Exhibit 10.8

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into by and
between Cano Petroleum Inc., a Delaware corporation with its principal executive
offices in Fort Worth, Texas (the “Company”), and John Lacik, an individual
currently residing in Fort Worth, Texas (“Employee”), this 1st day of May 2005
(the “Effective Date”).

 

Background

 

A.                                   The Company desires to employ Employee in
such a manner as will reinforce and encourage the highest attention and
dedication to the Company of Employee, and in the best interest of the Company
and its shareholders; and

 

B.                                     Employee is willing to serve the Company
on the terms and conditions herein provided.

 

Terms and Conditions

 

In consideration of the covenants and agreements herein contained and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.                                       Employment. The Company hereby employs
Employee in the capacity of Production Superintendent, and Employee hereby
agrees to accept such employment by the Company, upon the terms and conditions
stated in this Agreement.

 

2.                                       Term. The employment of Employee by the
Company as provided in Section 1 will be for a term (the ‘“Term”) commencing on
the Effective Date and expiring at the close of business on April 30, 2008.

 

3.                                       Duties. Employee shall perform such
services and duties as may be assigned to him from time to time by the Board of
Directors (the “Board”) and Chief Executive Officer of the Company. Employee
shall devote his full working time, efforts and energies to the performance of
his duties hereunder.

 

4.                                       Compensation.

 

(a)                                 Base Salary:  The Company shall pay Employee
for his services a base salary, on an annualized basis, of $82,000.00 (Eighty
Two Thousand Dollars) per annum for the period from the Effective Date, which
salary shall be payable by the Company in substantially equal installments on
the Company’s normal payroll dates. All applicable taxes on the base salary will
be withheld in accordance with applicable federal, state and local taxation
guidelines.

 

(b)                                 Bonus: In addition to the base salary
described in paragraph 4(a) above, Employee shall be eligible for periodic cash
or stock bonuses at the sole discretion of the Executive Committee.

 

(c)                                 Stock Plans:  In addition to the base salary
described in paragraph 4(a) above, Employee shall be eligible participate in all
stock plans offered to employees of the Company for the term of his employment.

 

(d)                                 Annual Raises:  In addition to the base
salary described in paragraph 4(a) above, Employee shall receive a 5% (Five
percent) raise on each of the 2 (two) anniversary dates of the Effective Date.

 

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(e)                                 Signing Bonus - Stock:  Company shall issue
1,000 (One Thousand) shares of Cano Petroleum, Inc. common stock upon execution
of this Agreement as a signing bonus. The stock shall bear a “restricted” legend
until the second anniversary of the Effective Date, at which time, if the
Employee is still employed by the Company, the restrictive legend shall be
removed. In the event the Employee is not employed by the Company on the second
anniversary date, the stock shall be returned unissued to the treasury.

 

(f)                                 Signing Bonus – Cash:  Company shall pay
employee the sum of $6,833.00 (Six Thousand Eight Hundred Thirty-Three Dollars)
upon execution of this Agreement as an additional signing bonus.

 

5.                                       Vacations and Days Off. Employee shall
be entitled to a reasonable paid vacation of not less than twenty (20) days each
calendar year during the Term, exclusive of holidays and weekends, which
vacation shall be taken by Employee in accordance with the business requirements
of the Company at the time and its vacation plans, policies and practices as
applied to other employees of the Company then in effect relative to this
subject. Employee shall also be entitled to up to five (5) paid days off each
calendar year for paternity leave and up to three (3) paid days off to attend
the funeral of any member of Employee’s immediate family.

 

6.                                       Employment Facilities. During the
Employment Period, the Company shall provide, at its expense, appropriate and
adequate office space, furniture, communications, stenographic and
word-processing equipment, supplies, personnel (including professional,
clerical, support and other personnel) and such other facilities and services as
shall be suitable to Employee’s position and adequate for the Employee’s use in
performing Employee’s duties and responsibilities under this Agreement.

 

7.                                       Expenses and Services. During the term
of Employee’s employment hereunder, Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by Employee by reason of his
employment, including travel and living expenses while away from home at the
request of and in the service of the Company, provided that such expenses are
incurred and accounted for in accordance with the policies and procedures
established by the Company and in effect when the expenses are incurred.

 

8.                                       Rights under Certain Plans. During the
term of Employee’s employment hereunder, Employee will be entitled to
participate in the health and dental insurance and employee benefit plans and
programs maintained by the Company applicable to other employees on the same
basis as other employees of the Company, subject only to the possible
substitution by or on behalf of the Company of other plans and programs
providing substantially similar or increased benefits for Employee.

