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Exhibit 10.1 (1)
EMPLOYMENT AGREEMENT - PRESIDENT
This Employment Agreement (the "Agreement") is effective as of August 1,
2001, by and between Pyramid Oil Company, a California corporation (the
"Employer") and J. Xxx Xxxxxxxx (the "Employee"). In consideration of the
mutual promises made in this Agreement, the parties agree as follows.
1.00. TERM OF EMPLOYMENT.
1.01. TERM. The Employer employs the Employee, and the Employee accepts
employment with the Employer, for a Term of three years beginning on August 1,
2001. The full Term of this Agreement (three years) shall be automatically
renewed on each succeeding annual anniversary date unless either party, which
is not then in material default of this Agreement, shall have given the other
party written notice of non-renewal at least 90 days prior to the next
succeeding annual anniversary date. Upon proper and timely notice of
non-renewal, there will then be two years remaining to the end of the then
current Term after the end of the year of the Term in which the notice of
non-renewal is given. Provided, however, that the Employer may not give notice
of non-renewal unless such notice is authorized by the vote or written consent
of at least a majority of the voting power of the Board of Directors of the
Employer.
1.03. EARLIER TERMINATION. This Agreement may be terminated earlier
only as provided subsequently in this Agreement.
2.00. DUTIES AND OBLIGATIONS OF THE EMPLOYEE.
2.01. TITLE AND DESCRIPTION OF DUTIES. The Employee shall serve as the
President of the Employer. In that capacity, the Employee shall do and perform
all services, acts, or things necessary or advisable to fulfill the duties of
a corporate President. However, the Employee shall at all times be subject to
the direction and policies established by the Board of Directors of the
Employer.
2.02. DEVOTION OF TIME TO THE EMPLOYER'S BUSINESS. (a) The Employee
shall devote a sufficient amount of his productive time, ability, and
attention to the business of the Employer to reasonably carry out his duties
as President during the Term of this Agreement. (b) During the Term of this
Agreement, the Employee shall not engage in any other substantial business
duties or pursuits that materially interfere with the performance of the
services required under this Agreement. The expenditure of reasonable amounts
of time for other permissible outside activities, (e.g., educational,
charitable, or professional activities) shall not be deemed a breach of this
Agreement if those activities do not materially interfere with the services
required under this Agreement and shall not require the prior written consent
of the Employer's Board of Directors. (c) This Agreement shall not be
interpreted to prohibit the Employee from making passive personal investments
or conducting private business affairs if those activities do not materially
interfere with the services required under this Agreement.
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2.04. UNIQUENESS OF THE EMPLOYEE'S SERVICES. The Employer represents
and agrees that the services to be performed under the terms of this Agreement
by the Employee require a broad breadth of experience in the oil and gas
industry in general, and specific knowledge of the operations of the Employer
in particular; which are of a special, unique, unusual, extraordinary, and
intellectual character that few other qualified individuals possess who are
available to fill this position, such that the Employer is willing to provide
the inducements set out in this Agreement to retain the Employee.
3.00. OBLIGATIONS OF THE EMPLOYER.
3.01. GENERAL DESCRIPTION. The Employer shall provide the Employee with
the compensation, incentives, benefits, and business expense reimbursement
specified elsewhere in this Agreement.
3.02. OFFICE, STAFF, AND OTHER SUPPORT. The Employer shall provide the
Employee with the current standard of support provided including but not
limited to an ISDN line, laptop and desk PC, cellular telephone, office space,
and administrative and clerical support suitable to the Employee's position
and adequate for the performance of his duties.
3.03. INDEMNIFICATION OF LOSSES OF THE EMPLOYEE. The Employer shall
indemnify the Employee for all necessary expenditures or losses incurred by
the Employee in direct consequence of the discharge of his duties on the
Employer's behalf.
4.00. COMPENSATION OF EMPLOYEE.
4.01. ANNUAL SALARY. (a) As compensation for the services to be
rendered by the Employee under this Agreement, the Employer shall pay the
Employee an annual salary at the rate per annum of $100,000, payable in equal
semi-monthly installments of $4,167 on the 15th and final day of each month
during the period of employment. (b) The Employee shall receive annual
increases in salary in an amount to be determined by the Employer's Board of
Directors.
