EXHIBIT 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into by and
between Sovereign Oil, Inc., a Nevada corporation (the "Employer"), and Xxxxx
Xxxxxx, (the "Employee"), effective as of June 18, 2007 (the "Effective Date").
The Employer and the Employee hereby agree as follows:
1. EMPLOYMENT.
(a) POSITION AND TERM. Upon execution of this Employment Agreement
and in accordance with the terms herein, the Employer hereby employs Employee to
serve as a Vice President of Distribution and Employee accepts such position.
The term of this Agreement shall be for a period of three years from the date
herein subject to termination provisions in Section 8 (the "Initial Term").
Employee further agrees that any employee handbooks or policies shall not be
construed to create binding contractual commitments on behalf of Employer.
(b) DUTIES AND RESPONSIBILITIES. During Employee's employment with
the Employer, Employee shall have such duties and responsibilities commensurate
with his position and as the Employer may reasonably assign which shall include
selling and marketing of motor oil, industrial oil, anti-freeze and other
products.
2. SALARY.
(a) Employee shall be paid a base salary ("Base Salary") at the
annual rate of $120,000, payable in equal installments at the end of such
regular payroll accounting periods as are established by the Employer, or in
such other installments upon which the parties hereto shall mutually agree, and
in accordance with Employer's usual payroll procedures.
(b) The Employer agrees to pay Employee 5,000,000 shares of common
stock of VYGO as additional compensation for services rendered to be issued in
the following manner: (i) 1,666,666 shares on December 31, 2007, (ii) 1,666,667
on December 31, 2008 and (iii) 1,666,667 on December 31, 2009. Employer may
issue these shares at its own discretion prior to the dates as indicated. The
shares to be issued in accordance with this Section 2(b) shall be valued at the
closing bid price of the Employer's common stock on the Over-The-Counter
Bulletin Board on the day before such shares are to be issued. Each installment
of shares to be issued to the Employee shall vest on the day received from the
Employer. The Employee agrees to sign any and all documentation necessary to
complete the transactions described herein. In the event Employee dies during
the Initial Term, Employee's estate shall be entitled to a pro-rated portion of
the installment due in the year of Employee's death based on the number of days
he worked during said year and all other shares to be issued pursuant to this
paragraph 2(b) shall be forfeited. Furthermore, upon the sale of substantially
all the assets of the Employer, any unearned installments set forth above will
become immediately due and payable to Employee at closing of the sale.
(c) In addition to the Base Salary, Employee shall be entitled to
receive a bonus of $50,000, payable in two installments of $25,000 payable on
November 15, 2007 and December 15, 2007.
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(d) PAYMENT. All amounts stated in this Agreement are prior to any
deduction for applicable withholding taxes and other amounts that are required
to be withheld or deducted by federal and state law. Payment of all compensation
to Employee hereunder shall be made in accordance with the relevant Employer
policies in effect from time to time, including normal payroll practices, and
shall be subject to all applicable employment and withholding taxes.
(e) BENEFIT AND SUPPLEMENTAL COMPENSATION PLANS. During the Initial
Term, Employee shall be entitled to participate in all medical and other
employee benefit plans, including vacation, sick leave, retirement accounts and
other employee benefits provided by Employer to similarly situated employees on
terms and conditions no less favorable than those offered to such employees.
Such participation shall be subject to the terms of the applicable plan
documents, Employer's generally applicable policies, and the discretion of the
Board of Directors or any administrative or other committee provided for in, or
contemplated by, such plan.
3. OTHER EMPLOYMENT.
During the Term of this Agreement, Employee shall devote substantially
all of his business and professional time and effort, attention, knowledge, and
skill to the management, supervision and direction of Employer's business and
affairs. Except as provided below, Employer shall be entitled to all benefits,
profits or other issues arising from or incidental to all work, services and
advice performed or provided by Employee. Nothing in this Agreement shall
preclude Employee from devoting reasonable periods required for:
(a) serving as a director or member of a committee of any
organization or corporation involving no conflict of interest with the interests
of Employer, provided that Employee must obtain the written consent of Employer;
(b) serving as a consultant in his area of expertise (in areas other
than in connection with the business of Employer), to government, industrial,
and academic panels where it does not conflict with the interests of Employer;
and
(c) managing his personal investments or engaging in any other
non-competing business provided that such activities do not materially interfere
with the regular performance of his duties and responsibilities under this
Agreement.
