DATED August 29th 2006 Index Oil and Gas Inc. and John Williams EMPLOYMENT AGREEMENT
Exhibit
10.1
DATED
August 29th 2006
Index
Oil and Gas Inc.
and
▇▇▇▇
▇▇▇▇▇▇▇▇
_________________________________
___________________________________
CONTENTS
| Article | Heading |
Page
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1.
|
Definitions
|
1
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|
2.
|
Appointment
|
2
|
|
3.
|
Term
|
2
|
|
4.
|
Duties
|
3
|
|
5.
|
Hours
and place of work
|
3
|
|
6.
|
Remuneration
|
4
|
|
7.
|
Deductions
|
4
|
|
8.
|
Expenses
|
5
|
|
9.
|
Holidays
|
5
|
|
10.
|
Sickness
benefits
|
5
|
|
11.
|
Restrictions
on other activities by the Executive
|
6
|
|
12.
|
Confidential
Information and Company documents
|
7
|
|
13.
|
Inventions
and other intellectual property
|
8
|
|
14.
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Data
Protection
|
13
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17.
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Notices
|
14
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18.
|
Former
Agreements
|
14
|
|
19.
|
Change
of Control Arrangements
|
14
|
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20.
|
Garden
Leave
|
16
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21.
|
Choice
of law and submission to jurisdiction
|
16
|
BETWEEN:
|
(1)
|
Index
Oil & Gas Inc. (Index),
a Nevada corporation, whose executive office is located at ▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Company");
and
|
|
(2)
|
▇▇▇▇
▇▇▇▇▇▇▇▇
of
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Executive")
|
IT
IS AGREED
as
follows:
| (1) |
Definitions
|
| 1.1 |
In
this Agreement unless the context otherwise
requires:
|
(a) the
following expressions have the following meanings:
“Anniversary
Date”
means
August 1st
of each
calendar year.
"Board"
means
the board of directors for the time being of the Company and any committee
of
the board of directors duly authorised by it.
"Confidential
Information"
shall
mean technical data including seismic, electric log, reports and project
interpretation including financial analysis, details of customers and their
requirements, the prices charged to and terms of business with customers,
customer data bases, other customer information, business models, information
relating to arrangements with banks and other intermediaries, marketing plans
and sales forecasts, financial information, results and forecasts (save to
the
extent that these are included in published audited accounts), any proposals
relating to the acquisition or disposal of a company or business or any part
thereof or to any proposed expansion or contraction of activities, details
of
employees and officers and of the remuneration and other benefits paid to them,
information relating to research activities, inventions, secret processes,
designs, formulae and product lines, any information which the Executive is
told
is confidential and any information which has been given to the Company or
any
Group Company in confidence by customers, suppliers or other
persons.
"Employment"
means
the Executive’s employment under this Agreement
"Group
Company" and
"Group"
means
the Company, and any entity which for the time being directly or indirectly
Controls, is Controlled by or is under common Control with the
Company;
1
"Control"
means
(including, with their correlative meanings, the terms "controlled by" and
"under common control with") the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of an
entity (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise); without limiting the foregoing,
it shall be deemed that the ownership of more than twenty-five percent (25%)
of
the voting securities, partnership interests or percentage interest of another
entity shall be deemed to meet such control test;
| (b) |
references
to Articles, sub-Articles and schedules are, unless otherwise stated,
to
Articles and sub-Articles of and schedules to this
Agreement;
|
| (c) |
the
headings to the Articles are for convenience only and shall not affect
the
construction or interpretation of this
Agreement;
|
| (d) |
any
references, express or implied, to statutes or statutory provisions
shall
be construed as references to those statutes as modified or amended
from
time to time.
|
| 2. |
Appointment
|
| 2.1 |
The
Company shall employ the Executive and the Executive agrees to serve
the
Company as Executive Vice President Exploration and Production and
to
serve as a member of the Board of the Company, subject to the terms
and
conditions specified in this
Agreement.
|
| 2.2 |
The
Executive represents and warrants that he is not bound by or subject
to
any court order, agreement, arrangement or undertaking which in any
way
restricts or prohibits him from entering into this Agreement or from
performing his duties under this
Agreement.
|
| 3. |
Term
|
The
Employment shall commence on the date
hereof and, subject to earlier termination in accordance with
Article
14, shall continue to but not including the next succeeding Anniversary Date.
