EMPLOYMENT AGREEMENT
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AGREEMENT effective as of the 1st of October, 2001, by and between GulfWest
Energy Inc., hereinafter called the Employer, and Xxxxxx X. Xxxxxxx hereinafter
called the Employee.
1. Employment. Employer hereby employs the Employee and the Employee hereby
accepts employment upon the terms and conditions hereinafter set forth.
2. Term. Subject to the provisions for termination as hereinafter provided,
the term of this Agreement shall be for a period commencing on the 1st day of
October, 2001 and ending on the 30th day of September, 2004.
3. Compensation. For all services rendered by the Employee under this
Agreement, the Employer shall pay the Employee a base salary of $150,000
increasing as deemed appropriate by the Employer's compensation committee. Also,
the Employee will receive $25,000 annual contribution to a life insurance
savings account and this will be paid monthly.
4. Stock Options/Warrants. The Employee shall be awarded 300,000 warrants
issued over time as follows:
a. 100,000 warrants issued April 30, 2002, with an exercise price of
$.75 per share and an expiration date of October 31, 2006.
b. 100,000 warrants issued October 31, 2002, with an exercise price of $.75
per share and an expiration date of October 31, 2007.
c. 100,000 warrants issued October 31, 2003, with an exercise price of $.75
per share and an expiration date of October 31, 2008.
5. Medical Insurance. The Employee shall be entitled to coverage pursuant
to the terms and provisions of Employer's Medical/Hospitalization insurance
coverage and such other prerequisites as are generally available to employees of
the Employer.
6. Duties. The Employee is engaged in an executive capacity with the
Employer and shall be assigned to supervise and direct the activities of the
Employer as well as to maintain the public relations and good will of the
Employer. The precise services of the Employee may be specified or changed from
time to time at the direction of the Board of Directors of Employer.
7. Extent of Services. The Employee shall devote as much of his time,
attention and energies to the business of the Employer as shall be necessary in
the reasonable determination of the Board of Directors of Employer, to carry out
the duties and responsibilities delegated to Employee by Employer, but Employee
shall not be precluded from engaging in other business activities so long as
such additional business activities do not, in the reasonable determination of
the Board of Directors of Employer, conflict with the interests of Employer,
whether or not such business activity is pursued for gain, profit or other
pecuniary advantages.
8. Disclosure of Information. Employee will make no unauthorized disclosure
of any Employer's trade secrets or confidential information, the disclosure of
which would be detrimental to Employer. In the event of a breach or threatened
breach by the Employee of the provisions of this paragraph, the Employer shall
be entitled to an injunction restraining the Employee from disclosing such
information, in whole or in part, or from rendering any services to any person,
firm, corporation, association or other entity to whom such information, in
whole or in part, has been disclosed or is threatened to be disclosed. Nothing
herein shall be construed as prohibiting the Employer from pursuing any other
remedies available to the Employer for such breach or threatened breach,
including the recovery of damages from the Employee.
9. Expenses. The Employee is authorized to incur reasonable expenses for
promoting the business of the Employer, including expenses for automobile,
entertainment, travel and similar items. The Employer will reimburse the
Employee for all such expenses upon the presentation by the Employee, from time
to time, of an itemized account of such expenditures and approval by the
Employer.
10. Vacations. The Employee shall be entitled each year to a vacation of
three (3) weeks during which time his compensation shall be paid in full.
11. Disability. If the Employee is unable to perform his services by reason
of illness or incapacity for a continuous period of more than three months, the
compensation otherwise payable to him shall cease during the continued period of
such illness or incapacity. The Employee's full compensation shall be reinstated
upon his return to employment and the discharge of his full duties hereunder.
Notwithstanding anything herein to the contrary, the Employer may terminate this
Agreement at any time after the Employee shall be absent from his employment,
for whatever cause, for a continuous period of more than three months, and all
obligation of the Employer hereunder shall cease upon any such termination.
12. Death During Employment. If the Employee dies during the term of his
employment, the Employer shall pay to the estate of the Employee the
compensation which would otherwise be payable to the Employee up to the end of
the month in which the Employee's death occurs.
