EXHIBIT 10.13
GASCO ENERGY, INC.
STRATEGIC CONSULTING AGREEMENT
THIS AGREEMENT is made as of this 14th day of February 2003 by Resource
Venture Management and Xxxx X. Xxxxxx, Xxxxxxxxx 00, 0000 Xxxxxxxxx,
Xxxxxxxxxxx, ("Consultant"), and GASCO ENERGY, INC., a Nevada corporation, with
offices at 00 Xxxxxxxxx Xxxxx Xxxx, Xxxxx X000, Xxxxxx, Xxxxxxxx 00000 (the
"Company"), for the purpose of setting forth the terms and conditions of
Consultant's services by the Company and to protect the Company's knowledge,
expertise, customer relationships and the confidential information the Company
has developed regarding clients, customers, shareholders, option holders,
employees, products, business operations and services. As of the Effective Date,
this Agreement supersedes any prior understandings or agreements, including the
Agreement dated July 11, 2001, between Consultant and the Company or any of the
Company's subsidiaries or affiliates.
RECITALS:
WHEREAS, the Board desires to provide for the continued services of
Consultant and to make certain changes in Consultant's services arrangements
with the Company which the Board has determined will reinforce and encourage the
continued attention and dedication to the Company of Consultant as a member of
the Company's management, in the best interest of the Company and its
shareholders. Consultant is willing to commit himself to continue to serve the
Company, on the terms and conditions herein provided, although this Agreement
may be amended at any time by written agreement among the parties; and
WHEREAS, in order to effect the foregoing, the Company and Consultant
wish to enter into a consulting agreement on the terms and conditions set forth
below,
NOW THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. TIME AND EFFORTS
1.1 Consultant shall be hired as the Company's Strategic Consultant and
shall devote time and attention to the duties and responsibilities of Strategic
Consultant in furtherance of the Company's business.
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1.2 In the performance of all of his responsibilities hereunder,
Consultant shall be subject to all of the Company's policies, rules, and
regulations applicable to its officers and employees generally. Consultant shall
report to the President and Chief Executive Officer and Board of Directors.
2. TERM
The initial Term of this Agreement is from 1/2/2003 (the "Effective
Date") until 1/31/2006; however on each anniversary of the Effective Date after
12/31/2005, this Agreement shall be automatically extended for an additional
one-year Term from such anniversary date unless the Company notifies Consultant
in writing 90 days prior to the anniversary of the Effective Date that the
Company will not be renewing this Agreement on the next anniversary of the
Effective Date, or unless sooner terminated pursuant to Section 4. References
hereinafter to the "Term" of this Agreement shall refer to both the initial term
and any extended term of Consultant's services hereunder.
3. COMPANY'S AUTHORITY
Consultant agrees to observe and comply with the reasonable rules and
regulations of Company as adopted by the Board of Directors of the Company or
committee of the Board of Directors respecting performance of Consultant's
duties and to carry out and perform orders, directions, and policies of Company
as they may be, from time-to-time, stated to Consultant either verbally or in
writing.
4. TERMINATION
This Agreement shall be terminated upon the happening of any of the
following events:
4.1 Upon the death of Consultant.
4.2 Whenever the Company and Consultant shall mutually agree to
termination.
4.3 At the option of the Company, upon written notice by the Company to
Consultant, for Cause. "Cause" shall exist for such termination if Consultant
(i) pleads or is found guilty of a felony involving an act of dishonesty or
moral turpitude by a court of competent jurisdiction; (ii) has engaged in gross
misconduct, materially and demonstratively injurious to the company; (iii) has
made any material misrepresentation or omission to the Company under Section 1.5
hereof; (iv) has committed an unexcused material breach of his duty in the
course of Consultant's services; (v) has been guilty of habitual neglect of his
duties; (vi) has usurped a corporate opportunity, is guilty of fraudulent
embezzlement of property or funds of the Company, or committed any act of fraud
or intentional misrepresentation, moral turpitude, dishonesty or other
misconduct that would constitute a felony; or (vii) has committed a material,
unexcused breach of this Agreement. Prior to any termination for Cause, Company
shall give Consultant written notice.