Thereafter, the term hereof shall be extended in annual increments until
terminate in accordance herewith.
| 3.1 |
Notwithstanding
the foregoing, the
Employment shall automatically terminate
when the Executive reaches the
age of sixty-two (62), unless extended by agreement of the
parties.
|
2
| 3.2 |
Notwithstanding
the foregoing, the Executive shall receive salary hereunder retroactive
to
August 1, 2006, and for purposes of his performance bonus shall be
deemed
to have begun employment hereunder on July 1, 2006.
|
| 4. |
Duties
|
| 4.1 |
The
Executive shall perform the duties of Executive Vice President Exploration
and Production and shall serve as a member of the Board. The specific
requirements of such offices are set forth in Schedule I.
|
| 4.2 |
Executive
shall:
|
| (a) |
devote
sufficient time to carry out the duties assigned to him and which
will
allow the Company’s business plan to be executed in a timely
manner.
|
| (b) |
faithfully
and diligently serve the Company (and all Group
Companies);
|
| (c) |
use
his best efforts to promote and protect the interests of the Company
(and
all Group Companies);
|
| (d) |
obey
all reasonable and lawful directions given to him by or under the
authority of the Board;
|
| (e) |
perform
services for and hold offices in any Group Company without additional
remuneration (except as otherwise
agreed);
|
| (f) |
make
such reports to the Board on any matters concerning the affairs of
the
Company or any Group Company as are reasonably required;
and
|
| (g) |
comply
with all relevant rules and regulations (as amended from time to
time) of
the NASDAQ OICBB or any other exchange on which the Company’s securities
are listed and traded and all applicable securities laws and regulations,
both state and federal.
|
| 4.3 |
The
Company may at its sole discretion assign this Agreement to any Group
Company at any time with the consent of the Executive which shall
not be
unreasonably withheld. The Executive shall not assign his interest
in and
to this Agreement.
|
| 5. |
Hours
and place of work
|
| 5.1 |
The
Executive shall work such hours as are necessary for the proper
performance of his duties. The Executive recognizes that his
responsibilities and duties exempt his service to the Company from
the
Fair Labor Standards Act, as amended, as well as any other law or
regulation relating to the hours and wages of employees.
|
3
| 5.2 |
The
Executive’s normal place of work will be the Company’s offices in Houston,
Texas but the Company may require the Executive to work from any
of its
current or future premises. The Executive will be given reasonable
notice
of any change in his place of work. In the event that the Company
and the
Executive fail to reach agreement on terms of transfer, such failure
to
reach agreement shall not deemed to be a material breach of this
contract.
|
| 5.3 |
If
the Executive’s principal place of work is changed to a location which is
outside reasonable commuting distance from his home, the Company
will
reimburse his reasonable moving costs, realtor’s fees and attorney’s fees
associated with his relocation to a location within reasonable commuting
distance to and from the relevant work
premises.
|
| 5.4 |
If
so required by the Company, the Executive shall travel to such places
(whether in the United States or abroad) by such means and on such
occasions as the Company may from time to time
require.
|
| 6. |
Remuneration
|
| 6.1 |
The
Company shall pay to the Executive a salary in accordance with the
provisions of Schedule II. In addition, the Executive shall receive
a
sign-on bonus as set forth in Schedule
II.
|
| 6.2 |
The
Company will make all monies owed payable by direct credit transfer
in
equal monthly instalments in arrears on the last working day of each
calendar month.
|
| 6.3 |
The
Executive’s base salary will be reviewed on 31st
July of each year and any increase will include performance together
with
a review of the cost of living as defined by the retail price index
for
Houston, Texas.
|
| 6.4 |
The
Company may award the Executive an annual bonus in accordance with
the
Company Bonus Scheme as set forth in Schedule II.
|
| 6.5 |
The
remuneration specified in Article 6.1 shall be inclusive of any fees
to
which the Executive may be entitled as a director of the Company
or any
Group Company.
|
| 6.6 |
Payment
of salary and bonus to the Executive shall be made either by the
Company
or by a Group Company and if by more than one company, in such proportions
as the Board may from time to time
determine.
|
4
| 6.7 |
The
Company has in place Directors and Officers liability insurance with
an
indemnity limit of US$3,000,000 which shall be made applicable to
the
Executive at such time as his Employment commences and the Company
agrees
to maintain such cover for the full term of the Executive’s appointment
and any liability that may arise
thereafter.
|
| 7. |
Deductions
|
The
Executive hereby authorises the Company to deduct from his remuneration
hereunder any sums due from him to the Company including, without limitation,
any overpayments or loans or advances made to him by the Company.
| 8. |
Expenses
|
The
Company shall reimburse the Executive in respect of all expenses reasonably
incurred by him in the proper performance of his duties, subject to the
Company’s expense policy which may be amended from time to time.