 

9.                                       Confidential Information. Employee
recognizes and acknowledges that he will have access to confidential information
of the Company and its Affiliates, including, without limitation, customer
information, lists of suppliers and costs, information concerning the business
and operations of the Company and its Affiliates and other proprietary data or
information, that is valuable, special and a unique asset of the Company and its
Affiliates. Employee agrees not to disclose such confidential information,
except as may be necessary in the performance of his duties, to any Person, nor
use such confidential information in any way, either during the term of his
employment or within the three years immediately following his termination of
employment unless he has received the written consent of the Company or unless
such confidential information becomes public knowledge through no wrongful act
of Employee. Upon termination of Employee’s employment for any reason, Employee
shall promptly deliver to Employer all drawings, manuals, letters, notebooks,
customer lists, documents, records, equipment, files, computer disks or tapes,
reports or any other materials relating to Employer’s business (and all copies)
which are in Employee’s possession or under Employee’s control.

 

10.                                 Early Termination. Employee’s employment
hereunder may be terminated without any breach of this Agreement only under the
following circumstances:

 

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(a)                                  Employee’s employment hereunder will
terminate upon his death;

 

(b)                                 If, as a result of Employee’s incapacity due
to physical or mental illness, Employee shall have been absent from his duties
or unable to perform his full duties hereunder for a total of 90 days during any
12 month period, and within 15 days after written notice of termination is given
(which may occur before or after the end of such 90 day period), shall not have
returned to the performance of his full duties hereunder on a full-time basis,
the Company may terminate the Employee’s employment hereunder.

 

(c)                                  The Company may terminate Employee’s
employment hereunder for Cause. For purposes of this Agreement, the Company
shall have “Cause” to terminate the Employee’s employment hereunder upon (1) the
willful and continued failure by Employee to substantially perform his duties
hereunder (other than any such failure resulting from Employee’s incapacity due
to physical or mental illness); or (2) the willful engaging by Employee in
misconduct which is materially injurious to the Company; or (3) the conviction
of Employee of any felony or crime of moral turpitude. For purposes of this
subsection (C), no act, or failure to act, on Employee’s part shall be
considered “willful” unless done, or omitted to be done, by him not in good
faith and without reasonable belief that his action or omission was in the best
interest of the Company.

 

(d)                                 Any termination of Employee’s employment by
the Company or by Employee (other than termination pursuant to
subsection (a) above) shall be communicated by written Notice of Termination to
the other party hereto. For purposes of this Agreement, a “Notice of
Termination” shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
Employee’s employment under the provision so indicated.

 

(e)                                  “Date of Termination” shall mean (1) if
Employee’s employment is terminated by his death, the date of his death; (2) if
Employee’s employment is terminated pursuant to subsection (b) above, 15 days
after Notice of Termination is given (provided that Employee shall not have
returned to the performance of his duties on a full-time basis during such 15
days period); (3) if Employee’s employment is terminated at the expiration of
the Term or any extension thereof, the last day of the Term or, if applicable,
the last day of any extension; and (4) if Employee’s employment is terminated
for any other reason, the date specified in the Notice of Termination.

 

11.                                 Compensation upon Termination or During
Disability. Upon termination of Employee’s employment hereunder or during any
period of Employee’s physical or mental disability, Employee shall be paid as
follows:

 

(a)                                  During any period that Employee fails to
perform his duties hereunder as a result of incapacity due to physical or mental
illness (the “Disability Period’), the Employee shall continue to receive his
annual base salary at the rate then in effect, until the earlier of (i) the end
of the Term, or (ii) the 90th day following the commencement of the Disability
Period, provided that payments so made to the Employee shall be reduced by the
sum of the amounts, if any, payable to Employee under disability benefit plans
of the Company and which were not previously applied to reduce any such payment.
In addition the Company shall reimburse Employee for any theretofore
unreimbursed expenses incurred prior to the commencement of the Disability
Period.

 

(b)                                 If Employee’s employment is terminated by
his death, the Company shall pay to Employee’s designated beneficiaries, or if
he leaves no designated beneficiaries, to his estate, his annual base salary
through the date of Employee’s death at the rate then in effect and any
theretofore unreimbursed expenses, and the Company shall have no further
obligations to Employee under this Agreement.

 

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(c)                                  If Employee’s employment shall be
terminated for Cause, the Company shall pay Employee his annual base salary (but
not the compensation described in Sections 4(b) and (c)) through the Date of
Termination at the rate in effect at the time Notice of Termination is given and
the Company shall have no further obligations to Employee under this Agreement.

 

(d)                                 If (1) in breach of this Agreement, the
Company shall terminate Employee’s employment other than pursuant to
Section 8(b) or 8(c) hereof (it being understood that a purported termination
pursuant to Section 8(b) or 8(c) hereof which is disputed and finally determined
not to have been proper shall be a termination by the Company in breach of this
Agreement) then the Company shall pay Employee, with no offset, an amount equal
to three (3) months of his annual base salary at the rate in effect at the time
Notice of Termination is given, such payments to be made in substantially equal
semimonthly installments on the first and sixteenth of each month commencing
with the month in which the Date of Termination occurs and continuing until the
end of the Term.

 

During the term of this Agreement Employee shall give the Company immediate
notice of any change of address.

 

If Employee shall terminate his employment pursuant to Section 8(d), the Company
shall pay Employee his full salary through the Date of Termination at the rate
in effect on the date that Notice of Termination is received by the Company.

