UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 Or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 13, 2014
Signature Exploration and Production Corp.
(Exact name of Registrant as specified in its charter)
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Delaware
(State or other Jurisdiction of
Incorporation or organization)
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333-382580
(Commission File Number)
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59-3733133
(IRS Employer I.D. No.)
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4700 Millenia Blvd, Suite 175
Orlando, FL 32829
Phone: (844) 843-2569
Fax: (866) 929-5122
(Address, including zip code, and telephone and facsimile numbers, including area code, of
registrant’s executive offices)
NA
(Former name, former address and former fiscal year, if changed since last report)
INTRODUCTORY NOTE
The purpose for this Amendment 1 is to correct the phone number and the fax number on the front page of the current report on Form 8-K that was filed immediately prior to this amendment. Otherwise, this filing is a restatement of the original filing.
ITEM 1.01 Entry into a Material Definitive Agreement.
(See description under Item 2.1 below.)
ITEM 2.01 Completion of Acquisition of Assets.
On March 13, 2014, the Registrant (hereinafter the “Company”), entered into a definitive agreement (the “Agreement”) with Mr. Craig Ellins for the acquisition of assets (the “Assets”) to be used in the legal production and use of cannabis. The Agreement is between Mr. Ellins and the Company and is attached to this filing as Exhibit 10.1. Currently, there are approximately twenty-one states plus the District of Columbia that have laws and/or regulations that recognize in one form or another legitimate medical uses for cannabis and consumer use of cannabis in connection with medical treatment. Other states are considering similar legislation. The Assets equip the Company to be among the first to provide methods of cannabis production for the legal uses that are being legislated in the various states. The Assets include:
• a provisional patent application associated with the production or use of cannabis;
• concepts associated with the production, use of, or in any way connected with cannabis conceived or developed by Mr. Ellins or his associates;
• trademarks;
• business plans;
• investor presentations and histories;
• websites;
• trade secrets including without limitation trade secrets involving nutrient mixes;
• drawings and digital artwork;
• research analysis and reports, including without limitation a report entitled “GrowOpp Hydroponic Agriculture;
• raw materials associated with the production and use of cannabis;
• production equipment and related assets including without limitation electrical equipment, plastic molds and internal parts;
• proof-of-concept equipment; and
• URL’s associated with or intended to be associated with the production, use of, or in any way connected with cannabis.
In exchange for the Assets, the Company agreed to issue 12,500,000 restricted shares of the Company’s common stock. Of the total number of shares to be issued, 4,500,000 were issued upon the signing of the Agreement. The remainder of the shares will be issued upon reaching certain milestones. The shares were issued pursuant to the exemption from registration set forth in Section 4(2) of the Securities Act of 1933
ITEM 3.02 Unregistered Sales of Equity Securities.
(See description under Item 2.1 above.)
ITEM 5.01 Changes in Control of Registrant.
In connection with the transaction described in Item 2.1, Craig Ellins gained control of the Company by virtue of his stock ownership in the Company. As stated in Item 2.1, Mr. Ellins acquired 4,500,000 shares of common stock on March 13, 2014, in exchange for the Assets described in Item 2.1. The share acquisition gave Mr. Ellins control of the Company by virtue of holding approximately 84% of its the voting capital. Mr. Ellins will become the Chairman and CEO of the Company. Prior to March 13, 2014, the Company was controlled by Mr. Steven Weldon and Screaming Reach Investments LLC by virtue of a combined 52% ownership of the common shares of the Company.
ITEM 5.02 Departure of Certain Officer; Election of Certain Officer; Compensatory Arrangements of Certain Officers.
On March 17, 2014, Mr. Steven Weldon resigned as the Chief Executive Officer of the Company. Mr. Weldon will continue to serve as the Chief Financial Officer of the Company. A copy of Mr. Weldon’s employment agreement relating to his duties as Chief Financial Officer is attached to this current report as Exhibit 10.2.
On March 17, 2014, Mr. Craig Ellins was appointed Chief Executive Officer of the Company. Mr. Ellins' employment is pursuant to the terms and conditions of his employment agreement with the Company entered into on March 17, 2014, a copy of which is attached to this current report as Exhibit 10.3.
Mr. Ellins has a varied and impressive business background. He has spent more than 30 years discovering emerging trends and creating start-ups, from being a pioneer in companies offering 24-hour live shopping networks, to developing one of the internet's first streaming video business opportunities. He has launched new products via domestic and international television direct response advertising, including the successful Pilates Performer, BioFlex, Nature's Vision and the Voit Ab Roller. Ellins has been sought out for strategic planning by well-known companies, including NetCom, AT&T, Time Warner Inc., K-Tel International, Fingerhut Corporation, Guthy-Renker, Simitar Entertainment, and Stamina Products. Most recently, Mr. Ellins has been developing technology and trade secrets central to the production of cannabis of the variety and type that will support the legal purposes of cannabis that now exist in various states.
ITEM 9.01 Exhibits.
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Exhibit No.
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Exhibit Name
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10.1
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Asset Assignment, Acquisition and Professional Association Agreement
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10.2
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Employment Agreement (Steven Weldon)
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10.3
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Employment Agreement (Craig Ellins)
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SIGNATURE PAGE
Pursuant to the requirement of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Signature Exploration and Production Corp.
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Dated: March 19, 2014
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By:
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/s/ Steven Weldon
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Steven Weldon
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Chief Financial Officer and Director
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ASSET ASSIGNMENT, ACQUISITION
AND
PROFESSIONAL ASSOCIATION AGREEMENT
This Asset Assignment, Acquisition and Professional Association Agreement (the "Agreement") is made as of the 13
th
day of March, 2014, (the "Effective Date") by and between Signature Exploration and Production Corp., a Delaware corporation (the “Company”) and Craig Ellins (Mr. Ellins”). Hereinafter the Company and Mr. Ellins are sometimes individually referred to as a “party” and jointly as the “parties”.
Recitals
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A.
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Currently, there are approximately twenty-one states plus the District of Columbia that have laws and/or regulations that recognize in one form or another legitimate medical uses for cannabis and consumer use of cannabis in connection with medical treatment.
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B.
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The Company desires to be among the first to provide methods of cannabis production for the legal uses of Cannabis that are being legislated.
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C.
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Mr. Ellins is the developer and owner of technology and trade secrets central to the production of cannabis of the variety and type that will support the legal uses of cannabis.
