EMPLOYMENT AGREEMENT
This Employment Agreement is effective as of December 19, 2002 by and
between Petrol Oil and Gas Inc, a Nevada Corporation ("Employer"), and Xxxx
Xxxxxxxx, ("Executive").
Recitals
WHEREAS, Employer is engaged in the business of acquiring petroleum
leases, drilling and completing those leases, and producing gas and/or oil.
Employer is desirous of acquiring the special skills and abilities and
background in and knowledge of Executive as it relates to Employer's business
and the industry.
WHEREAS, Employer seeks assurance of the association and services of
Executive in order to retain his experience, skills, abilities, background,
and knowledge, and is therefore willing to engage his services on the terms
and conditions set forth below.
WHEREAS, Executive desires to commence working with Employer and is
willing to do so on those terms and conditions.
NOW THEREFORE, in consideration of the above recitals and the mutual
promises and conditions in this Agreement, and other good and valuable
considerations, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. EMPLOYMENT. Employer shall employ Executive as President.
2. EXECUTIVE'S DUTIES.
2.1. Duties at Employer: Executive shall represent the Employer as
President of Employer. Executive shall possess the power and authority to
hire and fire all employees of Employer, unless otherwise directed by the
Employer to the contrary. Executive shall assist in managing and conducting
the business of Employer by setting and implementing procedures and policies
of Employer. Executive's duties shall include, but not be limited to the
following:
2.1.1 Directing the use and control of finances;
2.1.2 Appointing and dismissing all employees of
Employer;
2.1.3 Implementing long-term strategies and policies
by defining and implementing short, medium, and long-term
objectives;
2.1.4 Communicating the intentions and results of management to
Employer's Board on a regular basis.
2.1.5 Borrowing or obtaining credit in any amount or executing
any guaranty,
2.1.6 Approving a budget and any amendments thereto;
2.1.7 Determining and approving long-term policies and strategies;
3. DEVOTION OF TIME. During the period of his employment hereunder, Executive
shall devote his business time, interest attention, and effort to the
faithful performance of his duties hereunder. However, Executive may serve,
on the boards of directors of, and hold any other offices or positions in,
companies or organizations in which he currently holds a position, or others
which, in the judgment of Employer's Board of Directors (the "Board" as
expressed in a written Board Resolution), will not present any conflict of
interest with Employer or adversely affect the performance of Executive's
duties pursuant to this Agreement.
4. NON COMPETITION DURING TERM OF EMPLOYMENT. During the employment term,
Executive shall not, directly or indirectly, whether as a partner, employee,
creditor, shareholder, or otherwise, promote, participate, or engage in any
activity or other business directly competitive with Employer's business,
except with express permission of the Board. In addition, Executive, while
employed, shall not take any action without Employer's prior written consent
to establish, form, or become employed by a competing business on termination
of employment by Employer, Executive's failure to comply with the provisions
of the preceding sentence shall give Employer the right (in addition to all
other remedies Employer may have) to terminate any benefits or compensation
to which Executive may be otherwise entitled following termination of this
Agreement.
5. VARIATION OF DUTIES. During the term hereof, Executive shall not vary the
terms of his employment with Employer, without the specific written
authorization from the Board of Directors.
6. TERM OF AGREEMENT. Subject to earlier termination as provided in this
Agreement, Executive shall be employed for a Three (3) year term beginning on
the date first written above, and ending August 16, 2005.
6.1 TERM EXTENSION. At any time prior to the expiration of the Term,
as stated in section 6, Employer and Executive may, by mutual written
agreement, extend Executive's employment under the terms of this
Agreement for such additional periods as they may agree.
7. LOCATION OF EMPLOYMENT. Unless the parties agree otherwise in writing,
during the employment term Executive shall perform the services he is
required to perform under this Agreement at an office to be located in Las
Vegas, NV; provided, however, that Employer may from time to time require
Executive to travel temporarily to other locations on Employer's business.
