Exhibit 10.3

EMPLOYMENT AGREEMENT
 
This Employment Agreement, is made as of April 24, 2006 and effective as of May
1, 2006 (the “Effective Date”), by and between Joseph Wallen (“Employee”) and
Quest Oil Corporation, a Nevada corporation (the “Company”). In consideration of
the premises and for other good and valuable consideration, and with the intent
to be legally bound, the parties hereto agree as follows:
 
RECITALS

WHEREAS, the Company desires to employ Employee on the terms and conditions
herein stated and Employee accepts such terms of employment.
 
1. Position. During the term of this Agreement, the Company will employ the
Employee, and the Employee will serve the Company in the capacity of Chief
Financial Officer.
 
2. Duties. The Employee will perform duties described in Exhibit “A,” attached
to this Agreement and incorporated by this reference, together with such
additional reasonably related duties assigned by the Chief Executive Officer or
the Board of Directors.
 
3. Service. Except with respect to the matters specified below, Employee will
devote substantial working time and efforts to the business and affairs of the
Company. The foregoing shall not, however, preclude the Employee: (a) from
engaging in appropriate civic, charitable or religious activities; (b) from
serving on the boards of directors of other entities, with the consent of the
Company, which consent shall not be unreasonably withheld; (c) from providing
incidental assistance to family members on matters of family business, so long
as the foregoing activities and service do not conflict with the Employee's
responsibilities to the Company; and (d) from completing, managing and
supervising Employee’s personal business affairs.
 
4. Term of Agreement. The Company agrees to continue the Employee's employment,
and the Employee agrees to remain in the employ of the Company, pursuant to the
terms of this Agreement for a period of 12 months, but this Agreement shall be
subject to extension for and up to an additional twelve (12) months after the
Effective Date, unless the Employee’s employment is earlier terminated or
modified pursuant to the provisions of this Agreement.
 
5. Compensation and Benefits.
 
5.1 Compensation.
 
5.1.1. Base Salary. Employee shall receive a salary of $5,000 per month (the
“Base Salary”), in accordance with the general payroll practices of the Company.
 
5.1.2 Expenses. The Company will reimburse (monthly) the Employee for all
reasonable and necessary expenses incurred by the Employee in connection with
the Company's business including: entertainment, airfare, automobile, hotel and
miscellaneous expenses incurred by Employee. Expenses exceeding $1,000 shall
require approval by the CEO prior to the time such expenses are incurred.
 
5.1.3 Common Stock Purchase Warrants. Common stock purchase warrants (in the
form attached as Exhibit A) to purchase 1,000,000 shares of the Company’s common
stock at an exercise price equal to 110% of the closing market price of the
Company’s common stock as of April 24, 2006. The warrants shall have a term of 5
years and shall vest to the holder at a rate of 250,000 warrants every 90 days.

5.1.4 Profit from Operations. Employee shall receive a Profit from Operations
Bonus (“POB”), payable quarterly, equal to a 2.5% carried working interest
(“CWI”) from all oil and gas well owned and/or operated by the Company. The POB
shall be derived from (i) new CWI revenues from new production, and (ii)
increased CWI revenues from existing production, based on the trailing three
months CWI revenues from the date of the execution of this Agreement. The CWI
revenue calculation shall be based on the difference derived when subtracting
(i) taxes, and (ii) royalties from a gross revenue amount. So long as this
Agreement provides for a POB, the POB shall be paid for the life of a particular
well.

Example:

Assume that an Agreement was Executed on April 1, 2006
   
Well No. 1
Well No.2
January 1 to March 31
0
$100,000 in Gross Sales
April 1 through June 30
$100,000 in Gross Sales
$200,000 in Gross Sales
 
Assume: (i) the two wells above were both located in Alberta, Canada and that
there was a provincial tax equal to 20%; and (ii) there was a royalty
arrangement with a landowner, paying this person 10%.
 
Note that a “Royalty” shall not mean a production cost or a fee to an operator
or other contractor providing services.
 
Analysis: In the above example, the Employee with a 2.5% POB would receive, from
the April 1 to June 30 period, $1,750 from Well 1 and $1,750 from Well 2. Well 1
would be considered new production and the Well 2 POB would be based on the
increase in CWI from the preceding three month period.