4.02. SALARY CONTINUATION DURING DISABILITY. If the Employee for any
reason whatsoever becomes permanently disabled so that he is unable to perform
the duties prescribed in this Agreement, the Employer agrees to pay the
Employee 75% of the Employee's annual salary, payable in the same manner as
provided for the payment of salary, for the remainder of the then current
employment Term provided for in this Agreement.
4.03. OTHER COMPENSATION. In the event the Employer's Board of
Directors institutes any additional compensation or incentive plans for its
management level employees (including, but not limited to stock bonus plans,
profit sharing, and the like) the Employee shall participate in the same to a
degree commensurate with his position with the Employer.
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5.00. EMPLOYEE BENEFITS.
5.01. ANNUAL VACATION. The Employee shall be entitled to five weeks
vacation time each year with full pay. The Employee may be absent from his
employment for vacation only at such times as the Employers Board of Directors
and Employee shall reasonably agree from time to time. If the Employee is
unable for any reason to take the total amount of authorized vacation time
during any year, he may accrue that time and add it to vacation time for any
following year or, in the Employee's sole discretion, receive a cash payment
in an amount equal to the amount of annual salary attributable to that period.
5.02. ILLNESS. The Employee shall be entitled to an unlimited number of
days per year as sick leave with full pay.
5.03. DEATH BENEFITS. If the Employee should die during the Term of his
employment, the Employer agrees to pay his surviving spouse, designee, or
estate the remaining sums due under the then current Term of this Agreement at
the time of his death.
5.04. USE OF THE EMPLOYER-SUPPLIED AUTOMOBILE. (a) During the Term of
employment under this Agreement, the Employee shall be entitled to the full
use of an American made or comparable automobile, SUV, or truck of his own
choice in the price range of $35,000 to $45,000. (b) Every two years, on
return to the Employer of the Employers automobile then being used by the
Employee, the Employee shall be entitled to the full use of a new vehicle in
the same price range. (c) The Employer also agrees to pay all operating
expenses of any nature whatsoever with regard to such vehicle, and to procure
and maintain in force a liability insurance policy on the vehicle, with
coverage including the Employee, in the minimum amounts of $500,000 for bodily
injury or death to each person per occurrence, and $1,000,000 total per
occurrence. (d) If the Employee is prohibited by order of any court from
holding or using a drivers license, the Employee will no longer be entitled to
this benefit, but shall instead receive the cash value of such benefit on an
annualized basis.
5.05. GROUP LIFE INSURANCE. The Employer agrees to include the Employee
under the Employers group term life insurance coverage in an amount equal to
at least $50,000.
5.06. GROUP MEDICAL INSURANCE. The Employer shall provide the Employee
with medical coverage during the employment Term by obtaining medical
insurance covering the Employee.
5.07. DENTAL COVERAGE. The Employer shall provide the Employee with
dental coverage during the employment Term by obtaining dental insurance
covering the Employee.
6.00. BUSINESS EXPENSES.
6.01. BUSINESS EXPENSES. The Employer shall promptly reimburse the
Employee for all reasonable business expenses incurred by the Employee
including expenditures for entertainment, gifts, and travel.
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6.02. REPAYMENT BY THE EMPLOYEE OF DISALLOWED BUSINESS EXPENSES. In the
event that any expenses paid for the Employee or any reimbursement of
expenses paid to the Employee shall, on audit or other examination of the
Employer's income tax returns, be determined not to be allowable deductions
from the Employer's gross income, and in the further event that any such
determination is acceded to by the Employer or made final by the appropriate
federal or state taxing authority or a final judgment of a court of competent
jurisdiction, and no appeal is taken from the judgment or the applicable
period for filing notice of appeal has expired, the Employee shall repay to
the Employer the amount of the disallowed expenses.
