EXHIBIT 10.3: Executive Compensation Agreement - Xxxxxx X. Xxxxxxxx
EXECUTIVE COMPENSATION AGREEMENT
Between
NUTEK OIL, INC
and
XXXXXX X. XXXXXXXX
This Agreement is made this 1st day of April, 2004, by and between NUTEK
OIL, INC, a Nevada corporation ("NUTEK OIL"), and XXXXXX X. XXXXXXXX
("EXECUTIVE").
WHEREAS, NUTEK OIL is engaged in the business of oil and gas exploration
and development; and
WHEREAS, NUTEK OIL desires to retain the services of the EXECUTIVE in the
capacity of its Chairman, President and Chief Executive Officer.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
SECTION 1. EMPLOYMENT.
1.1 EXECUTIVE EMPLOYMENT. NUTEK OIL appoints EXECUTIVE and EXECUTIVE
accepts the appointment as Chairman, President and Chief Executive Officer
until March 31, 2009.
1.2 ADVISORY PERIOD. If EXECUTIVE's Employment is terminated as
provided in paragraph (1.1) above, or in any other manner, he shall
nevertheless be retained thereafter by NUTEK OIL as an advisor and consultant
until March 31, 2014 (Advisory Period).
SECTION 2. DUTIES. EXECUTIVE shall serve as Chairman, President and Chief
Executive Officer of NUTEK OIL, with such duties as are customarily associated
with such position in public corporations and specifically as set out in the
By-Laws of NUTEK OIL.
SECTION 3. EXTENT OF SERVICES. EXECUTIVE shall devote his best efforts,
attention, and energies to the performance of his duties as set out above. The
duties shall be rendered at the NUTEK OIL offices, or at such other place or
places and at such times as the needs of NUTEK OIL may from time-to-time
dictate.
Nothing in this Agreement shall preclude EXECUTIVE from conducting other
business or holding official positions or directorships in other entities, the
activities of which do not directly conflict with EXECUTIVE's duties and
responsibilities as Chairman, President and Chief Executive Officer of NUTEK
OIL.
SECTION 4. TERM. The term of this Agreement shall begin on April 1, 2004
(the "Effective Date"), and shall continue for a five year period. The parties
presently anticipate that the employment relationship may continue beyond this
five-year term.
SECTION 5. EXECUTIVE COMPENSATION.
5.1 BASE SALARY. NUTEK OIL will pay to EXECUTIVE a base salary for
the first year in the amount of Twenty Four Thousand Dollars ($24,000), payable
in accordance with NUTEK OIL's standard payroll procedures but no less
frequently than monthly, at the election of EXECUTIVE. This base salary will
be payable throughout the term serving in the EXECUTIVE or advisory capacity,
as defined in Section 1.1 (Executive Employment) and 1.2 (the Advisory Period).
5.2 SUPPLEMENTAL SALARY.
(a) EXECUTIVE's Base Salary at the rate of $24,000 plus 25% in
cash per annum will be paid beginning from the first day of the month following
the quarter in which NUTEK OIL achieves annualized gross revenues of at least
$300,000.
(b) If NUTEK OIL achieves first fiscal year $300,000 in gross
revenues, EXECUTIVE will be entitled to a 50% increase in base salary over and
above any quarterly increases. This newly calculated Base Salary will then
become the Base Salary for the second year of employment.
(c) EXECUTIVE's increased Base Salary plus 25% in cash per annum
will be paid beginning from the first day of the month following the quarter in
which NUTEK OIL achieves annualized gross revenues of at least $500,000.
(d) If NUTEK OIL achieves second year $500,000 in gross revenues,
EXECUTIVE will be entitled to a 50% increase in base salary over and above any
quarterly increases. This newly calculated Base Salary will then become the
Base Salary for the third year of employment.
(e) The same procedure will be followed for determining
EXECUTIVE's compensation in the third through the fifth years of this
Agreement, with the gross revenue thresholds for quarterly and annual increases
negotiated with the Board of Directors prior to the beginning of the third,
fourth and fifth years of this Agreement, except that at no time will
EXECUTIVE's Base Salary be less than that determined at the beginning of the
third year of employment. Said supplemental salary shall be effective
throughout the executive period and the advisory period of employment.
(f) Notwithstanding the goals set out above, in the event that
NUTEK OIL has substantially advanced toward its goals and objectives during any
quarter, and other advances have been made such as acquisition of businesses or
properties, EXECUTIVE shall be entitled to a supplemental salary amount for the
following quarter and/or lump sum bonus in an amount set by the Board of
Directors.