8. COMPENSATION. Employer shall pay compensation to Executive in the
following amounts and on the following terms:
8.1 Salary. For all services rendered by Executive in any capacity
during the term of this Agreement, Employer shall pay Executive
annual compensation as follows, in equal, bi-monthly installments
payable on the 1st day of each month, or in such other manner as is
the general practice of Employer:
8.1.1 First Year of Employment - $135,000.
8.1.2 Second Year of Employment - $160,000.
8.1.3 Third Year of Employment - $160,000.
8.2 Stock Options. In addition to the basic salary provided for above,
Employer hereby grants to executive the following:
8.2.1 the right, privilege and option (the "Stock Option") to purchase
a total of One million (1,250,000) shares of the common stock $0.001
par value, of Employer (the "Option Shares"), which are to be fully
vested and become exercisable immediately. The exercise price per
share of the Option Shares shall be:
8.2.1.1 250,000 shares priced at $.50 per share
8.2.1.2 250,000 shares priced at $1.00 per share
8.2.1.3 250,000 shares priced at $1.50 per share
8.2.1.4 250,000 shares priced at $2.00 per share
8.2.1.5 250,000 shares priced at $2.50 per share
The option rights granted hereby shall be cumulative. Upon becoming
exercisable, the option rights shall be exercisable at any time and from time
to time, in whole or in part; provided, however, that options may be
exercised only during such time as Executive is employed by Employer under
the terms of this Agreement. Executive shall forfeit all right and privilege
to all unexecercised options immediately and automatically upon the
termination of this Agreement, for any reason and by any party. The options
shall be exercised by written notice directed to Employer, accompanied by a
check payable to Employer for the Option shares being purchased. Employer
shall make immediate delivery of such purchased shares, fully paid and non-
assessable, registered in the name of Executive. All share certificates
issued to Executive in the Stock Option shall bear the following restrictive
legend, unless and until such shares have been registered in accordance with
the Securities and Exchange Act of 1933, as amended (the "Act"):
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT"), OR THE SECURITIES
LAWS OF ANY OTHER JURISDICTION, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED, OR OTHERWISE DISPOSED OF IN ANY MANNER UNLESS THEY ARE
REGISTERED UNDER SUCH ACT AND THE SECURITIES LAWS OR ANY APPLICABLE
JURISDICTIONS OR UNLESS PURSUANT TO ANY EXEMPTION THEREFROM.
Employer shall use its best efforts to register the Option Shares under the
Act at the earlier of such time as it registers shares issuable pursuant to a
qualified employee stock option plan or such time as it registers shares
beneficially owned by or issued to others.
Employer currently has total authorized common shares of one hundred million
(100,000,000). If, and to the extent that the number of authorized shares of
common stock of Employer shall be increased beyond such 100,000,000, or
reduced from 100,000,000 by whatever action, including but not limited to
change of par value, split, reclassification, distribution or a dividend
payable in stock, or the like, the number of shares subject to the Stock
Option and the option price per share shall be proportionately adjusted. If,
however, Employer, for any reason, issues additional common stock in any
amount up to the 100,000,000 shares authorized, no such adjustment shall be
applicable. If Employer is reorganized, consolidated or merged with another
corporation, Executive shall be entitled to receive options covering shares
of such reorganized, consolidated, or merged company in the same proportion,
at an equivalent price, and subject to the same conditions. For purposes of
the preceding sentence, the excess of the aggregate fair market value of the
shares subject to the option immediately after any such reorganization,
consolidation, or merger over the aggregate option price of such shares shall
not be more than the excess of the aggregate fair market value of all shares
subject to the Stock Option immediately before such reorganization,
consolidation, or merger over the aggregate option price of such shares, and
the new option or assumption of the old Stock Option shall not give Executive
additional benefits which he did not have under the old Stock Option, or
deprive him of benefits which he had under the old Stock Option.
