EMPLOYMENT AGREEMENT

Exhibit 10.1

DATED January 1st 2006

Index Oil & Gas Ltd

and

Daniel L Murphy

EMPLOYMENT AGREEMENT

CONTENTS

 

 

THIS AGREEMENT is dated January 1st 2006 and is made BETWEEN:

     (1)  Index Oil & Gas Ltd  (Index)  whose  registered  office is at Lawrence House, Lower Bristol Road, Bath BA 2 9ET UK (the "Company"); and

     (2)  Daniel L Murphy, New Hextalls West, Hextalls Lane, Bletchingley Surrey RH1 4QT (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:

          "associated company" means  an associated company (within  the meaning of  section  416(1)  Income  and  Corporation  Taxes  Act 1988) of the Company; the  "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. the "Employment" means the Executive's employment under this Agreement

          "Group  Company" and "Group" means the Company,  its ultimate  holding company and any subsidiary or associated company of the Company or its ultimate holding company; "subsidiary" and "holding  company" have the meanings given to them in section 736 of the Companies Act 1985 as amended;

          (b)  references  to  clauses,  sub-clauses  and  schedules  are unless otherwise  stated to clauses and  sub-clauses of and schedules to this Agreement;

          (c)  the  headings to the clauses 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 act as the  Chairman  of  the  Company's  Board  of  Directors  and of the Remuneration  Committee 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

     3.1  The  Employment  shall commence on the later of the date hereof or the date a finalised  merger with or sale of the Company to a stock market listed  company  occurs  and,  subject  to clauses  3.2 and 15,  shall continue unless or until  terminated by either the Executive giving to the Company not less than three months  notice and the Company  giving to the Executive not less than six months notice in writing.

     3.2  The Employment shall terminate when the Executive  reaches such age as the Board shall determine is the appropriate retirement age for senior employees of the Company.

     3.3  The Executive's period of employment will begin on January 1st 2006.

4.   Duties

     4.1  The  Executive  shall  perform  the  duties  of  The  Chairman  of the Company's   Board  of  Directors  and  of  the  Board's   Remuneration Committee.

     4.2  The 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  endeavours  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  OFEX  Rule  Book,  London  Stock  Exchange Limited (including the Model Code for Securities  Transactions by Directors  of  Listed  Companies  and the AIM  Rules)  and of all regulatory  authorities  relevant  to the  Company  and any Group Companies with which the Executive is concerned.

          4.3  The Company may at its sole discretion transfer this Agreement to any Group  Company at any time with the consent of the  Executive which should not be unreasonably withheld.

5.   Hours and place of work

     5.1  The  Executive  shall work such hours as are  necessary for the proper performance of his duties which are estimated to be approximately  2.5 days per week.

     5.2  The Executive's  normal place of work will be the Company's offices in London  area,  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,  then  it is 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  removal costs,  estate agents' and solicitors' fees.

     5.4  If so required by the  Company,  the  Executive  shall  travel to such places  (whether in the United Kingdom 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 of (pound)3,437.50 per month. (Refer to Appendix I attached)

     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 UK retail price index.

     6.4  The Company may pay the  Executive  an annual  bonus of such amount as the  Remuneration  Committee as  appointed by the Board may  determine based on any agreed and in place performance scheme.

     6.5  The  remuneration  specified  in clause 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.

     6.7  The  Company  will  put in  place  Directors  and  Officers  liability insurance as soon as practical  after you have formally  taken up your role  and  will  maintain  such  cover  for  the  full  term  of  your appointment and any liability that may arise thereafter. The indemnity limit will be (pound)5.5  million. A copy of the policy document shall be provided upon receipt by the Company.

7.   Deductions

     For the purposes of the Employment  Rights Act 1996,  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,  loans or advances  made to him by the  Company,  the cost of repairing  any damage or loss to the Company's  property  caused by him and any losses  suffered by the Company as a result of any gross  negligence or breach of duty by the Executive.