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D.
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The Company desires to obtain and Mr. Ellins desires to transfer to the Company the Assets as defined below in this Agreement.
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E.
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Furthermore, the Company desires to obtain the professional services of Mr. Ellings, all accordingly to the terms and conditions of this Agreement.
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Agreement
Now therefore, for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the parties to be derived here from, it is hereby agreed as follows:
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1.
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Recitals
. The recitals above are incorporated by this reference and are made a part of this Agreement as though fully set forth in this paragraph.
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2.
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Assets
. For the purposes of this Agreement, the term “Assets” includes the following:
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Any and all provisional patent applications associated with the production or use of cannabis conceived, owned in whole or in part, or developed by Mr. Ellins or his associates;
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Any and all concepts and or ideas associated with the production, use of, or in any way connected with cannabis conceived, owned in whole or in part, or developed by Mr. Ellins or his associates that have been targeted for protection pursuant to the filing of provisional patent application;
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All trademarks intended to be used in association with the production, use of, or in way connected with cannabis conceived, owned in whole or in part, or developed by Mr. Ellins or his associates;
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Any and all business plans associated with the production, use of, or in any way connected with cannabis conceived, owned in whole or in part, or developed by Mr. Ellins or his associates;
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Any and all investor presentations and histories associated with the production, use of, or in any way connected with cannabis conceived, owned in whole or in part, or developed by Mr. Ellins or his associates;
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Any and all websites associated with the production, use of, or in any way connected with cannabis conceived, owned in whole or in part, or developed by Mr. Ellins or his associates;
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Any and all trade secrets associated with the production, use of, or in any way connected with cannabis conceived, owned in whole or in part, or developed by Mr. Ellins or his associates, including without limitation trade secrets involving nutrient mixes;
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Any and all drawings and digital artwork associated with the production, use of, or in any way connected with cannabis conceived, owned in whole or in part, or developed by Mr. Ellins or his associates;
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Any and all research analysis and reports associated with the production, use of, or in any way connected with cannabis conceived, owned in whole or in part, or developed by Mr. Ellins or his associates, including without limitation a report entitled “GrowOpp Hydroponic Agriculture;
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Any and all raw materials associated with the production, use of, or in any way connected with cannabis conceived, owned in whole or in part, or developed by Mr. Ellins or his associates;
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Any and all production equipment and related assets including without limitation electrical equipment, plastic molds and internal parts wherever located including in China associated with the production, use of, or in any way connected with cannabis conceived, owned in whole or in part, or developed by Mr. Ellins or his associates;
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Any and all proof-of-concept equipment associated with the production, use of, or in any way connected with cannabis conceived, owned in whole or in part, or developed by Mr. Ellins or his associates wherever located;
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Any and all URL’s associated with or intended to associated with the production, use of, or in any way connected with cannabis conceived, owned in whole or in part, or developed by Mr. Ellins or his associates; and
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Any and all other ideas, tools, methods, customer lists, designs, concepts, plans, equipment, and proprietary property associated with the production, use of, or in any way connected with cannabis conceived, owned in whole or in part, or developed by Mr. Ellins or his associates.
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3.
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Assignment of Assets
. Mr. Ellins hereby assigns the Assets to the Company in behalf of himself and any and all companies and legal entities that he controls or can control and agrees to obtain all transfers and releases from other persons and entities as necessary to vest full ownership of the Assets in the Company.
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4.
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Executive Employment
. The Company hereby offers and Mr. Ellins hereby accepts executive employment with the Company pursuant to the terms and conditions of a definitive agreement and an employment agreement to be entered into by the parties. Mr. Ellins shall be paid compensation and receive benefits commensurate with employment and positions of this type and based upon successes Mr. Ellins achieves for the Company.
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5.
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Issuance of Shares
. The Company agrees to issue to Mr. Ellins 12,500,000 shares (the “Shares”) of the Company’s common stock pursuant to the terms and conditions of a definitive agreement to be entered into by the parties. The Shares will be issued in three tranches. The first tranche of 4,500,000 will be issued upon the execution of this Agreement. The second tranche of 4,000,000 will be issued upon the completion of a minimum of $1,000,000 in proceeds to the Company from the fund raising. Mr. Ellins does not have to raise the funds personally. The second tranche will issue upon the Company receiving the funds. The third tranche of 4,000,000 shares will be issued upon the filing of two additional provisional patent applications for technology inside the GrowBLOX Controlled Environment Agricultural Chamber. The two additional provisional patent applications shall be based upon two of the following four applications: (1) AeroVAPOR; (2) Heat Exchanger; (3) Vertical LED Lighting Cluster; or (4) Atmospheric Controls. Mr. Ellins understands the Shares will be restricted securities pursuant to the standard restrictions assigned to such shares by the rules and regulations of the federal securities laws as well as other restrictions as agreed to by the parties.
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6.
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Representations of the Company
. The Company represents to Mr. Ellins as follows:
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The Company is a corporation duly organized, existing and in good standing under the laws of the state of Delaware and has the power to conduct the business which it conducts and proposes to conduct;
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The Company has filed all reports that it is required to file pursuant to the requirements of the Securities Exchange Act of 1934;
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Upon issue, the Shares will be duly and validly issued, fully paid and non-assessable except as agreed upon by the parties;
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The Company has the power and authority to enter into this Agreement and to perform its obligations as stated herein; and
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The signature of the officer on this Agreement is binding upon the Company and does not put the Company in violation of any other agreement or obligation.
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7.