 

12.                                 Defined Terms. For purposes of this
Agreement, the terms set forth in this Section 10 shall have the following
meanings:

 

(a)                                  “Affiliate” shall mean any individual,
corporation, unincorporated organization, trust or other form of entity
controlling, controlled by or under common control with the Company. For
purposes of this definition, “control” (including “controlled by” and “under
common control with”) means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such
individual, corporation, unincorporated organization, trust or other form of
entity, whether through the ownership of voting securities or otherwise.

 

(b)                                 “Person” shall mean an individual, a
corporation, a partnership, an association, a joint-stock company, a trust, an
incorporated organization or a government or political subdivision thereof.

 

13.                                 Waiver. No waiver of any provision of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a waiver of any
continuing or succeeding breach of such provision, a waiver of the provision
itself, or a waiver of any right under this Agreement. No waiver shall be
binding unless executed in writing by the party making the waiver.

 

14.                                 Limitation of Rights. Nothing in this
Agreement, except as specifically stated herein, is intended to confer any
rights or remedies under or by reason of this Agreement on any persons other
than the parties to it and their respective permitted successors and assigns and
other legal representatives, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third persons to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation or action over against any party to this Agreement.

 

15.                                 Notices. All notices given in connection
with this Agreement shall be in writing and shall be delivered either by
personal delivery, by telecopy or similar facsimile means, by certified or
registered mail (postage prepaid and return receipt requested), or by express
courier or delivery service, addressed to the applicable party hereto at the
following address:

 

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If to the Company:

 

Cano Petroleum, Inc.

309 West Seventh Street

Suite 1600

Fort Worth, Texas 76102

ATTENTION: S JEFFERY JOHNSON

Telecopy No.: 817-698-0761:

 

If to Employee:

 

John Lacik

5917 Fairglen Avenue Apt # 627

Fort Worth, Texas 76137

 

or such other address and number as either party shall have previously
designated by written notice given to the other party in the manner hereinabove
set forth. Notices shall be deemed given when received, if sent by telecopy or
similar facsimile means (confirmation of such receipt by confirmed facsimile
transmission being deemed receipt of communications sent by telecopy or other
facsimile means); and when delivered and receipted for (or upon the date of
attempted delivery where delivery is refused), if hand-delivered, sent by
express courier or delivery service, or sent by certified or registered mail.

 

16.                                 Inconsistent Obligations. Employee
represents and warrants that he has not previously assumed any obligations
inconsistent with those of this Agreement.

 

17.                                 Entirety and Amendments. This instrument and
the instruments referred to herein embody the entire agreement between the
parties, supersede all prior agreements and understandings, if any, relating to
the subject matter hereof, and may be amended only by an instrument in writing
executed by all parties, and supplemented only by documents delivered or to be
delivered in accordance with the express terms hereof.

 

18.                                 Successors and Assigns. This Agreement will
be binding upon and inure to the benefit of the parties hereto and any
successors in interest to the Company, but neither this Agreement nor any rights
hereunder may be assigned by Employee except in the case of the death of
Employee.

 

19.                                 Governing Law And Venue. This Agreement
shall be governed by and construed and enforced in accordance with the laws of
the State of Texas applicable to agreements made and to be performed entirely in
Texas. The obligations and undertakings of each of the parties to this Agreement
shall be performable in Dallas County, Texas, and each party agrees that if any
action at law or in equity is necessary by the Company or Employee to enforce or
interpret the terms of this Agreement, venue shall be in Dallas County, Texas,
and the prevailing party in any such action shall be entitled to reasonable
attorneys’ fees, costs and necessary disbursements in addition to any other
relief to which it may be entitled.

 

20.                                 Cumulative Remedies. No remedy herein
conferred upon any party is intended to be exclusive of any other benefits or
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other benefits or remedy given hereunder or now or hereafter
existing at law or in equity or by statute or otherwise. No single or partial
exercise by any party of any right, power or remedy hereunder shall preclude any
other or further exercise thereof.

 

21.                                 Multiple Counterparts. This Agreement may be
executed in a number of identical counterparts, each of which constitute
collectively, one agreement; but in making proof of this Agreement, it shall not
be necessary to produce or account for more than one counterpart.

 

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22.                                 Descriptive Headings. The headings, captions
and arrangements used in this Agreement are for convenience only and shall not
be deemed to limit, amplify or modify the terms of this Agreement, nor affect
the meanings hereof.

 

Signatures

 

To evidence the binding effect of the covenants and agreements described above,
the parties hereto have executed this Agreement effective as of the date first
above written.

 

 

  

THE COMPANY:

 

 

 

CANO PETROLEUM, INC.

 

 

 

By:

/s/ S. Jeffrey Johnson

 

 

 

S. Jeffrey Johnson

 

 

President

 

 

 

 

 

EMPLOYEE:

 

 

 

/s/ John Lacik

 

 

       John Lacik

 

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