7.00. TERMINATION OF EMPLOYMENT.
7.01. TERMINATION FOR CAUSE. (a) The Employer reserves the right to
terminate this Agreement only if the Employee (1) willfully breaches or
habitually neglects substantial and material duties that he is required to
perform under the terms of this Agreement, or (2) commits acts of dishonesty,
fraud, misrepresentation, or other acts of moral turpitude that substantially
and materially adversely affects the Employer's operations, and that would
prevent the future effective performance of his duties. (b) The Employer may
at its option terminate this Agreement for the reasons stated in this section
by giving written notice of termination to the Employee without prejudice to
any other remedy to which the Employer may be entitled either at law, in
equity, or under this Agreement. (c) The notice of termination required by
this section shall specify the ground for the termination and shall be
supported by a statement of all relevant facts. (d) Termination under this
section shall be considered "for cause" for the purposes of this Agreement.
(e) Upon a termination for cause, the Employer shall immediately pay the
Employee 75% of the sums otherwise due under the then current full remaining
Term of this Agreement.
7.02. TERMINATION WITHOUT CAUSE. (a) This Agreement shall be terminated
upon the death of the Employee. (b) The Employer reserves the right to
terminate this Agreement not less than six months after the Employee suffers
any physical or mental disability that would prevent the performance of his
essential job duties under this Agreement, unless reasonable accommodation can
be made to allow the Employee to continue working. (c) Termination
under this section shall be effected by giving 30 days written notice of
termination to the Employee. (d) Termination under this section shall be
considered "without cause" for the purposes of this Agreement. (e) Upon a
termination without cause, the Employer shall immediately pay the Employee or
his surviving spouse, designee, successor, assign, personal representative, or
estate the sums otherwise due under the then current full remaining Term of
this Agreement.
7.03. EFFECT OF MERGER, TRANSFER OF ASSETS, OR DISSOLUTION. (a) This
Agreement shall not be terminated by any voluntary or involuntary dissolution
of the Employer resulting from either a merger or consolidation in which the
Employer is not the consolidated or surviving corporation, or a transfer of
all or substantially all of the assets of the Employer. (b) In the event of
any such merger or consolidation or transfer of assets, the Employer's rights,
benefits, and obligations hereunder shall be assigned to the surviving or
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resulting corporation or the transferee of the Employer's assets. The
surviving corporation or the transferee of the Employer's assets shall be
bound by and shall have the benefit of the provisions of this Agreement, and
the Employer shall take all actions necessary to insure that any such
corporation or transferee is bound by the provisions of this Agreement. (c)
Alternatively, prior to the close of the subject transaction (which will
result in the merger or consolidation in which the Employer is not the
consolidated or surviving corporation, or the transfer of all or substantially
all of the assets of the Employer) such corporation or transferee may elect to
terminate this Agreement upon which it will (prior to or contemporaneously
with the close of such transaction) pay the Employee the sums otherwise due
under the then current full remaining Term of this Agreement.
7.04. TERMINATION IN EVENT OF BANKRUPTCY OR SIMILAR PROCEEDINGS. (a)
This Agreement shall be terminated if the Employer (1) Files a petition in
bankruptcy court or is adjudicated a bankrupt; (2) Institutes or permits to be
instituted any procedure in bankruptcy court for reorganization or
rearrangement of its financial affairs; (3) Has a receiver of its assets or
property appointed because of insolvency; or (4) Makes a general assignment
for the benefits of creditors. (b) Termination shall be effected upon 30 days
of written notice of termination by either party. (c) Termination under this
section shall be considered "without cause" for purposes of this Agreement,
and the Employee shall be entitled to payment as provided under Section 7.02.
7.05. TERMINATION UPON BREACH OR TRANSFER. Upon the breach of this
Agreement by the Employer of any of its obligations under sections 3.00
through 7.00 of this Agreement or upon transfer of the Employee's principal
place of employment for the Employer outside of the Bakersfield area, the
Employee in his sole discretion may terminate his obligations under this
Agreement by giving the Employer at least 30 days written notice. Termination
under this section shall be considered "without cause" for purposes of this
Agreement, and the Employee shall be entitled to the payments provided under
Section 7.02.
