EXHIBIT 10.15: Executive Compensation Agreement - Xxxxxx X. Xxxx
EXECUTIVE COMPENSATION AGREEMENT
Between
SOUTH TEXAS OIL COMPANY
and
XXXXXX X. XXXX
This Agreement is made this 1st day of December, 2005, by and between
SOUTH TEXAS OIL COMPANY, a Nevada corporation ("STXX"), and XXXXXX X. XXXX
("EXECUTIVE").
WHEREAS, STXX is engaged in the business of oil and gas exploration and
development; and
WHEREAS, STXX desires to retain the services of the EXECUTIVE in the
capacity of its Chief Operational Officer.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
SECTION 1. EMPLOYMENT.
1.1 EXECUTIVE EMPLOYMENT. NUTEK OIL appoints EXECUTIVE and EXECUTIVE
accepts the appointment as Chief Operational Officer.
1.2 ADVISORY PERIOD. If EXECUTIVE's Employment is terminated as
provided in paragraph (1.1) above, or in any other manner, he shall
nevertheless be retained thereafter by STXX as an advisor and consultant until
November 30, 2008 (Advisory Period).
SECTION 2. DUTIES. EXECUTIVE shall serve as Chief Operational Officer of
STXX, with such duties as are customarily associated with such position in
public corporations and specifically as set out in the By-Laws of STXX.
SECTION 3. EXTENT OF SERVICES. EXECUTIVE shall devote his best efforts,
attention, and energies to the performance of his duties as set out above. The
duties shall be rendered at the STXX offices, or at such other place or places
and at such times as the needs of STXX may from time-to-time dictate.
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 Operational Officer of STXX.
SECTION 4. TERM. The term of this Agreement shall begin on December 1,
2005 (the "Effective Date"), and shall continue for a five year period. The
parties presently anticipate that the employment relationship may continue
beyond this five-year term.
SECTION 5. EXECUTIVE COMPENSATION.
5.1 BASE SALARY. NUTEK OIL will pay to EXECUTIVE a base salary for
the first year in the amount of Forty Eight Thousand Dollars ($48,000), payable
in accordance with STXX's standard payroll procedures but no less frequently
than monthly, at the election of EXECUTIVE. This base salary will be payable
throughout the term serving in the EXECUTIVE or advisory capacity, as defined
in Section 1.1 (Executive Employment) and 1.2 (the Advisory Period).
5.2 SUPPLEMENTAL SALARY.
(a) N/A - Removed
(b) N/A - Removed
(c) N/A - Removed
(d) N/A - Removed
(e) N/A - Removed
(f) N/A - Removed
(g) During any period of the contract in which EXECUTIVE provides
consulting services relating to STXX which are outside those services normally
provided by a Chief Operational Officer, he shall be entitled to separate and
supplemental compensation in amounts reasonably associated with such services,
in addition to other compensation provided for under this agreement.
(h) EXECUTIVE shall be entitled to a signing bonus of 100,000
shares of STXX common stock and options to purchase 100,000 shares of STXX
common stock at a strike price of $0.46 per share. (See Exhibit 10.16 Stock
Option Agreement - Xxxxxx Xxxx)
5.3 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. EXECUTIVE BENEFIT PACKAGE.
6.1 Insurance Benefits. Medical, dental and optical insurance for
EXECUTIVE and EXECUTIVE's immediate family shall be paid by STXX. In addition,
EXECUTIVE shall be entitled to receive a supplemental medical, dental and
optical compensation benefit, an amount when placed with the amount payable the
insurance policies referenced above shall equal one hundred percent (100%) of
the cost of medical treatment for EXECUTIVE and EXECUTIVE's immediate family.
6.2 Disability Benefits. In the event EXECUTIVE should become
disabled during the period of his executive employment, his salary shall
continue at the same rate that it was on the date of such disability. If such
disability continues for a period of five consecutive months (or EXECUTIVE
shall die), STXX may at its option thereafter, upon written notice to EXECUTIVE
or his Personal Representative, terminate his executive employment. In such
event the advisory period shall commence immediately upon such termination of
employment and shall continue until November 30, 2008, regardless of the
disability or death of EXECUTIVE. If EXECUTIVE shall receive any disability
payments from any insurance policies paid for by STXX, payments to EXECUTIVE
during any period of disability shall be reduced by the amount of the
disability payments received by EXECUTIVE under such insurance policy or
policies. For the purposes of this agreement, disability shall mean mental or
physical illness or condition rendering EXECUTIVE incapable of performing his
normal duties with STXX.
