EXHIBIT 10.19: Executive Compensation Agreement - XXXXXXX XXXXXXXXX
EXECUTIVE COMPENSATION AGREEMENT
Between
SOUTH TEXAS OIL COMPANY
and
XXXXXXX XXXXXXXXX
This Agreement is made this 1st day of March 2007, by and between SOUTH
TEXAS OIL COMPANY, a Nevada corporation ("SOUTH TEXAS OIL"), and
XXXXXXX XXXXXXXXX ("EXECUTIVE").
WHEREAS, SOUTH TEXAS OIL is engaged in the business of oil and gas exploration
and development; and
WHEREAS, SOUTH TEXAS OIL desires to retain the services of the EXECUTIVE in
the capacity of its Chief Financial Officer.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
SECTION 1. EMPLOYMENT.
1.1 EXECUTIVE EMPLOYMENT. SOUTH TEXAS OIL appoints EXECUTIVE and EXECUTIVE
accepts the appointment as Chief Financial Officer until February 1, 2008.
SECTION 2. DUTIES. EXECUTIVE shall serve as Chief Financial Officer of SOUTH
TEXAS OIL, with such duties as are customarily associated with such position in
public corporations and specifically as set out in the By-Laws of SOUTH TEXAS
OIL.
SECTION 3. EXTENT OF SERVICES. EXECUTIVE shall devote her best efforts,
attention, and energies to the performance of her duties as set out above.
Nothing in this Agreement shall preclude EXECUTIVE from conducting other
business or holding official positions or directorships in other entities, the
activities of which do not directly conflict with EXECUTIVE's duties and
responsibilities as Chief Financial Officer of SOUTH TEXAS OIL.
SECTION 4. TERM. The term of this Agreement shall begin on March 1, 2007
(the "Effective Date"), and shall continue for a one year period. The parties
presently anticipate that the employment relationship may continue beyond this
one-year term. In the absence of a written extension by the parties or notice
of non-renewal by either SOUTH TEXAS OIL or Employee, this Agreement shall be
treated as an agreement from month-to-month following the expiration of the
indicated Term
SECTION 5. EXECUTIVE COMPENSATION.
5.1 BASE SALARY. SOUTH TEXAS OIL will pay to EXECUTIVE a base salary for the
first year in the amount of Three Thousand Dollars ($3,000) per month, payable
in accordance with SOUTH TEXAS OIL's standard payroll procedures but no less
frequently than monthly, at the election of EXECUTIVE. The Executive's Base
Salary shall be reviewed, and may be increased but not decreased, annually, by
the Board pursuant to its normal performance review policies for senior
executives, with the first such review occurring not later than July 2007.
5.2 BONUSES. EXECUTIVE shall be eligible to receive a discretionary bonus for
each year (or portion thereof) during the term of this Agreement and any
extensions thereof, with the actual amount of any such bonus to be determined
in the sole discretion of the Board of Directors based upon its evaluation of
EXECUTIVE's performance during such year.
SECTION 6. TERMINATION.
6.1 Termination for Cause by Company. This Agreement may be terminated for
"cause" by Company. For purposes hereof, "cause" shall mean any of the
following events:
a. Any embezzlement or wrongful diversion of funds of SOUTH
TEXAS OIL or any other affiliate of SOUTH TEXAS OIL by EXECUTIVE;
b. Malfeasance or insubordination by EXECUTIVE in the conduct
of his duties prescribed by the Board of Directors;
c. Material breach of this Agreement by EXECUTIVE that remains
uncured for a period of at least thirty (30) days following written notice from
SOUTH TEXAS OIL to EXECUTIVE of such alleged breach, which written notice
describes in reasonable detail the nature of such alleged breach; or
d. Conviction or the entry of a plea of nolo contendere or
equivalent plea of a felony in a court of competent jurisdiction, or any other
crime or offense involving moral turpitude.