13. Restrictive Covenant. If the Employee is terminated with cause or
leaves the employ of the Employer for any reason, then for a period of one year
following such termination by the Employer, the Employee will not, within any
geographical area wherein Employer conducts its business, engage directly or
indirectly, own, manage, operate, control, be employed by, participate in, or
engage in any manner with the ownership, management, operation, or control of
any business entity whose primary activity includes the exploration for oil
and/or gas, or engaging in any other similar business which would in any way
compete with the business conducted by the Employer, at the time of the
termination of said Employee.
14. Notices. Any notice of termination of the Agreement shall be sufficient
if in writing, and if sent by certified mail to his residence in the case of the
Employee, or to its principal offices in the case of the Employer.
15. Termination. The Employer shall have the right to terminate the
employment of Employee at any time for cause. As used herein, the term "Cause"
is defined to mean (a) willful action intended by the Employee to adversely
impact the Employer or (b) the conviction of Employee of a felony or any other
offense involving moral turpitude. Employee may terminate this agreement at any
time by the giving of ninety (90) days' prior written notice to Employer, in
which case Employer shall be obligated to pay Employee all compensation accrued
through the effective date of the termination of the employment, after which
neither party shall have any further rights or obligations except the obligation
of Employee described in paragraph 7 and 13 hereof.
16. Waiver of Breach. The waiver by the Employer of a breach of any
provision of this Agreement by the Employee shall not operate or be construed as
a waiver of any subsequent breach by the Employee.
17. Assignment. The rights and obligations of the Employee under this
Agreement shall not be assignable without the prior written consent of the
Employer, which consent may be withheld at the discretion of the Employer.
18. Attorney's Fees. If either party hereto is required to retain the
services of legal counsel to enforce its rights hereunder, the party prevailing
in any such proceeding shall be entitled to reimbursement of its reasonable
legal expenses incurred.
19. Additional Compensation to Employee in the Event of the Change of
Control of the Board of Directors of Employer. In the event of a change of
control, the Employee will have the option to continue as an employee of the
Company under the terms of the Agreement or receive a lump-sum cash severance
payment equal to 200% of his annual base salary for the year following the
change of control, it being understood by Employer that Employee would not
otherwise commit to provide his services to Employer upon the Terms and
conditions set forth herein. Such additional sums shall be paid to Employee
within fifteen (15) business days from the written demand therefor by Employee.
Any stock options or warrants held by the Employee will become vested in the
Event of a Change of Control and will remain valid for their duration.
A "change of control" is defined as: (i) an acquisition (other than from
the Company) by an individual, entity or a group (excluding the Company, its
subsidiaries, a related employee benefit plan or a corporation the voting stock
of which is beneficially owned following such acquisition 50% or more by the
Company's stockholders in substantially the same proportions as their holdings
in the Company prior to such acquisition) of beneficial ownership of 50% or more
of the Company's voting stock; (ii) a change in a majority of the Board of
Directors (excluding any persons approved by a vote of at least a majority of
the incumbent Board other than in connection with a proxy contest); (iii) the
approval by the stockholders of a reorganization, merger or consolidation (other
than a reorganization, merger or consolidation in which all or substantially all
of the stockholders of the Company receive 50% or more of the voting stock of
the surviving company); or (iv) a complete liquidation or dissolution of the
Company or the sale of all, or substantially all, of its assets.
20. Entire Agreement. This instrument contains the entire agreement of the
parties. It may not be changed orally but only by an agreement in writing signed
by the party against whom enforcement or any waiver, change, modification or
discharge is sought.
IN WITNESS WHEREOF, the parties have executed this Agreement the 30th day
of May, 2002, but effective the 1st day of October, 2001.
EMPLOYER:
GULFWEST ENERGY INC.
By: \S\ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
On behalf of the Compensation Committee of
the Board of Directors
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GULFWEST ENERGY INC.
By:
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Xxx X. Xxxxxx
Title: Executive Vice President
EMPLOYEE:
By:
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Xxxxxx X. Xxxxxxx