4. CONFIDENTIAL INFORMATION.
(a) EMPLOYER INFORMATION. Employee shall not, in any manner, for any
reasons, either directly or indirectly, divulge or communicate to any person,
firm or corporation, any confidential information concerning any matters not
generally known in the oil industry or otherwise made public by Employer which
affects or relates to Employer's business, finances, marketing and/or
operations, research, development, inventions, products, designs, plans,
procedures, customer base, pricing or other data (collectively, "Confidential
Information") except in the ordinary course of business or as required by
applicable law. Without regard to whether any item of Confidential Information
is deemed or considered confidential, material, or important, the parties hereto
stipulate that as between them, to the extent such item is not generally known
in the oil industry, such item is important, material, and confidential and
affects the successful conduct of Employer's business and goodwill, and that any
breach of the terms of this Section 4(a) shall be a material and incurable
breach of this Agreement. Confidential Information shall not include: (i)
information obtained or which became known to Employee other than through his
employment by Employer or through his interactions with Employer prior to his
Employment; (ii) information in the public domain at the time of the disclosure
of such information by Employee; (iii) information that Employee can document
was independently developed by Employee; (iv) information that is disclosed by
Employee with the prior written consent of Employer and (v) information that is
disclosed by Employee as required by law, governmental regulation or court
order.
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(b) DOCUMENTS. Employee further agrees that all documents and
materials furnished to Employee by Employer and relating to the Employer's
business or prospective business are and shall remain the exclusive property of
Employer. Employee shall deliver all such documents and materials, not copied,
to Employer upon demand therefore and in any event upon expiration or earlier
termination of this Agreement. Any payment of sums due and owing to Employee by
Employer upon such expiration or earlier termination shall be conditioned upon
returning all such documents and materials, and Employee expressly authorizes
Employer to withhold any payments due and owing pending return of such documents
and materials.
(c) FORMER EMPLOYER INFORMATION. Employee agrees that he/she will
not, during employment with the Employer, improperly use or disclose any
proprietary information or trade secrets of any former Employer or other person
or entity and that Employee will not bring onto the premises of the Employer any
unpublished document or propriety information belonging to any such Employer,
person or entity unless consented to in writing by such Employer, person or
entity.
(d) INVENTIONS. All ideas, inventions, and other developments or
improvements conceived or reduced to practice by Employee, alone or with others,
during the Initial Term of this Agreement, whether or not during working hours,
that are within the scope of the business of Employer or that relate to or
result from any of Employer's work or projects or the services provided by
Employee to Employer pursuant to this Agreement, shall be the exclusive property
of Employer. Employee agrees to assist Employer, at Employer's expense, to
obtain patents and copyrights on any such ideas, inventions, writings, and other
developments, and agrees to execute all documents necessary to obtain such
patents and copyrights in the name of Employer.
(e) DISCLOSURE. During the Term, Employee will promptly disclose to
the Board of Directors of Employer full information concerning any interest,
direct or indirect, of Employee (as owner, shareholder, partner, lender or other
investor, director, officer, employee, consultant or otherwise) or any member of
his immediate family in any business that is reasonably known to Employee to
purchase or otherwise obtain services or products from, or to sell or otherwise
provide services or products to, Employer or to any of its suppliers or
customers.
5. NON-COMPETE.
Except as expressly permitted in Section 3 above, during the Initial Term of
this Agreement, Employee shall not engage in any of the following competitive
activities: (a) engaging directly or indirectly in any business or activity
substantially similar to any business or activity engaged in (or proposed to be
engaged in) by Employer; (b) engaging directly or indirectly in any business or
activity competitive with any business or activity engaged in (or proposed to be
engaged in) by Employer; (c) soliciting or taking away any employee, agent,
representative, contractor, supplier, vendor, customer, franchisee, lender or
investor of Employer, or attempting to so solicit or take away; (d) interfering
with any contractual or other relationship between Employer and any employee,
agent, representative, contractor, supplier, vendor, customer, franchisee,
lender or investor; or (e) using, for the benefit of any person or entity other
than Employer, any Confidential Information of Employer. The foregoing covenant
prohibiting competitive activities shall survive the termination of this
Agreement and shall extend, and shall remain enforceable against Employee, for
the period of two (2) years following the date this Agreement is terminated. In
addition, during the two-year period following such expiration or earlier
termination, neither Employee nor Employer shall make or permit the making of
any negative statement of any kind concerning Employer or its affiliates, or
their directors, officers or agents or Employee.
