EXHIBIT 10 (v)

 

                              EMPLOYMENT AGREEMENT

 

     This Employment Agreement (the "Agreement") is entered into as of this 21st

day of April, 2005 by and between American Oil & Gas, Inc., a Nevada corporation

(the "Company"), and Patrick D. O'Brien ("Employee") to be effective as of April

21, 2005 (the "Effective Date"). Employee and Company are sometimes referred to

individually as a "Party" and collectively as the "Parties."

 

     In consideration of the mutual covenants, promises and agreements herein

contained, the Company and Employee hereby covenant, promise and agree to and

with each other as follows:

 

     1. Employment. The Company shall employ Employee and Employee shall perform

services for and on behalf of the Company upon the terms and conditions set

forth in this Agreement.

 

     2. Positions and Duties of Employment. Employee shall be required to devote

his full energy, skill and best efforts as required to the furtherance of his

managerial duties with the Company as the Company's Chief Executive Officer, or

such other senior executive officer as determined by the Board of Directors of

the Company (the "Board"), and as a Petroleum Engineer for the Company.

 

     Employee understands that his employment by the Company involves a high

degree of trust and confidence, that he is employed for the purpose of

furthering the Company's reputation and improving the Company's operations and

profitability, and that in executing this Agreement he undertakes the

obligations set forth herein to accomplish such objectives. Employee agrees that

he shall serve the Company fully, diligently, competently, and to the best of

his ability. Employee certifies that he fully understands his right to discuss

this Agreement with his attorney, that he has availed himself of this right to

the extent that he desires, that he has carefully read and fully understands

this entire Agreement, and that he is voluntarily entering into this Agreement.

 

     3. Duties. Employee shall perform the following services for the Company:

 

          3.1 Employee shall serve as Chief Executive Officer of the Company, or

in such other senior executive officer position as determined by the Board, and

in that capacity shall work with the Company to pursue the Company's plans as

directed by the Board. Employee shall have the responsibilities, duties,

obligations, rights, benefits, and requisite authority as is customary for the

position of Chief Executive Officer and as may be determined by the Board.

 

          3.2 Employee shall perform the duties and functions of a Petroleum

Engineer of the Company, subject to the direction of the Board and the executive

officers of the Company. Employee shall have the responsibilities, duties,

obligations, rights, benefits, and requisite authority as is customary for the

position of Petroleum Engineer and as may be determined by the Board and the

executive officers of the Company.

 

          3.3 During the term of this Agreement, Employee shall devote

substantially all of Employee's business time, attention, knowledge, and skills

solely to the business and interests of the Company and to the performance of

Employee's duties under this Agreement. Without limiting the foregoing, Employee

shall perform services on behalf of the Company for at least 40 hours per week,

and Employee shall be available at the request of the Company at other times,

including weekends and holidays, to meet the needs and requests of the Company's

customers.

 

 

 

          3.4 During the term of this Agreement, Employee will not engage in any

other activities or undertake any other commitments that conflict with or take

priority over Employee's responsibilities and obligations to the Company and the

Company's customers, including without limitation those responsibilities and

obligations incurred pursuant to this Agreement.

 

     4. Term. Unless terminated earlier as provided for in this Agreement, the

term of this Agreement shall commence on the Effective Date and end on the fifth

anniversary of the Effective Date (the "Term"). If the employment relationship

is terminated by either Party, Employee agrees to cooperate with the Company and

with the Company's new management with respect to the transition of the new

management in the operations previously performed by Employee. Upon Employee's

termination, Employee agrees to return to the Company all Company documents (and

all copies thereof), any other Company property in Employee's possession or

control, and any materials of any kind that contain or embody any proprietary or

confidential material of the Company.

 

     5. Compensation. Employee shall receive the following as compensation:

 

          (a) A salary at the annual rate of $95,000, subject to possible

increases from time to time in the discretion of the Board, or a committee

selected by the Board, payable in accordance with the Company's customary

payroll practices.