Executive shall have no rights as a stockholder with respect to the Option
Shares until exercise of the Stock Option and payment of the Option Price as
herein provided.
9. BENEFITS. During the employment term, Executive shall be entitled to
receive all other benefits of employment generally available to Employer's
other executive and managerial employees when and as he becomes eligible for
them, including group health and life insurance benefits and an annual
vacation.
9.1 Vacation. Executive shall be entitled to a paid annual vacation of
three (3) weeks during the first year of employment, and four (4)
weeks during any subsequent years; provided however, that vacation
time may only be accumulated up to 6 months beyond the year in which
they were accrued.
9.2 Personal Leave. Executive shall be entitled, without any adjustment
in his compensation, to five (5) days personal leave in each fiscal
year of employment hereunder. Personal leave may not be carried over
from one fiscal year to the next.
9.3 Plans. Executive shall be entitled to participate in any and all
plans, arrangements, or distributions by Employer pertaining to or in
connection with any pension, bonus, profit sharing, stock options,
and/or similar benefits for its employees and/or executives, as
determined by the Board of Directors of committees thereof pursuant
to the governing instruments which establish and/or determine
eligibility and other rights of the participants and beneficiaries
under such plans or other benefit programs.
10. EXPENSE REIMBURSEMENT. During the employment term, Employer shall
reimburse Executive for reasonable out-of-pocket expenses incurred in
connection with Employer's business, including travel expenses, food, and
lodging when away from home, subject to such policies as Employer may from
time to time reasonably establish for its employees.
11. INTELLECTUAL PROPERTY. All processes, inventions, patents, copyrights,
trademarks, and other intangible rights that may be conceived or developed by
Executive, either alone or with others, during the term of Executive's
employment, whether or not conceived or developed during Executive's working
hours, and with respect to which the equipment, supplies, facilities, or
trade secret information of Employer was used, or that relate at the time of
conception or reduction to practice of the invention to the business of the
Employer or to Employer's actual or demonstrably anticipated research and
development, or that result from any work performed by Executive for
Employer, shall be the sole property of Employer. Executive shall disclose to
Employer all inventions conceived during the term of employment, whether or
not the property of Employer under the terms of the preceding sentence,
provided that such disclosure shall be received by Employer in confidence.
Executive shall execute all documents, including patent applications and
assignments, required by Employer to establish Employer's rights under this
Section.
12. INDEMNIFICATION OF EXECUTIVE. Employer shall, to the maximum extent
permitted by law, indemnify and hold Executive harmless against expenses,
including reasonable attorney's fees judgments, fines, settlement, and other
amounts actually and reasonably incurred in connection with any proceeding
arising by reason of Executive's employment by Employer. Employer shall
advance to Executive any expense incurred in defending such proceeding to the
maximum extent permitted by law.
13. TERMINATION BY EMPLOYER. Employer may terminate this Agreement at any
time, if termination is "For Cause", as hereinafter defined. "For Cause"
shall mean Employer's termination of Executive due to an adjudication of
Executive's fraud, theft, dishonesty to Employer regarding Executive's duties
or material breach of this Agreement, if Executive fails to cure such breach
within ten (10) days after written notice is given by the Board of Directors
to Executive and Executive fails with ten (10) days of such notification to
commence such cure and thereafter diligently prosecute such cure to
completion. In the event of such termination, Executive shall forfeit all
right to any further compensation as contemplated in this Agreement,
including, but not limited to, bonuses and Stock Options.
14. TERMINATION BY EXECUTIVE. Executive may terminate this Agreement by
giving Employer thirty (30) days prior written notice of resignation In the
event of such termination, however, Executive shall forfeit all right to any
further compensation as contemplated in this Agreement, including, but not
limited to, bonuses and Stock Options.
