EXHIBIT 10 (v)
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of this 21st
day of April, 2005 by and between American Oil & Gas, Inc., a Nevada corporation
(the "Company"), and Xxxxxxx X. X'Xxxxx ("Employee") to be effective as of April
21, 2005 (the "Effective Date"). Employee and Company are sometimes referred to
individually as a "Party" and collectively as the "Parties."
In consideration of the mutual covenants, promises and agreements herein
contained, the Company and Employee hereby covenant, promise and agree to and
with each other as follows:
1. Employment. The Company shall employ Employee and Employee shall perform
services for and on behalf of the Company upon the terms and conditions set
forth in this Agreement.
2. Positions and Duties of Employment. Employee shall be required to devote
his full energy, skill and best efforts as required to the furtherance of his
managerial duties with the Company as the Company's Chief Executive Officer, or
such other senior executive officer as determined by the Board of Directors of
the Company (the "Board"), and as a Petroleum Engineer for the Company.
Employee understands that his employment by the Company involves a high
degree of trust and confidence, that he is employed for the purpose of
furthering the Company's reputation and improving the Company's operations and
profitability, and that in executing this Agreement he undertakes the
obligations set forth herein to accomplish such objectives. Employee agrees that
he shall serve the Company fully, diligently, competently, and to the best of
his ability. Employee certifies that he fully understands his right to discuss
this Agreement with his attorney, that he has availed himself of this right to
the extent that he desires, that he has carefully read and fully understands
this entire Agreement, and that he is voluntarily entering into this Agreement.
3. Duties. Employee shall perform the following services for the Company:
3.1 Employee shall serve as Chief Executive Officer of the Company, or
in such other senior executive officer position as determined by the Board, and
in that capacity shall work with the Company to pursue the Company's plans as
directed by the Board. Employee shall have the responsibilities, duties,
obligations, rights, benefits, and requisite authority as is customary for the
position of Chief Executive Officer and as may be determined by the Board.
3.2 Employee shall perform the duties and functions of a Petroleum
Engineer of the Company, subject to the direction of the Board and the executive
officers of the Company. Employee shall have the responsibilities, duties,
obligations, rights, benefits, and requisite authority as is customary for the
position of Petroleum Engineer and as may be determined by the Board and the
executive officers of the Company.
3.3 During the term of this Agreement, Employee shall devote
substantially all of Employee's business time, attention, knowledge, and skills
solely to the business and interests of the Company and to the performance of
Employee's duties under this Agreement. Without limiting the foregoing, Employee
shall perform services on behalf of the Company for at least 40 hours per week,
and Employee shall be available at the request of the Company at other times,
including weekends and holidays, to meet the needs and requests of the Company's
customers.
3.4 During the term of this Agreement, Employee will not engage in any
other activities or undertake any other commitments that conflict with or take
priority over Employee's responsibilities and obligations to the Company and the
Company's customers, including without limitation those responsibilities and
obligations incurred pursuant to this Agreement.
4. Term. Unless terminated earlier as provided for in this Agreement, the
term of this Agreement shall commence on the Effective Date and end on the fifth
anniversary of the Effective Date (the "Term"). If the employment relationship
is terminated by either Party, Employee agrees to cooperate with the Company and
with the Company's new management with respect to the transition of the new
management in the operations previously performed by Employee. Upon Employee's
termination, Employee agrees to return to the Company all Company documents (and
all copies thereof), any other Company property in Employee's possession or
control, and any materials of any kind that contain or embody any proprietary or
confidential material of the Company.
5. Compensation. Employee shall receive the following as compensation:
(a) A salary at the annual rate of $95,000, subject to possible
increases from time to time in the discretion of the Board, or a committee
selected by the Board, payable in accordance with the Company's customary
payroll practices.
(b) At the discretion of the Board, or a committee selected by the
Board, a performance-based bonus.
(c) Company shall include Employee, if otherwise eligible, in any
profit sharing plan, executive stock option plan, pension plan, retirement plan,
medical and/or hospitalization plan, and/or any and all other benefit plans,
which may be placed in effect by the Company for the benefit of the Company's
employees during the Term. Except for the fact that the Company at all times
shall provide Employee with all or at least a portion of Employee's medical
and/or hospitalization insurance, which shall not be less than that afforded to
the Company's other employees, nothing in this Agreement shall limit (i)
Company's ability to exercise the discretion provided to it under any such
benefit plan, or (ii) the Company's discretion to adopt, not adopt, amend or
terminate any such benefit plan at any time.
(d) The Company shall provide Employee with three weeks vacation leave
per each year of Employee's employment and sick leave consistent with Company
plans and policies in effect for Employees from time to time.
(e) Any payments which the Company shall make to Employee pursuant to
this Agreement shall be reduced by standard withholding and other applicable
payroll deductions, including but not limited to federal, state or local income
or other taxes, Social Security and Medicare Taxes, State Unemployment
Insurance, State Disability Insurance, and the like.