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4.4 The Company may terminate Consultant's services under this
Agreement at any time without Cause, on at least ninety (90) working days
written notice, subject to provisions for payment of compensation as specified
under Section 5.5 of this Agreement. Should the Company fail to maintain
appropriate directors' and officers' liability insurance, this Agreement shall
terminate, at Consultant's option, subject to provisions for payment of
compensation as specified under Section 5.5 of this Agreement.
4.5 At the option of Consultant, upon 90 days written notice by
Consultant to the Company.
4.6 If as a result of Consultant's incapacity due to physical or mental
illness, Consultant shall have been absent from his duties hereunder on a
part-time basis for the entire period of three consecutive months, and within 30
days after written notice of termination is given (which may occur before or
after the end of such three-month period) shall not have returned to the
performance of his duties hereunder on a part-time basis, the Company may
terminate Consultant's services hereunder.
4.7 Upon the expiration of the Term of this Agreement, or any
extension or renewal thereof.
4.8 Upon a Change of Control as defined in subsection 5.5.5 below.
5. CURRENT COMPENSATION
5.1 Annual Consulting Fee. For all services rendered by Consultant
under this Agreement, the Company shall pay or cause to be paid to Consultant,
and Consultant shall accept the Consulting Fee and Bonus Compensation, if any,
all in accordance with the subject to the terms of this Agreement. For purposes
of this Agreement, the term "Compensation" shall mean the Annual Consulting Fee
and Bonus Compensation, if any. Consultant shall be entitled to receive as
current compensation an Annual Fee in an amount of not less than $120,000.
(Hereinafter referred to as the "Consulting Fee"). References in this Agreement
to "annual" or "per annum" or "Annual" and similar phrases shall mean the
twelve-month period commencing on January 1st of each year during the Term of
this Agreement unless otherwise indicated.
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5.2 Bonus Compensation. Consultant shall also be entitled to annual
incentive compensation ("Bonus Compensation") equal to 0.875% of the sum of the
Company's net after-tax earnings as reported in the Company's audited year-end
financial statements plus interest expense, deferred taxes, depletion expenses,
depreciation expenses, amortization expenses, and exploration expenses (which
sum is hereinafter referred to as "cash flow"). The parties agree that
exploration expenses would be deducted from net after-tax earning only if the
Company has elected the "successful-efforts" accounting method; if the Company
has elected the "full-cost" accounting method, exploration expenses would
already be deducted in the computation of the Company's net after-tax earnings,
subject to the additional provisions forth in Sections 5.2.1 and 5.2.2 below. In
addition, prior to January 31 of each year during the Term of this Agreement,
Consultant and the Company shall mutually agree to a performance-based bonus
plan. Such bonus plan shall be based on mutually agreeable measures of
performance.
5.2.1 The parties agree that Bonus Compensation payments are
intended to be based on cash flow from undrilled Company-owned properties as of
July 11, 2001 and undrilled properties acquired by the Company subsequent to
July 11, 2001. Should the Company acquire proven-producing properties with
existing cash flows, net income less the hypothetical income tax due thereon
plus interest expense, deferred taxes, depletion expenses, depreciation
expenses, amortization expenses, and exploration expenses (which exploration
expenses would only be added if the Company has elected the "successful-efforts"
accounting method) attributable to the acquired, proven-producing properties
shall be deducted from the base amount upon which the cash flow is derived.
5.2.2 Should the Company acquire proven-producing properties
with existing cash flows, the parties agree to negotiate in good faith with
respect to the development of a schedule of the declining production profile of
such properties. The parties agree that the amount derived by multiplying the
proven-production stream, as set forth in the schedule, by the corresponding
sales price, less corresponding production costs shall be subtracted from the
cash flow upon which Bonus Compensation is based.
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5.2.3 Bonus Compensation payments due hereunder shall be made
within 15 days after the Company has received the signed audit report covering
the year-end financial statements.