15. DEATH OF EXECUTIVE. If Executive dies during the initial term or during
any renewal term of this Agreement, this Agreement shall be terminated on the
last day of the calendar month of his death. Employer shall then pay to
Executive's estate any salary accrued but unpaid as of the last day of the
calendar month in which Executive dies. Employer shall have no further
financial obligations to Executive or his estate hereunder. Any and all
unexercised Stock Option shall survive Executive's death and shall be
exercisable by Executive's estate or its beneficiaries to whom such Stock
Options may be distributed in accordance with the original terms and
conditions of any such Stock Options.
16. AGREEMENT ON BUSINESS COMBINATION OR DISSOLUTION. This Agreement shall
not be terminated by Employer's voluntary or involuntary dissolution or by
any merger in which Employer is not the surviving or resulting corporation,
or on any transfer of all or substantially all of Employer's assets. In the
event any such merger or transfer of assets, the provisions of this Agreement
shall be binding on and inure to the benefit of the surviving business entity
or the business entity to which such assets shall be transferred.
17. TRADE SECRETS AND CONFIDENTIAL INFORMATION:
17.1 Nondisclosure. Without the prior written consent of Employer,
Executive shall not, at any time, either during or after the term of
this Agreement, directly or indirectly, divulge or disclose to any
person, firm, association, or corporation, or use for Executive's
own benefit, gain, or otherwise, any customer lists, plans,
products, data, results of tests and data, or any other trade
secrets or confidential materials or like information (collectively
referred to as the "Confidential Information") of Employer and/or
its Affiliates, as hereinafter defined, it being the intent of
Employer, with which intent Executive hereby agrees, to restrict
Executive from disseminating or using any like information that is
unpublished or not readily available to the general public.
17.1.1 Definition of Affiliate. For purposes of this
Agreement, the term "Affiliate" shall mean any entity,
individual, firm, or corporation, directly or indirectly,
through one or more intermediaries, controlling,
controlled by, or under common control with Employer.
17.2 Return of Property. Upon the termination of this Agreement,
Executive shall deliver to Employer all lists, books, records, data,
and other information (including all copies thereof in whatever form
or media) of every kind relating to or connected with Employer or
its Affiliates and their activities, business and customers.
17.3 Notice of Compelled Disclosure. If, at any time, Executive becomes
legally compelled (by deposition, interrogatory, request for
documents, subpoena, civil investigative demand, or similar process
or otherwise) to disclose any of the Confidential Information,
Executive shall provide Employer with prompt, prior written notice
of such requirement so that Employer may seek a protective order or
other appropriate remedy and/or waive compliance with the terms of
this Agreement. In the event that such protective order or other
remedy is not obtained, that Employer waives compliance with the
provisions hereof, Executive agrees to furnish only that portion of
the Confidential Information which Executive is advised by written
opinion of counsel is legally required and exercise Executive's best
efforts to obtain assurance that confidential treatment will be
accorded such Confidential Information. In any event, Executive
shall not oppose action by Employer to obtain an appropriate
protective order or other reliable assurance that confidential
treatment will be accorded the Confidential Information.
17.4 Assurance of Compliance. Executive agrees to represent to Employer,
in writing, at any time that Employer so request, that Executive has
complied with the provisions of this section, or any other section
of this Agreement.
18. NON-COMPETITION. For a period of three (3) months after the termination
of this Agreement, Executive expressly covenants and agrees that Executive
will not and will not attempt to, without the prior written consent of the
Board of Directors, directly or indirectly, (except as to those entities set
forth in Paragraph 4, above):
18.1 Own, manage, operate, finance, join, control, or participate in the
ownership, management, operation, financing, or control of, or be
associated as an officer, director, employee, agent, partner,
principal, representative, consultant, or otherwise with, or use or
permit his name to be used in connection with, any line of business
or enterprise that competes with Employer or its Affiliates (as
defined herein) in any business of Employer or its Affiliates,
existing or proposed, wherever located, provided that Executive
shall not be prohibited from owning, directly or indirectly, less
than one percent (1%) of the outstanding shares of any Corporation,
the shares of which are traded on a National Securities Exchange or
in the over-the-counter markets;
18.2 Interfere with or disrupt or attempt to interfere with or disrupt
or take any action that could be reasonably expected to interfere
with or disrupt any past or present or prospective relationship,
contractual or otherwise, between Employer and/or any of its
Affiliates, and any customer, insurance company, supplier, sales
representative, or agent or employee of Employer or any such
affiliate of Employer.