| 9. |
Holidays
|
| 9.1 |
The
Executive shall be entitled to receive his normal remuneration for
all
public holidays normally observed in Houston, Texas and a further
30
working days’ vacation in each vacation year (being the period from
1st
January-31st
December). The Executive may only take his vacation at such times
as are
consented to in advance by the Board, which consent will not be
unreasonably withheld.
|
| 9.2 |
In
the respective years in which the Employment commences or terminates,
the
Executive’s entitlement to vacation shall accrue on a pro rata basis for
each complete month of service during the relevant
year.
|
| 9.3 |
The
Executive may carry over a maximum of up to 10 days vacation into
the
following vacation year but these must be used in the following vacation
year.
|
| 9.4 |
On
termination of the Employment, the Company may either require the
Executive to take any unused accrued vacation entitlement during
any
notice period or make payment in lieu of that entitlement. Any payment
in
lieu or deduction made shall be calculated on the basis that each
day of
paid vacation is equivalent to 1/260 of the Executive’s
salary.
|
| 9.5 |
Subject
to Article 9.4 above, unless otherwise agreed with the Board, failure
to
take vacation entitlement in the appropriate vacation year will lead
to
forfeiture of any untaken accrued vacation, without any right to
payment
in lieu.
|
5
| 10. |
Sickness
benefits
|
| 10.1 |
The
Company shall continue to pay the Executive’s salary during any period of
absence on medical grounds up to a maximum of 30 business days in
any
period of 12 consecutive calendar months, provided that the Executive
shall:
|
| (a) |
notify
the Company of the Executive’s ill health by no later than the close of
business on the first day of absence and the cause thereof as soon
as
reasonably possible after it has been
determined;
|
| (b) |
complete
self-certification documentation provided by the Company in respect
of any
absence from work due to sickness or
incapacity;
|
| (c) |
supply
the Company with medical certificates covering any period of sickness
or
incapacity exceeding seven days (including weekends);
and
|
| (d) |
if
required, undergo at the Company’s expense a medical examination by a
doctor appointed by the Company and, subject to the restrictions
contained
in applicable state and federal law, allow the Company access to
any
medical report produced by such
doctor.
|
| 10.2 |
Payment
of the Executive’s salary pursuant to Article 10.1 shall be inclusive of
any Statutory Sick Pay to which the Executive may be entitled.
|
| 11. |
Restrictions
on other activities by the
Executive
|
| 11.1 |
The
Executive shall not (except with the prior sanction of a resolution
of the
Board) be directly or indirectly employed, engaged, concerned or
interested in any other business or undertaking, provided that this
shall
not prohibit the holding (directly or through nominees) of investments
listed on a recognized stock exchange in the United States or elsewhere
as
long as not more than three per cent of the issued shares or other
securities of any class of any one company shall be so held without
the
prior sanction of a resolution of the
Board.
|
| 11.2 |
The
Executive shall comply with:
|
| (a) |
every
rule of law and all requirements of any stock exchange on which the
Company or any Group Company is
listed;
|
| (b) |
every
regulation of the Company for the time being in force in relation
to
dealings in shares or other securities of the Company or any Group
Company.
|
6
| 11.3 |
The
Executive shall be deemed to be the beneficial owner of all securities
of
the Company or any Group Company owned directly or indirectly by
his
spouse, children and other related persons and the Executive warrants
to
the Company that all dealings with such securities shall be in accordance
with the Company’s code for securities transactions by
directors.
|
| 11.4 |
Subject
to any regulations issued by the Company, the Executive shall not
be
entitled to receive or obtain directly or indirectly any discount,
rebate
or commission in respect of any sale or purchase effected or other
business transacted (whether or not by him) by or on behalf of the
Company
or any Group Company and if he (or any firm or company in which he
is
interested) shall obtain any such discount, rebate or commission
he shall
account to the Company or the relevant Group Company for the amount
received by him (or a due proportion of the amount received by such
company or firm having regard to the extent of his interest
therein).
|
| 12. |
Confidential
Information and company
documents
|
| 12.1 |
The
Executive shall neither during the Employment (except in the proper
performance of his duties) nor at any time (without limit) after
the
termination of the Employment:
|
| (a) |
divulge
or communicate to any person, company, business entity or other
organisation;
|
| (b) |
use
for his own purposes or for any purposes other than those of the
Company
or any Group Company; or
|
| (c) |
through
any failure to exercise due care and diligence, cause any unauthorised
disclosure of
|
any
trade
secrets or Confidential Information relating to the Company or any Group Company
or their clients, but so that these restrictions shall cease to apply to any
information which shall become available to the public generally otherwise
than
through the default of the Executive or which the Executive is required to
disclose by law.
