EXHIBIT 10.5: Executive Compensation Agreement - Jason Griffith
EXECUTIVE COMPENSATION AGREEMENT
Between
AMERIGO ENERGY, INC
and
JASON F. GRIFFITH
This Agreement is made this 4th day of January 2013, by and between AMERIGO
ENERGY INC, a Deleware corporation ("AMERIGO ENERGY"), and JASON GRIFFITH
("EXECUTIVE"), with effective date of January 1, 2013.
WHEREAS, AMERIGO ENERGY desires to retain the services of the EXECUTIVE in the
capacity of its Chief Executive Officer.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
SECTION 1. EMPLOYMENT.
1.1 EXECUTIVE EMPLOYMENT. AMERIGO ENERGY appoints EXECUTIVE and EXECUTIVE
accepts the appointment as Chief Executive Officer until December 31, 2017.
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 AMERIGO ENERGY as an advisor and consultant until
December 31, 2022 (Advisory Period).
SECTION 2. DUTIES. EXECUTIVE shall serve as Chief Executive Officer of AMERIGO
ENERGY, with such duties as are customarily associated with such position in
public corporations and specifically as set out in the By-Laws of AMERIGO
ENERGY.
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 AMERIGO ENERGY offices, or at such other place
or places and at such times as the needs of AMERIGO ENERGY 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 Chief Executive Officer of AMERIGO ENERGY.
SECTION 4. TERM. The term of this Agreement shall begin on January 1, 2013
(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. AMERIGO ENERGY will pay to EXECUTIVE a base salary for the
first year in the amount of One Hundred and Eighty Thousand Dollars ($180,000),
payable in accordance with AMERIGO ENERGY'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). The Executive's Base Salary shall be reviewed, and may be
increased but not decreased, annually, by the Board pursuant to its normal
performance review policies for senior executives, with the first such review
occurring not later than September 2013.
Should the Company for any reason be unable to pay the Executive monthly or
more frequent installments in accordance with the Company's payroll policies,
the Executive may elect either of the following alternatives, or a combination
thereof;
(a) Executive may elect to treat the unpaid compensation as a loan payable
on demand that accrues an annual interest of eight (8) percent,
(b) Executive may elect to receive common stock of the Company issued under
an S-8 registration statement which will provide the Executive common stock at
fair market value based on the average closing price for the five (5) trading
days preceding the request for issuance of stock for the effective pay period.
Executive may also elect to receive common stock of the Company issued under an
S-8 registration statement which will provide the Executive common stock at
fair market value based on the average closing price of the five (5) trading
days preceding the request for issuance of stock for the loan payable on demand
pursuant to subsection 5.1(a).
5.2 SUPPLEMENTAL SALARY during any period of the contract in which EXECUTIVE
provides consulting services relating to AMERIGO ENERGY which are outside those
services normally provided by a 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.
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 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), AMERIGO
ENERGY 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 December 31, 2022, regardless of the disability or
death of EXECUTIVE. If EXECUTIVE shall receive any disability payments from any
insurance policies paid for by AMERIGO ENERGY, 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
AMERIGO ENERGY.
6.2 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.
6.3 Reserved.
6.4 Death Benefits. If EXECUTIVE shall die between the date of this agreement
and December 31, 2022, compensation payments hereunder shall not cease and
AMERIGO ENERGY 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 provided 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, if less time is remaining on subject
contract.
6.5 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 AMERIGO ENERGY 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 AMERIGO ENERGY and further, that
(a) AMERIGO ENERGY 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 AMERIGO ENERGY,
AMERIGO ENERGY 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 AMERIGO ENERGY for 51% or more
of the outstanding common stock of AMERIGO ENERGY, 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 AMERIGO ENERGY, 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 AMERIGO
ENERGY 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
AMERIGO ENERGY 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, AMERIGO ENERGY 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 AMERIGO
ENERGY 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 AMERIGO ENERGY'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 AMERIGO ENERGY 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 AMERIGO ENERGY 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. AMERIGO ENERGY 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 AMERIGO ENERGY 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 AMERIGO ENERGY. 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. AMERIGO ENERGY'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 AMERIGO ENERGY'S
breach of any provision of this Agreement shall not operate or be construed as
a waiver of any subsequent breach by AMERIGO ENERGY.
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 AMERIGO ENERGY at:
AMERIGO ENERGY INC
2580 Anthem Village Drive
Henderson, NV 89052
addressed to EXECUTIVE at:
JASON GRIFFITH
2580 Anthem Village Drive
Henderson, NV 89052
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 AMERIGO ENERGY, its successors and assigns, including, without
limitations, any persons, partnership, company or corporation which may acquire
substantially all of AMERIGO ENERGY'S assets or business or with or into which
AMERIGO ENERGY 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 September 15,
2 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.
AMERIGO ENERGY, INC. JASON F. GRIFFITH
By: /s/ Jason F. Griffith By: /s/ Jason F. Griffith
----------------------------- --------------------------
Jason F. Griffith An individual
Chief Executive Officer and Director
Dated: January 4, 2013