Document:

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                                                                    EXHIBIT 10.1

EMPLOYMENT AGREEMENT

                              EMPLOYMENT AGREEMENT

        This Employment Agreement (the "Agreement") is entered into by and
between Sovereign Oil, Inc., a Nevada corporation (the "Employer"), and Mazen
Khatib, (the "Employee"), effective as of June 18, 2007 (the "Effective Date").
The Employer and the Employee hereby agree as follows:

1.      EMPLOYMENT.

        (a)     POSITION AND TERM. Upon execution of this Employment Agreement
and in accordance with the terms herein, the Employer hereby employs Employee to
serve as a Vice President of Distribution and Employee accepts such position.
The term of this Agreement shall be for a period of three years from the date
herein subject to termination provisions in Section 8 (the "Initial Term").
Employee further agrees that any employee handbooks or policies shall not be
construed to create binding contractual commitments on behalf of Employer.

        (b)     DUTIES AND RESPONSIBILITIES. During Employee's employment with
the Employer, Employee shall have such duties and responsibilities commensurate
with his position and as the Employer may reasonably assign which shall include
selling and marketing of motor oil, industrial oil, anti-freeze and other
products.

2.      SALARY.

        (a)     Employee shall be paid a base salary ("Base Salary") at the
annual rate of $120,000, payable in equal installments at the end of such
regular payroll accounting periods as are established by the Employer, or in
such other installments upon which the parties hereto shall mutually agree, and
in accordance with Employer's usual payroll procedures.

        (b)     The Employer agrees to pay Employee 5,000,000 shares of common
stock of VYGO as additional compensation for services rendered to be issued in
the following manner: (i) 1,666,666 shares on December 31, 2007, (ii) 1,666,667
on December 31, 2008 and (iii) 1,666,667 on December 31, 2009. Employer may
issue these shares at its own discretion prior to the dates as indicated. The
shares to be issued in accordance with this Section 2(b) shall be valued at the
closing bid price of the Employer's common stock on the Over-The-Counter
Bulletin Board on the day before such shares are to be issued. Each installment
of shares to be issued to the Employee shall vest on the day received from the
Employer. The Employee agrees to sign any and all documentation necessary to
complete the transactions described herein. In the event Employee dies during
the Initial Term, Employee's estate shall be entitled to a pro-rated portion of
the installment due in the year of Employee's death based on the number of days
he worked during said year and all other shares to be issued pursuant to this
paragraph 2(b) shall be forfeited. Furthermore, upon the sale of substantially
all the assets of the Employer, any unearned installments set forth above will
become immediately due and payable to Employee at closing of the sale.

        (c)     In addition to the Base Salary, Employee shall be entitled to
receive a bonus of $50,000, payable in two installments of $25,000 payable on
November 15, 2007 and December 15, 2007.

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        (d)     PAYMENT. All amounts stated in this Agreement are prior to any
deduction for applicable withholding taxes and other amounts that are required
to be withheld or deducted by federal and state law. Payment of all compensation
to Employee hereunder shall be made in accordance with the relevant Employer
policies in effect from time to time, including normal payroll practices, and
shall be subject to all applicable employment and withholding taxes.

        (e)     BENEFIT AND SUPPLEMENTAL COMPENSATION PLANS. During the Initial
Term, Employee shall be entitled to participate in all medical and other
employee benefit plans, including vacation, sick leave, retirement accounts and
other employee benefits provided by Employer to similarly situated employees on
terms and conditions no less favorable than those offered to such employees.
Such participation shall be subject to the terms of the applicable plan
documents, Employer's generally applicable policies, and the discretion of the
Board of Directors or any administrative or other committee provided for in, or
contemplated by, such plan.