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Representations of Mr. Ellins
. Mr. Ellins represents to the Company as follows:
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He is familiar with the Company and has such knowledge and experience in finance, securities, investments, including investment in non-registered securities, and other business matters so as to be able to protect its interests in connection with this transaction;
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He acknowledges that the Shares are being issued by the Company pursuant to an exemption from registration provided by Section 4(2) of the Act and that no state or federal agency has passed upon the Shares or this transaction;
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He understands that the shares of Common Stock are “restricted securities” under the Act and that any shares purchased hereby may not be re-offered for sale or resold or otherwise transferred except pursuant to an effective registration statement under the Act or pursuant to an available exemption from registration under such Act and therefore the Purchaser must bear the economic risk of the Purchaser’s investment for an indefinite period of time. Notwithstanding the foregoing, Company acknowledges that Mr. Ellins may transfer the shares to third parties who own or control certain of the assets listed herein above, in order to assure that the Company has complete and unfettered right, title and interest to all such assets. However, no shares shall be transferred by Mr. Ellins for this purpose until 90 days following the release of all interests by said third parties in the Assets, as a settling period during which time it can be assured that the Assets are free and clear of any extraneous claims of rights or ownership;
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“Assets” as defined herein encompasses all assets and interests that exist that are connected in any way to cannabis or related to the cannabis industry or potential cannabis industry, in which he has an interest or connection of any kind;
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He has the personal capacity to transfer the Assets or to control the entities that can transfer the Assets or to obtain the transfer and release of third parties as necessary to vest full ownership of the Assets in the Company;
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After obtaining transfers and releases pursuant to section 3 herein, no third party will be able to assert a legally viable claim against the Assets;
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He has the power and authority to enter into this Agreement and to perform his obligations as stated herein; and
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His signature on this Agreement and his obligations set forth in this Agreement do not put him in violation of any other Agreement or obligation.
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8.
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Other Actions
. The parties will do and cause to be done all such acts, matters and things necessary or helpful to be done, and will execute and deliver all such documents and instruments as will be required to enable the parties to perform their respective covenants and obligations hereunder.
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9.
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Entire Agreement
. This Agreement constitutes the entire agreement between the parties with respect to the matters referred to herein and supersedes all prior agreements, contracts, proposals, representations, negotiations, or other communications, whether written or oral, with respect to such matters. Neither party will be bound by or liable for any statement, representation, promise, inducement, or understanding of any kind not expressly set forth in this Agreement.
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10.
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Indemnification
. Each party hereto agrees to indemnify and hold harmless the other party, its directors, officers, employees, stockholders and each person who controls the Company against any losses, claims, damages, liabilities and expense (including reasonable attorney fees) resulting from any untrue representation set forth in this Agreement or from a parties failure to perform its responsibilities and obligations under this agreement.
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11.
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Amendment
. No amendment to any provision of this Agreement will be valid unless agreed to in writing and signed by the party against whom enforcement is sought.
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12.
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Assigns
. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. Nothing herein will be construed to provide any rights to any other entity or individual except as specifically provided for herein.
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13.
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Execution and Delivery
. This Agreement may be executed and delivered in original form or by electronic transfer, in one or more counterparts, and each counterpart will be read and construed as one and the same instrument as if the parties had executed the same document in the presence of each other.
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In witness whereof, the parties have duly executed this Agreement to be effective as of the Effective
Date.
Craig Ellins
_/s/ Craig Ellins________________________
Craig Ellins, Individual
Signature Exploration and Production Corp.
_/s/ Steven Weldon______________________
By: Steven Weldon, CEO
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the 17
h
day of March, 2014 by and between Signature Exploration and Production Corp., a Delaware corporation (hereinafter called the "Company"), and Steven Weldon (hereinafter called the "Executive").
Recitals
A.
The Board of Directors of the Company (the "Board") desires to assure the Company of the Executive's continued employment in an executive capacity and to compensate him therefore.
B.
The Board has determined that this Agreement will reinforce and encourage the Executive's continued attention and dedication to the Company.
C.
The Executive is willing to make his services available to the Company on the terms and conditions hereinafter set forth.
Agreement
NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein, the parties agree as follows:
1.
Employment
.
1.1
Employment and Term
. The Corporation hereby agrees to employ the Executive as its Chief Financial Officer, in such capacity, agrees to provide services to the Corporation for the period beginning on March 17, 2014 and ending March 17, 2017 (the “
TERMINATION DATE
") (or such later date as may be agreed to by the parties within 120 days prior to the Termination Date) (the “
EMPLOYMENT PERIOD
").
1.2
Duties of Executive
. The Executive shall serve as the Chief Financial Officer of the Company. Subject to the preceding sentence, during the term of Employment, the Executive shall diligently perform all services as may be reasonably assigned to him by the Board, and shall exercise such power and authority as may from time to time be delegated to him by the Board. The Executive shall be required to report solely to, and shall be subject solely to the supervision and direction of the Board at duly called meetings thereof, and no other person or group shall be given authority to supervise or direct Executive in the performance of his duties. In addition, the Executive shall regularly consult with the Chairman of the Board with respect to the Company's business and affairs. The Executive shall devote his working time and attention as he deems appropriate to the business and affairs of the Company (excluding any vacation and sick leave to which the Executive is entitled), render such services to the best of his ability, and use his reasonable best efforts to promote the interests of the Company. It shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions, and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement.
1.3
Place of Performance
. In connection with his employment by the Company, the Executive shall be based at the Company's principal executive offices in Las Vegas, Nevada except for travel reasonably necessary in connection with the Company's business.
2.
Compensation
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2.1
Base Salary
. Commencing on the effective date of this Agreement, the Executive shall receive a base salary at the annual rate of not less than $108,000 for year one, $132,000 for year two, and $180,000 for year three payable in installments consistent with the Company's normal payroll schedule, subject to applicable withholding and other taxes. The initial annual salary will be reduced to $4,000 per month until such time the Executive relocates to the Company’s location in Las Vegas, Nevada.
2.2
Restricted Stock Grant
.
(a) As compensation for entering into this Agreement, the Company hereby grants and issue each year to the Executive 500,000 shares of the common stock of the Company, that is currently traded on the Over The Counter Bulletin Board under the symbol SXLP, on the first, second and third year anniversaries’ of the execution of this Agreement. The stock is restricted as defined by the Rules and Regulations promulgated under the Securities Act of 1933, as amended. The shares are fully paid and non-assessable.
3.
Expense Reimbursement and Other Benefits
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3.1
Expense Reimbursement
. During the term of Executive's employment hereunder, the Company, upon the submission of reasonable supporting documentation by the Executive, shall reimburse the Executive for all reasonable expenses actually paid or incurred by the Executive in the course of and pursuant to the business of the Company, including expenses for travel and entertainment.
3.2
Vacation
. During the Initial Term, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its subsidiaries as in effect at any time hereafter with respect to other key executives of the Company and its subsidiaries;
provided
,
however
, that in no event shall Executive be entitled to fewer than four weeks paid vacation per year.
