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Exhibit 10.1
EMPLOYMENT AGREEMENT
This
Employment Agreement (the “
Agreement ”)
is entered into as of the 13th day of May 2008, by and between La
Cortez Energy, Inc., a Nevada corporation, with a business address
of 1266 1
st Street,
Suite 4, Sarasota, FL 34236 (the “
Company ”),
and Andres Gutierrez Rivera, an individual with a residence address
of Calle ---- No 8-41, Apt 401, Bogota, Colombia (the
“
Executive ”).
INTRODUCTION
WHEREAS,
the Company is in the oil and gas exploration business (the
“Business”);
WHEREAS,
the Company wishes to employ the Executive as its President
and Chief Executive Officer pursuant to the terms and
conditions set forth herein; and
WHEREAS,
the Executive desires to be employed by the Company pursuant
to the terms and conditions set forth herein.
AGREEMENT
NOW,
THEREFORE, In consideration of the premises and mutual
promises herein below set forth, the parties hereby agree as
follows:
1
.
Employment Period .
The term of the Executive’s employment by the Company
pursuant to this Agreement (the “
Employment Period ”)
shall commence upon receipt of written notice of commencement from
the Executive to be received by the Company no later than thirty
(30) days from the date hereof (the “Effective Date”)
and shall continue for a period of one year from the Effective
Date. Thereafter, the Employment Period shall automatically renew
for successive periods of one (1) year, unless either party shall
have given to the other at least thirty (30) days’ prior
written notice of their intention not to renew the
Executive’s employment prior to the end of the Employment
Period or the then applicable renewal term, as the case may be. In
any event, the Employment Period may be terminated as provided
herein.
2
.
Employment; Duties .
(a)
General .
Subject
to the terms and conditions set forth herein, the Company hereby
employs the Executive to act as the President and Chief Executive
Officer of the Company during the Employment Period, and the
Executive hereby accepts such employment. The duties assigned and
authority granted to the Executive shall be as determined by the
Company’s Board of Directors (the “
Board ”)
from time to time. The Executive agrees to perform his duties for
the Company diligently, competently, and in a good faith manner and
to use his best efforts to promote and serve the best interests of
the Company. The Executive will also serve as a member of the
Company’s Board.
(b)
Exclusive Services .
The
Executive shall devote substantially all of his working time and
efforts during the Company's normal business hours to the business
and affairs of the Company and its subsidiaries, including its
subsidiary in Bogota, Colombia, La Cortez Energy Colombia E.U. (the
“Colombia Subsidiary”, and together with any other
subsidiaries and/ or affiliates of the Company, the
“Affiliates”), and to the diligent and faithful
performance of the duties and responsibilities duly assigned to him
by the Board pursuant to this Agreement. However, Executive may
devote a reasonable amount of his time to civic, community, or
charitable activities and may serve as a director of other
corporations (provided that any such other corporation is not a
competitor of the Company, as determined by the Board) and to other
types of business or public activities not expressly mentioned in
this paragraph. Additionally, Executive may participate as a
director and/or investor in that certain ethanol project as
described by Executive to the Board (the “Ethanol
Project”), so long as Executive’s responsibilities with
respect to the Ethanol project do not conflict or interfere with
the faithful performance of his duties to the Company.
(c)
Place of Employment .
It
is acknowledged that the Executive's services shall be performed
primarily at the offices of the Colombia Subsidiary, in Bogota,
Colombia. The parties acknowledge, however, that Executive may be
required to travel in connection with the performance of his duties
hereunder.
3
.
Base Salary .
The
Executive shall be entitled to receive a salary from the Company
during the Employment Period at the rate of Two Hundred Fifty
Thousand ($250,000) per year (the “
Base Salary ”),
payable in substantially monthly installments in accordance with
the Company’s customary payroll practices. Beginning on the
anniversary of the Effective Date, the Executive’s Base
Salary may be increased on each anniversary of the Effective Date,
at the Board’s sole discretion. The parties expressly agree
that what the Executive receives now or in the future, in addition
to his regular Base Salary, whether this be in the form of benefits
or regular or occasional aid/assistance, such as recreation, club
memberships, meals, education for him or his family, extralegal
health benefits, vehicle, lodging or clothing, occasional bonuses
or anything else he receives, during the Employment Period and any
renewals thereof, in cash or in kind, shall not be deemed as
salary. Additionally, the Base salary is “Integral”
under the labor laws of Colombia.