 

          (b) At the discretion of the Board, or a committee selected by the

Board, a performance-based bonus.

 

          (c) Company shall include Employee, if otherwise eligible, in any

profit sharing plan, executive stock option plan, pension plan, retirement plan,

medical and/or hospitalization plan, and/or any and all other benefit plans,

which may be placed in effect by the Company for the benefit of the Company's

employees during the Term. Except for the fact that the Company at all times

shall provide Employee with all or at least a portion of Employee's medical

and/or hospitalization insurance, which shall not be less than that afforded to

the Company's other employees, nothing in this Agreement shall limit (i)

Company's ability to exercise the discretion provided to it under any such

benefit plan, or (ii) the Company's discretion to adopt, not adopt, amend or

terminate any such benefit plan at any time.

 

          (d) The Company shall provide Employee with three weeks vacation leave

per each year of Employee's employment and sick leave consistent with Company

plans and policies in effect for Employees from time to time.

 

          (e) Any payments which the Company shall make to Employee pursuant to

this Agreement shall be reduced by standard withholding and other applicable

payroll deductions, including but not limited to federal, state or local income

or other taxes, Social Security and Medicare Taxes, State Unemployment

Insurance, State Disability Insurance, and the like.

 

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          (f) During the term of his employment, Employee shall be reimbursed

for reasonable expenses that are authorized by the Company and that are incurred

by Employee for the benefit of the Company in accordance with the standard

reimbursement practices of the Company. Any direct payment or reimbursement of

expenses shall be made only upon presentation of an itemized accounting

conforming in form and content to standards prescribed by the Internal Revenue

Service relative to the substantiation of the deductibility of business

expenses.

 

     6. Confidentiality. Employee hereby warrants, covenants and agrees that,

Employee may disclose confidential information, including but not limited to (a)

information, memoranda, plans or other documents concerning Company's business

or development plans, customers or suppliers, (b) Company's development, or

sales and marketing methods or techniques, or (c) Company's trade secrets and

other "know-how" or information not of a public nature, regardless of how such

information came to the custody of Employee, only when Employee believes such

disclosure to be in the best interest of the Company and never contrary to the

specific written instruction of the Board. For purposes of this Agreement, such

information shall include, but not be limited to, information, including a

formula, pattern, compilation, program, device, method, technique or process,

that (i) derives independent economic value, present or potential, from not

being generally known to, and not being readily ascertainable by proper means

by, other persons who can obtain economic value from its disclosure or use, and

(ii) is the subject of efforts that are reasonable under the circumstances to

maintain its secrecy. The warranty, covenant and agreement set forth in this

paragraph shall not expire, shall survive this Agreement, and shall be binding

upon Employee without regard to the passage of time or other events.

 

     7. Non-Compete.

 

          (a) Employee acknowledges and recognizes the highly competitive nature

of the Company's business and that Employee's duties hereunder justify

restricting Employee's further employment. The Employee agrees that so long as

the Employee is employed by the Company, Employee, except when acting at the

request of the Company on behalf of or for the benefit of the Company, (i) will

not induce customers, agents or other sources of distribution of the Company's

business under contract, doing business with the Company, or in negotiations to

do business with the Company to terminate, reduce, alter or divert business with

or from the Company, (ii) will not, directly or indirectly, solicit or induce,

or enter into any discussions that would have the effect of soliciting or

inducing, any individual that was, within ninety days prior to the termination

of this Agreement, an employee of Company or any of Company's affiliates to

leave the Company or such affiliate of the Company, (iii) will not, directly or

indirectly, employ any individual that was, within ninety days prior to the

termination of this Agreement, an employee of either the Company or an affiliate

of the Company, and (iv) shall not, directly or indirectly, either as a

principal, agent, employee, employer, consultant, partner, member or manager of

a limited liability company, shareholder of a company that does not have

securities registered under the Securities Exchange Act of 1934, as amended (the

"1934 Act"), or shareholder in excess of one percent of a company that has

securities registered under the 1934 Act, corporate officer or director, or in

any other individual or representative capacity, engage or otherwise participate

in any manner or fashion in any business that is in competition in any manner

 