6.2 Termination for Good Reason by EXECUTIVE. This Agreement may be
terminated for "good reason" by EXECUTIVE giving rise to the severance pay
provisions set forth in paragraph 6.3 below. For purposes hereof, "good
reason" shall mean only the following events:
a. A material breach of this Agreement by SOUTH TEXAS OIL that
remains uncured for a period of at least thirty (30) days following written
notice from EXECUTIVE to SOUTH TEXAS OIL of such alleged breach, which written
notice describes in reasonable detail the nature of such alleged breach.
c. A change of control (as defined below) if within
forty five (45) days following the change of control EXECUTIVE is not offered
the renewal of employment for at least six (6) months beyond the then pending
employment term at the equivalent monthly benefits in effect at the time of the
change of control; provided, however, that such offer of employment need not
include the same job title or job description as held by EXECUTIVE at the time
of the change of control and need not contain a new change of control provision
covering subsequent changes of control. The equivalent monthly benefits shall
be the only criterion for determining if the offer complies with this section.
A "Change in Control" shall mean the occurrence during the Term of any of the
following events which is coupled with a change in the majority of Board
positions on the Board of Directors: (i) An acquisition (other than directly
from the Company) of any voting securities of SOUTH TEXAS OIL (the "Voting
Securities") by any "Person" (as the term person is used for purposes of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934 (the "1934 Act"))
immediately after which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the 0000 Xxx) of 40% or more of the
combined voting power of SOUTH TEXAS OIL's then outstanding Voting Securities;
provided however, that in determining whether a Change in Control has occurred,
Voting Securities which are acquired in a "Non-Control Acquisition" (as
hereinafter defined) shall not constitute an acquisition which would cause a
Change in Control. A "Non-Control Acquisition" shall mean an acquisition by
(a) an employee benefit plan (or a trust forming a part therof) maintained by
(x) the Company or (y) any corporation or other Person of which a majority of
its voting power or its equity securities or equity interest is owned directly
or indirectly by SOUTH TEXAS OIL, (2) any Person in connection with a "Non-
Control" Acquisition, (ii) the sale or other disposition of all or
substantially all of the business or assets of SOUTH TEXAS OIL to any person
(other than a transfer to a Subsidiary); or (iii) a merger, consolidation or
reorganization involving SOUTH TEXAS OIL.
6.3 Severance Pay/Effect of Termination Without Cause by SOUTH TEXAS OIL
or With Good Reason by EXECUTIVE. In the event that this Agreement is
terminated by SOUTH TEXAS OIL without "cause" or by EXECUTIVE "with good
reason", EXECUTIVE's sole remedy shall be limited to recovery by EXECUTIVE from
SOUTH TEXAS OIL of the compensation and continuation of the benefits described
above for the period of two (2) months. The severance pay provided for in this
Agreement shall be in lieu of any other severance or termination pay to which
the EXECUTIVE may be entitled under any SOUTH TEXAS OIL severance or
termination plan, program, practice or arrangement. The EXECUTIVE's
entitlement to any other compensation or benefits shall be determined in
accordance with SOUTH TEXAS OIL's employee benefit plans and other applicable
programs, policies and practices then in effect.
SECTION 7. CONFIDENTIALITY.
EXECUTIVE acknowledges that she will develop and be exposed to information
that is or will be confidential and proprietary to SOUTH TEXAS OIL. The
information includes oil and gas prospects, engineering and geological
information, exploration and development plans, and other intangible
information. Such information shall be deemed confidential to the extent not
generally known within the trade. EXECUTIVE agrees to make use of such
information only in the performance of her duties under this Agreement, to
maintain such information in confidence and to disclose the information only to
persons with a need to know.
SECTION 8. MISCELLANEOUS PROVISIONS.
8.1 WAIVER. SOUTH TEXAS OIL's waiver of the EXECUTIVE's breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by the EXECUTIVE. EXECUTIVE's waiver of SOUTH TEXAS OIL'S
breach of any provision of this Agreement shall not operate or be construed as
a waiver of any subsequent breach by SOUTH TEXAS OIL.
8.2 NOTICES. Any notices permitted or required under this Agreement shall be
deemed given upon the date of personal delivery or forty-eight (48) hours after
deposit in the United States mail, postage fully prepaid, return receipt
requested, addressed to SOUTH TEXAS OIL at:
SOUTH TEXAS OIL COMPANY
0000 Xxxxxxxxx Xxxxx, Xxxxx # 000
Xxxxxx, XX 00000
addressed to EXECUTIVE at:
XXXXXXX XXXXXXXXX
0000 Xxxxxx Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
or at any other address as any party may, from time to time, designate by
notice given in compliance with this Section.