6.3 Vacation Benefits. EXECUTIVE shall be entitled to four (4) weeks
of vacation leave per year for each year of the contract period including the
executive and advisory period, cumulative at the option of EXECUTIVE.
6.4 Automobile Benefits. EXECUTIVE shall have the option to receive
annually an automobile of a make and model of his selection for his use,
beginning on the third anniversary of the signing of this agreement. Should
the EXECUTIVE not exercise this option, EXECUTIVE will be entitled to a monthly
automobile allowance of $450 per month, indexed to inflation. Provided,
however, that any amount of expenditure in excess of that proscribed as an
ordinary and necessary business expense by the Internal Revenue Service shall
be deducted from the base salary as set out above. EXECUTIVE shall have the
option of accepting a cash disbursement equal to the amount set out above for
the use of his private automobile. In addition, EXECUTIVE shall receive
reimbursement for all reasonable and necessary expense necessary for the
maintenance and upkeep of said automobile including repairs, gasoline, oil, and
insurance.
6.5 Death Benefits. If EXECUTIVE shall die between the date of this
agreement and November 30, 2010, compensation payments hereunder shall not
cease and STXX shall pay to EXECUTIVE's widow, if she survives him, or if she
shall not survive him to his estate, in equal monthly installments in an amount
equal to the advisory compensation provide for above. Such payments shall
commence with the month following the date of death. Said amount shall not be
less than two years' base salary plus medical, dental and optical coverage for
at least two (2) years, if less time is remaining on subject contract.
6.6 Employment Benefits. This Agreement is not intended to and shall
not be deemed to be in lieu of any rights, benefits and privileges to which
EXECUTIVE may be entitled as an employee of STXX under any retirement, pension,
profit-sharing, insurance, hospital, automobile or other plans which may now be
in effect or which may hereinafter be adopted, it being understood that
EXECUTIVE shall have the same rights and privileges to participate in such
plans and benefits as any other employee during this period providing such
benefits are at least equal to those provided herein.
SECTION 7. STOCK AND STOCK OPTIONS
7.1 It is acknowledged that EXECUTIVE owns a number of shares of
common stock in STXX and further, that
(a) STXX shall register for public trading with the Securities
and Exchange Commission at least ten percent (10%) of the shares owned by
EXECUTIVE per year for each year of the contract beginning with the second year
of the contract or the first offering of securities, whichever shall occur
first.
(b) In the event a voluntary termination by EXECUTIVE and STXX,
STXX shall register the balance of the stock owned by EXECUTIVE pro-rata over
five (5) years following such termination in the event such stock is not sooner
sold.
(c) In the event of involuntary termination or an offer is made
by a single purchaser or group of purchasers and accepted by STXX for 51% or
more of the outstanding common stock of STXX, all remaining shares of stock
owned by EXECUTIVE shall be registered for public trading immediately.
7.2 EXECUTIVE is entitled to receive stock distributions of fully
paid and non-assessable common stock of STXX, in addition to any other stock
options EXECUTIVE may be entitled to, as described in Exhibit A and part of
this Agreement, entitled "Executive Stock Option Agreement".
SECTION 8. TERMINATION.
8.1 Termination For Cause. Termination for Cause may be effected by
STXX at any time during the term of this Agreement and shall be effected by
written notification to EXECUTIVE. Provided, however, EXECUTIVE shall be given
30 days from date of delivery of such notification to cure the defect set out
in the notice. Upon Termination For Cause, Employee shall promptly be paid all
accrued salary, bonus compensation to extent earned, vested deferred
compensation (other than pension or profit sharing plan benefits which will be
paid in accordance with the applicable plan), any benefits under any plans of
STXX in which EXECUTIVE is a participant to the full extent of EXECUTIVE's
rights under such plans, accrued vacation pay and any appropriate business
expenses incurred by EXECUTIVE in connection with his duties hereunder, all to
the date of termination, along with a severance payment equal to six-months
base salary.
8.2 Termination Other Than For Cause. Notwithstanding anything else
in this Agreement, STXX may effect a Termination Other Than For Cause at any
time upon giving written notice to EXECUTIVE of such termination. Upon any
Termination Other Than For Cause, EXECUTIVE shall promptly be paid all accrued
salary, bonus compensation to extent earned, vested deferred compensation
(other than pension or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any benefits under any plans of STXX in
which EXECUTIVE is a participant to the full extent of EXECUTIVE's rights under
such plans, (including accelerated vesting, if any, of awards granted to
EXECUTIVE under STXX's stock option plan), accrued vacation pay and any
appropriate business expenses incurred by EXECUTIVE in connection with his
duties hereunder, all to the date of termination. Thereafter, EXECUTIVE will be
retained as an advisor and consultant during the Advisory Period in accordance
with Paragraph 1.2.