6. Termination.
 
6.1 Events of Termination. The Employee's employment with the Company shall
terminate upon any one of the following:

6.1.1 Thirty (30) days after the date of a written notice sent to the Employee
stating the Company's determination, made in good faith, that it is terminating
the Employee for “Cause” as defined under Section 6.2 below (“Termination for
Cause”); or

6.1.2 Thirty (30) days after the date of a written notice sent to the Employee
stating the Company's determination, made in good faith that, due to a mental or
physical incapacity, the Employee has been unable to perform his duties under
this Agreement for a period of not less than six (6) consecutive months
(“Termination for Disability”); or
 
6.1.3 Upon the Employee's death (“Termination Upon Death”); or
 
6.1.4 Thirty (30) days after the date of a notice sent to the Employee stating
that the Company is terminating his employment, without Cause, which notice can
only be given by the Company at any time after the Effective Date at the
Company's sole discretion, for any reason or for no reason (“Termination Without
Cause”); or
 
6.1.5 The date of a notice sent to the Company from the Employee stating that
the Employee is electing to terminate his employment with the Company
(“Voluntary Termination”).
 
6.2 “Cause” Defined. For purposes of this Agreement, “Cause” for the Employee's
termination will exist at any time after the occurrence of one or more of the
following events:
 
6.2.1 Any willful act or acts of dishonesty undertaken by the Employee intended
to result in substantial gain or personal enrichment of the Employee at the
expense of the Company;
 
6.2.2 Any willful act of gross misconduct which could reasonably be expected to
materially and demonstrably result in damage to the Company. No act, or failure
to act, by the Employee shall be considered “willful” if done, or omitted to be
done, by him in good faith and in the reasonable belief that his act or omission
was in the best interest of the Company and/or required by applicable law, or
 
6.2.3 Employee is charged with the commission of a felony involving moral
turpitude.
 
6.2.4 Any violation of the Company’s Code of Ethics (Attached as Exhibit B)
 
6.2.5. Any violation of Sections 8 or 10 of this Agreement during the term of
employment with the Company.
 
6.3 “Termination Without Cause” shall mean:
 
6.3.1 Termination of the Employee’s employment with the Company for any reason
other than Cause.
 
6.4 Effect of Termination.
 
6.4.1 Termination for Cause or Voluntary Termination. In the event of any
termination of the Employee's employment pursuant to Section 6.1.1 or
Section 6.1.5, the Company shall immediately pay to the Employee the
compensation and benefits accrued and otherwise payable to the Employee under
Section 5 through the date of termination. The Employee's rights under the
Company's benefit plans, is one should exist, shall be determined under the
provisions of those plans.
 
6.4.2 Termination for Disability. In the event of termination of employment
pursuant to Section 6.1.2:
 
6.4.2.1 The Company shall immediately pay to the Employee the compensation and
benefits accrued and otherwise payable to the Employee under Section 5 through
the date of termination; and
 
6.4.2.2 The Employee shall receive any other benefit payments as provided in the
Company's standard benefit plans applicable to disability, should such a plan
exist.
 
6.4.3 Termination Upon Death. In the event of termination of employment pursuant
to Section 6.1.3, all obligations of the Company and the Employee shall cease,
except the Company shall immediately pay to the Employee (or to the Employee's
estate) the compensation and benefits accrued and otherwise payable to the
Employee under Section 5 through the date of termination.
 
7.5 Termination Without Cause. In the event of any termination of this Agreement
pursuant to Section 6.1.4:
 
7.5.1 The Company shall immediately pay to the Employee the compensation and
benefits accrued and otherwise payable to the Employee under the entire term of
this Agreement.
 
7.5.2 Provided that Employee is not in violation of Section 8 or 10 of this
Agreement during the time of Employment and for the period of time during which
the POB is payable to Employee, the Company shall pay to the Employee the POB
under Section 5.1.4 as follows:
 
7.5.2.1  Fifty percent (50%) of the POB for a period of 12 months following the
expiration of the term of this Agreement.
 
7.5.2.1  Twenty five percent (25%) of the POB for the period beginning on a date
which begins on the date which is 12 months from the date of expiration of this
Agreement and ending on a date which is 24 months from the expiration of this
Agreement.
 