5.3 Reserved.
5.4 Payments of Current Compensation. The payment of Consulting Fee
shall be made in monthly installments on the then prevailing paydays of the
Company. Any payment for Incentive Compensation will be made in accordance with
the Consultant Incentive Compensation Plan, and payment will be made in one lump
sum concurrently with payments made to others in senior management. All payments
are not subject to the customary withholding tax and other employment taxes as
required with respect to compensation paid to an employee.
5.5 Payment of Compensation on Termination.
5.5.1 Upon termination of Consultant's services prior to the
expiration of this Agreement, if such termination is pursuant to Section 4.1,
4.2, 4.5, 4.6, or 4.7 hereof, Consultant shall be entitled to his Consulting Fee
and Bonus Compensation, earned but unpaid through the date of termination of
agreement, payable on the date of termination. Consultant shall also be entitled
to exercise any vested Plan options for a period of One (1) Year following the
termination of his agreement hereunder.
5.5.2 Upon termination of Consultant's employment prior to the
expiration of this Agreement, if such termination is pursuant to Section 4.4
hereof, Consultant shall be entitled to any Consulting Fee and Bonus
Compensation accrued but unpaid through the date of termination of employment,
payable on the date of termination. Consultant shall also be entitled to
compensation in an amount equal to the greater of (i) Consultant's Consulting
Fee for one year and (ii) Consultant's Annual Consulting Fee for the period from
the date of termination through the remaining Term of this Agreement plus cash
equal to the greater amount of $500,000 or the amount that is to be distributed
pursuant to paragraph 5.5.4 (a) below as if there were a Board of Director
Recommended Change of Control. The stock price used in calculating such amount
in 5.5.4 (a) shall be the average closing price for the thirty (30) trading days
prior to termination. Consultant shall also be entitled to exercise any vested
Plan options for a period of one year following the termination of his
employment hereunder. The provisions of this Section 5.5.2 shall apply
throughout the Term of this Agreement, including any period of extension in
accordance with the provisions of Section 2 above.
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5.5.3 If the Company fails to extend this contract pursuant to
Section 2 hereof Company shall pay to Consultant cash equal to the greater
amount of $500,000 or the amount that is to be distributed pursuant to paragraph
5.5.4 (a) below as if there were a Board of Director Recommended Change of
Control on or prior to the then applicable date of expiration in effect
hereunder. The stock price used in calculating such amount in 5.5.4 (a) shall be
the average closing price for the thirty (30) trading days prior to termination.
5.5.4 In the event that this Agreement terminates as a result
of a Change of Control (as hereafter defined), Consultant shall be entitled to
any Annual Consulting Fee, and Bonus Compensation but unpaid through the date of
termination of employment, payable on the date of termination. Upon termination
as a result of a Change of Control, Consultant shall also receive the following
additional compensation payable in cash on the date a Change of Control occurs:
a) If the Change of Control occurs pursuant to a transaction
or series of transactions that have been recommended to the shareholders of the
Company by the Company's Board of Directors then Consultant shall receive
additional compensation based on the cash equivalent consideration paid to a
holder of one share of the Company's Common Stock as set forth below:
Value of consideration for each Compensation to be paid to
Level Common Share Consultant
--------------- --------------------------------- ------------------------------
--------------- --------------------------------- ------------------------------
I $1.00 - $1.49 $500,000
II $1.50 - $.199 $1,000,000
III $2.00 - $2.49 $2,000,000
IV $2.50 - $2.99 $2,500,000
V $3.00 - $3.49 $3,000,000
VI >$3.50 $3,500,000
b) If the Change of Control occurs pursuant to a transaction
or series of transactions that have not been recommended by the Board of the
Directors to the shareholders of the Company then Consultant shall receive the
greater of $1,500,000 or cash equal to the amount that is to be distributed
pursuant to paragraph 5.5.4 (a) above as if there were a Board of Director
Recommended Change of Control immediately upon such Change of Control.
Consultant shall be entitled to exercise all granted Plan stock options for a
period of one year following the termination of his contract hereunder.
