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EXHIBIT 10(z)
EMPLOYMENT AND OPTION
AGREEMENT
AGREEMENT made as of the 1st day of July, 1990, between ALN Resources
Corporation (hereinafter called the "Company"), and Michael Paulk (hereinafter
called "Employee").
1. EMPLOYMENT. The Company employs Employee who accepts employment upon
the terms and conditions of this Agreement.
2. TERM. The Term of employment provisions of this Agreement shall begin
on July 1, 1990, and shall terminate on June 30, 1995, unless renewed. The
Company shall have the option of renewing this contract for an additional
two-year period, commencing on July 1, 1995, and ending on June 30, 1997.
Notice of the Company's intention to renew the Agreement for an additional
two-year period shall be made in writing to Employee on or before January 1,
1995.
3. COMPENSATION. For all services rendered by Employee, the Company
shall pay him a salary of $89,100. a year, payable in equal monthly
installments on the 15th day of each month. Salary payment shall be subject to
withholding and other applicable taxes. The Company shall review said
compensation semiannually with the opportunity to provide raises or increases
to Employee at the review date, with such decision to be subject to approval by
the President.
4. BONUS COMPENSATION. It will be the Company's policy to provide
Employee, as an additional incentive, either on an annual or quarterly basis,
additional bonus compensation in the form of additional cash payments at the
discretion of the President. Such bonus compensation, if any, shall be
determined by the President in consideration of such factors as the Company's
profitability, change in asset size of Company, number of employees, sales
levels and growth in sales, and other factors determined by the President as
relevant in its decision.
5. STOCK OPTIONS. At the discretion of the Board of Directors, as
additional incentive to the employee, options to purchase stock of the Company
will be issued at times and amounts determined by the Board. Such issuances
will be within all Security and Exchange Commission, or other governing body
rules.
6. DUTIES. Employee is to be employed as the President of the Company
and will be charged with all activities related thereto. Employee shall devote
all time, attention and energies to the Company's business.
7. EXPENSES. Employee may incur reasonable expenses
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for promoting the Company's business, including expenses for entertainment,
travel and similar items. The Company will reimburse Employee for all such
expenses upon the periodic presentation of an itemized account of such
expenditures.
8. VACATIONS. Employee shall be entitled each year to a vacation of
three weeks, during which time his compensation shall be paid in full.
9. DISABILITY. If Employee should be unable to perform his services by
reason of illness or incapacity for a period of more than thirty (30)
consecutive days, the compensation thereafter payable to him during the
continued period of such illness or incapacity shall be reduced by 50%.
Employee's full compensation shall be reinstated upon a return to full
employment and discharge of full duties. Notwithstanding anything to the
contrary, the Company may terminate this Agreement at any time after the
Employee shall be absent from his employment, for whatever cause, for a
continuing period of more than six months, and all obligations of the Company,
other than Paragraphs 10 and 11 of this Agreement, shall thereupon terminate.
10. DEATH DURING EMPLOYMENT. If Employee should die during the term of
employment, the Company shall pay to the estate of Employee the compensation
which would otherwise be payble to him up to the end of the month in which his
death occurs. In addition, the Company shall pay an additional three (3) months
salary within 60 days after the death of the Employee, to the widow, to the
Employee's surviving children in equal shares or, if there are no such
surviving children, to the estate of the Employee.
11. TERMINATION OF EMPLOYMENT. This agreement may terminate for any
reason based on the sole discretion of the Board of Directors. In the event the
Board of Directors of the Company decides that it is in the best interest of
the Company to terminate this agreement, Employee will be promptly notified and
this agreement shall terminate. In the event this agreement is terminated by
the Board of Directors of the Company, Employee shall be entitled to a one time
severance payment, made upon termination, equal to the remaining months of this
agreement before expiration or if applicable, the renewal agreement. Other than
the payment of severance as set forth in this paragraph, all other duties,
obligations, payments, privileges and consideration of any sort shall terminate
and shall no longer be effective by and between the Company and Employee.
12. NO RIGHTS IN OPTION STOCK. Employee shall have no rights as
shareholders in respect of shares as to which the option shall not have been
exercised and payment made as herein provided, and shall have no rights with
respect to such shares not expressly conferred by this Agreement.
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13. SHARES RESERVED. The Company shall at all times during the term of
this Agreement reserve and keep available such number of its common shares as
will be sufficient to satisfy the requirements of this Agreement, and shall pay
all original issue taxes on the exercise of this option, and all other fees and
expenses necessarily incurred by the Company in connection therewith.
14. ASSIGNMENT. Employee acknowledges that the services to be performed
by him are unique and personal. Accordingly, the Employee may not assign any of
his rights or delegate any of his duties or obligations under this Agreement.
The rights and obligations of the Company under this Agreement shall inure to
the benefit of and shall be binding upon the successors and assigns of the
Company.
IN WITNESS WHEREOF, the parties have signed this Agreement.
By /s/ MICHAEL PAULK
Title
(Corporate Seal)
Attest:
/s/ CHRIS WILLIFORD
Secretary
Employee:
/s/ MICHAEL PAULK
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AMENDMENT NUMBER 1 TO EMPLOYMENT
AND OPTION AGREEMENT
THIS AMENDMENT is made as of the 1st day of May, 1993 between American
Natural Energy Corporation (the "Company") and Michael Paulk (the "Employee")
amending the Employment and Option Agreement entered into by and between the
Company and the Employee dated as of July 1, 1990 (the "Agreement").
1. The Company and the Employee agree to amend the Agreement as follows:
(a) Section 3 of the Agreement is hereby amended to provide that
the Employee's salary is $96,000 per annum. The parties hereto confirm that the
Employee's Salary has been $96,000 per annum since January 1, 1992, and the
parties agree that the amendment of the Agreement provided for by this Section
1(a) shall be deemed effective as of such date.
(b) Section 4 of the Agreement is hereby amended to provide that
payment of any bonus compensation to the Employee shall be made pursuant to the
authorization of the Company's Board of Directors, or any duly appointed
committee thereof, in consideration of such factors as are listed in Section 6
of the Agreement.
(c) The following provision is added to the Agreement effective as
of the date of this Amendment:
"15. Non-competition. In the event the Employee is terminated for
cause, as defined below, or refuses to continue his employment
with the Company if the Company has exercised its option under
Section 2 of this Agreement to renew this Agreement for an additional
two year period, the Employee agrees, notwithstanding any
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provision to the contrary in this Agreement, that for a period of one
year commencing upon such termination he shall not, directly or
indirectly, engage in the oil and gas business at any location in the
State of Oklahoma or the State of Texas. For the purposes of this
Agreement, "cause" shall mean (i) willful and repeated refusal of the
Employee to follow the lawful directives of the Board of Directors of
the Company for the performance of material duties which the Employee
is required to perform hereunder, other than any such failure
resulting from the Employee's incapacity due to physical or mental
illness, or (ii) conviction of the Employee for a felony involving
moral turpitude."
(d) The following provision is hereby added to the Amendment:
"16. Reimbursement. The Employee and the Company hereby agree that
the Employee shall be reimbursed for all dues or fees incurred
by him with respect to his country club membership now existing or
hereafter acquired."
2. The Company and the Employee agree that except as otherwise expressly
provided by this Amendment, the terms and provisions of the Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties have duly executed this Amendment as of
the date first above written.
AMERICAN NATURAL ENERGY CORPORATION
By: /s/ MICHAEL PAULK
Name:
Title: President
/s/ MICHAEL PAULK
Michael Paulk