(g) During any period of the contract in which EXECUTIVE provides
consulting services relating to NUTEK OIL which are outside those services
normally provided by a Chairman, President and Chief Executive Officer, he
shall be entitled to separate and supplemental compensation in amounts
reasonably associated with such services, in addition to other compensation
provided for under this agreement.
(h) EXECUTIVE shall be entitled to a lump sum supplement,
consisting of options to purchase 200,000 shares of NUTEK OIL common stock at a
strike price of $0.50 per share at the time NUTEK OIL'S common stock is
accepted for trading on the Over the Counter Bulletin Board, NASDAQ (small
cap), American Stock Exchange or other recognized stock exchange.
5.3 BONUSES. EXECUTIVE shall be eligible to receive a discretionary
bonus for each year (or portion thereof) during the term of this Agreement and
any extensions thereof, with the actual amount of any such bonus to be
determined in the sole discretion of the Board of Directors based upon its
evaluation of EXECUTIVE's performance during such year.
SECTION 6. EXECUTIVE BENEFIT PACKAGE.
6.1 Insurance Benefits. Medical, dental and optical insurance for
EXECUTIVE and EXECUTIVE's immediate family shall be paid by NUTEK OIL. In
addition, EXECUTIVE shall be entitled to receive a supplemental medical, dental
and optical compensation benefit, an amount when placed with the amount payable
the insurance policies referenced above shall equal one hundred percent (100%)
of the cost of medical treatment for EXECUTIVE and EXECUTIVE's immediate
family.
6.2 Disability Benefits. In the event EXECUTIVE should become
disabled during the period of his executive employment, his salary shall
continue at the same rate that it was on the date of such disability. If such
disability continues for a period of five consecutive months (or EXECUTIVE
shall die), NUTEK OIL may at its option thereafter, upon written notice to
EXECUTIVE or his Personal Representative, terminate his executive employment.
In such event the advisory period shall commence immediately upon such
termination of employment and shall continue until March 31, 2014, regardless
of the disability or death of EXECUTIVE. If EXECUTIVE shall receive any
disability payments from any insurance policies paid for by NUTEK OIL, payments
to EXECUTIVE during any period of disability shall be reduced by the amount of
the disability payments received by EXECUTIVE under such insurance policy or
policies. For the purposes of this agreement, disability shall mean mental or
physical illness or condition rendering EXECUTIVE incapable of performing his
normal duties with NUTEK OIL.
6.3 Vacation Benefits. EXECUTIVE shall be entitled to four (4) weeks
of vacation leave per year for each year of the contract period including the
executive and advisory period, cumulative at the option of EXECUTIVE.
6.4 Automobile Benefits. EXECUTIVE shall have the option to receive
annually an automobile of a make and model of his selection for his use,
beginning on the third anniversary of the signing of this agreement. Should
the EXECUTIVE not exercise this option, EXECUTIVE will be entitled to a monthly
automobile allowance of $500 per month, indexed to inflation. Provided,
however, that any amount of expenditure in excess of that proscribed as an
ordinary and necessary business expense by the Internal Revenue Service shall
be deducted from the base salary as set out above. EXECUTIVE shall have the
option of accepting a cash disbursement equal to the amount set out above for
the use of his private automobile. In addition, EXECUTIVE shall receive
reimbursement for all reasonable and necessary expense necessary for the
maintenance and upkeep of said automobile including repairs, gasoline, oil, and
insurance.
6.5 Death Benefits. If EXECUTIVE shall die between the date of this
agreement and March 31, 2014, compensation payments hereunder shall not cease
and NUTEK OIL shall pay to EXECUTIVE's widow, if she survives him, or if she
shall not survive him to his estate, in equal monthly installments in an amount
equal to the advisory compensation provide for above. Such payments shall
commence with the month following the date of death. Said amount shall not be
less than two years' base salary plus medical, dental and optical coverage for
at least two (2) years, if less time is remaining on subject contract.
6.6 Employment Benefits. This Agreement is not intended to and shall
not be deemed to be in lieu of any rights, benefits and privileges to which
EXECUTIVE may be entitled as an employee of NUTEK OIL under any retirement,
pension, profit-sharing, insurance, hospital, automobile or other plans which
may now be in effect or which may hereinafter be adopted, it being understood
that EXECUTIVE shall have the same rights and privileges to participate in such
plans and benefits as any other employee during this period providing such
benefits are at least equal to those provided herein.