3.3
Benefit Plans
The
Company provides its executives certain employee benefit plans and fringe benefits. Company reserves the right to amend, modify or terminate any of these plans and benefits. You will be entitled to whatever benefits may be provided to you in accordance with the terms of these plans and benefits, as amended from time to time.
4.
Termination
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4.1
Termination for Cause
. Notwithstanding anything contained to the contrary in this Agreement, this Agreement may be terminated by the Company for Cause. As used in this Agreement, "Cause" shall only mean (i) an act or acts of personal dishonesty taken by the Executive and intended to result in substantial personal enrichment of the Executive at the expense of the Company, (ii) subject to the following sentences, repeated violation by the Executive of the Executive's material obligations under this Agreement which are demonstrably willful and deliberate on the Executive’s part and which are not remedied in a reasonable period of time after receipt of written notice from the Company, or (iii) the conviction of the Executive for any criminal act which is a felony. For purposes of the preceding sentence, criminal act shall not include any act that violates U.S. Federal law that is related in any way to cannabis. Upon any determination by the Company's Board of Directors that Cause exists under clause (ii) of the preceding sentence, the Company shall cause a special meeting of the Board to be called and held at a time mutually convenient to the Board and Executive, but in no event later than ten (10) business days after Executive's receipt of the notice contemplated by clause (ii). Executive shall have the right to appear before such special meeting of the Board with legal counsel of his choosing to refute any determination of Cause specified in such notice, and any termination of Executive's employment by reason of such Cause determination shall not be effective until Executive is afforded such opportunity to appear. Any termination for Cause pursuant to clause (i) or (iii) of the first sentence of this Section 4.1 shall be made in writing to Executive, which notice shall set forth in detail all acts or omissions upon which the Company is relying for such termination. Upon any termination pursuant to this Section 4.1, the Executive shall be entitled to be paid his Base Salary to the date of termination and the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination).
4.2
Disability
. Notwithstanding anything contained in this Agreement to the contrary, the Company, by written notice to the Executive, shall at all times have the right to terminate this Agreement, and the Executive's employment hereunder, if the Executive shall, as the result of mental or physical incapacity, illness or disability, fail to perform his duties and responsibilities provided for herein for a period of more than sixty (60) consecutive days in any 12-month period. Upon any termination pursuant to this Section 4.2, the Executive shall be entitled to be paid his Base Salary to the date of termination and the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination).
4.3
Death
. In the event of the death of the Executive during the term of his employment hereunder, the Company shall pay to the estate of the deceased Executive an amount equal to the sum of (x) any unpaid amounts of his Base Salary to the date of his death, plus (y) six months of Base Salary, and the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of the Executive's death).
4.4
Termination Without Cause
. At any time the Company shall have the right to terminate Executive's employment hereunder by written notice to Executive; provided, however, that the Company shall (i) pay to Executive any unpaid Base Salary accrued through the effective date of termination specified in such notice, and (ii) pay to the Executive in a lump sum, in cash within 30 days after the date of employment termination, an amount equal to the product of (x) the sum of the Executive’s then Base Salary plus the amount of the highest annual bonus or other incentive compensation payment theretofore made by the Company to the Executive,
multiplied
times
(y) one. The Company shall be deemed to have terminated the Executive's employment pursuant to this Section 4.4 if such employment is terminated (i) by the Company without Cause, or (ii) by the Executive voluntarily for "Good Reason." For purposes of this Agreement, "Good Reason" means
(a) the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 1.2 of this Agreement, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;
(b) any failure by the Company to comply with any of the provisions of Section 2, Section 3, Section 7 or Section 17 of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;
(c) any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement;
(d) any failure by the Company to comply with and satisfy Section 10(c) of this Agreement; or
(e) any termination by the Executive for any reason during the three-month period following the effective date of any "Change in Control".
For purposes of this Section 4.4, any good faith determination of "Good Reason" made by the Executive shall be conclusive.
In addition to other rights the Executive has pursuant to this Section 4.4, if the Executive is terminated by the Company pursuant to this Section 4.4, or if the Executive terminates his own employment for “Good Reason” pursuant to Section 4.4(e) with regard to “Change in Control”, if on the date of termination the Executive has worked for the Company less than three years from the date of this Agreement, the Executive shall be entitled to receive the shares of stock he would have received under Section 2.2 if he had been employed for a full three years from the date of this Agreement.
5.
Change in Control
. For purposes of this Agreement, a “Change in Control” shall mean:
(a) The acquisition (other than by or from the Company), at any time after the date hereof, by any person, entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act"), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50%or more of either the then outstanding shares of common stock or the combined voting power of the Company's then outstanding voting securities entitled to vote generally in the election of directors; or
(b) All or any of the individuals who, as of the date hereof, constitute the Board (as of the date hereof the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board; or
(c) Approval by the stockholders of the Company of (A) a reorganization, merger or consolidation with respect to which persons who were the shareholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company's then outstanding voting securities, (B) a liquidation or dissolution of the Company, or (C) the sale of all or substantially all of the assets of the Company, unless the approved reorganization, merger, consolidation, liquidation, dissolution or sale is subsequently abandoned.
(d) The approval by the Board of the sale, distribution and/or other transfer or action (and/or series of sales, distributions and/or other transfers or actions from time to time or over a period of time), that results in the Company's ownership of less than 50% of the Company's current assets.
6.
Restrictive Covenants
.
6.1
Nondisclosure
. During his employment and for twelve (12) months thereafter, Executive shall not divulge, communicate, use to the detriment of the Company or for the benefit of any other person or persons, or misuse in any way, any Confidential Information (as hereinafter defined) pertaining to the business of the Company. Any Confidential Information or data now or hereafter acquired by the Executive with respect to the business of the Company shall be deemed a valuable, special and unique asset of the Company that is received by the Executive in confidence and as a fiduciary, and Executive shall remain a fiduciary to the Company with respect to all of such information. For purposes of this Agreement, "Confidential Information" means all material information about the Company's business disclosed to the Executive or known by the Executive as a consequence of or through his employment by the Company (including information conceived, originated, discovered or developed by the Executive) after the date hereof, and not generally known.
6.2
Nonsolicitation of Employees
. While employed by the Company and for a period of six (6) months thereafter, Executive shall not directly or indirectly, for himself or for any other person, firm, corporation, partnership, association or other entity, attempt to employ or enter into any contractual arrangement with any employee or former employee of the Company, unless such employee or former employee has not been employed by the Company for a period in excess of six months.