8.3 Voluntary Termination. In the event of a Voluntary Termination,
EXECUTIVE shall promptly be paid all accrued salary, bonus compensation to
extent earned, vested deferred compensation (other than pension or profit
sharing plan benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of STXX in which EXECUTIVE is a participant
to the full extent of EXECUTIVE's rights under such plans, accrued vacation pay
and any appropriate business expenses incurred by EXECUTIVE in connection with
his duties hereunder, all to the date of termination. Thereafter, EXECUTIVE
will be retained as an advisor and consultant during the Advisory Period in
accordance with Paragraph 1.2.
8.4 Termination Upon A Change of Control. In the event of a
Termination Upon A Change of Control, EXECUTIVE shall promptly be paid all
accrued salary, bonus compensation to extent earned, vested deferred
compensation (other than pension or profit sharing plan benefits which will be
paid in accordance with the applicable plan), any benefits under any plans of
STXX in which EXECUTIVE is a participant to the full extent of EXECUTIVE's
rights under such plans, accrued vacation pay and any appropriate business
expenses incurred by EXECUTIVE in connection with his duties hereunder, all to
the date of termination. Thereafter, EXECUTIVE will be retained as an advisor
and consultant during the Advisory Period in accordance with Paragraph 1.2.
8.5 Notice of Termination. STXX may effect a termination of this
Agreement pursuant to the provisions of this Section upon giving 30 days
written notice to EXECUTIVE of such termination. EXECUTIVE may effect a
termination of this Agreement pursuant to the provisions of this Section upon
giving 30 days written notice to STXX of such termination.
SECTION 9. CONFIDENTIALITY.
EXECUTIVE acknowledges that he will develop and be exposed to
information that is or will be confidential and proprietary to the STXX. 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 his duties under this Agreement, to
maintain such information in confidence and to disclose the information only to
persons with a need to know.
SECTION 10. MISCELLANEOUS PROVISIONS.
10.1 WAIVER. STXX'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 NUTEK OIL'S breach of
any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach by NUTEK OIL.
10.2 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 STXX at:
SOUTH TEXAS OIL COMPANY
000 XX Xxxx 000, Xxxxx X-000
Xxx Xxxxxxx, XX 00000
addressed to EXECUTIVE at:
XXXXXX X. Xxxx
000 XX Xxxx 000, Xxxxx X-000
Xxx Xxxxxxx, XX 00000
or at any other address as any party may, from time to time, designate by
notice given in compliance with this Section.
10.3 LAW GOVERNING. This Agreement shall be governed by and construed
in accordance with the laws of the State of Nevada.
10.4 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.
10.5 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.
10.6 NON-TRANSFERABILITY. Neither EXECUTIVE, his wife, 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.
10.7 AGREEMENT BINDING. This Agreement shall inure to the benefit of
and be binding upon STXX, its successors and assigns, including, without
limitations, any persons, partnership, company or corporation which may acquire
substantially all of STXX'S assets or business or with or into which STXX may
be liquidated, consolidated, merged or otherwise combined, and shall inure to
the benefit of and be binding upon EXECUTIVE, his heirs, distributees and
personal representatives. If payments become payable to the surviving widow of
EXECUTIVE and he shall thereafter die prior to January 1, 2014, such payments
shall nevertheless continue to be made to his estate until such date.
10.8 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.
10.9 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.
10.10 ARBITRATION. If at any time during the term of this Agreement
any dispute, difference, or disagreement shall arise upon or in respect of the
Agreement, and the meaning and construction hereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter agreed upon
by the parties, or if no single arbiter can be agreed upon, an arbiter or
arbiters shall be selected in accordance with the rules of the American
Arbitration Association and such dispute, difference, or disagreement shall be
settled by arbitration in accordance with the then prevailing commercial rules
of the American Arbitration Association, and judgment upon the award rendered
by the arbiter may be entered in any court having jurisdiction thereof.
10.11 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.
10.12 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.
10.13 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.
10.14 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 COMPANY
a Nevada corporation
by: /s/ Xxxxxx X. Xxxxxxxx
---------------------------
Xxxxxx X. Xxxxxxxx
its: Chief Executive Officer/Director
/s/ Xxxxxx X. Xxxx
---------------------------
Xxxxxx X. Xxxx, Individually