4
.
Bonus . The
Executive shall be eligible to receive an annual cash bonus (the
”Annual Bonus”) of up to fifty percent (50%) of the
then applicable Base Salary, payable in U.S. dollars within ten
(10) days of the filing with the Securities and Exchange Commission
of the Company’s annual report on Form 10-K. The
Executive’s Annual Bonus (if any) shall be in such amount (up
to the limit stated above) as the Board may determine in its sole
discretion, based upon the Executive’s achievement of certain
performance milestones to be established annually by the Board in
discussion with the Executive (the “Milestones”). For
the initial Employment Period, in the event the Board and the
Executive are unable to agree to Milestones acceptable to both the
Board and the Executive, the amount of the Executive’s bonus
shall be determined by the Board on a discretionary basis. The
Executive shall be eligible to participate in any other bonus or
incentive program established by the Company for executives of the
Company.
5.
Stock Options .
(a)
Grant of Options .
As
of the Effective Date, the Company shall grant the Executive
an option to purchase an aggregate of 1,000,000 shares of the
Company’s common stock (“Options”) under the
Company’s 2008 Equity Incentive Plan (the “2008
Plan”). Such grant shall be evidenced by an Option
Agreement issued by the Company as contemplated by the 2008
Plan and approved by the Board. In subsequent years the
Executive shall be eligible for such grants of Options and/or
other permissible awards under the 2008 Plan as the
Compensation Committee of the Company, if any, or the Board
shall determine.
(b)
Option Price; Term .
The
per share exercise price of the Options shall be the fair
market closing price per share of Company common stock on the
date of grant. The term of the Option (i.e., the length of
time during which the Option may be exercised) shall be ten
years from the date of grant.
(c)
Exercise .
One
third of the shares of the Options shall become exercisable on
each anniversary of the date of grant (with 333,334 shares
becoming eligible for exercise on the first anniversary of the
date of grant, an additional 333,333 shares becoming eligible
for exercise on the second anniversary of the date of grant
and the final 333,333 shares becoming eligible for exercise on
the third anniversary of the date of grant).
(d)
Payment .
The
full consideration for any shares purchased by the Executive
upon exercise of the Options shall be paid in
cash.
(e)
Termination of Employment; Accelerated Vesting
.
(i)
If
the Executive’s employment is terminated for Cause, as
such term is defined below, all Options, whether or not
vested, shall immediately expire effective as of the date of
termination of employment.
(ii)
If
the Executive’s employment is terminated voluntarily by
the Executive without Good Reason, as such term is defined
below, all unvested Options shall immediately expire effective
the date of termination of employment. Vested Options, to the
extent unexercised, shall expire one month after the
termination of employment.
(iii)
If
the Executive’s employment terminates on account of
death or Disability, as defined below, all unvested Options
shall immediately expire effective the date of termination of
employment. Vested Options, to the extent unexercised, shall
expire nine months after the termination of
employment.
(iv)
If
the Executive’s employment is terminated (A) in
connection with a Change of Control, as defined below, (B) by
the Company without Cause within 12 months of the Effective
Date or (C) by the Executive for Good Reason, all unvested
Options shall immediately vest and become exercisable
effective the date of termination of employment, and, to the
extent unexercised, shall expire nine months after any such
event. These acceleration and expiration provisions shall not
apply with respect to a Change of Control following which the
Executive remains President or Chief Executive Officer or
continues to perform functions and be responsible for duties
significantly and substantially similar to those of one or
both of those positions.
(f)
Change of Control .