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5.5.5 For all purposes of this Agreement, a "change of
control" shall mean and shall be deemed to have occurred if: (i) there shall be
consummated (X) any consolidation or merger of the Company with another
corporation or entity and as a result of such consolidation or merger less than
50% of the outstanding voting securities of the surviving or resulting
corporation or entity shall be owned, directly or indirectly, in the aggregate
by the stockholders of the Company, other than "affiliates," as defined in the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), of any party
to such consolidation or merger, as the same shall have existed immediately
prior to such consolidation or merger, or (Y) any sale, lease, exchange or other
transfer (or in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company; (ii) the stockholders of the
Company shall have approved any plan or proposal for the liquidation or
dissolution of the Company; (iii) any "person" (as such term is used in the
Section 13(d) and 14(d) (2) of the Exchange Act) shall have become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of
50% or more of the Company's outstanding common stock, without the prior
approval of the Board; (iv) during any period of two consecutive years,
individuals who at the beginning of such period constituted the entire Board of
Directors shall have ceased for any reason to constitute a majority thereof
unless the election, or the nomination for election by the Company's
stockholders, of each new Director was approved by vote of at least two-thirds
of the Directors then still in office who were Directors at the beginning of the
period; (v) a change of control of a nature that would be required to be
reported in response to item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Exchange Act shall have occurred; or (vi) any consolidation or merger
of the Company with another corporation or entity and as a result of such
consolidation or merger Consultant is not retained by the Board of Directors as
the Chairman of the Board and Strategic Consultant (a "Change of Control").
6. DETERMINATION OF DISABILITY; PAYMENT OF DISABILITY INSURANCE PREMIUMS
6.1 In the event Consultant's disability, as defined in Section 4.6, is
in question, and after written request by the Company, Consultant refuses to be
examined by his regularly attending physician or if the regularly attending
physician fails to submit a report within 30 days after the examination has been
requested by the Company, the determination of disability shall be made by the
Company.
6.2 Consultant shall be entitled to the disability benefits available
to all executive employees of the Company. It is the intent of the Company to
establish a disability insurance program as soon as practicable.
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7. MISCELLANEOUS BENEFITS
7.4 Business Expenses. Consultant shall be reimbursed for all
reasonable expenses incurred by Consultant and approved in advance by the
President, Chief Executive or the Board of Directors in connection with
Consultant's attendance of business meetings and promotion of Company business
upon presentation by Consultant to the Company of an expense report and adequate
records or other documentation substantiating the expenditures, not less
frequently than monthly. Any such amounts disallowed, as a business expense for
federal or state income tax purposes, shall be deemed additional consulting fees
to Consultant. The fact that the Company may not reimburse Consultant for an
expense is not an indication that the Company determined that the expense was
not incurred on its behalf or in connection with the Company's business.
8. RESTRICTIVE COVENANTS
9.1 Confidential Information. Consultant acknowledges that in his
services hereunder he occupies a position of trust and confidence. During the
Term, and thereafter in accordance with the provisions of this Agreement,
Consultant shall not, except as may be required to perform his duties hereunder
as required by applicable law, and except for information which is or becomes
publicly available other than as a result of a breach by Consultant of the
provisions hereof, disclose to others or use, whether directly or indirectly,
any Confidential Information. "Confidential Information" shall mean information
about the Company, its subsidiaries and affiliates, and their respective
suppliers, clients and customers that is not disclosed by the Company for
financial reporting purposes and that was learned by Consultant in the course of
this agreement hereunder, including (without limitation) proprietary knowledge,
trade secrets, market research, data, formulae, information and supplier, client
and customer lists and all papers, resumes, and records (including computer
records) of the documents containing such Confidential Information. Consultant
agrees to deliver or return to the Company, at the Company's request at any time
or upon termination or expiration of this agreement, or as soon thereafter as
possible, all documents, computer tapes and disks, records, lists, data,
drawings, prints, notes and written information (and all copies thereof)
furnished by the Company or any of its subsidiaries affiliates or prepared by
Consultant during the Term of this agreement by the Company. The obligations
hereof shall not apply to any information that is or becomes public or in the
public domain by action of the Company or through no fault of Consultant.