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6. INJUNCTIVE RELIEF. Employee acknowledges and agrees that the covenants
and obligations of Employee set forth in Section 4 and 5 with respect to
non-competition, non-solicitation, confidentiality and Employer's property
relate to special, unique and extraordinary matters and that a violation of any
of the terms of such covenants and obligations will cause Employer irreparable
injury for which adequate remedies are not available at law. Therefore, Employee
agrees that Employer shall be entitled to an injunction, restraining order or
such other equitable relief (without the requirement to post bond) as a court of
competent jurisdiction may deem necessary or appropriate to restrain Employee
from committing any violation of the covenants and obligations referred to
Sections 4 and 5. These injunctive remedies are cumulative and in addition to
any other rights and remedies Employer may have at law or in equity.
7. SURVIVAL. Employee agrees that the provisions of Sections 4, 5 and 6
shall survive expiration or earlier termination of this Agreement for any
reasons, whether voluntary or involuntary, with or without cause, and shall
remain in full force and effect thereafter. Notwithstanding the foregoing, if
this Agreement is terminated upon the dissolution of Parent or Employer, the
filing of a petition in bankruptcy by Employer or upon an assignment for the
benefit of creditors of the assets of Employer, Sections 4, 5 and 6 shall be of
no further force or effect.
8. TERMINATION.
(a) TERMINATION BY EMPLOYEE. Employee may terminate this Agreement
for Good Reason at any time upon 30 days' written notice to Employer, provided
the Good Reason has not been cured within such period of time.
(b) GOOD REASON. In this Agreement, "Good Reason" means, without
Employee's prior written consent, the occurrence of any of the following events,
unless Employer shall have fully cured all grounds for such termination within
thirty (30) days after Employee gives notice thereof:
(i) any reduction in his then-current Salary;
(ii) any material failure to timely grant, or timely honor, any
equity or long-term incentive award;
(iii) failure to pay or provide required compensation and benefits;
(iv) any failure to appoint, elect or reelect him to the position of
Vice President of Distribution of Employer; the removal of him
from such position; or any changes in the reporting structure so
that Employee reports to someone other than the President of
Employer;
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(v) any material diminution in his title or duties or the assignment
to him of duties not customarily associated with Employee's
position as Vice President of Distribution of Employer;
(vi) any relocation of Employee's office as assigned to him by
Employer, to a location more than 25 miles from Employer's
current office;
(vii) the failure of Employer to obtain the assumption in writing of
its obligation to perform the Employment Agreement by any
successor to all or substantially all of the assets of Employer
or upon a merger, consolidation, sale or similar transaction of
Employer; or
(viii) the voluntary or involuntary dissolution of Employer or Parent,
the filing of a petition in bankruptcy by Parent or Employer or
upon an assignment for the benefit of creditors of the assets of
Parent or Employer.
The written notice given hereunder by Employee to Employer shall specify in
reasonable detail the cause for termination, and such termination notice shall
not be effective until thirty (30) days after Employer's receipt of such notice,
during which time Employer shall have the right to respond to Employee's notice
and cure the breach or other event giving rise to the termination.