8. Non-Disclosure. The Employee acknowledges that during the course of his
employment by the Company, the Company will provide, and the Employee will
acquire, knowledge of special and unique value with respect to the Company's
business operations, including, by way of illustration, the Company's existing
and contemplated product line, trade secrets, compilations, business and
financial methods or practices, plans, hardware and software technology
products, systems, programs, projects and know-how, pricing, cost of providing
service and equipment, operating and maintenance costs, marketing and selling
techniques and information, customer data, customer names and addresses,
customer service requirements, supplier lists, and confidential information
relating to the Company's policies, employees, and/or business strategy (all of
such information herein referenced to as the “Confidential Information”). The
Employee recognizes that the business of the Company is dependent upon
Confidential Information and that the protection of the Confidential Information
against unauthorized disclosure or use is of critical importance to the Company.
The Employee agrees that, without prior written authorization of the President
of the Company, the Employee will not, during his employment, divulge to any
person, directly or indirectly, except to the Company or its officers and agents
or as reasonably required in connection with the Employee’s duties on behalf of
the Company, or make any independent use of, except on behalf of the Company,
any of the Company's Confidential Information, whether acquired by the Employee
during his employment or not. The Employee further agrees that the Employee will
not, at any time after his employment has ended, use or divulge to any person
directly or indirectly any Confidential Information, or use any Confidential
Information in subsequent employment of any nature. If the Employee is
subpoenaed, or is otherwise required by law to testify concerning Confidential
Information, the Employee agrees to notify the Company upon receipt of a
subpoena, or upon belief that such testimony shall be required. This
nondisclosure provision shall survive the termination of this Agreement for any
reason. The Employee acknowledges that the Company would not employ the Employee
but for his covenants and promises contained in this Section 8.
 
9. Return of Documents. The Employee agrees that if the Employee’s relationship
with the Company is terminated (for whatever reason), the Employee shall not
remove or take with the Employee, but will leave with the Company or return to
Company, all Confidential Information, records, files, data, memoranda, reports,
customer lists, customer information, product information, price lists,
documents and other information, in whatever form (including on computer disk),
and any and all copies thereof, or if such items are not on the premises of the
Company, the Employee agrees to return such items immediately upon the
Employee's termination or the request of the Company. The Employee acknowledges
that all such items are and remain the property of the Company.
 
10. No Interference or Solicitation. The Employee agrees that during his
employment, and for a period of six (6) months following the termination of his
employment (for whatever reason), that neither he nor any individual,
partner(s), limited partnership, corporation or other entity or business with
which he is in any way affiliated, including, without limitation, any partner,
limited partner, director, officer, shareholder, employee, or agent of any such
entity or business, will: (i) request, induce or attempt to influence, directly
or indirectly, any employee of the Company to terminate their employment with
the Company; or (ii) employ any person who as of the date of this Agreement was,
or after such date is or was, an employee of the Company. The Employee further
agrees that during the period beginning with the commencement of the Employee’s
engagement with the Company and ending six (6) months after the termination of
the Employee’s employment with the Company (for whatever reason), he shall not,
directly or indirectly, as an employee, agent, consultant, stockholder,
director, partner or in any other individual or representative capacity of the
Company or of any other person, entity or business, solicit or encourage any
present or future customer, supplier, contractor, partner or investor of the
Company to terminate or otherwise alter his, his or its relationship with the
Company. This provision shall survive the termination of this Agreement for any
reason.

11. Injunctive Relief. The Employee acknowledges and agrees that the agreements
and covenants contained in this Agreement are essential to protect the
Confidential Information, business, and goodwill of the Company. The Employee
further acknowledges that the breach of any of the agreements contained herein,
including, without limitation, the confidentiality covenants specified in
Section 8 and the non-solicitation covenants specified in Section 10 will give
rise to irreparable injury to the Company, inadequately compensable in damages.
Accordingly, the Company shall be entitled to injunctive relief to prevent or
cure breaches or threatened breaches of the provisions of this Agreement and to
enforce specific performance of the terms and provisions hereof in any court of
competent jurisdiction, in addition to any other legal or equitable remedies
which may be available. The Employee further acknowledges and agrees that in the
event of the termination of the Employee's employment with the Company, whether
voluntary or involuntary, that the enforcement of a remedy hereunder by way of
injunction shall not prevent the Employee from earning a reasonable livelihood.
The Employee further acknowledges and agrees that the covenants contained herein
are necessary for the protection of the Company's legitimate business interests
ad are reasonable in scope and content.

12. Miscellaneous.

12.1 Indemnification. The Company agrees to indemnify and defend the Employee to
the full extent provided by law, and on terms no less favorable than any
indemnification agreement the Company has at any time during the term of this
Agreement with an executive or officer of the Company. The Company agrees to
reimburse Employee upon demand for any costs incurred in requesting or obtaining
indemnification under this paragraph.