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9.2 Business Diversion. During the Term and for 12 months thereafter,
Consultant shall not, directly or indirectly, influence or attempt to influence
customers or suppliers of the Company or any of its subsidiaries or affiliates
to divert their business to any competitor of the Company, to the exclusion of
the Company. However, Consultant may contract with the same customers and
suppliers after the Term hereof so long as it is not to the exclusion of the
Company's relationships with such customers and suppliers.
9.3 Non-Solicitation. Consultant recognizes that he will possess
confidential information about other employees of the Company and its
subsidiaries and affiliates relating to, among other things, their education,
experience, skills, abilities, compensation and benefits, and interpersonal
relationships with suppliers and customers of the Company. Consultant recognizes
that the information he will possess about these other employees is not
generally known, is of substantial value to the Company, and will be acquired by
him because of his business position with the Company. Consultant agrees that,
during the Term and for 12 months thereafter, he will not, directly or
indirectly, solicit or recruit any employee of the Company, its subsidiaries or
affiliates for the purpose of being employed by him or by any other person on
whose behalf he is acting as an agent, representative or employee and that he
will not convey any such confidential information or trade secrets about other
employees of the Company, including its subsidiaries or affiliates, to any other
person. However, if Consultant's employment is terminated in accordance with the
provisions of Section 4.4, nothing herein shall prevent Consultant from
soliciting or recruiting, directly or indirectly, any employee of the Company
recruited to the Company by Consultant.
9.4 If Consultant breaches, or threatens to commit a breach of, any of
the provisions of Section 9 (the "Restrictive Covenants"), the Company and its
subsidiaries shall have the right to seek the following:
9.4.1 Specific Performance. The right and remedy to have the
Restrictive Covenants specifically enforced by any court of competent
jurisdiction, it being agreed that any breach or threatened breach of the
Restrictive Covenants would cause irreparable injury to the Company or its
subsidiaries and that money damages may not provide an adequate remedy to the
Company or its subsidiaries.
9.4.2 Accounting. The right and remedy to require Consultant
to account for and pay over to the Company or its subsidiaries, as the case may
be, all compensation, profits, monies, accruals, increments or other benefits
derived or received by Consultant as a result of any transaction constituting a
breach of the Restrictive Covenants.
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9.4.3 Severability of Restrictive Covenants. Consultant
acknowledges and agrees that the Restrictive Covenants are reasonable and valid
in geographic and temporal scope and in all other respects. If any court
determines at any of the Restrictive Covenants, or any part thereof, is invalid
or unenforceable, the remainder of the Restrictive Covenants shall not thereby
be affected and shall be given full effect without regard to the invalid
provisions.
9.4.4 Blue Penciling. If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographic scope or such provision, such court shall have the power
to reduce the duration or scope of such provision, as the case may be, and, in
its reduced form, such provision shall not be enforceable.
9.4.5 Enforceability of Jurisdictions. The obligations in this
Section 9 shall survive the termination of Consultant's Agreement or expiration
of this Agreement and shall be fully enforceable thereafter. Consultant intends
to and hereby confers jurisdiction to enforce the Restrictive Covenants upon the
courts of any jurisdiction within the geographic scope of such Restrictive
Covenants. If the courts of any one or more of such jurisdictions hold the
Restrictive Covenants unenforceable by reason of the breadth of such scope or
otherwise, it is the intention of Consultant that such determination not bar or
in any way affect the right of the Company or its subsidiaries to the relief
provided above in the courts of any other jurisdiction within the geographic
scope of such Restrictive Covenants, as to breaches of such Restrictive
Covenants in such other respective jurisdictions, such Restrictive Covenants as
they relate to each jurisdiction being, for this purpose, severable into diverse
and independent Restrictive Covenants.