| 12.2 |
All
notes, technical data including seismic, electric log, reports and
project
interpretation including financial analysis, memoranda, records,
lists of
customers and suppliers and employees, correspondence, documents,
computer
and other discs and tapes, data listings, codes, designs and drawings
and
other documents and material whatsoever (whether made or created
by the
Executive or otherwise) relating to the business of the Company or
any
Group Company (and any copies of the
same):
|
7
| (a) |
shall
be and remain the property of the Company or the relevant Group Company;
and
|
| (b) |
shall
be handed over by the Executive to the Company or to the relevant
Group
Company on demand and in any event on the termination of the
Employment.
|
| 13. |
Inventions
and other intellectual
property
|
| 13.1 |
The
parties foresee that the Executive may make inventions or create
other
intellectual property in the course of his duties for the Company
and
agree that in this respect the Executive has a special responsibility
to
further the interests of the Company and the Group
Companies.
|
| 13.2 |
Any
invention, or improvement, design, process, information, copyright
work,
trade ▇▇▇▇ or trade name or get-up made, created or discovered by
the
Executive during the course of his duties for the Company (whether
capable
of being patented or registered or not and whether or not made or
discovered in the course of the Employment) in conjunction with or
in any
way affecting or relating to the business of any company in the Group
or
capable of being used or adapted for use therein or in connection
therewith shall forthwith be disclosed to the Company and shall belong
to
and be the absolute property of the Company or such Group Company
as the
Company may direct.
|
| 13.3 |
The
Executive if and whenever required so to do by the Company shall
at the
expense of the Company or such Group Company as the Company may
direct:
|
| (a) |
apply
or join with the Company or such Group Company in applying for letters
patent or other protection or registration in the United States of
America
and in any other part of the world for any such invention, improvement,
design, process, information, work, trade ▇▇▇▇, trade name or get-up
aforesaid; and
|
| (b) |
execute
all instruments and do all things necessary for vesting the said
letters
patent or other protection or registration when obtained and all
right
title and interest to and in the same absolutely and as sole beneficial
owner in the Company or such Group Company or in such other person
as the
Company may specify.
|
| 13.4 |
The
Executive hereby irrevocably and unconditionally waives all rights
under
the applicable patent laws in connection with his authorship of any
existing or future copyright work in the course of the Employment,
in
whatever part of the world such rights may be enforceable including,
without limitation:
|
8
| (a) |
the
right to be identified as the author of any such work;
and
|
| (b) |
the
right not to have any such work subjected to derogatory
treatment.
|
| 13.5 |
The
Executive hereby irrevocably appoints the Company to be his Attorney
in
his name and on his behalf to execute and do any such instrument
or thing
and generally to use his name for the purpose of giving to the Company
the
full benefit of this Article. In favour of any third party a certificate
in writing signed by any Director or by the Secretary of the Company
that
any instrument or act falls within the authority hereby conferred
shall be
conclusive evidence that such is the
case.
|
| 14. |
Termination
|
| 1.37 |
The
Employment shall be subject to
termination:
|
|
(a)
|
by
the Company giving not less than one-hundred-eighty (180) days notice
in
writing given at any time while the Executive shall have been prevented
by
reason of ill health or accident from performing his duties under
this
Agreement for a period of or periods aggregating 180 days in the
preceding
365 consecutive days;
|
|
(b)
|
by
the Executive giving not less than ninety (90) days notice in writing
given at any time.
|
|
(c)
|
by
summary notice in writing and without any entitlement to pay in lieu
of
notice if the Executive shall have:
|
| (i) |
been
guilty of an act of gross misconduct or committed any serious breach
or
repeated or continued (after warning) any material breach of his
obligations under this Agreement;
or
|
| (ii) |
been
guilty of conduct which in the opinion of the Board brings himself
or the
Company or any Group Company into disrepute or constitutes a violation
of
applicable law; or
|
| (iii) |
provided
false or misleading information to the Company in respect of his
suitability for the Employment or his qualifications and experience;
or
|
| (iv) |
become
bankrupt or had an interim order made against him under applicable
state
law or the federal Bankruptcy Code or entered into a composition
with his
creditors generally; or
|
9
| (v) |
failed
in the opinion of the Board to perform his duties to a satisfactory
standard, after having received a written warning from the Company
and a
period of 3 months in which to remedy the performance issues raised
by the
Board relating to the same; or
|
| (vi) |
been
disqualified from holding any office which he holds in the Company
or any
Group Company or resigns from such office without the prior written
approval of the Board; or
|
| (vii) |
been
convicted of any criminal offence other than a minor offence under
the
highway traffic laws for which a custodial sentence is not
imposed.
|
| (viii) |
been
guilty of violation of any provision of Article
11.
|
Any
delay
by the Company in exercising such right of termination shall not constitute
a
waiver thereof.