6.3
Injunction
. It is recognized and hereby acknowledged by the parties hereto that a breach by the Executive of any of the covenants contained in Section 6.1, 6.2 or 6.3 of this Agreement will cause irreparable harm and damage to the Company, the monetary amount of which may be virtually impossible to ascertain. As a result, the Executive recognizes and hereby acknowledges that the Company shall be entitled to an injunction from any court of competent jurisdiction enjoining and restraining any violation of any or all of the covenants contained in this Section 6 by the Executive or any of his affiliates, associates, partners or agents, either directly or indirectly, and that such right to injunction shall be cumulative and in addition to whatever other remedies the Company may possess.
7.
Other Matters
.
Election of Executive as Director
. Contemporaneously herewith, the Board is appointing Executive to fill the position of a Director. For so long as the Executive continues to serve as the Company’s Chief Financial Officer, the Company shall cause the nomination of the Executive as a Director at each stockholder meeting at which election of directors is considered and otherwise use its best efforts to cause the election of the Executive as a Director of the Company.
8.
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.
9.
Notices
: Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered by hand or when deposited in the United States mail, by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
|
If to the Company:
|
Signature Exploration and Production Corp.
4700 Millenia Blvd, Suite 175
Orlando, FL 32839
|
|
If to the Executive:
|
Steven Weldon
4700 Millenia Blvd, Suite 175
Orlando, FL 32839
|
|
with a copy to
:
|
Gary Henrie, Attorney at Law
3518 N. 1450 W.
Pleasant Grove, Utah 84062
|
or to such other addresses as either party hereto may from time to time give notice of to the other in the aforesaid manner.
10.
Successors
.
(a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law or otherwise.
11.
Severability
. The invalidity of any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall not affect the enforceability of the remaining portions of this Agreement or any part thereof, all of which are inserted conditionally on their being valid in law, and, in the event that any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall be declared invalid, this Agreement shall be construed as if such invalid word or words, phrase or phrases, sentence or sentences, clause or clauses, or section or sections had not been inserted. If such invalidity is caused by length of time or size of area, or both, the otherwise invalid provision will be considered to be reduced to a period or area which would cure such invalidity.
12.
Waivers
. The waiver by either party hereto of a breach or violation of any term or provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach or violation.
13.
Damages
. Nothing contained herein shall be construed to prevent the Company or the Executive from seeking and recovering from the other damages sustained by either or both of them as a result of its or his breach of any term or provision of this Agreement.
14.
No Third Party Beneficiary
. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person (other than the parties hereto and, in the case of Executive, his heirs, personal representative(s) and/or legal representative) any rights or remedies under or by reason of this Agreement.
15.
Full Settlement
. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to Section 16 of this Agreement), plus in each case interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code.
16.
Certain Reduction of Payments by the Company
.
(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a "Payment"), would be nondeductible by the Company for Federal income tax purposes because of Section 280G of the Code, then the aggregate present value of amounts payable or distributable to or for the benefit of the Executive pursuant to this Agreement (such payments or distributions pursuant to this Agreement are hereinafter referred to as "Agreement Payments") shall be reduced to the Reduced Amount. The "Reduced Amount" shall be an amount expressed in present value which maximizes the aggregate present value of Agreement Payments without causing any Payment to be nondeductible by the Company because of Section 280G of the Code. Anything to the contrary notwithstanding, if the Reduced Amount is zero and it is determined further that any Payment which is not an Agreement Payment would nevertheless be nondeductible by the Company for Federal income tax purposes because of Section 280G of the Code, then the aggregate present value of Payments which are not Agreement Payments shall also be reduced (but not below zero) to an amount expressed in present value which maximizes the aggregate present value of Payments without causing any Payment to be nondeductible by the Company because of Section 280G of the Code. For purposes of this Section 16, present value shall be determined in accordance with Section 280G(d)(4) of the Code. Any amount which is not paid in the taxable year in which it was originally scheduled to be paid as a result of the postponement thereof pursuant hereto shall be payable in the next succeeding taxable year in which such payment will not result in the disallowance of a deduction pursuant to either Section 162(m) or 280G of the Code; provided, however, that all postponed payments shall be placed in a Rabbi trust or similar vehicle for the benefit of the Executive in such a way that the amounts so transferred are not taxable to such person or deductible by the Company until payment from such vehicle to the Executive is made. In the event a payment has been made to the Executive, but then disallowed as a deduction by the Internal Revenue Service and return of the payment is required into the trust, said payment to the Executive shall be treated as a loan and said payment to the trust shall be treated as repayment of said loan. The Company shall not pledge, hypothecate or otherwise encumber any amounts held in the trust or other similar vehicle for the benefit of the Executive hereunder.
(b) All determinations required to be made under this Section 16 shall be made by the L J Sullivan, CPA, LLC or, at the Executive's option, any other nationally or regionally recognized firm of independent public accountants selected by the Executive and approved by the Company, which approval shall not be unreasonably withheld or delayed (the "Accounting Firm"), which shall provide (i) detailed supporting calculations both to the Company and the Executive within twenty (20) business days of the termination of Executive’s employment or such earlier time as is requested by the Company, and (ii) an opinion to the Executive that he has substantial authority not to report any excise tax on his Federal income tax return with respect to any Payments. Any such determination by the Accounting Firm shall be binding upon the Company and the Executive. The Executive shall determine which and how much of the Payments shall be eliminated or reduced consistent with the requirements of this Section 16, provided that, if the Executive does not make such determination within ten business days of the receipt of the calculations made by the Accounting Firm, the Company shall elect which and how much of the Payments shall be eliminated or reduced consistent with the requirements of this Section 16 and shall notify the Executive promptly of such election. Within five business days thereafter, the Company shall pay to or distribute to or for the benefit of the Executive such amounts as are then due to the Executive under this Agreement. All fees and expenses of the Accounting Firm incurred in connection with the determinations contemplated by this Section 16 shall be borne by the Company.