     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 bank and  public  holidays  normally  observed  in UK and a further 30 working  days' holiday in each holiday year (being the period from 1 ^st January-31st  December)  all  on a pro  rata  basis  of  (actual  days worked/260.  The  Executive may only take his holiday at such times as are agreed with the Board, which will not be unreasonably withheld.

     9.2  In  the  respective  years  in  which  the  Employment   commences  or terminates,  the Executive's  entitlement to holiday 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 up to 10 days vacation into the following year but these must be used in the following calendar year.

     9.4  On termination of the  Employment,  the Company may either require the Executive to take any unused accrued  holiday  entitlement  during any notice period or make payment of lieu of that entitlement. Any payment in lieu or deduction  made shall be  calculated on the basis that each day of paid holiday is equivalent to 1/21 of the  Executive's  monthly salary.

     9.5  Subject to clause 9.4 above,  unless  otherwise agreed with the Board, failure to take holiday  entitlement in the  appropriate  holiday year will lead to forfeiture of any untaken  accrued  holiday,  without any right to payment in lieu.

10.  Sickness benefits

     10.1 The Company shall continue to pay the Executive's normal salary during any period of absence on medical grounds up to a maximum of 6 weeks in any period of 12 months, provided that the Executive shall:

          (a)  notify the  Company by no later than 10 a.m.  on the first day of absence of the reason for his absence;

          (b)  complete self-certification  forms  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 Access to Medical Reports Act 1988,  allow the Company access to any medical report produced by such doctor.

     10.2 Payment of the  Executive's  salary  pursuant  to clause 10.1 shall be inclusive  of any  Statutory  Sick Pay to which the  Executive  may be entitled.

     10.3 If the Executive's absence is caused by the actionable negligence of a third party in respect of which damages are recoverable, then all sums paid by the  Company  shall  constitute  loans to the  Executive,  who shall:

          (a)  immediately notify the Company of all the relevant  circumstances and of any claim,  compromise,  settlement  or  judgment  made or awarded in respect of it;

          (b)  if the Company so requires, refund to the Company such sum as the Company may determine, not exceeding the lesser of:

               (i)  the   amount  of  damages   recovered   by  him  under  such compromise, settlement or judgment; and

               (ii) the  sums  advanced  to him in  respect  of  the  period  of incapacity.

11.  Pension

     The Company will provide within the base compensation  package,  subject to Board approval, a financial amount which the Executive can use to invest in a private pension plan of their choosing.

12.  Restrictions on other activities by the Executive

     12.1 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 the London Stock  Exchange or in respect of which  dealing  takes place on any  recognised  stock exchange 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.

 

     12.2 The Executive shall comply with:

          (a)  every rule of law;

          (b)  the rules and  regulations of the OFEX Rule Book and/or any other rules and  regulations  which are  applicable to him from time to time; and

          (c)  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.

     12.3 The  Executive  shall not (and shall procure so far as he is able that his spouse,  infant children and other connected  persons,  within the meaning of section 346 Companies Act 1985), deal or become or cease to be interested  (within the meaning of part I Schedule  XIII  Companies Act 1985) in any securities of the Company,  except in accordance with the Company's code for securities transactions by directors.

     12.4 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).

13.  Confidential Information and company documents

     13.1 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 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 entitled to  disclose  under the Public  Interest  Disclosure  Act 1998 or required to disclose by law.

 

 

          13.2 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):

               (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.

14.  Inventions and other intellectual property

     14.1 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.

     14.2 Any invention, or improvement, design, process, information, copyright work,  trade mark 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  (subject  to  sections  39 to 43 Patents Act 1977) belong to and be the  absolute  property  of the Company or such Group Company as the Company may direct.

     14.3 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  Kingdom  and in any other  part of the world for any such invention, improvement, design, process, information, work, trade mark, trade name or get-up aforesaid; and

          (b)  execute and do all instruments  and 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.

          (a)  the right conferred by section 77 of that Act to be identified as the author of any such work; and

          (b)  the right  conferred  by  section  80 of that Act not to have any such work subjected to derogatory treatment.

     14.5 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  clause.  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.

     14.6 Nothing in this clause s