SECTION 7. STOCK AND STOCK OPTIONS
7.1 It is acknowledged that EXECUTIVE owns a number of shares of
common stock in NUTEK OIL and further, that
(a) NUTEK OIL shall register for public trading with the
Securities and Exchange Commission at least ten percent (10%) of the shares
owned by EXECUTIVE per year for each year of the contract beginning with the
second year of the contract or the first offering of securities, whichever
shall occur first.
(b) In the event a voluntary termination by EXECUTIVE and NUTEK
OIL, NUTEK OIL shall register the balance of the stock owned by EXECUTIVE pro-
rata over five (5) years following such termination in the event such stock is
not sooner sold.
(c) In the event of involuntary termination or an offer is made
by a single purchaser or group of purchasers and accepted by NUTEK OIL for 51%
or more of the outstanding common stock of NUTEK OIL, all remaining shares of
stock owned by EXECUTIVE shall be registered for public trading immediately.
7.2 EXECUTIVE is entitled to receive stock distributions of fully
paid and non-assessable common stock of NUTEK OIL, in addition to any other
stock options EXECUTIVE may be entitled to, as described in Exhibit A to this
Agreement, entitled "Executive Stock Option Agreement".
SECTION 8. TERMINATION.
8.1 Termination For Cause. Termination for Cause may be effected by
NUTEK OIL at any time during the term of this Agreement and shall be effected
by written notification to EXECUTIVE. Provided, however, EXECUTIVE shall be
given 30 days from date of delivery of such notification to cure the defect set
out in the notice. Upon Termination For Cause, Employee shall promptly be paid
all accrued salary, bonus compensation to extent earned, vested deferred
compensation (other than pension or profit sharing plan benefits which will be
paid in accordance with the applicable plan), any benefits under any plans of
NUTEK OIL in which EXECUTIVE is a participant to the full extent of EXECUTIVE's
rights under such plans, accrued vacation pay and any appropriate business
expenses incurred by EXECUTIVE in connection with his duties hereunder, all to
the date of termination, along with a severance payment equal to six-months
base salary.
8.2 Termination Other Than For Cause. Notwithstanding anything else
in this Agreement, NUTEK OIL may effect a Termination Other Than For Cause at
any time upon giving written notice to EXECUTIVE of such termination. Upon any
Termination Other Than For Cause, EXECUTIVE shall promptly be paid all accrued
salary, bonus compensation to extent earned, vested deferred compensation
(other than pension or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any benefits under any plans of NUTEK OIL
in which EXECUTIVE is a participant to the full extent of EXECUTIVE's rights
under such plans, (including accelerated vesting, if any, of awards granted to
EXECUTIVE under NUTEK OIL's stock option plan), accrued vacation pay and any
appropriate business expenses incurred by EXECUTIVE in connection with his
duties hereunder, all to the date of termination. Thereafter, EXECUTIVE will be
retained as an advisor and consultant during the Advisory Period in accordance
with Paragraph 1.2.
8.3 Voluntary Termination. In the event of a Voluntary Termination,
EXECUTIVE shall promptly be paid all accrued salary, bonus compensation to
extent earned, vested deferred compensation (other than pension or profit
sharing plan benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of NUTEK OIL in which EXECUTIVE is a
participant to the full extent of EXECUTIVE's rights under such plans, accrued
vacation pay and any appropriate business expenses incurred by EXECUTIVE in
connection with his duties hereunder, all to the date of termination.
Thereafter, EXECUTIVE will be retained as an advisor and consultant during the
Advisory Period in accordance with Paragraph 1.2.
8.4 Termination Upon A Change of Control. In the event of a
Termination Upon A Change of Control, EXECUTIVE shall promptly be paid all
accrued salary, bonus compensation to extent earned, vested deferred
compensation (other than pension or profit sharing plan benefits which will be
paid in accordance with the applicable plan), any benefits under any plans of
NUTEK OIL in which EXECUTIVE is a participant to the full extent of EXECUTIVE's
rights under such plans, accrued vacation pay and any appropriate business
expenses incurred by EXECUTIVE in connection with his duties hereunder, all to
the date of termination. Thereafter, EXECUTIVE will be retained as an advisor
and consultant during the Advisory Period in accordance with Paragraph 1.2.
8.5 Notice of Termination. NUTEK OIL may effect a termination of this
Agreement pursuant to the provisions of this Section upon giving 30 days
written notice to EXECUTIVE of such termination. EXECUTIVE may effect a
termination of this Agreement pursuant to the provisions of this Section upon
giving 30 days written notice to NUTEK OIL of such termination.
SECTION 9. CONFIDENTIALITY.
EXECUTIVE acknowledges that he will develop and be exposed to
information that is or will be confidential and proprietary to the NUTEK OIL.