(c) As a result of the uncertainty in the application of Section 280G of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Payments will have been made by the Company which should not have been made ("Overpayment") or that additional Payments which will not have been made by the Company could have been made ("Underpayment"), in each case, consistent with the calculations required to be made hereunder. In the event that the Accounting Firm, based upon the assertion of a deficiency by the Internal Revenue Service against the Executive which the Accounting Firm believes has a high probability of success, determines that an Overpayment has been made, any such Overpayment paid or distributed by the Company to or for the benefit of the Executive shall be treated for all purposes as a loan ab initio to the Executive which the Executive shall repay to the Company together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code; provided, however, that no such loan shall be deemed to have been made and no amount shall be payable by the Employee to the Company if and to the extent such deemed loan and payment would not either reduce the amount on which the Executive is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the Accounting Firm, based upon controlling precedent or other substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code.
17.
Conflicts With Certain Existing Arrangements
. The Company agrees that (x) it shall not hereafter acquire a “Conflicting Organization” or otherwise expand its present business activities such that Executive could reasonably be expected to be deemed in breach or violation of such non-competition covenants, and (y) it shall indemnify and hold harmless the Executive from any and all damages that Executive may hereafter suffer or incur by reason of any such Company acquisition or expansion of business after the date hereof.
18.
Indemnification
. The Company agrees to promptly execute and deliver to Executive an Indemnification Agreement in substantially the same form as described to the Executive by Gary Henrie, Attorney at Law within 15 days of the date of execution of this Agreement.
IN WITNESS WHEREOF
, the undersigned have executed this Agreement as of the date first above written.
COMPANY
:
Signature Exploration and Production Corp.
_/s/ Craig Ellins__________________________
EXECUTIVE
:
_/s/ Steven Weldon_______________________
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the 17
h
day of March, 2014 by and between Signature Exploration and Production Corp., a Delaware corporation (hereinafter called the "Company"), and Craig Ellins (hereinafter called the "Executive").
Recitals
A.
The Board of Directors of the Company (the "Board") desires to assure the Company of the Executive's continued employment in an executive capacity and to compensate him therefore.
B.
The Board has determined that this Agreement will reinforce and encourage the Executive's continued attention and dedication to the Company.
C.
The Executive is willing to make his services available to the Company on the terms and conditions hereinafter set forth.
Agreement
NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein, the parties agree as follows:
1.
Employment
.
1.1
Employment and Term
. The Corporation hereby agrees to employ the Executive as its Chief Executive Officer, in such capacity, agrees to provide services to the Corporation for the period beginning on March 17, 2014 and ending March 17, 2017 (the “
TERMINATION DATE
") (or such later date as may be agreed to by the parties within 120 days prior to the Termination Date) (the “
EMPLOYMENT PERIOD
").
1.2
Duties of Executive
. The Executive shall serve as the Chief Executive Officer. Subject to the preceding sentence, during the term of Employment, the Executive shall diligently perform all services as may be reasonably assigned to him by the Board, and shall exercise such power and authority as may from time to time be delegated to him by the Board. The Executive shall be required to report solely to, and shall be subject solely to the supervision and direction of the Board at duly called meetings thereof, and no other person or group shall be given authority to supervise or direct Executive in the performance of his duties. In addition, the Executive shall regularly consult with the Board with respect to the Company's business and affairs. The Executive shall devote his working time and attention as he deems appropriate to the business and affairs of the Company (excluding any vacation and sick leave to which the Executive is entitled), render such services to the best of his ability, and use his reasonable best efforts to promote the interests of the Company. It shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions, and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement.
1.3
Place of Performance
. In connection with his employment by the Company, the Executive shall be based at the Company's principal executive offices in Las Vegas, Nevada except for travel reasonably necessary in connection with the Company's business.
2.
Compensation
.
2.1
Base Salary
. Commencing on the effective date of this Agreement, the Executive shall receive a base salary at the annual rate of not less than $147,000 for year one, $180,000 for year two, and $240,000 for year three payable in installments consistent with the Company's normal payroll schedule, subject to applicable withholding and other taxes.
2.2
Restricted Stock Grant
.
(a) As compensation for entering into this Agreement, the Company hereby grants and issues each year to the Executive 1,000,000 shares of the common stock of the Company, that is currently traded on the Over The Counter Bulletin Board under the symbol SXLP, on the first, second and third year anniversaries’ of the execution of this Agreement. The stock is restricted as defined by the Rules and Regulations promulgated under the Securities Act of 1933, as amended. The shares are fully paid and non-assessable.
3.
Expense Reimbursement and Other Benefits
.
3.1
Expense Reimbursement
. During the term of Executive's employment hereunder, the Company, upon the submission of reasonable supporting documentation by the Executive, shall reimburse the Executive for all reasonable expenses actually paid or incurred by the Executive in the course of and pursuant to the business of the Company, including expenses for travel and entertainment.
3.2
Vacation
. During the Initial Term, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its subsidiaries as in effect at any time hereafter with respect to other key executives of the Company and its subsidiaries;
provided
,
however
, that in no event shall Executive be entitled to fewer than four weeks paid vacation per year.
3.3
Benefit Plans
The
Company provides its executives certain employee benefit plans and fringe benefits. Company reserves the right to amend, modify or terminate any of these plans and benefits. You will be entitled to whatever benefits may be provided to you in accordance with the terms of these plans and benefits, as amended from time to time.
4.
Termination
.
4.1
Termination for Cause
. Notwithstanding anything contained to the contrary in this Agreement, this Agreement may be terminated by the Company for Cause. As used in this Agreement, "Cause" shall only mean (i) an act or acts of personal dishonesty taken by the Executive and intended to result in substantial personal enrichment of the Executive at the expense of the Company, (ii) subject to the following sentences, repeated violation by the Executive of the Executive's material obligations under this Agreement which are demonstrably willful and deliberate on the Executive’s part and which are not remedied in a reasonable period of time after receipt of written notice from the Company, or (iii) the conviction of the Executive for any criminal act which is a felony. For purposes of the preceding sentence, criminal act shall not include any act that violates U.S. Federal law that is related in any way to cannabis. Upon any determination by the Company's Board of Directors that Cause exists under clause (ii) of the preceding sentence, the Company shall cause a special meeting of the Board to be called and held at a time mutually convenient to the Board and Executive, but in no event later than ten (10) business days after Executive's receipt of the notice contemplated by clause (ii). Executive shall have the right to appear before such special meeting of the Board with legal counsel of his choosing to refute any determination of Cause specified in such notice, and any termination of Executive's employment by reason of such Cause determination shall not be effective until Executive is afforded such opportunity to appear. Any termination for Cause pursuant to clause (i) or (iii) of the first sentence of this Section 4.1 shall be made in writing to Executive, which notice shall set forth in detail all acts or omissions upon which the Company is relying for such termination. Upon any termination pursuant to this Section 4.1, the Executive shall be entitled to be paid his Base Salary to the date of termination and the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination).