(d) automatically
upon the Exectutive’s reaching the age of sixty-two (62) in accordance with
Article 3.2
| 14.2 |
The
Company (at its sole and absolute discretion) reserves the right
to
terminate the Employment without
cause at
any time and with immediate effect by making the Executive a payment
of a
sum
equal to the Executive’s monthly salary for the greater of the remaining
portion of the current term of the Emplyment or on hundred and
eighty
(180) days. For this purpose, the Executive agrees that the payment
in
lieu will consist of his basic salary for the relevant period and
will exclude any bonus and any other emolument referable to the
Employment. For the avoidance of doubt, if the Company terminates
the
Employment,
other than under Article 14.1 (a), (c), or (d)
above, and elects not to make a payment in lieu,
as provided above, the Executive may be entitled to damages for
breach of
contract which shall be assessed on the normal common law principles
(including the Executive’s obligation to mitigate his loss).
|
| 14.3 | On the termination of the Employment (howsoever arising) or on either the Company or the Executive having served notice of such termination, the Executive shall: |
| (a) |
at
the request of the Company resign from office as a director of the
Company
and all offices held by him in any Group Company, provided however
that
such resignation shall be without prejudice to any claims which the
Executive may have against the Company or any Group Company arising
out of
the termination of the Employment;
and
|
10
| (b) |
forthwith
deliver to the Company all materials within the scope of Article
12.2 and
all credit cards, motor-cars, car keys and other property of or relating
to the business of the Company or of any Group Company which may
be in his
possession or under his power or
control,
|
and
if
the Executive should fail to do so the Company is hereby irrevocably authorised
to appoint some person in his name and on his behalf to sign any documents
and
do any things necessary to give effect thereto.
| 14.4 |
On
termination of the Employment (howsoever arising and whether
lawful or
not) the Executive shall have no rights as a result of this Agreement
or
any alleged breach of this Agreement to any compensation under
or in
respect of any share option or other long term incentive scheme
in which
he may participate or have received grants or allocations at
or before the
date the Employment terminates. Any rights which he may have
under such
share option or other scheme(s) shall be exclusively governed
by the rules
of such scheme(s).
|
| 14.5 | If the Executive shall have been offered but shall unreasonably have refused to agree to the transfer of this Agreement by way of novation to a company which has acquired or agreed to acquire the whole or substantially the whole of the undertaking and assets of or of the equity share capital of the Company, the executive shall have no claim against the Company in respect of the termination of his employment hereunder by reason of the subsequent voluntary winding-up of the Company or of the disclaimer of this Agreement by the Company within one month after such acquisition. |
| 15. |
Restrictive
Covenants
|
| 15.1 |
For
the purposes of Article 15.2 the following words have the following
meanings:
|
| (i) |
"Mineral
Rights Seller"
means any person, firm, company or other organization whatsoever
from whom
the Company or any Group Company has Purchased, sought to Purchase
or
expressed an interest in Purchasing an interest in and to minerals
or
rights to explore for and produce minerals located wholly or partly
within
the Restricted Area. Mineral Rights Seller shall include anyone acting
as
an agent, representative of or broker for the owner of any such minerals
or mineral interest. Failed negotiations for the acquisition by the
Company or a Group Company of an interest in minerals or rights to
explore
for and produce minerals located within the Restricted Area shall
be
deemed to be included within the term "sought to purchase" as that
term is
used above.
|
11
| (ii) |
"Prospective
Mineral Rights Seller"
means any owner of an interest in minerals or rights to explore for
and
produce minerals with respect to which the Company or any Group Company
has taken the decision or has under consideration the decision to
attempt
to Purchase such a mineral interest owned by such Prospective Mineral
Rights Seller but which attempt has not at the relevant time been
initiated.
|
| (iii) |
"Purchase"
includes, but is not limited to,
any and all arrangements by which the acquirer of a mineral interest,
in
lieu of payment for the acquisition of a mineral interest, pays all
or a
portion of the future costs to be incurred for the further exploration,
development or extension of the infrastructure for the production
of
minerals from the mineral interest
acquired.
|
| (iv) |
"Restricted
Area"
means the geographical area defining and overlying any geological
basin
located within the United States of America or Canada and with respect
to
which the Company or any Group Company has performed technical studies,
acquired geological or geophysical data or otherwise sought to Purchase
a
mineral interest therein.