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(f) During the term of his employment, Employee shall be reimbursed
for reasonable expenses that are authorized by the Company and that are incurred
by Employee for the benefit of the Company in accordance with the standard
reimbursement practices of the Company. Any direct payment or reimbursement of
expenses shall be made only upon presentation of an itemized accounting
conforming in form and content to standards prescribed by the Internal Revenue
Service relative to the substantiation of the deductibility of business
expenses.
6. Confidentiality. Employee hereby warrants, covenants and agrees that,
Employee may disclose confidential information, including but not limited to (a)
information, memoranda, plans or other documents concerning Company's business
or development plans, customers or suppliers, (b) Company's development, or
sales and marketing methods or techniques, or (c) Company's trade secrets and
other "know-how" or information not of a public nature, regardless of how such
information came to the custody of Employee, only when Employee believes such
disclosure to be in the best interest of the Company and never contrary to the
specific written instruction of the Board. For purposes of this Agreement, such
information shall include, but not be limited to, information, including a
formula, pattern, compilation, program, device, method, technique or process,
that (i) derives independent economic value, present or potential, from not
being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use, and
(ii) is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy. The warranty, covenant and agreement set forth in this
paragraph shall not expire, shall survive this Agreement, and shall be binding
upon Employee without regard to the passage of time or other events.
7. Non-Compete.
(a) Employee acknowledges and recognizes the highly competitive nature
of the Company's business and that Employee's duties hereunder justify
restricting Employee's further employment. The Employee agrees that so long as
the Employee is employed by the Company, Employee, except when acting at the
request of the Company on behalf of or for the benefit of the Company, (i) will
not induce customers, agents or other sources of distribution of the Company's
business under contract, doing business with the Company, or in negotiations to
do business with the Company to terminate, reduce, alter or divert business with
or from the Company, (ii) will not, directly or indirectly, solicit or induce,
or enter into any discussions that would have the effect of soliciting or
inducing, any individual that was, within ninety days prior to the termination
of this Agreement, an employee of Company or any of Company's affiliates to
leave the Company or such affiliate of the Company, (iii) will not, directly or
indirectly, employ any individual that was, within ninety days prior to the
termination of this Agreement, an employee of either the Company or an affiliate
of the Company, and (iv) shall not, directly or indirectly, either as a
principal, agent, employee, employer, consultant, partner, member or manager of
a limited liability company, shareholder of a company that does not have
securities registered under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), or shareholder in excess of one percent of a company that has
securities registered under the 1934 Act, corporate officer or director, or in
any other individual or representative capacity, engage or otherwise participate
in any manner or fashion in any business that is in competition in any manner
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whatsoever with the business activities of Company. Employee further covenants
and agrees that the restrictive covenant set forth in this paragraph is
reasonable as to duration, terms, and geographical area and that the same
protects the legitimate interests of Company, imposes no undue hardship on
Employee, and is not injurious to the public. Ownership by Employee, for
investment purposes only, of less than one percent of any class of securities of
a corporation if said securities are listed on a national securities exchange or
registered under the 1934 Act shall not constitute a breach of the covenant set
forth under (iv) above. It is the desire and intent of the Parties that the
provisions of this paragraph be enforced to the fullest extent permissible under
the laws and public policies applied in each jurisdiction in which enforcement
is sought. Accordingly, if any particular portion of this paragraph shall be
adjudicated to be invalid or unenforceable, this paragraph shall be deemed
amended to apply in the broadest allowable manner and to delete therefrom the
portion adjudicated to be invalid or unenforceable, such amendment and deletion
to apply only with respect to the operation of paragraph in the particular
jurisdiction in which that adjudication is made.
(b) The Company recognizes that the Employee currently owns interests
in Tower Energy Corporation, Tower Equipment Corporation, Tower Drilling
Corporation and Ragged Mountain Resources, LLC, and these entities may own minor
oil and gas related interests. Ownership in these entities will not constitute a
breach of the covenant set forth under 7(a)(iv) above.
(c) In the event that Employee's employment with Company is terminated
pursuant to Section 8(a) below, the provisions in Section 7(a) above shall
continue to apply for a period of 12 months following the date of termination,
however, such provisions will be limited geographically to any areas that
Company is currently developing, or any areas that Company has, during the 12
month period prior to the date of termination, analyzed to determine if
development and exploration is feasible in such area. Company shall, no later
than thirty days after the termination of Employee's employment pursuant to
Section 8(a) below, provide Employee with a list of areas to which Section 7(a)
is limited.
8. Termination.
(a) In the event that Employee's employment with the Company is
terminated for Cause, by reason of Employee's death or disability, or due to
Employee's resignation or voluntary termination, then all compensation and
benefits will cease as of the effective date of such termination, and Employee
shall receive no severance benefits, or any other compensation; provided that
Employee shall be entitled to receive all compensation earned and all benefits
and reimbursements due through the effective date of termination.