The information includes oil and gas prospects, engineering and geological
information, exploration and development plans, and other intangible
information. Such information shall be deemed confidential to the extent not
generally known within the trade. EXECUTIVE agrees to make use of such
information only in the performance of his duties under this Agreement, to
maintain such information in confidence and to disclose the information only to
persons with a need to know.
SECTION 10. MISCELLANEOUS PROVISIONS.
10.1 WAIVER. NUTEK OIL's waiver of the EXECUTIVE's breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by the EXECUTIVE. EXECUTIVE's waiver of NUTEK OIL'S
breach of any provision of this Agreement shall not operate or be construed as
a waiver of any subsequent breach by NUTEK OIL.
10.2 NOTICES. Any notices permitted or required under this Agreement
shall be deemed given upon the date of personal delivery or forty-eight (48)
hours after deposit in the United States mail, postage fully prepaid, return
receipt requested, addressed to NUTEK OIL at:
NUTEK OIL, INC
0000 XxXxxx Xxxxx, Xxxxx 0
Xxx Xxxxx, XX 00000
addressed to EXECUTIVE at:
XXXXXX X. XXXXXXXX
0000 XxXxxx Xxxxx, Xxxxx 0
Xxx Xxxxx, XX 00000
or at any other address as any party may, from time to time, designate by
notice given in compliance with this Section.
10.3 LAW GOVERNING. This Agreement shall be governed by and construed
in accordance with the laws of the State of Nevada.
10.4 TITLES AND CAPTIONS. All section titles or captions contained
in this Agreement are for convenience only and shall not be deemed part of the
context nor effect the interpretation of this Agreement.
10.5 ENTIRE AGREEMENT. This Agreement contains the entire
understanding between and among the parties and supersedes any prior
understandings and agreements among them respecting the subject matter of this
Agreement.
10.6 NON-TRANSFERABILITY. Neither EXECUTIVE, his wife, nor their
estates shall have any right to commute, anticipate, encumber, or dispose of
any payment hereunder, which payment and the rights thereto are expressly
declared nonassignable and nontransferable, except as other wise specifically
provided herein.
10.7 AGREEMENT BINDING. This Agreement shall inure to the benefit of
and be binding upon NUTEK OIL, its successors and assigns, including, without
limitations, any persons, partnership, company or corporation which may acquire
substantially all of NUTEK OIL'S assets or business or with or into which NUTEK
OIL may be liquidated, consolidated, merged or otherwise combined, and shall
inure to the benefit of and be binding upon EXECUTIVE, his heirs, distributees
and personal representatives. If payments become payable to the surviving widow
of EXECUTIVE and he shall thereafter die prior to January 1, 2014, such
payments shall nevertheless continue to be made to his estate until such date.
10.8 COMPUTATION OF TIME. In computing any period of time pursuant to
this Agreement, the day of the act, event or default from which the designated
period of time begins to run shall be included, unless it is a Saturday,
Sunday, or a legal holiday, in which event the period shall begin to run on the
next day which is not a Saturday, Sunday, or legal holiday, in which event the
period shall run until the end of the next day thereafter which is not a
Saturday, Sunday, or legal holiday.
10.9 PRONOUNS AND PLURALS. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular, or
plural as the identity of the person or persons may require.
10.10 ARBITRATION. If at any time during the term of this Agreement
any dispute, difference, or disagreement shall arise upon or in respect of the
Agreement, and the meaning and construction hereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter agreed upon
by the parties, or if no single arbiter can be agreed upon, an arbiter or
arbiters shall be selected in accordance with the rules of the American
Arbitration Association and such dispute, difference, or disagreement shall be
settled by arbitration in accordance with the then prevailing commercial rules
of the American Arbitration Association, and judgment upon the award rendered
by the arbiter may be entered in any court having jurisdiction thereof.
10.11 PRESUMPTION. This Agreement or any section thereof shall not be
construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party.
10.12 FURTHER ACTION. The parties hereto shall execute and deliver
all documents, provide all information and take or forbear from all such action
as may be necessary or appropriate to achieve the purposes of the Agreement.
10.13 PARTIES IN INTEREST. Nothing herein shall be construed to be to
the benefit of any third party, nor is it intended that any provision shall be
for the benefit of any third party.
10.14 SEVERABILITY. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby, and shall remain in full force and effect.
NUTEK OIL INC.
a Nevada corporation
by: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Xxxxx X. Xxxxxxxx
its: Chief Financial Officer/Director
/s/ Xxxxxx X. Xxxxxxxx
---------------------------
Xxxxxx X. Xxxxxxxx, Individually