|
| (v) |
"Restricted
Period"
means the period of ninety (90) consecutive days immediately following
the
Termination Date;
|
| (vi) |
"Termination
Date"
means the date of termination of the Employment or, if the Executive
spends a period on Garden Leave immediately before the termination
of the
Employment, such earlier date on which Garden Leave
commences.
|
| 15.2 |
The
Executive hereby undertakes with the Company (for itself and as trustee
for each Group Company) that he will not during the Restricted Period
without the prior written consent of the Company (such consent not
to be
unreasonably withheld) whether by himself, through his employees
or agents
or otherwise howsoever and whether on his own behalf or on behalf
of any
other person, firm, company or other organisation, directly or
indirectly:
|
| (a) |
be
employed or otherwise engaged in the business of advising others
with
respect to or researching into or Purchasing or attempting to Purchase,
whether directly or indirectly or whether for himself or for others,
any
mineral property of a Mineral Rights Seller or Prospective Mineral
Rights
Seller located within the Restricted
Area;
|
12
| (b) |
solicit
or induce or endeavour to solicit or induce any person who on the
Termination Date was a director, officer, or other key employee of
the
Company or any Group Company with whom the Executive had dealings
during
his employment to cease working for or providing services to the
Company,
whether or not any such person would thereby commit a breach of
contract.
|
| 16. |
Data
Protection
|
The
Company will hold details pertinent to the Executive’s employment on file as
part of his personnel records, which may include sensitive information. This
information may be processed for administrative or legal purposes or as required
by the Executive’s continuing employment with the Company.
| 17. |
Notices
|
| 17.1 |
Any
notice or other document to be given under this Agreement shall be
in
writing and may be given personally to the Executive or to the Company
Secretary (as the case may be) or may be sent by first class mail
or other
fast postal service or by facsimile transmission to, in the case
of the
Company, its executive office for the time being and in the case
of the
Executive either to his address shown in this Agreement or to his
last
known place of residence.
|
| 17.2 |
Any
such notice shall be deemed served when in the ordinary course of
the
means of transmission it would first be received by the addressee in
normal business hours.
|
| 18. |
Former
Agreements
|
| 18.1 |
This
Agreement shall be in substitution for any previous letters of
appointment, agreements or arrangements, whether written, oral or
implied,
relating to the employment of the
Executive.
|
| 18.2 |
The
Executive hereby acknowledges that he has no outstanding claims of
any
kind against any Group Company.
|
| 19. |
Change
of Control
Arrangements
|
| 19.1 |
The
provisions of Article 19 shall apply upon the commencement of the
Employment and shall terminate on December 31st
2007. If a Change of Control of the Company (as defined below)
occurs
during the period that this Article is in effect, then this Article
becomes operative for a fixed three-year period commencing upon
the Change
of Control. The Executive's terms and conditions of employment
(including
position, work location, compensation and benefit) shall not be
adversely
changed during the three-year period after a Change of Control
of the
Company. If the Company terminates the Executive's employment (other
than
for cause, death or disability), the Executive terminates employment
for
poor health, family or personal hardship reasons during such three-year
period, or, the Executive terminates employment for any reason
during the
30-day period following the first anniversary of the Change of
Control,
the Executive is entitled to receive the following payment and
benefits of
earned but unpaid compensation;
|
| Four (4) times the executive's base annual compensation as defined in Schedule II of this Employment; provided that no Bonus payment shall be payable with respect to any period following the termination of the Executive’s Employment. |
| In addition, in the event of a Change of Control, the Company shall pay all legal fees and expenses incurred by the Executive in enforcing any right or benefit provided by this Article. |
| 19.2 |
The
Executive hereby acknowledges that he has no outstanding claims
of any
kind against any Group
Company.
|
|
19.2
|
As
a condition to receipt of these Change of Control benefits, the Executive
must remain in the employ of the Company and render services commensurate
with his position until the Executive is terminated or is otherwise
permitted to terminate the Employment pursuant to the provisions
of this
Article. The Executive must also agree to retain in confidence any
and all
Confidential Information known to him concerning the Company and
any Group
Company and their business so long as the information is not otherwise
publicly disclosed.