4.2
Disability
. Notwithstanding anything contained in this Agreement to the contrary, the Company, by written notice to the Executive, shall at all times have the right to terminate this Agreement, and the Executive's employment hereunder, if the Executive shall, as the result of mental or physical incapacity, illness or disability, fail to perform his duties and responsibilities provided for herein for a period of more than sixty (60) consecutive days in any 12-month period. Upon any termination pursuant to this Section 4.2, the Executive shall be entitled to be paid his Base Salary to the date of termination and the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination).
4.3
Death
. In the event of the death of the Executive during the term of his employment hereunder, the Company shall pay to the estate of the deceased Executive an amount equal to the sum of (x) any unpaid amounts of his Base Salary to the date of his death, plus (y) six months of Base Salary, and the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of the Executive's death).
4.4
Termination Without Cause
. At any time the Company shall have the right to terminate Executive's employment hereunder by written notice to Executive; provided, however, that the Company shall (i) pay to Executive any unpaid Base Salary accrued through the effective date of termination specified in such notice, and (ii) pay to the Executive in a lump sum, in cash within 30 days after the date of employment termination, an amount equal to the product of (x) the sum of the Executive’s then Base Salary plus the amount of the highest annual bonus or other incentive compensation payment theretofore made by the Company to the Executive,
multiplied
times
(y) one. The Company shall be deemed to have terminated the Executive's employment pursuant to this Section 4.4 if such employment is terminated (i) by the Company without Cause, or (ii) by the Executive voluntarily for "Good Reason." For purposes of this Agreement, "Good Reason" means
(a) the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 1.2 of this Agreement, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;
(b) any failure by the Company to comply with any of the provisions of Section 2, Section 3, Section 7 or Section 17 of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;
(c) any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement;
(d) any failure by the Company to comply with and satisfy Section 10(c) of this Agreement; or
(e) any termination by the Executive for any reason during the three-month period following the effective date of any "Change in Control".
In addition to other rights the Executive has pursuant to this Section 4.4, if the Executive is terminated by the Company pursuant to this Section 4.4, or if the Executive terminates his own employment for “Good Reason” pursuant to Section 4.4(e) with regard to “Change in Control”, if on the date of termination the Executive has worked for the Company less than three years from the date of this Agreement, the Executive shall be entitled to receive the shares of stock he would have received under Section 2.2 if he had been employed for a full three years from the date of this Agreement.
For purposes of this Section 4.4, any good faith determination of "Good Reason" made by the Executive shall be conclusive.
5.
Change in Control
. For purposes of this Agreement, a “Change in Control” shall mean:
(a) The acquisition (other than by or from the Company), at any time after the date hereof, by any person, entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act"), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50%or more of either the then outstanding shares of common stock or the combined voting power of the Company's then outstanding voting securities entitled to vote generally in the election of directors; or
(b) All or any of the individuals who, as of the date hereof, constitute the Board (as of the date hereof the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board; or
(c) Approval by the stockholders of the Company of (A) a reorganization, merger or consolidation with respect to which persons who were the shareholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company's then outstanding voting securities, (B) a liquidation or dissolution of the Company, or (C) the sale of all or substantially all of the assets of the Company, unless the approved reorganization, merger, consolidation, liquidation, dissolution or sale is subsequently abandoned.
(d) The approval by the Board of the sale, distribution and/or other transfer or action (and/or series of sales, distributions and/or other transfers or actions from time to time or over a period of time), that results in the Company's ownership of less than 50% of the Company's current assets.
6.
Restrictive Covenants
.
6.1
Nondisclosure
. During his employment and for twelve (12) months thereafter, Executive shall not divulge, communicate, use to the detriment of the Company or for the benefit of any other person or persons, or misuse in any way, any Confidential Information (as hereinafter defined) pertaining to the business of the Company. Any Confidential Information or data now or hereafter acquired by the Executive with respect to the business of the Company shall be deemed a valuable, special and unique asset of the Company that is received by the Executive in confidence and as a fiduciary, and Executive shall remain a fiduciary to the Company with respect to all of such information. For purposes of this Agreement, "Confidential Information" means all material information about the Company's business disclosed to the Executive or known by the Executive as a consequence of or through his employment by the Company (including information conceived, originated, discovered or developed by the Executive) after the date hereof, and not generally known.
6.2
Nonsolicitation of Employees
. While employed by the Company and for a period of six (6) months thereafter, Executive shall not directly or indirectly, for himself or for any other person, firm, corporation, partnership, association or other entity, attempt to employ or enter into any contractual arrangement with any employee or former employee of the Company, unless such employee or former employee has not been employed by the Company for a period in excess of six months.
6.3
Injunction
. It is recognized and hereby acknowledged by the parties hereto that a breach by the Executive of any of the covenants contained in Section 6.1, 6.2 or 6.3 of this Agreement will cause irreparable harm and damage to the Company, the monetary amount of which may be virtually impossible to ascertain. As a result, the Executive recognizes and hereby acknowledges that the Company shall be entitled to an injunction from any court of competent jurisdiction enjoining and restraining any violation of any or all of the covenants contained in this Section 6 by the Executive or any of his affiliates, associates, partners or agents, either directly or indirectly, and that such right to injunction shall be cumulative and in addition to whatever other remedies the Company may possess.
7.
Other Matters
.
Election of Executive as Director
. Contemporaneously herewith, the Board is appointing Executive to fill the position of Chairman of the Board. For so long as the Executive continues to serve as the Company’s Chief Executive Officer, the Company shall cause the nomination of the Executive as Chairman of the Board of the Company at each stockholder meeting at which election of directors is considered and otherwise use its best efforts to cause the election of the Executive as Chairman of the Board of the Company.
8.
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.
9.
Notices
: Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered by hand or when deposited in the United States mail, by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
|
If to the Company:
|
Signature Exploration and Production Corp.