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whatsoever with the business activities of Company. Employee further covenants

and agrees that the restrictive covenant set forth in this paragraph is

reasonable as to duration, terms, and geographical area and that the same

protects the legitimate interests of Company, imposes no undue hardship on

Employee, and is not injurious to the public. Ownership by Employee, for

investment purposes only, of less than one percent of any class of securities of

a corporation if said securities are listed on a national securities exchange or

registered under the 1934 Act shall not constitute a breach of the covenant set

forth under (iv) above. It is the desire and intent of the Parties that the

provisions of this paragraph be enforced to the fullest extent permissible under

the laws and public policies applied in each jurisdiction in which enforcement

is sought. Accordingly, if any particular portion of this paragraph shall be

adjudicated to be invalid or unenforceable, this paragraph shall be deemed

amended to apply in the broadest allowable manner and to delete therefrom the

portion adjudicated to be invalid or unenforceable, such amendment and deletion

to apply only with respect to the operation of paragraph in the particular

jurisdiction in which that adjudication is made.

 

          (b) The Company recognizes that the Employee currently owns interests

in Tower Energy Corporation, Tower Equipment Corporation, Tower Drilling

Corporation and Ragged Mountain Resources, LLC, and these entities may own minor

oil and gas related interests. Ownership in these entities will not constitute a

breach of the covenant set forth under 7(a)(iv) above.

 

          (c) In the event that Employee's employment with Company is terminated

pursuant to Section 8(a) below, the provisions in Section 7(a) above shall

continue to apply for a period of 12 months following the date of termination,

however, such provisions will be limited geographically to any areas that

Company is currently developing, or any areas that Company has, during the 12

month period prior to the date of termination, analyzed to determine if

development and exploration is feasible in such area. Company shall, no later

than thirty days after the termination of Employee's employment pursuant to

Section 8(a) below, provide Employee with a list of areas to which Section 7(a)

is limited.

 

     8. Termination.

 

          (a) In the event that Employee's employment with the Company is

terminated for Cause, by reason of Employee's death or disability, or due to

Employee's resignation or voluntary termination, then all compensation and

benefits will cease as of the effective date of such termination, and Employee

shall receive no severance benefits, or any other compensation; provided that

Employee shall be entitled to receive all compensation earned and all benefits

and reimbursements due through the effective date of termination.

 

               (i) For purposes of this Agreement, "Cause" shall mean that the

Board, acting in good faith based upon the information then known to the

Company, determines that Employee has engaged in or committed any of the

following: willful misconduct, gross negligence, theft, fraud, or other illegal

conduct; refusal or unwillingness to perform Employee's duties; performance by

Employee of Employee's duties determined by the Board to be inadequate in a

material respect; breach of any applicable non-competition, confidentiality or

other proprietary information or inventions agreement between Employee and the

Company; inappropriate conflict of interest; insubordination; failure to follow

the directions of the Board or any committee thereof; or any other material

breach of this Agreement. Indictment or conviction of any felony, or any entry

of a plea of nolo contendre in a felony proceeding, under the laws of the United

States or any State shall also be considered "Cause" hereunder.

 

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          (b) In the event that the Board determines, in its sole discretion,

that it is in the best interests of the Company to terminate the Employee's

employment with the Company, and the Board does not desire to base such

termination on the provisions of Section 8(a) regardless of whether it is unable

or does not desire to do so, then all compensation and benefits will cease as of

three months after the effective date of such termination, and Employee shall

receive no severance benefits, or any other compensation; provided that Employee

shall be entitled to receive all compensation earned and all benefits and

reimbursements due through the date which is three months after the effective

date of termination.