For
purposes of this Agreement, “Change of Control” means
the occurrence of, or a Board vote to approve, any of the
following:
(i)
any
consolidation or merger of the Company pursuant to which the
stockholders of the Company immediately before the transaction
do not retain immediately after the transaction, in
substantially the same proportions as their ownership of
shares of the Company’s voting stock immediately before
the transaction, direct or indirect beneficial ownership of
more than 50% of the total combined voting power of the
outstanding voting securities of the surviving business
entity;
(ii)
any
sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all, or substantially
all, of the assets of the Company other than any sale, lease,
exchange or other transfer to any company where the Company
owns, directly or indirectly, 100% of the outstanding voting
securities of such company after any such transfer;
or
(iii)
the
direct or indirect sale or exchange in a single or series of
related transactions by the stockholders of the Company of
more than 50% of the voting stock of the Company.
6
.
Other Benefits
(
a
)
Insurance and Other Benefits .
During the Employment Period, the Executive shall be entitled to
participate in the Company’s insurance programs and any ERISA
benefit plans, as the same may be adopted and/or amended from time
to time (the “
Benefits ”).
The Executive shall be entitled to paid personal days on a basis
consistent with the Company’s other senior executives, as
determined by the Board. The Executive shall be bound by all of the
policies and procedures established by the Company from time to
time. However, in case any of those policies conflict with the
terms of this Agreement, the terms of this Agreement shall
control.
(
b
)
Vacation .
During the Employment Period, the Executive shall be entitled to an
annual vacation of such duration consistent with the
Company’s policies from time to time, as determined by the
Board.
(c)
Expense Reimbursement .
The Company shall reimburse the Executive for all reasonable
business, promotional, travel and entertainment expenses
("Reimbursable Expenses") incurred or paid by him
during
the Employment Period in the performance of his
services
under this Agreement, provided that the Executive furnishes to the
Company appropriate documentation required by the Internal Revenue
Code in a timely fashion in connection with such expenses and shall
furnish such other documentation and accounting as the Company may
from time to time reasonably request.
7.
Termination; Compensation Due Upon Termination of
Employment
. The
Executive's employment hereunder may terminate as provided in
paragraphs (a) through (e) below. The Executive’s right to
compensation for periods after the date his
employment
with the Company terminates shall be determined in accordance with
the provisions of paragraphs (a) through (e) below:
(a
)
Voluntary Resignation; Termination without Cause
.
(i)
Voluntary Resignation .
The
Executive may terminate his
employment
at any time upon thirty (30) days prior written notice to the
Company. In the event of the Executive's voluntary termination of
employment other than for Good Reason (as defined below), the
Company shall have no obligation to make payments to the Executive
in accordance with the provisions of Sections 3 or 4, except as
otherwise required by this Agreement or by Colombia or U.S. law, to
provide the benefits described in Section 6, for periods after the
date on which the Executive's employment with the Company
terminates due to the Executive 's voluntary resignation, except
for the payment of the Executive’s Base Salary accrued
through the date of such resignation.
(ii)
Termination without Cause .
(A)
If the
Executive’s employment is terminated by the Company
without Cause at any time during the twelve month period
commencing on the Effective Date, the Company shall (x)
continue to pay the Executive the Base Salary (at the rate in
effect on the date the Executive’s employment is
terminated) until the end of the Severance Period (as defined
in Section 7(e) below), (y) to the extent the Milestones are
achieved or, in the absence of Milestones, the Board has, in
its sole discretion, otherwise determined an amount for the
Executive’s bonus for the initial Employment Period, pay
the Executive a pro rata portion of his Annual Bonus for the
initial Employment Period on the date such Annual Bonus would
have been payable to the Executive had he remained employed by
the Company, and (z) pay any other accrued compensation and
Benefits. The Executive shall have no further rights under
this Agreement or otherwise to receive any other compensation
or benefits after such termination of employment.
(B)
If,
following a termination of employment without Cause, the
Executive breaches the provisions of Sections 8 through 9
hereof, the Executive shall not be eligible, as of the date of
such breach, for the payments and benefits described in
Section 7(a)(ii), and any and all obligations and
agreements of the Company with respect to such payments shall
thereupon cease.
(b
)
Discharge for Cause .
Upon (i) written notice to the Executive, the Company may terminate
the Executive’s employment for “Cause” if any of
the following events shall occur:
(i
)
any
act or omission that constitutes a material breach by the
Executive of any of his obligations under this
Agreement ;
(ii
)
the
willful and continued failure or refusal of the Executive to
satisfactorily perform the duties reasonably re
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