(i) For purposes of this Agreement, "Cause" shall mean that the
Board, acting in good faith based upon the information then known to the
Company, determines that Employee has engaged in or committed any of the
following: willful misconduct, gross negligence, theft, fraud, or other illegal
conduct; refusal or unwillingness to perform Employee's duties; performance by
Employee of Employee's duties determined by the Board to be inadequate in a
material respect; breach of any applicable non-competition, confidentiality or
other proprietary information or inventions agreement between Employee and the
Company; inappropriate conflict of interest; insubordination; failure to follow
the directions of the Board or any committee thereof; or any other material
breach of this Agreement. Indictment or conviction of any felony, or any entry
of a plea of nolo contendre in a felony proceeding, under the laws of the United
States or any State shall also be considered "Cause" hereunder.
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(b) In the event that the Board determines, in its sole discretion,
that it is in the best interests of the Company to terminate the Employee's
employment with the Company, and the Board does not desire to base such
termination on the provisions of Section 8(a) regardless of whether it is unable
or does not desire to do so, then all compensation and benefits will cease as of
three months after the effective date of such termination, and Employee shall
receive no severance benefits, or any other compensation; provided that Employee
shall be entitled to receive all compensation earned and all benefits and
reimbursements due through the date which is three months after the effective
date of termination.
(c) Employee agrees that the payments contemplated by this Agreement
shall constitute the exclusive and sole remedy for any termination of
employment, and Employee covenants not to assert or pursue any other remedies,
at law or in equity, with respect to any termination of employment.
(d) Any party terminating this Agreement shall give prompt written
notice ("Notice of Termination") to the other party hereto advising such other
party of the termination of this Agreement stating in reasonable detail the
basis for such termination.
9. Remedies. If there is a breach or threatened breach of any provision of
Section 6 or Section 7 of this Agreement, the Company will suffer irreparable
harm and shall be entitled to an injunction restraining Employee from such
breach. Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies for such breach or threatened breach.
10. Severability. It is the clear intention of the Parties to this
Agreement that no term, provision or clause of this Agreement shall be deemed to
be invalid, illegal or unenforceable in any respect, unless such term, provision
or clause cannot be otherwise construed, interpreted, or modified to give effect
to the intent of the Parties and to be valid, legal or enforceable. The Parties
specifically charge the trier of fact to give effect to the intent of the
Parties, even if in doing so, information of a specific provision of this
Agreement is required consistent with the foregoing stated intent. In the event
that such a term, provision, or clause cannot be so construed, interpreted or
modified, the validity, legality and enforceability of the remaining provisions
contained herein and other application(s) thereof shall not in any way be
affected or impaired thereby and shall remain in full force and effect.
11. Waiver of Breach. The waiver by the Company or Employee of the breach
of any provision of this Agreement by the other Party shall not operate or be
construed as a waiver of any subsequent breach by that Party.
12. Entire Agreement. This document contains the entire agreement between
the Parties and supersedes all prior oral or written agreements, if any,
concerning the subject matter hereof or otherwise concerning Employee's
employment by the Company. This Agreement may not be changed orally, but only by
agreement in writing signed by the Parties.
13. Governing Law. This Agreement, its validity, interpretation and
enforcement, shall be governed by the laws of the State of Colorado, excluding
conflict of laws principles. Employee hereby expressly consents to personal
jurisdiction in the state and federal courts located in Denver County, Colorado
for any lawsuit filed there against him by the Company arising from or relating
to this Agreement.
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14. Notices. Any notice pursuant to this Agreement shall be validly given
or served if that notice is made in writing and delivered personally or sent by
certified mail or registered, return receipt requested, postage prepaid, to the
following addresses:
If to Company: American Oil & Gas, Inc.
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
If to Employee: To the address for Employee set forth below his signature.
All notices so given shall be deemed effective upon personal delivery or,
if sent by certified or registered mail, five business days after date of
mailing. Either party, by notice so given, may change the address to which his
or its future notices shall be sent.
15. Assignment and Binding Effect. This Agreement shall be binding upon
Employee and the Company and shall benefit the Company and its successors and
assigns. This Agreement shall not be assignable by Employee.
16. Headings. The headings in this Agreement are for convenience only; they
form no part of this Agreement and shall not affect its interpretation.
17. Construction. Employee represents he has (a) read and completely
understands this Agreement and (b) had an opportunity to consult with any legal
and other advisers as he has desired in connection with this Agreement. This
Agreement shall not be construed against any one of the Parties.
* * * * * *
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IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective on the day and year first above written.
EMPLOYEE AMERICAN OIL & GAS, INC.
/s/ Xxx X'Xxxxx /s/ Xxxxxx Xxxxxxxx
--------------- -------------------
Xxx X'Xxxxx, Individually Name: Xxxxxx Xxxxxxxx
Title: President
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