4700 Millenia Blvd, Suite 175
Orlando, FL 32839
|
|
If to the Executive:
|
Craig Ellins
6500 Bullring Lane
Las Vegas, NV 89130
|
|
with a copy to
:
|
Gary Henrie, Attorney at Law
3518 N. 1450 W.
Pleasant Grove, Utah 84062
|
or to such other addresses as either party hereto may from time to time give notice of to the other in the aforesaid manner.
10.
Successors
.
(a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law or otherwise.
11.
Severability
. The invalidity of any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall not affect the enforceability of the remaining portions of this Agreement or any part thereof, all of which are inserted conditionally on their being valid in law, and, in the event that any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall be declared invalid, this Agreement shall be construed as if such invalid word or words, phrase or phrases, sentence or sentences, clause or clauses, or section or sections had not been inserted. If such invalidity is caused by length of time or size of area, or both, the otherwise invalid provision will be considered to be reduced to a period or area which would cure such invalidity.
12.
Waivers
. The waiver by either party hereto of a breach or violation of any term or provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach or violation.
13.
Damages
. Nothing contained herein shall be construed to prevent the Company or the Executive from seeking and recovering from the other damages sustained by either or both of them as a result of its or his breach of any term or provision of this Agreement.
14.
No Third Party Beneficiary
. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person (other than the parties hereto and, in the case of Executive, his heirs, personal representative(s) and/or legal representative) any rights or remedies under or by reason of this Agreement.
15.
Full Settlement
. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to Section 16 of this Agreement), plus in each case interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code.
16.
Certain Reduction of Payments by the Company
.
(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a "Payment"), would be nondeductible by the Company for Federal income tax purposes because of Section 280G of the Code, then the aggregate present value of amounts payable or distributable to or for the benefit of the Executive pursuant to this Agreement (such payments or distributions pursuant to this Agreement are hereinafter referred to as "Agreement Payments") shall be reduced to the Reduced Amount. The "Reduced Amount" shall be an amount expressed in present value which maximizes the aggregate present value of Agreement Payments without causing any Payment to be nondeductible by the Company because of Section 280G of the Code. Anything to the contrary notwithstanding, if the Reduced Amount is zero and it is determined further that any Payment which is not an Agreement Payment would nevertheless be nondeductible by the Company for Federal income tax purposes because of Section 280G of the Code, then the aggregate present value of Payments which are not Agreement Payments shall also be reduced (but not below zero) to an amount expressed in present value which maximizes the aggregate present value of Payments without causing any Payment to be nondeductible by the Company because of Section 280G of the Code. For purposes of this Section 16, present value shall be determined in accordance with Section 280G(d)(4) of the Code. Any amount which is not paid in the taxable year in which it was originally scheduled to be paid as a result of the postponement thereof pursuant hereto shall be payable in the next succeeding taxable year in which such payment will not result in the disallowance of a deduction pursuant to either Section 162(m) or 280G of the Code; provided, however, that all postponed payments shall be placed in a Rabbi trust or similar vehicle for the benefit of the Executive in such a way that the amounts so transferred are not taxable to such person or deductible by the Company until payment from such vehicle to the Executive is made. In the event a payment has been made to the Executive, but then disallowed as a deduction by the Internal Revenue Service and return of the payment is required into the trust, said payment to the Executive shall be treated as a loan and said payment to the trust shall be treated as repayment of said loan. The Company shall not pledge, hypothecate or otherwise encumber any amounts held in the trust or other similar vehicle for the benefit of the Executive hereunder.
(b) All determinations required to be made under this Section 16 shall be made by the L J Sullivan, CPA, LLC or, at the Executive's option, any other nationally or regionally recognized firm of independent public accountants selected by the Executive and approved by the Company, which approval shall not be unreasonably withheld or delayed (the "Accounting Firm"), which shall provide (i) detailed supporting calculations both to the Company and the Executive within twenty (20) business days of the termination of Executive’s employment or such earlier time as is requested by the Company, and (ii) an opinion to the Executive that he has substantial authority not to report any excise tax on his Federal income tax return with respect to any Payments. Any such determination by the Accounting Firm shall be binding upon the Company and the Executive. The Executive shall determine which and how much of the Payments shall be eliminated or reduced consistent with the requirements of this Section 16, provided that, if the Executive does not make such determination within ten business days of the receipt of the calculations made by the Accounting Firm, the Company shall elect which and how much of the Payments shall be eliminated or reduced consistent with the requirements of this Section 16 and shall notify the Executive promptly of such election. Within five business days thereafter, the Company shall pay to or distribute to or for the benefit of the Executive such amounts as are then due to the Executive under this Agreement. All fees and expenses of the Accounting Firm incurred in connection with the determinations contemplated by this Section 16 shall be borne by the Company.
(c) As a result of the uncertainty in the application of Section 280G of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Payments will have been made by the Company which should not have been made ("Overpayment") or that additional Payments which will not have been made by the Company could have been made ("Underpayment"), in each case, consistent with the calculations required to be made hereunder. In the event that the Accounting Firm, based upon the assertion of a deficiency by the Internal Revenue Service against the Executive which the Accounting Firm believes has a high probability of success, determines that an Overpayment has been made, any such Overpayment paid or distributed by the Company to or for the benefit of the Executive shall be treated for all purposes as a loan ab initio to the Executive which the Executive shall repay to the Company together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code; provided, however, that no such loan shall be deemed to have been made and no amount shall be payable by the Employee to the Company if and to the extent such deemed loan and payment would not either reduce the amount on which the Executive is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the Accounting Firm, based upon controlling precedent or other substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code.
17.
Conflicts With Certain Existing Arrangements
. The Company agrees that (x) it shall not hereafter acquire a “Conflicting Organization” or otherwise expand its present business activities such that Executive could reasonably be expected to be deemed in breach or violation of such non-competition covenants, and (y) it shall indemnify and hold harmless the Executive from any and all damages that Executive may hereafter suffer or incur by reason of any such Company acquisition or expansion of business after the date hereof.
18.
Indemnification
. The Company agrees to promptly execute and deliver to Executive an Indemnification Agreement in substantially the same form as described to the Executive by Gary Henrie, Attorney at Law within 15 days of the date of execution of this Agreement.
IN WITNESS WHEREOF
, the undersigned have executed this Agreement as of the date first above written.
COMPANY
:
_Signature Exploration and Production Corp.__
By:
/s/ Steven Weldon
EXECUTIVE
:
__/s/ Craig Ellins
_________________________