3.      OTHER EMPLOYMENT.

        During the Term of this Agreement, Employee shall devote substantially
all of his business and professional time and effort, attention, knowledge, and
skill to the management, supervision and direction of Employer's business and
affairs. Except as provided below, Employer shall be entitled to all benefits,
profits or other issues arising from or incidental to all work, services and
advice performed or provided by Employee. Nothing in this Agreement shall
preclude Employee from devoting reasonable periods required for:

        (a)     serving as a director or member of a committee of any
organization or corporation involving no conflict of interest with the interests
of Employer, provided that Employee must obtain the written consent of Employer;

        (b)     serving as a consultant in his area of expertise (in areas other
than in connection with the business of Employer), to government, industrial,
and academic panels where it does not conflict with the interests of Employer;
and

        (c)     managing his personal investments or engaging in any other
non-competing business provided that such activities do not materially interfere
with the regular performance of his duties and responsibilities under this
Agreement.

4.      CONFIDENTIAL INFORMATION.

        (a)     EMPLOYER INFORMATION. Employee shall not, in any manner, for any
reasons, either directly or indirectly, divulge or communicate to any person,
firm or corporation, any confidential information concerning any matters not
generally known in the oil industry or otherwise made public by Employer which
affects or relates to Employer's business, finances, marketing and/or
operations, research, development, inventions, products, designs, plans,
procedures, customer base, pricing or other data (collectively, "Confidential
Information") except in the ordinary course of business or as required by
applicable law. Without regard to whether any item of Confidential Information
is deemed or considered confidential, material, or important, the parties hereto
stipulate that as between them, to the extent such item is not generally known
in the oil industry, such item is important, material, and confidential and
affects the successful conduct of Employer's business and goodwill, and that any
breach of the terms of this Section 4(a) shall be a material and incurable
breach of this Agreement. Confidential Information shall not include: (i)
information obtained or which became known to Employee other than through his
employment by Employer or through his interactions with Employer prior to his
Employment; (ii) information in the public domain at the time of the disclosure
of such information by Employee; (iii) information that Employee can document
was independently developed by Employee; (iv) information that is disclosed by
Employee with the prior written consent of Employer and (v) information that is
disclosed by Employee as required by law, governmental regulation or court
order.

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        (b)     DOCUMENTS. Employee further agrees that all documents and
materials furnished to Employee by Employer and relating to the Employer's
business or prospective business are and shall remain the exclusive property of
Employer. Employee shall deliver all such documents and materials, not copied,
to Employer upon demand therefore and in any event upon expiration or earlier
termination of this Agreement. Any payment of sums due and owing to Employee by
Employer upon such expiration or earlier termination shall be conditioned upon
returning all such documents and materials, and Employee expressly authorizes
Employer to withhold any payments due and owing pending return of such documents
and materials.

        (c)     FORMER EMPLOYER INFORMATION. Employee agrees that he/she will
not, during employment with the Employer, improperly use or disclose any
proprietary information or trade secrets of any former Employer or other person
or entity and that Employee will not bring onto the premises of the Employer any
unpublished document or propriety information belonging to any such Employer,
person or entity unless consented to in writing by such Employer, person or
entity.

        (d)     INVENTIONS. All ideas, inventions, and other developments or
improvements conceived or reduced to practice by Employee, alone or with others,
during the Initial Term of this Agreement, whether or not during working hours,
that are within the scope of the business of Employer or that relate to or
result from any of Employer's work or projects or the services provided by
Employee to Employer pursuant to this Agreement, shall be the exclusive property
of Employer. Employee agrees to assist Employer, at Employer's expense, to
obtain patents and copyrights on any such ideas, inventions, writings, and other
developments, and agrees to execute all documents necessary to obtain such
patents and copyrights in the name of Employer.

        (e)     DISCLOSURE. During the Term, Employee will promptly disclose to
the Board of Directors of Employer full information concerning any interest,
direct or indirect, of Employee (as owner, shareholder, partner, lender or other
investor, director, officer, employee, consultant or otherwise) or any member of
his immediate family in any business that is reasonably known to Employee to
purchase or otherwise obtain services or products from, or to sell or otherwise
provide services or products to, Employer or to any of its suppliers or
customers.