(c) TERMINATION BY EMPLOYER. Employer may terminate its employment
of Employee under this Agreement for cause or not for cause at any time by
written notice to Employee. For purposes of this Agreement, the term "cause" for
termination by Employer shall be (a) a conviction of or plea of guilty or NOLO
CONTENDERE by Employee to a felony, or any crime involving fraud or
embezzlement; (b) the refusal by Employee to perform his material duties and
obligations hereunder; (c) Employee's willful and intentional misconduct in the
performance of his material duties and obligations; or (d) if Employee or any
member of his family makes any personal profit arising out of or in connection
with a transaction to which Employer is a party or with which it is associated
without making disclosure to and obtaining the prior written consent of
Employer. The written notice given hereunder by Employer to Employee shall
specify in reasonable detail the cause for termination. For purposes of this
Agreement, "family" shall mean Employee's spouse and/or children. In the case of
a termination for the causes described in (a) and (d) above, such termination
shall be effective upon receipt of the written notice. In the case of the causes
described in (b) and (c) above, such termination notice shall not be effective
until thirty (30) days after Employee's receipt of such notice, during which
time Employee shall have the right to respond to Employer's notice and cure the
breach or other event giving rise to the termination.
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(d) SEVERANCE. Upon a termination of this Agreement without Good
Reason by Employee or with cause by Employer, Employer shall pay to Employee all
accrued and unpaid compensation subject to the provision of Section 2(d) and
expense reimbursement as of the date of such termination,. Employee shall not be
entitled to any outstanding installment payment of shares as set forth in
Section 2(b) above or any pro-rata share thereof. In addition, Employee shall
not be entitled to receive any outstanding bonus payments pursuant to Section
2(c) if termination occurs prior to November 15, 2007 and is not entitled to the
second $25,000 installment payment if termination occurs subsequent to November
15, 2007 but prior to December 15, 2007.
Upon a termination of this Agreement with Good Reason by Employee or without
cause by Employer, Employer shall pay to Employee all accrued and unpaid
compensation subject to the provision of Section 2(d) and expense reimbursement
as of the date of such termination and the "Severance Payment." The Severance
Payment shall be payable in a lump sum, subject to Employer's statutory and
customary withholdings. If the termination of Employee hereunder is by Employee
with Good Reason, the Severance Payment shall be paid by Employer within five
(5) business days of the expiration of any applicable cure period. If the
termination of Employee hereunder is by Employer without cause, the Severance
Payment shall be paid by Employer within five (5) business days of termination.
The "Severance Payment" shall equal $10,000 (TEN THOUSAND DOLLARS). Employee is
also entitled to a pro-rated portion of shares not yet issued under Section 2(b)
in the year of Employee's termination based on the number of days he worked
during said year and all other shares to be issued thereunder shall be
forfeited. In addition, Employee shall not be entitled to receive any
outstanding bonus payments pursuant to Section 2(c) if termination occurs prior
to November 15, 2007 and is not entitled to the second $25,000 installment
payment if termination occurs subsequent to November 15, 2007 but prior to
December 15, 2007.
(e) TERMINATION UPON DEATH. If Employee dies during the Initial Term
of this Agreement, this Agreement shall terminate, except that Employee's legal
representatives shall be entitled to receive any earned but unpaid compensation
as indicated in Section 2(a), any expense reimbursement due hereunder through
the date of death and those shares to be issued on a pro-rata basis in
accordance with the terms of Section 2(b) herein. Any installment payment
payable under Section 2(b) which is not required to be paid prior to death is
forfeited. Employee is not entitled to receive any outstanding bonus payments
pursuant to Section 2(c) if death occurs prior to November 15, 2007 and is not
entitled to the second $25,000 installment payment if death occurs subsequent to
November 15, 2007 but prior to December 15, 2007.
(f) TERMINATION UPON DISABILITY. If, during the Term of this
Agreement, Employee suffers and continues to suffer from a "Disability" (as
defined below), then Employer may terminate this Agreement by delivering to
Employee thirty (30) calendar days' prior written notice of termination based on
such Disability, setting forth with specificity the nature of such Disability
and the determination of Disability by Employer. For the purposes of this
Agreement, "Disability" means Employee's inability, with reasonable
accommodation, to substantially perform Employee's duties, services and
obligations under this Agreement due to physical or mental illness or other
disability for a continuous, uninterrupted period of sixty (60) calendar days or
ninety (90) days during any twelve month period. Upon any such termination for
Disability, Employee shall be entitled to receive any earned but unpaid
compensation or expense reimbursement due hereunder through the date of
termination. Any installment payment payable under Section 2(b) which is not
required to be paid prior to termination for Disability is forfeited. Employee
is not entitled to receive any outstanding bonus payments pursuant to Section
2(c) if termination for Disability occurs prior to November 15, 2007 and is not
entitled to the second $25,000 installment payment if termination for Disability
occurs subsequent to November 15, 2007 but prior to December 15, 2007.
