is entered into by and between
TIDELANDS OIL & GAS CORPORATION, a Nevada limited liability company (the
“Company”),
and
XXXXX X. XXXXX (“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 five (5) 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 the Chief Executive Officer and
President reporting directly to the Board of Directors. 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 shall be based at
the
Company’s headquarters in Texas or such other 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 Three Hundred Thousand Dollars ($300,000),
payable in accordance with the Company’s standard payroll policies including
compliance with applicable withholding requirements. 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.
Each
year during the term of this Agreement, the Company will issue Executive shares
of common stock with a value of One Million Dollars ($1,000,000), valued on
the
date of each 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.
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. During the Term of this Agreement, the Company shall at its
expense procure and keep in effect term life insurance on the life of Executive
payable to the Executive's heirs in the aggregate amount of $2,000,000 and
long-term disability insurance payable to the Executive with a minimum monthly
disability income benefit amount equal to $15,000 per month.
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.
3.5. Automobile
Allowance.
During
the term of this Agreement, the Company shall provide Executive with an
automobile allowance of $12,000 annually, which allowance shall be payable
monthly in increments of $1,000.
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(a)
(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(a)
(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(a)
(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(a)
(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.
In the
event Executive’s employment with the Company is terminated by the Company
without Cause, 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 Xxxxx
Name:
Xxxxx
Xxxxx
Title: Secretary
EXECUTIVE:
/s/
Xxxxx X.
Xxxxx
Xxxxx X. Xxxxx, an individual
Xxxxx X. Xxxxx, an individual