8.3 LAW GOVERNING. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada.
8.4 TITLES AND CAPTIONS. All section titles or captions contained in this
Agreement are for convenience only and shall not be deemed part of the context
nor effect the interpretation of this Agreement.
8.5 ENTIRE AGREEMENT. This Agreement contains the entire understanding between
and among the parties and supersedes any prior understandings and agreements
among them respecting the subject matter of this Agreement.
8.6 NON-TRANSFERABILITY. Neither EXECUTIVE, her husband, nor their estates
shall have any right to commute, anticipate, encumber, or dispose of any
payment hereunder, which payment and the rights thereto are expressly declared
nonassignable and nontransferable, except as other wise specifically provided
herein.
8.7 AGREEMENT BINDING. This Agreement shall inure to the benefit of and be
binding upon SOUTH TEXAS OIL, its successors and assigns, including, without
limitations, any persons, partnership, company or corporation which may acquire
substantially all of SOUTH TEXAS OIL'S assets or business or with or into which
SOUTH TEXAS OIL may be liquidated, consolidated, merged or otherwise combined,
and shall inure to the benefit of and be binding upon EXECUTIVE, her heirs,
distributees and personal representatives. If payments become payable to the
surviving widower of EXECUTIVE and she shall thereafter die prior to March
1, 2008, such payments shall nevertheless continue to be made to her estate
until such date.
8.8 COMPUTATION OF TIME. In computing any period of time pursuant to this
Agreement, the day of the act, event or default from which the designated
period of time begins to run shall be included, unless it is a Saturday,
Sunday, or a legal holiday, in which event the period shall begin to run on the
next day which is not a Saturday, Sunday, or legal holiday, in which event the
period shall run until the end of the next day thereafter which is not a
Saturday, Sunday, or legal holiday.
8.9 PRONOUNS AND PLURALS. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular, or plural as the
identity of the person or persons may require.
8.10 BINDING ARBITRATION. ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING
TO THIS AGREEMENT, OR THE BREACH THEREOF, SHALL BE SETTLED BY FINAL AND BINDING
ARBITRATION CONDUCTED IN AUSTIN, TEXAS, IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES ("RULES") OF THE AMERICAN ARBITRATION ASSOCIATION IN EFFECT
AT THE TIME THE CONTROVERSY OR CLAIM ARISES, BUT SAID ARBITRATION NEED NOT BE
ADMINISTERED BY THE AMERICAN ARBITRATION ASSOCIATION. THE ARBITRATOR, WHICH
SHALL BE AGREED UPON BY THE PARTIES, SHALL HAVE JURISDICTION TO DETERMINE ANY
SUCH CLAIM AND MAY GRANT ANY RELIEF AUTHORIZED BY LAW FOR SUCH CLAIM EXCLUDING
CONSEQUENTIAL AND PUNITIVE DAMAGES. EACH PARTY TO THE ARBITRATION SHALL BEAR
THE INITIAL FILING FEES AND CHARGES EQUALLY, PROVIDED, HOWEVER, THAT THE
ARBITRATOR SHALL AWARD REIMBURSEMENT OF ALL SUCH COSTS AND FEES TO THE
PREVAILING PARTY AS A PART OF ITS AWARD. THIS PARAGRAPH SHALL LIKEWISE BE
SPECIFICALLY ENFORCEABLE IN A COURT OF COMPETENT JURISDICTION SHOULD THE PARTY
NOT DEMANDING ARBITRATION REFUSE TO PARTICIPATE IN OR COOPERATE WITH THE
ARBITRATION PROCESS.
8.11 PRESUMPTION. This Agreement or any section thereof shall not be construed
against any party due to the fact that said Agreement or any section thereof
was drafted by said party.
8.12 FURTHER ACTION. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of the Agreement.
8.13 PARTIES IN INTEREST. Nothing herein shall be construed to be to the
benefit of any third party, nor is it intended that any provision shall be for
the benefit of any third party.
8.14 SEVERABILITY. If any provision of this Agreement, or the application of
such provision to any person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provision to persons or
circumstances other than those as to which it is held invalid, shall not be
affected thereby, and shall remain in full force and effect.
SOUTH TEXAS OIL, INC. XXXXXXX XXXXXXXXX
By: By:
----------------------------- --------------------------
XXXXXX X. XXXXXXXX An individual
Chief Executive Officer and Director
Dated: March 1, 2007