10. PARTICIPATION IN STOCK AND OPTION CONSULTANT COMPENSATION PLAN
10.1 Consultant shall receive additional grants of options, stock
appreciation rights, phantom stock rights, and any similar option or securities
or equity compensation when and as such grants are considered for other
executives or employees of the Company in an amount equal to 25% of the total
number of options granted to all executives and employees in any calendar year
during the term of this contract beginning in 2003.
10.2 If any conditions contained herein contradict the Plan then the
terms of this Agreement shall supersede those of the Plan.
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10.3 In the event of termination of Consultant's employment pursuant to
a Change of Control, Consultant shall be entitled to exercise all vested
options, and any additional options that have been granted. In the event of
termination of Consultant's employment pursuant to Section 4.4, any additional
options that have been granted but have not yet vested in accordance with their
terms shall immediately vest.
10.4 Within 120 days of the Effective Date the Company shall issue
Consultant 187,500 shares of Company common stock pursuant to a restricted stock
plan in exchange for Consultant surrendering all of Consultant's rights, claims
and interests in the following options to purchase Company common stock:
150,000 options priced at $3.15 per share,
50,000 options priced at $3.00 per share, and
925,000 options priced at $2.00 per share
11. DISPUTE RESOLUTION
The parties agree that any dispute that may arise in connection with,
arising out of or relating to this Agreement, or any dispute that relates in any
way, in whole or in part, to Consultant's agreement with the Company, the
termination of that agreement, or any other dispute by and among the parties or
their successors, assigns or affiliates, shall be submitted to binding
arbitration in Arapahoe County, Colorado according to the Contract Dispute
Resolution Rules and Procedures of the American Arbitration Association. This
arbitration obligation extends to any and all claims that may arise by and
between the parties or their successors, assigns or affiliates, and expressly
extends to, without limitation, claims or cause of action for wrongful
termination, impairment of ability to compete in the open labor market, breach
or an express or implied contract, breach of the covenant of good faith and fair
dealing, breach of fiduciary duty, fraud, misrepresentation, defamation,
slander, infliction of emotional distress, disability, loss of future earnings,
and claims under the applicable state constitution, the United States
Constitution, and applicable state fair employment laws, federal equal
employment opportunity laws, and federal and state labor statutes and
regulations, including, but not limited to, the Civil Rights Act of 1964, as
amended, the Labor-Management Relations Act, as amended, the Worker Retraining
and Notification Act of 1988, the Americans With Disabilities Act of 1990, the
Rehabilitation Act of 1973, as amended, the Employee Retirement Income Security
Act of 1974, as amended, the Age Discrimination in Employment Act of 1967, as
amended, and the California Fair Employment and Housing Act, as amended.
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12. ASSIGNMENT
This Agreement is a personal contract, and the rights, interests and
obligations of Consultant hereunder may not be sold, transferred, assigned,
pledged or hypothecated except as otherwise expressly permitted by the
provisions of this Agreement. Consultant may, with the prior written consent of
the Company (which shall not unreasonably be withheld), assign this Agreement to
an entity (corporation, partnership or limited liability company) that is
controlled by Consultant. Consultant shall not under any circumstances have any
option or right to require payment hereunder otherwise than in accordance with
the terms hereof. Except as otherwise expressly provided herein, Consultant
shall not have any power of anticipation, alienation or assignment of payments
contemplated hereunder, and all rights and benefits of Consultant shall be for
the sole personal benefit of Consultant, and no other person shall acquire any
right, title or interest hereunder by reason of any sale, assignment, transfer,
claim or judgment or bankruptcy proceedings against Consultant; provided,
however, that in the event of Consultant's death, Consultant's estate, legal
representatives or beneficiaries (as the case may be) shall have the right to
receive all of the benefits that accrued to Consultant pursuant to, and in
accordance with, the terms of this Agreement.
13. SUCCESSOR
This Agreement may be assigned by the Company to any successor interest
to its business. This Agreement shall bind and inure to the benefit of the
Company's successors and assigns as well.