5.      NON-COMPETE.

Except as expressly permitted in Section 3 above, during the Initial Term of
this Agreement, Employee shall not engage in any of the following competitive
activities: (a) engaging directly or indirectly in any business or activity
substantially similar to any business or activity engaged in (or proposed to be
engaged in) by Employer; (b) engaging directly or indirectly in any business or
activity competitive with any business or activity engaged in (or proposed to be
engaged in) by Employer; (c) soliciting or taking away any employee, agent,
representative, contractor, supplier, vendor, customer, franchisee, lender or
investor of Employer, or attempting to so solicit or take away; (d) interfering
with any contractual or other relationship between Employer and any employee,
agent, representative, contractor, supplier, vendor, customer, franchisee,
lender or investor; or (e) using, for the benefit of any person or entity other
than Employer, any Confidential Information of Employer. The foregoing covenant
prohibiting competitive activities shall survive the termination of this
Agreement and shall extend, and shall remain enforceable against Employee, for
the period of two (2) years following the date this Agreement is terminated. In
addition, during the two-year period following such expiration or earlier
termination, neither Employee nor Employer shall make or permit the making of
any negative statement of any kind concerning Employer or its affiliates, or
their directors, officers or agents or Employee.

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6.      INJUNCTIVE RELIEF. Employee acknowledges and agrees that the covenants
and obligations of Employee set forth in Section 4 and 5 with respect to
non-competition, non-solicitation, confidentiality and Employer's property
relate to special, unique and extraordinary matters and that a violation of any
of the terms of such covenants and obligations will cause Employer irreparable
injury for which adequate remedies are not available at law. Therefore, Employee
agrees that Employer shall be entitled to an injunction, restraining order or
such other equitable relief (without the requirement to post bond) as a court of
competent jurisdiction may deem necessary or appropriate to restrain Employee
from committing any violation of the covenants and obligations referred to
Sections 4 and 5. These injunctive remedies are cumulative and in addition to
any other rights and remedies Employer may have at law or in equity.

7.      SURVIVAL. Employee agrees that the provisions of Sections 4, 5 and 6
shall survive expiration or earlier termination of this Agreement for any
reasons, whether voluntary or involuntary, with or without cause, and shall
remain in full force and effect thereafter. Notwithstanding the foregoing, if
this Agreement is terminated upon the dissolution of Parent or Employer, the
filing of a petition in bankruptcy by Employer or upon an assignment for the
benefit of creditors of the assets of Employer, Sections 4, 5 and 6 shall be of
no further force or effect.

8.      TERMINATION.

        (a)     TERMINATION BY EMPLOYEE. Employee may terminate this Agreement
for Good Reason at any time upon 30 days' written notice to Employer, provided
the Good Reason has not been cured within such period of time.

        (b)     GOOD REASON. In this Agreement, "Good Reason" means, without
Employee's prior written consent, the occurrence of any of the following events,
unless Employer shall have fully cured all grounds for such termination within
thirty (30) days after Employee gives notice thereof:

        (i)     any reduction in his then-current Salary;

        (ii)    any material failure to timely grant, or timely honor, any
                equity or long-term incentive award;

        (iii)   failure to pay or provide required compensation and benefits;

        (iv)    any failure to appoint, elect or reelect him to the position of
                Vice President of Distribution of Employer; the removal of him
                from such position; or any changes in the reporting structure so
                that Employee reports to someone other than the President of
                Employer;

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        (v)     any material diminution in his title or duties or the assignment
                to him of duties not customarily associated with Employee's
                position as Vice President of Distribution of Employer;

        (vi)    any relocation of Employee's office as assigned to him by
                Employer, to a location more than 25 miles from Employer's
                current office;

        (vii)   the failure of Employer to obtain the assumption in writing of
                its obligation to perform the Employment Agreement by any
                successor to all or substantially all of the assets of Employer
                or upon a merger, consolidation, sale or similar transaction of
                Employer; or

        (viii)  the voluntary or involuntary dissolution of Employer or Parent,
                the filing of a petition in bankruptcy by Parent or Employer or
                upon an assignment for the benefit of creditors of the assets of
                Parent or Employer.