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9. AUTHORIZATION AND CONSENT. Employee authorizes the Employer, as it deems
appropriate, to perform all acts necessary to verify Employee's education,
employment, licenses and credentials and to investigate Employee's credit
history, motor vehicle record and criminal background, if any, on a local, state
and federal level. Employee shall fully cooperate with Employer in obtaining the
information delineated herein including, but not limited to, the execution of
written authorizations and disclosure of any material information. Failure by
Employee to cooperate may result in Employee's discharge without warning. If, as
a result of any verification or investigation herein, the Employer determines
that misstatements or omissions were made by Employee, either verbally or in
writing, then Employer may discharge Employee without warning.
10. PUBLIC DISCLOSURE. Employee consents to the inclusion of Employee's
personal biography of Employee's education, employment, licenses and other
credentials to any publication and dissemination thereof by or on behalf of
Employer or Parent.
11. PERSONNEL POLICIES. Except as otherwise provided herein, Employee's
employment shall be subject to the personnel policies and benefit plans which
apply generally to Employer's employees as the same may be interpreted, adopted,
revised or deleted from time to time, during the Initial Term of this Agreement,
by Employer in its sole discretion. During the Initial Term hereof, Employee
shall be entitled to vacation during each year of the Initial Term pursuant to
Employer's policies.
12. BENEFICIARIES. This Agreement shall inure to the benefit of Employer and
any affiliates, successors, assigns, parent corporations, subsidiaries of parent
corporations, subsidiaries, and/or purchasers of Employer as they now or shall
exist while this Agreement is in effect.
13. MISCELLANEOUS.
(a) NO WAIVER. No failure by either party to declare a default based
on any breach by the other party of any obligation under this Agreement, nor
failure of such party to act quickly with regard thereto, shall be considered to
be a waiver of any such obligation, or of any future breach.
(b) MODIFICATION. No waiver or modification of this Agreement or of
any covenant, condition, or limitation herein contained shall be valid unless in
writing and duly executed by the parties to be charged therewith.
(c) CHOICE OF LAW/JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of the State of Illinois, without
regard to any conflict-of-laws principles. Employer and Employee hereby consent
to personal jurisdiction before all courts in the State of Illinois, and hereby
acknowledge and agree that Illinois is and shall be the most proper forum to
bring a complaint before a court of law.
(d) ENTIRE AGREEMENT. This Agreement embodies the whole agreement
between the parties hereto regarding the subject matter hereof and there are no
inducements, promises, terms, conditions, or obligations made or entered into by
Employer or Employee other than contained herein.
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(e) SEVERABILITY. All agreements and covenants contained herein are
severable, and in the event any of them, with the exception of those contained
in Articles 1 and 2 hereof, shall be held to be invalid by any competent court,
this Agreement shall be interpreted as if such invalid agreements or covenants
were not contained herein.
(f) HEADINGS. The headings contained herein are for the convenience
of reference and are not to be used in interpreting this Agreement.
(g) INDEPENDENT LEGAL ADVICE. Employer has obtained legal advice
concerning this Agreement and has requested that Employee obtain independent
legal advice with respect to same before executing this Agreement. Employee, in
executing this Agreement, represents and warranties to Employer that he has been
so advised to obtain independent legal advice, and that prior to the execution
of this Agreement he has so obtained independent legal advice, or has, in his
discretion, knowingly and willingly elected not to do so.
(h) NO ASSIGNMENT. Employee may not assign, pledge or encumber his
interest in this Agreement nor assign any of his rights or duties under this
Agreement without the prior written consent of Employer.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the Effective Date.
SOVEREIGN OIL, INC. EMPLOYEE-XXXXX XXXXXX
By: /s/ Xxxxxxxxx X. XxXxxx By: /s/ Xxxxx Xxxxxx
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Name: Xxxxxxxxx X. Xxxxxx Name: Xxxxx Xxxxxx
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Title: President
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Date: 6/18/07 Date: 6/18/07
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