12.2 Arbitration. The Employee and the Company shall submit to mandatory binding
arbitration in San Diego County, California before a sole arbitrator under the
rules of the American Arbitration Association, in any controversy or claim
arising out of, or relating to, this Agreement or any breach hereof. The
arbitrator is hereby authorized to permit discovery, including deposition
testimony and award to the prevailing party the costs (including reasonable
attorneys' fees and expenses) of any such arbitration.

12.3 Severability. If any provision of this Agreement shall be found by any
arbitrator or court of competent jurisdiction to be invalid or unenforceable,
then the parties hereby waive such provision to the extent that it is found to
be invalid or unenforceable and to the extent that to do so would not deprive
one of the parties of the substantial benefit of its bargain. Such provision
shall, to the extent allowable by law and the preceding sentence, be modified by
such arbitrator or court so that it becomes enforceable and, as modified, shall
be enforced as any other provision hereof, all the other provisions continuing
in full force and effect.
12.4 No Waiver. The failure by either party at any time to require performance
or compliance by the other of any of its obligations or agreements shall in no
way affect the right to require such performance or compliance at any time
thereafter. The waiver by either party of a breach of any provision hereof shall
not be taken or held to be a waiver of any preceding or succeeding breach of
such provision or as a waiver of the provision itself. No waiver of any kind
shall be effective or binding, unless it is in writing and is signed by the
party against whom such waiver is sought to be enforced.

12.5 No Assignment. This Agreement and all rights hereunder are personal to the
Employee and may not be transferred or assigned by the Employee at any time. The
Company may assign its rights, together with its obligations hereunder, to any
parent, subsidiary, affiliate or successor, or in connection with any sale,
transfer or other disposition of all or substantially all of its business and
assets, provided, however, that any such assignee assumes the Company's
obligations hereunder.

12.6 Withholding. All sums payable to the Employee hereunder shall be reduced by
all federal, state, local and other withholding and similar taxes and payments
required by applicable law.

12.7 Entire Agreement. This Agreement constitutes the entire and only agreement
between the parties relating to employment of the Employee with the Company, and
this Agreement supersedes and cancels any and all previous contracts,
arrangements or understandings with respect thereto.

12.8 Amendment. This Agreement may be amended, modified, superseded, cancelled,
renewed or extended only by an agreement in writing executed by both parties
hereto.

12.9 Notices. All notices and other communications required or permitted under
this Agreement shall be in writing and hand delivered, sent by telecopier, sent
by registered first class mail, postage pre-paid, or sent by nationally
recognized express courier service. Such notices and other communications shall
be effective upon receipt if hand delivered or sent by telecopier, five (5) days
after mailing if sent by mail.

12.10 Binding Nature. This Agreement shall be binding upon, and inure to the
benefit of, the successors and personal representatives of the respective
parties hereto.

12.11 Headings. The headings contained in this Agreement are for reference
purposes only and shall in no way affect the meaning or interpretation of this
Agreement. In this Agreement, the singular includes the plural, the plural
included the singular, the masculine gender includes both male and female
referents, and the word “or” is used in the inclusive sense.

12.12 Counterparts and Fax Signatures. This Agreement may be executed by Fax and
in two or more counterparts, each of which shall be deemed to be an original but
all of which, taken together, constitute one and the same agreement.

12.13 Governing Law. This Agreement and the rights and obligations of the
parties hereto shall be construed in accordance with the laws of the State of
Nevada.

12.14 Attorneys' Fees. In the event of any claim, demand or suit arising out of
or with respect to this Agreement, the prevailing party shall be entitled to
reasonable costs and attorneys' fees, including any such costs and fees upon
appeal.

 

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IN WITNESS WHEREOF, the Company and the Employee have executed this Agreement as
of the date first above written.

“COMPANY”
 
Quest Oil Corporation
A Nevada corporation
 
 
 
_________________________________
By: James B. Panther, II
Its: President
 
“Employee”
 
 
 
 
 
_________________________________
Joseph Wallen

 

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EXHIBIT “A”
TO
EMPLOYMENT AGREEMENT

DUTIES OF EMPLOYEE

1.  
Act as the Chief Financial Officer as described in Article IV of the Bylaws of
the Company or as directed by Company’s board of directors or Chief Executive
Officer.

 

 

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EXHIBIT “B”
TO
EMPLOYMENT AGREEMENT

 
CODE OF ETHICS