18.3 Directly or indirectly solicit for employment or attempt to employ
or assist any other entity in employing or soliciting or attempting
to employ or solicit for employment, either on a full-time, part-
time, or consulting basis, any employee, agent, representative, or
executive (whether salaried or otherwise, union or non-union) who
within one (1) years of the time that Executive ceased to perform
services hereunder has been employed by Employer or its Affiliates.
19. VIOLATION OF COVENANTS:
19.1 Injunctive Relief. Executive acknowledges and agrees that the
services to be rendered by Executive hereunder are of a special
unique, and personal character that gives them peculiar value; that
the provisions of this section are, in view of the nature of the
business of Employer, reasonable and necessary to protect the
legitimate business interests of Employer; that violation of any of
the covenants or Agreements hereof would cause irreparable injury to
Employer, that the remedy at law for any violation or threatened
violation thereof would be inadequate; and that, therefore, Employer
shall be entitled to temporary and permanent injunctive or other
equitable relief as it may deem appropriate without the necessity of
proving actual damages and to an equitable accounting of all
earnings, profits, and other benefits arising, from any such
violation, or attempted violation, which rights shall be cumulative
and in addition to all other rights or remedies available to
Employer.
19.2 Executive and Employer recognize that the laws and public policies
of the various states of the United States may differ as to the
validity and enforceability of certain of the provisions contained
in this section. It is the intention of Executive and Employer that
the provisions of this section shall be enforced to the fullest
extent permissible under the laws and public policies of each
jurisdiction in which such enforcement is sought, but that the
invalidation (or modification to conform with such laws or public
policies) of any provision hereof shall not render unenforceable or
impair the remainder of this section. Accordingly, if any provision
of this section shall be determined to be invalid or unenforceable,
either in whole or in part this section shall be deemed to delete or
modify, as necessary, the offending provision and to alter the
balance of this section in order to render it valid and enforceable
to the fullest extent permissible as provided herein.
20. LIQUIDATED DAMAGES, EMPLOYER'S BREACH. In the event of any material
breach of this Agreement on the part of Employer, Executive at his sole
option, may terminate his employment under this Agreement and, at his sole
option, shall be entitled to receive as liquidated damages the amounts set
forth in the following subsection. The liquidated damages so received by
Executive shall not be limited or reduced by amounts that Executive might
otherwise earn or be able to earn during the period between termination of
his employment under this Agreement and payment of those liquidated damages.
The provisions of this Section 20 shall be in addition to any and all rights
Executive may have in equity or at law to require Employer to comply with or
to prevent the breach of this Agreement.
20.1 The present value on the payment date (as defined in this section)
of the full amount of his basic salary as provided for in this
Agreement for five (5) years following the payment due, discounted
to the payment date at a rate for quarterly periods based on prime
interest rate charged by Bank of America in Las Vegas, Nevada, for
short term commercial loans on the payment date. The amount payable
to Executive under this subsection shall be due and payable in full
on the date of notification of Employer by Executive of the exercise
of his option to terminate his employment under this Agreement (the
"payment date").
21. MISCELLANEOUS:
21.1 Authority to Execute. The parties herein represent that they
have the authority to execute this Agreement.
21.2 Severability. If any term, provision, covenant, or condition of
this Agreement is held by a court of competent jurisdiction to be
invalid, void, or unenforceable, the rest of this Agreement shall
remain in full force and effect.