 

          (c) Employee agrees that the payments contemplated by this Agreement

shall constitute the exclusive and sole remedy for any termination of

employment, and Employee covenants not to assert or pursue any other remedies,

at law or in equity, with respect to any termination of employment.

 

          (d) Any party terminating this Agreement shall give prompt written

notice ("Notice of Termination") to the other party hereto advising such other

party of the termination of this Agreement stating in reasonable detail the

basis for such termination.

 

     9. Remedies. If there is a breach or threatened breach of any provision of

Section 6 or Section 7 of this Agreement, the Company will suffer irreparable

harm and shall be entitled to an injunction restraining Employee from such

breach. Nothing herein shall be construed as prohibiting the Company from

pursuing any other remedies for such breach or threatened breach.

 

     10. Severability. It is the clear intention of the Parties to this

Agreement that no term, provision or clause of this Agreement shall be deemed to

be invalid, illegal or unenforceable in any respect, unless such term, provision

or clause cannot be otherwise construed, interpreted, or modified to give effect

to the intent of the Parties and to be valid, legal or enforceable. The Parties

specifically charge the trier of fact to give effect to the intent of the

Parties, even if in doing so, information of a specific provision of this

Agreement is required consistent with the foregoing stated intent. In the event

that such a term, provision, or clause cannot be so construed, interpreted or

modified, the validity, legality and enforceability of the remaining provisions

contained herein and other application(s) thereof shall not in any way be

affected or impaired thereby and shall remain in full force and effect.

 

     11. Waiver of Breach. The waiver by the Company or Employee of the breach

of any provision of this Agreement by the other Party shall not operate or be

construed as a waiver of any subsequent breach by that Party.

 

     12. Entire Agreement. This document contains the entire agreement between

the Parties and supersedes all prior oral or written agreements, if any,

concerning the subject matter hereof or otherwise concerning Employee's

employment by the Company. This Agreement may not be changed orally, but only by

agreement in writing signed by the Parties.

 

     13. Governing Law. This Agreement, its validity, interpretation and

enforcement, shall be governed by the laws of the State of Colorado, excluding

conflict of laws principles. Employee hereby expressly consents to personal

jurisdiction in the state and federal courts located in Denver County, Colorado

for any lawsuit filed there against him by the Company arising from or relating

to this Agreement.

 

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     14. Notices. Any notice pursuant to this Agreement shall be validly given

or served if that notice is made in writing and delivered personally or sent by

certified mail or registered, return receipt requested, postage prepaid, to the

following addresses:

 

     If to Company:   American Oil & Gas, Inc.

                      1050 17th Street, Suite 1850

                      Denver, CO  80265

                      Attention:  Andy Calerich

 

     If to Employee:  To the address for Employee set forth below his signature.

 

     All notices so given shall be deemed effective upon personal delivery or,

if sent by certified or registered mail, five business days after date of

mailing. Either party, by notice so given, may change the address to which his

or its future notices shall be sent.

 

     15. Assignment and Binding Effect. This Agreement shall be binding upon

Employee and the Company and shall benefit the Company and its successors and

assigns. This Agreement shall not be assignable by Employee.

 

     16. Headings. The headings in this Agreement are for convenience only; they

form no part of this Agreement and shall not affect its interpretation.

 

     17. Construction. Employee represents he has (a) read and completely

understands this Agreement and (b) had an opportunity to consult with any legal

and other advisers as he has desired in connection with this Agreement. This

Agreement shall not be construed against any one of the Parties.

 

 

 

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     IN WITNESS WHEREOF, the parties have executed this Agreement to be

effective on the day and year first above written.

 

 

EMPLOYEE                                       AMERICAN OIL & GAS, INC.

 

 

/s/ Pat O'Brien                                /s/ Andrew Calerich

---------------                                -------------------

Pat O'Brien, Individually                      Name: Andrew Calerich

 

                                Title: President

 

 

 

 

 

 

 

 

 

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