7.06. TERMINATION BY THE EMPLOYEE. The Employee in his sole discretion
may terminate his obligations under this Agreement at any time for any reason
by giving the Employer at least one month notice. Termination under this
section shall be considered "for cause" for purposes of this Agreement, and
the Employee shall be entitled to the payments provided under Section 7.01.
8.00. GENERAL PROVISIONS.
8.01. NOTICES. Any notices to be given by either party to the other
shall be in writing and may be transmitted either by personal delivery or by
mail, registered or certified, postage prepaid with return receipt requested.
Mailed notices shall be addressed to the parties at the most recent addresses
appearing in the records of the Employer, and each party may change that
address by written notice in accordance with this section. Notices delivered
personally shall be deemed communicated as of the date of actual receipt;
mailed notices shall be deemed communicated as of three business days from
the date of mailing.
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8.02. ATTORNEYS' FEES AND COSTS. If any legal action is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, costs, and necessary disbursements
in addition to any other relief to which that party may be entitled. This
provision shall be construed as applicable to the entire Agreement.
8.03. ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties with respect to the
employment of the Employee by the Employer, and contains all of the covenants
and agreements between the parties with respect to that employment in any
manner whatsoever. Each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, orally or otherwise,
have been made by any party, or anyone acting on behalf of any party, which
are not embodied in this Agreement, and that no other agreement, statement, or
promise not contained in this Agreement shall be valid or binding.
8.04. MODIFICATIONS. Any modification of this Agreement will be
effective only if it is in writing signed by the party or parties to be
charged.
8.05. EFFECT OF WAIVER. The failure of either party to insist on the
strict compliance with any of the terms, covenants, or conditions of this
Agreement by the other party shall not be deemed a waiver of that term,
covenant, or condition, nor shall any waiver or relinquishment of any right or
power at anyone time or times be deemed a waiver or relinquishment of that
right or power for all or any other times.
8.06. PARTIAL INVALIDITY. If any provision in this Agreement is held by
a court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
8.07. OPINIONS; DETERMINATIONS. Where the terms of this Agreement
provide for actions to be based on the opinion, judgment, approval, consent,
review, certification, or determination of any party, such terms are not
intended to be and shall not be construed as permitting such opinion,
judgment, approval, consent, review, certification, or determination to be
arbitrary, capricious, or unreasonable.
8.08. LAW GOVERNING AGREEMENT. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
8.09. SUCCESSORS; ASSIGNS. The terms, covenants, and obligations under
this Agreement shall be binding upon the heirs, executors, administrators,
successors, and assigns of the parties. No party shall sell, assign, transfer,
convey, or encumber this Agreement or any right or interest under the same,
or permit any such assignment, transfer, or encumbrance to occur by operation
of law without the prior written consent of the other party, which consent
shall not be unreasonably withheld. The sale, assignment, or transfer of any
interest in the Agreement shall not serve to invalidate any term of this
Agreement or affect the terms, covenants, and obligations under this
Agreement. The successor, transferee, or its legal representatives shall agree
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in writing with the other party or parties to personally assume, perform, and
be bound by this Agreement.
8.10. WARRANTIES, IDENTITY, AUTHORITY. The parties represent and
warrant each for itself as follows: a) its respective legal status is that
which is set out in this Agreement, b) the names used in this Agreement are
their true, full legal names, c) the relationships stated in this Agreement
are true, and d) each has the authority to bind itself and/or the relevant
legal entity to the terms and conditions of this Agreement.
SIGNATURES
The parties have executed this Agreement on July 19, 2001 unless otherwise
indicated below.
"Employer" "Employee"
PYRAMID OIL COMPANY
A California Corporation
XXXX X. XXXXXXXXX J. XXX XXXXXXXX
By --------------------------------- By ----------------------
Xxxx X. Xxxxxxxxx, Vice President J. Xxx Xxxxxxxx
XXX X. XXXXXXXXXXXX
By ---------------------------------
Xxx X. Xxxxxxxxxxxx, Secretary