|
|
19.3
|
In
addition, in the event of a Change of Control applicable pursuant
to the
terms of this Article, the Executive shall be receive all rights
and
benefits to which he is entitled pursuant to the terms of any Company
stock plan with respect to which he is a participant.,
|
|
19.4
|
For
purposes of this Article, a Change of Control is defined
as:
|
A
sale of
all or substantially all of the Company’s assets, or any merger or consolidation
of the Company with or into another corporation, or if a "person" or "group"
within the meaning of Sections 13(d) and 14(d) of the Securities and Exchange
Act of 1934 (the "Exchange Act"), becomes the "beneficial owner" (within the
meaning of Rule 13d-3 under the Exchange Act) of securities of the Company
(including options, warrants, rights and convertible and exchangeable
securities) representing 30% or more of the combined voting power of the
Company’s then outstanding securities in any one or more transactions, other
than a merger or consolidation in which the holders of more than 50% of the
shares of capital stock of the Company outstanding immediately prior to such
transaction continue to hold (either by voting securities remaining outstanding
or by their being converted into voting securities of the surviving entity)
more
than 50% of the total voting power represented by the voting securities of
the
Company, or such surviving entity, outstanding immediately after such
transaction.
20
Garden
Leave
|
20.1
|
Despite
any other provision in this Agreement the Company is under no obligation
to provide the Executive with work and may (if either party serves
notice
to terminate the Employment or if the Executive purports to terminate
the
Employment without due notice and the Company has not accepted that
resignation):-
|
| (a) |
require
the Executive to perform:-
|
(i)
only
a
specified part of his normal duties, and no others:
|
(ii)
|
such
duties as it may reasonably require, and no others:
or
|
|
(iii)
|
no
duties whatever; and
|
|
(b)
|
exclude
the Executive from any premises of any Group
Company
|
|
20.2
|
During
any period [not under any circumstances to exceed ninety (90) days]
of
Garden Leave the Executive shall
|
[a] remain
an
employee of the Company;
[b] not
[except as a representative of the Company or with the prior
written approval of the Board] whether directly or indirectly,
paid or unpaid, be engaged or concerned in the conduct
of any other actual or prospective business or profession
or be or become an employee, agent, partner, consultant
or director of any other company or firm or assist or have
any
financial interest in any other such business or profession;
[c] not
to have any contact or
communication with any client or other business contact, customer,
employee, officer, director, agent or consultant of the Company or
any Group Company, except such person[s] as the Board
may direct;
[d] keep
the Company informed of his
whereabouts so that he can be called upon to perform any appropriate duties
as required by the Company;
[e] if
the Company, so requests, resign
from any office held by him in
any
Group Company;
[f] continue
to receive his salary and all contractual benefits in the usual
way; and
[g] continue
to be bound by his contractual and implied duties of good
faith and fidelity.
|
21
|
Choice
of law and submission to jurisdiction
|
21.1
This
Agreement shall be governed by and interpreted in accordance with laws of the
State of Texas.
21.2
The
parties hereby submit to the jurisdiction of the State of Texas, USA but this
Agreement may be enforced by the Company in any court of competent
jurisdiction.
13
IN
WITNESS whereof
this Agreement has been executed the day and year first above
written.
EXECUTED
by INDEX OIL AND GAS Inc.
| and signed by two duly | ) | President.............................................. |
| authorised officers on its behalf | ) | |
| ) | Secretary............................................. | |
| EXECUTED and DELIVERED | ) | |
| by ▇▇▇▇ ▇▇▇▇▇▇▇▇ | ) | |
| in the presence of: | ) | |
| Signature of Witness …………………….. | Occupation.......................................... | |
| Name………………………….................…... | ||
| Address …………………....…………......... | ||
| ……………….....................……………......... | ||
| ......................……………………………........ |
14
SCHEDULE
I
The
following are the position details:
Function:
Member of the Board of Directors
| · |
Participate
in the legal and compliant direction of the Company as a member of
the
Board of Directors to include:
|
| o |
Setting
strategy, goals, business plan, and budget for the Company and the
Group
|
| o |
Preparing
and reporting annual exploration
results
|
| o |
Providing
information and participation in all facets of external relations
as
required
|
| o |
Maintaining
a focus on delivery of lasting shareholder value in Board decision
processes
|
| o |
Carryout
the responsibilities of the role of Company director as defined in
the
Company’s Bylaws
|
Function:
Executive Vice President Exploration and Production
| · |
Accountable
and responsible for inclusive and collaborative exploration and production
management to include:
|
| o |
Assuring
technical and commercial evaluation of exploration-stage
opportunities
|
| o |
Increasing
the Group’s capability of accessing high-graded upstream
opportunities
|
| o |
Developing
and maintaining exploration tools and processes to allow objective
and
efficient decision making
|
| o |
Tracking
decisions to be used for performance improvement and goal
measurement
|
| o |
Managing
the Group’s annual reserve audit in a timely fashion during Q1 of each
year
|
| o |
Building
an annual budget for new ventures and ongoing operations for submittal
to
the Board
|
| o |
Managing,
tracking, and reporting production on a monthly and annual
basis
|
| o |
Developing
and overseeing partner, consultant, and supplier
relations
|
| o |
Managing
and administering the Houston office, to include personnel supervision,
performance evaluation and
direction
|
| · |
Reporting
directly to the Chief Executive
Officer
|
| · |
Direct
reports include:
|
| o |
Reservoir
engineer (currently consultant - ▇▇▇▇▇
▇▇▇▇▇▇)
|
| o |
Geologist
(currently consultant - ▇▇▇▇
▇▇▇▇▇▇▇▇)
|
| o |
Banking
(▇▇▇▇ ▇▇▇▇▇)
|
| o |
Others
as approved by the CEO
|
15
SCHEDULE
II
| Ø |
Base
annual salary US$150,000 (paid monthly in arrears via Direct Deposit
to
the checking account of ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ held with Chase Bank,
Houston).