21.3 Successors. This Agreement shall be binding on and inure to the
benefit of the respective successors, assigns, and personal
representatives of the parties, except to the extent of any contrary
provision in this Agreement.
21.4 Assignment. This Agreement may not be assigned by either party
without the written consent of the other party.
21.5 Singular, Plural and Gender Interpretation. Whenever used herein,
the singular number shall include the plural, and the plural number
shall include the singular. Also, as used herein, the masculine,
feminine or neuter gender shall each include the others whenever
the context so indicates.
21.6 Captions. The subject headings of the paragraphs of this
Agreement are included for purposes of convenience only, and shall
not effect the construction or interpretation of any of its
provisions.
21.7 Entire Agreement. This Agreement contains the entire agreement
of the parties relating to the rights granted and the obligations
assumed in this instrument and supersedes any oral or prior written
agreements between the parties. Any oral representations or
modifications concerning this instrument shall be of no force or
effect unless contained in a subsequent written modification signed
by the party to be charged.
21.8 Arbitration. Any controversy or claim arising out of, or
relating to, this Agreement, or the making, performance, or
interpretation thereof, shall be submitted to a panel of three (3)
arbitrators. The arbitration shall comply with and be governed by
the provisions of the American Arbitration Association. The panel
of arbitrators shall be composed of two (2) members chosen by
Executive and Employer respectively and one (1) member chosen by
the arbitrators previously selected. The findings of such
arbitrators shall be conclusive and binding on the parties hereto.
The cost of arbitration shall be borne by the losing party or in
such proportions as the arbitrator shall conclusively decide.
21.9 No Waiver. No failure by either Executive or Employer to insist
upon the strict performance by the other of any covenant,
agreement, term or condition of this Agreement or to exercise the
right or remedy consequent upon a breach thereof shall constitute a
waiver of any such breach or of any such covenant, agreement, term
or condition. No waiver of any breach shall affect or alter this
Agreement, but each and every covenant, condition, agreement and
term of this Agreement shall continue in full force and effect with
respect to any other then existing or subsequent breach.
21.10 Time of the Essence. Time is of the essence of this Agreement,
and each provision hereof.
21.11 Counterparts. The parties may execute this Agreement in two (2)
or more counterparts, which shall, in the aggregate, be signed by
both parties, and each counterpart shall be deemed an original
instrument as to each party who has signed by it.
21.12 Attorney's Fees and Costs. In the event that suit be brought
hereon, or an attorney be employed or expenses be incurred to
compel performance the parties agree that the prevailing party
therein be entitled to reasonable attorney's fees.
21.13 Governing Law. The formation, construction, and performance
of this Agreement shall be construed in accordance with the laws of
Nevada.
21.14 Notice. Any notice, request, demand or other communication
required or permitted hereunder or required by law shall be in
writing and shall be effective upon delivery of the same in person
to the intended addressee, or upon deposit of the same with an
overnight courier service (such as Federal Express) for delivery to
the intended addressee at its address shown herein, or upon deposit
of the same in the United States mail, postage prepaid, certified
or registered mail, return receipt requested, sent to the intended
addressee at its address shown herein. The address of any party to
this Agreement may be changed by written notice of such other
address given in accordance herewith and actually received by the
other parties at least ten (10) days in advance of the date upon
which such change of address shall be effective.
Executive Address Employer Address
Xxxx Xxxxxxxx Petrol Oil and Gas, Inc.
2948 Vista del Sol 000 Xxxxxxx Xxx
Xxx Xxxxx, XX 00000 Xxxxxxx, XX 00000
000 000 0000 000-000-0000
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
EXECUTIVE:
DATE: Dec 19, 2002 By:/s/ Xxxx Xxxxxxxx
December 19th, 2002 Xxxx Xxxxxxxx
EMPLOYER:
Petrol Oil and Gas Inc.
DATE:Dec 19, 2002 By:/s/ Xxxxx Mo;;
December 19th, 2002 Xxxxx Xxxx , Director
