EXECUTIVE COMPENSATION AGREEMENT
between
CAMBRIDGE ENERGY CORPORATION
and
▇▇▇▇▇ ▇▇▇▇▇▇▇ WEST
This Agreement is made this 2nd day of January, 1998, by and between
CAMBRIDGE ENERGY CORPORATION, a Nevada corporation ("CAMBRIDGE"), and ▇▇▇▇▇
▇▇▇▇▇▇▇ WEST, ("WEST").
WHEREAS,CAMBRIDGE is engaged in the business of oil and gas exploration
and development; and
WHEREAS, CAMBRIDGE desires to retain the services of the WEST in the
capacity of its Chairman and Chief Executive Officer.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
SECTION 1. EMPLOYMENT.
1.1 EXECUTIVE EMPLOYMENT. CAMBRIDGE appoints WEST and
WEST accepts the appointment as Chairman and Chief Executive Officer until
January 1, 2003.
1.2 ADVISORY PERIOD. If WEST's Executive Employment is
terminated as provided in paragraph (1.1) above, or in any other manner, he
shall nevertheless be retained thereafter by CAMBRIDGE as an advisor and
consultant until January 1, 2008 (Advisory Period).
SECTION 2. DUTIES. WEST shall serve as Chairman and Chief Executive
Officer of CAMBRIDGE, with such duties as are customarily associated with such
position in public corporations and specifically as set out in the By-Laws of
CAMBRIDGE.
SECTION 3. EXTENT OF SERVICES. WEST 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 CAMBRIDGE office in Florida, or at such other
place or places and at such times as the needs of CAMBRIDGE may from
time-to-time dictate.
Nothing in this Agreement shall preclude WEST from conducting other
business or holding official positions or directorships in other entities, the
activities of which do not directly conflict with WEST's duties and
responsibilities as Chairman and Chief Executive Officer of CAMBRIDGE.
SECTION 4. TERM. The term of this Agreement shall begin on January 2,
1998 (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. CAMBRIDGE will pay to WEST a base salary for
the first year in the amount of One Hundred Fifty Thousand Dollars ($150,000),
payable in accordance with CAMBRIDGE's standard payroll procedures but no less
frequently than monthly, at the election of WEST.
5.2 SUPPLEMENTAL SALARY.
(a) WEST's Base Salary at the rate of $150,000
plus 25% in cash per annum will be paid beginning from the first day of the
month following the quarter in which CAMBRIDGE achieves annualized gross
revenues of at least $4,000,000.
(b) When CAMBRIDGE achieves first fiscal year
$4,000,000 in gross revenues, WEST 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) WEST'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 CAMBRIDGE achieves annualized gross revenues of at least
$8,000,000.
(d) When CAMBRIDGE achieves second year
$8,000,000 in gross revenues, WEST 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 WEST'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 ▇▇▇▇ ▇▇▇▇'▇
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 CAMBRIDGE has substantially advanced toward its goals and
objectives during any quarter, and other advances have been made such as
acquisition of businesses or properties,WEST 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 WEST
provides legal services relating to CAMBRIDGE which are outside those services
normally provided by a Chairman 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) WEST shall be entitled to lump sum
supplement, consisting of options to purchase 100,000 shares of CAMBRIDGE
common stock at a strike price of $1.00 per share at the time CAMBRIDGE'S
common stock is accepted for trading on NASDAQ (small cap), American Stock
Exchange or other recognized stock exchange.
5.3 BONUSES. WEST 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 WEST's performance during such year.
SECTION 6 EXECUTIVE BENEFIT PACKAGE.
6.1 Insurance Benefits. Medical, dental and optical insurance
for WEST and WEST's immediate family shall be paid by CAMBRIDGE. In addition,
WEST 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 WEST and WEST's immediate family.
6.2 Disability Benefits. In the event WEST 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 WEST shall
die), CAMBRIDGE may at its option thereafter, upon written notice to WEST 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 January 1, 2008, regardless of the disability or death
of WEST. If WEST shall receive any disability payments from any insurance
policies paid for by CAMBRIDGE, payments to WEST during any period of disability
shall be reduced by the amount of the disability payments received by WEST under
such insurance policy or policies. For the purposes of this agreement,
disability shall mean mental or physical illness or condition rendering WEST
incapable of performing his normal duties with CAMBRIDGE.