The written notice given hereunder by Employee to Employer shall specify in
reasonable detail the cause for termination, and such termination notice shall
not be effective until thirty (30) days after Employer's receipt of such notice,
during which time Employer shall have the right to respond to Employee's notice
and cure the breach or other event giving rise to the termination.

        (c)     TERMINATION BY EMPLOYER. Employer may terminate its employment
of Employee under this Agreement for cause or not for cause at any time by
written notice to Employee. For purposes of this Agreement, the term "cause" for
termination by Employer shall be (a) a conviction of or plea of guilty or NOLO
CONTENDERE by Employee to a felony, or any crime involving fraud or
embezzlement; (b) the refusal by Employee to perform his material duties and
obligations hereunder; (c) Employee's willful and intentional misconduct in the
performance of his material duties and obligations; or (d) if Employee or any
member of his family makes any personal profit arising out of or in connection
with a transaction to which Employer is a party or with which it is associated
without making disclosure to and obtaining the prior written consent of
Employer. The written notice given hereunder by Employer to Employee shall
specify in reasonable detail the cause for termination. For purposes of this
Agreement, "family" shall mean Employee's spouse and/or children. In the case of
a termination for the causes described in (a) and (d) above, such termination
shall be effective upon receipt of the written notice. In the case of the causes
described in (b) and (c) above, such termination notice shall not be effective
until thirty (30) days after Employee's receipt of such notice, during which
time Employee shall have the right to respond to Employer's notice and cure the
breach or other event giving rise to the termination.

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        (d)     SEVERANCE. Upon a termination of this Agreement without Good
Reason by Employee or with cause by Employer, Employer shall pay to Employee all
accrued and unpaid compensation subject to the provision of Section 2(d) and
expense reimbursement as of the date of such termination,. Employee shall not be
entitled to any outstanding installment payment of shares as set forth in
Section 2(b) above or any pro-rata share thereof. In addition, Employee shall
not be entitled to receive any outstanding bonus payments pursuant to Section
2(c) if termination occurs prior to November 15, 2007 and is not entitled to the
second $25,000 installment payment if termination occurs subsequent to November
15, 2007 but prior to December 15, 2007.

Upon a termination of this Agreement with Good Reason by Employee or without
cause by Employer, Employer shall pay to Employee all accrued and unpaid
compensation subject to the provision of Section 2(d) and expense reimbursement
as of the date of such termination and the "Severance Payment." The Severance
Payment shall be payable in a lump sum, subject to Employer's statutory and
customary withholdings. If the termination of Employee hereunder is by Employee
with Good Reason, the Severance Payment shall be paid by Employer within five
(5) business days of the expiration of any applicable cure period. If the
termination of Employee hereunder is by Employer without cause, the Severance
Payment shall be paid by Employer within five (5) business days of termination.
The "Severance Payment" shall equal $10,000 (TEN THOUSAND DOLLARS). Employee is
also entitled to a pro-rated portion of shares not yet issued under Section 2(b)
in the year of Employee's termination based on the number of days he worked
during said year and all other shares to be issued thereunder shall be
forfeited. In addition, Employee shall not be entitled to receive any
outstanding bonus payments pursuant to Section 2(c) if termination occurs prior
to November 15, 2007 and is not entitled to the second $25,000 installment
payment if termination occurs subsequent to November 15, 2007 but prior to
December 15, 2007.

        (e)     TERMINATION UPON DEATH. If Employee dies during the Initial Term
of this Agreement, this Agreement shall terminate, except that Employee's legal
representatives shall be entitled to receive any earned but unpaid compensation
as indicated in Section 2(a), any expense reimbursement due hereunder through
the date of death and those shares to be issued on a pro-rata basis in
accordance with the terms of Section 2(b) herein. Any installment payment
payable under Section 2(b) which is not required to be paid prior to death is
forfeited. Employee is not entitled to receive any outstanding bonus payments
pursuant to Section 2(c) if death occurs prior to November 15, 2007 and is not
entitled to the second $25,000 installment payment if death occurs subsequent to
November 15, 2007 but prior to December 15, 2007.