14. NOTICES
All notices, requests and demands hereunder shall be in writing and
delivered by hand, by mail, or by telegram, and shall be deemed given if by hand
delivery, upon such delivery, and if by mail, 48 hours after deposit in the
United States mail, first class, registered or certified mail, postage prepaid
and properly addressed to the party at the address set forth at the beginning of
this Agreement. Any party may change its address for purposes of this paragraph
by giving the other party written notice of the new address in the manner set
forth above.
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15. INVALID PROVISIONS
Invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this Agreement shall
be construed in all respects as if such invalid or unenforceable provision were
omitted.
16. AMENDMENT, MODIFICATION OR REVOCATION
This Agreement may be amended, modified or revoked in whole or in part,
but only by a written instrument which specifically refers to this Agreement and
expressly states that it constitutes an amendment, modification or revocation
hereof, as the case may be, and only if such written instrument has been signed
by each of the parties to this Agreement.
17. HEADINGS
The headings in this Agreement are inserted for convenience only and
are not to be considered in construction of the provisions hereof.
18. ENTIRE AGREEMENT
This Agreement contains the entire understanding among the parties and
supersedes any prior written or verbal agreements between them respecting the
subject matter hereof, including, without limitation, any prior verbal or
written employment agreement between Consultant and the Company. Upon the
effectiveness hereof, any such prior verbal or written agreements shall
terminate.
No representations or warranties of any kind or nature relating to the
Company or its affiliates or their respective businesses, assets, liabilities,
operations, future plans or prospects have been made by or on behalf of the
Company to Consultant; nor have any representations or warranties of any kind or
nature been made by Consultant to the Company, except as expressly set forth in
this Agreement.
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19. ATTORNEYS' FEES
If any legal action is necessary to enforce the terms and conditions of
this Agreement, the prevailing party in such action shall be entitled to recover
all costs of suit and reasonable attorneys' fees as determined by the
arbitrator.
20. FURTHER ASSURANCES
The parties shall execute such documents and take such other action as
is necessary or appropriate to effectuate the provisions of this Agreement.
21. CONTROLLING LAW
This Agreement shall be governed by the laws of the State of Colorado.
22. WAIVER
A waiver by either party of any of the terms and conditions hereof
shall not be construed as a general waiver by such party, and such party shall
be free to reinstate such part or clause, with or without notice to the other
party.
23. INDEMNIFICATION
To the fullest extent permitted by law and the Company's Certificate of
Incorporation and Bylaws, the Company shall indemnify, defend, and hold harmless
the Consultant for all amounts (including, without limitation, judgments, fines,
settlement payments, losses, damages, costs and expenses, including reasonable
attorneys fees, incurred or paid by Consultant in connection with any action,
proceeding, suit or investigation arising out of or relating to the performance
by Consultant of services for, or acting as, an officer or employee of the
Company or any subsidiary thereof. The Company agrees to use its best efforts to
maintain directors' and officers' liability insurance, but the failure of the
Company to maintain such insurance or any portion thereof shall not negate nor
diminish Company's obligations as set forth in this paragraph.
24. PERIODIC REVIEWS
During January of each year during the term hereof, the Board of
Directors of the Company shall review Consultant's Consulting Fee, bonus, stock
options, and additional benefits then being provided to Consultant. Following
each such review, the Company may in its discretion increase the Consulting Fee,
bonus, stock options, and benefits; however, the Company shall not decrease such
items during the period Consultant serves as an employee of the Company. Prior
to November 30th of each year during the term hereof, the Board of Directors of
the Company shall communicate in writing the results of such review to
Consultant.
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IN WITNESS WHEREOF, the parties have entered into this Agreement on
February 14, 2003.
THE COMPANY: CONSULTANT:
GASCO ENERGY, INC.
By /s/ Xxxx X. Xxxxxxxx /s/ Xxxx X. Xxxxxx
-------------------------- -------------------------
Xxxx X. Xxxxxxxx, President Xxxx X. Xxxxxx
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Exhibit A
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Exhibit B
Oil & Gas Holdings
Minority, noncontroling stocks in various oil & gas companies.
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