6.3 Vacation Benefits. WEST 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 WEST.
6.4 Automobile Benefits. WEST shall receive annually an
automobile of a make and model of his selection for his use. 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. WEST 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, WEST 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 WEST shall die between the date of this
agreement and January 1, 2008, compensation payments hereunder shall not cease
and CAMBRIDGE shall pay to WEST'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 WEST may be entitled as an employee of CAMBRIDGE 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 WEST 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 WEST owns a substantial number
of shares of common stock in CAMBRIDGE and further, that
(a) CAMBRIDGE shall register for public trading
with the Securities and Exchange Commission at least ten percent (10%) of the
shares owned by WEST 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 WEST
and CAMBRIDGE, CAMBRIDGE shall register the balance of the stock owned by
WEST 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 CAMBRIDGE for 51% or more of the outstanding common stock of CAMBRIDGE,
all remaining shares of stock owned by WEST shall be registered for public
trading immediately.
7.2 WEST is entitled to receive stock distributions of fully
paid and non-assessable common stock of CAMBRIDGE, in addition to any other
stock options WEST may be entitled to, as described in Exhibit A to this
Agreement, entitled "Key Employee Stock Option Plan.
SECTION 8. TERMINATION.
8.1 Termination For Cause. Termination For Cause may be
effected by CAMBRIDGE at any time during the term of this Agreement and shall be
effected by written notification to WEST. Provided, however, WEST 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
CAMBRIDGE in which WEST is a participant to the full extent of WEST's rights
under such plans, accrued vacation pay and any appropriate business expenses
incurred by WEST in connection with his duties hereunder, all to the date of
termination.
8.2 Termination Other Than For Cause. Notwithstanding anything
else in this Agreement, CAMBRIDGE may effect a Termination Other Than For Cause
at any time upon giving written notice to WEST of such termination. Upon any
Termination Other Than For Cause, WEST 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 CAMBRIDGE in which
WEST is a participant to the full extent of WEST's rights under such plans,
(including accelerated vesting, if any, of awards granted to WEST under
CAMBRIDGE's stock option plan), accrued vacation pay and any appropriate
business expenses incurred by WEST in connection with his duties hereunder, all
to the date of termination. Thereafter, WEST 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, WEST 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 CAMBRIDGE in which WEST is a participant
to the full extent of WEST's rights under such plans, accrued vacation pay and
any appropriate business expenses incurred by WEST in connection with his duties
hereunder, all to the date of termination. Thereafter, WEST 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, WEST 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 CAMBRIDGE in which
WEST is a participant to the full extent of WEST's rights under such plans,
accrued vacation pay and any appropriate business expenses incurred by WEST in
connection with his duties hereunder, all to the date of termination.
Thereafter, WEST will be retained as an advisor and consultant during the
Advisory Period in accordance with Paragraph 1.2.
8.5 Notice of Termination. CAMBRIDGE may effect a termination
of this Agreement pursuant to the provisions of this Section upon giving 30 days
written notice to WEST of such termination. WEST may effect a termination of
this Agreement pursuant to the provisions of this Section upon giving 30 days
written notice to CAMBRIDGE of such termination.
SECTION 9. CONFIDENTIALITY.
WEST acknowledges that he will develop and be exposed to
information that is or will be confidential and proprietary to the CAMBRIDGE.
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. WEST 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. CAMBRIDGE's waiver of the WEST's breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by the WEST.
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 CAMBRIDGE at:
CAMBRIDGE ENERGY CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
addressed to WEST at:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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 Florida.
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 WEST, 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 CAMBRIDGE, its successors and assigns, including,
without limitations, any persons, partnership, company or corporation which may
acquire substantially all of CAMBRIDGE'S assets or business or with or into
which CAMBRIDGE may be liquidated, consolidated, merged or otherwise combined,
and shall inure to the benefit of and be binding upon WEST, his heirs,
distributees and personal representatives. If payments become payable to the
surviving widow of WEST and he shall thereafter die prior to January 1, 2008,
such payments shall nevertheless continue to be made to his estate until such
date.
10.8 ATTORNEY FEES. In the event arbitration or suit is
brought by any party to this Agreement to enforce any of its terms, and in any
appeal therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial, and/or appellate
court.
10.9 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.
10.10 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.
10.11 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.
10.12 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.
10.13 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.
10.14 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.
10.15 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.
10.16 CAPTIONS. The captions at the head of a section or a
paragraph of this Agreement are designed for convenience of reference only and
are not to be resorted to for the purpose of interpreting any provision of this
Agreement.
CAMBRIDGE ENERGY CORPORATION
a Nevada corporation
by: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇
its: Chairman and Chief Executive Officer
by: /s/ ▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇
its: Executive Vice President/Director
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ West
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▇▇▇▇▇ ▇▇▇▇▇▇▇ West, Individually