|
| Ø |
An
employment bonus stock award of 50,000 shares will be given to the
Executive following 183 days of continuous service with the company
from August
1, 2006.
|
| Ø |
Contribution
to the Executive’s medical health insurance that is currently
US$13,428 per annum, grossed up, if applicable, to account for incremental
income taxes due on the amount, paid pro rata on a monthly basis
payable
in arrears via Direct Deposit into the checking account of ▇▇▇▇ ▇
▇▇▇▇▇▇▇▇
held with Chase Bank, Houston). Contributions for the Executive’s medical
health insurance are not subject to Article 19 of the Employment
Contract.
If
the insurance cost increases, Index will cover the
increase.
|
| Ø |
Annual
performance bonus shares award, with the initial year pro-rated for
the
period 1 July 2006 to 31 March 2007, (9/12) with an annual value
of
US$150,000 based on two individually assessed performance targets
as set
out in the table below. The shares awarded shall vest 33.33% on award
of
bonus, 33.33% one year after award and 33.33% two years after award.
Receipt of annual performance bonus shares are not subject to Article
19
of the Employment Contract.
|
|
EMPLOYEE
BONUS SCHEME
|
|||
|
Share
price targets $
|
1.55
- 1.75
|
1.75
- 2.5
|
>2.5
|
|
Value
at risk: US$75,000
|
|
|
|
|
%
of bonus to be received
|
50%
|
100%
|
150%
|
|
Earned
$ value amount
|
37500
|
75000
|
112500
|
|
#
of shares to be awarded to be determined (TBD) on the date in Note
1
|
▇▇▇
|
▇▇▇
|
TBD
|
|
Reserve
Additions for Fiscal Year Ending 31 March 2006
|
|
||
|
Reserves
addition targets in boe Net After Royalty
|
124500
- 166000
|
166000
- 249000
|
>249000
|
|
Value
at risk: US$75,000
|
|
||
|
%
of bonus to be received
|
50%
|
100%
|
150%
|
|
Earned
$ value amount
|
37500
|
75,000
|
112500
|
|
#
of shares to be awarded to be determined (TBD) on the date in Note
1
|
▇▇▇
|
▇▇▇
|
TBD
|
Notes:
1. Share
price to remain at or above target for 5 consecutive days prior to 31 March
2007
2. No
additional payment made with respect to sums between $1.56 - $1.74,
etc.
3. Number
of
shares awarded is calculated based on the closing price of the stock on the
date
specified in Note 1 above divided into the earned value $ amount.
16
4. The
reserve additions calculation includes proven (P1) + probable (P2) (i.e. the
industry’s measure for P50) that is equal to or greater than the proven reserves
(P1).
5. Reserves
are calculated using IOGI’s net reserve interests and expressed in barrels of
oil equivalent
6. The
Reserves additions calculation: a.) excludes Taffy 1 & Taffy 2 probable
reserves that ▇▇▇▇▇ ▇▇▇▇▇▇ included in the spreadsheet dated sent to IOGI but
are not included in the ▇▇▇▇▇ ▇▇▇▇▇▇’▇ 31 March 2006 Reserves Report; b.)
excludes all proven volumes in ▇▇▇▇▇ ▇▇▇▇▇▇’▇ 31 March 2006 Reserves Report and
c.) includes volumes gained by the increase in working interest in ▇▇▇▇▇ to
be
drilled (example: Taffy 2 from 12.5% to 20%).
Other
Benefits
| 1. |
Directors’
Liability Insurance will be supplied by
Company.
|
| 2. |
All
documented business related expenses will be reimbursed by Company
on a
monthly basis and are to include all business, travel, lodging,
telecommunications, and entertaining (according to Company policy).
|
| 3. |
30
days vacation per annum
|
| 4. |
10
US public holidays
|