        (f)     TERMINATION UPON DISABILITY. If, during the Term of this
Agreement, Employee suffers and continues to suffer from a "Disability" (as
defined below), then Employer may terminate this Agreement by delivering to
Employee thirty (30) calendar days' prior written notice of termination based on
such Disability, setting forth with specificity the nature of such Disability
and the determination of Disability by Employer. For the purposes of this
Agreement, "Disability" means Employee's inability, with reasonable
accommodation, to substantially perform Employee's duties, services and
obligations under this Agreement due to physical or mental illness or other
disability for a continuous, uninterrupted period of sixty (60) calendar days or
ninety (90) days during any twelve month period. Upon any such termination for
Disability, Employee shall be entitled to receive any earned but unpaid
compensation or expense reimbursement due hereunder through the date of
termination. Any installment payment payable under Section 2(b) which is not
required to be paid prior to termination for Disability is forfeited. Employee
is not entitled to receive any outstanding bonus payments pursuant to Section
2(c) if termination for Disability occurs prior to November 15, 2007 and is not
entitled to the second $25,000 installment payment if termination for Disability
occurs subsequent to November 15, 2007 but prior to December 15, 2007.

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9.      AUTHORIZATION AND CONSENT. Employee authorizes the Employer, as it deems
appropriate, to perform all acts necessary to verify Employee's education,
employment, licenses and credentials and to investigate Employee's credit
history, motor vehicle record and criminal background, if any, on a local, state
and federal level. Employee shall fully cooperate with Employer in obtaining the
information delineated herein including, but not limited to, the execution of
written authorizations and disclosure of any material information. Failure by
Employee to cooperate may result in Employee's discharge without warning. If, as
a result of any verification or investigation herein, the Employer determines
that misstatements or omissions were made by Employee, either verbally or in
writing, then Employer may discharge Employee without warning.

10.     PUBLIC DISCLOSURE. Employee consents to the inclusion of Employee's
personal biography of Employee's education, employment, licenses and other
credentials to any publication and dissemination thereof by or on behalf of
Employer or Parent.

11.     PERSONNEL POLICIES. Except as otherwise provided herein, Employee's
employment shall be subject to the personnel policies and benefit plans which
apply generally to Employer's employees as the same may be interpreted, adopted,
revised or deleted from time to time, during the Initial Term of this Agreement,
by Employer in its sole discretion. During the Initial Term hereof, Employee
shall be entitled to vacation during each year of the Initial Term pursuant to
Employer's policies.

12.     BENEFICIARIES. This Agreement shall inure to the benefit of Employer and
any affiliates, successors, assigns, parent corporations, subsidiaries of parent
corporations, subsidiaries, and/or purchasers of Employer as they now or shall
exist while this Agreement is in effect.

13.     MISCELLANEOUS.

        (a)     NO WAIVER. No failure by either party to declare a default based
on any breach by the other party of any obligation under this Agreement, nor
failure of such party to act quickly with regard thereto, shall be considered to
be a waiver of any such obligation, or of any future breach.

        (b)     MODIFICATION. No waiver or modification of this Agreement or of
any covenant, condition, or limitation herein contained shall be valid unless in
writing and duly executed by the parties to be charged therewith.

        (c)     CHOICE OF LAW/JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of the State of Illinois, without
regard to any conflict-of-laws principles. Employer and Employee hereby consent
to personal jurisdiction before all courts in the State of Illinois, and hereby
acknowledge and agree that Illinois is and shall be the most proper forum to
bring a complaint before a court of law.

        (d)     ENTIRE AGREEMENT. This Agreement embodies the whole agreement
between the parties hereto regarding the subject matter hereof and there are no
inducements, promises, terms, conditions, or obligations made or entered into by
Employer or Employee other than contained herein.

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        (e)     SEVERABILITY. All agreements and covenants contained herein are
severable, and in the event any of them, with the exception of those contained
in Articles 1 and 2 hereof, shall be held to be invalid by any competent court,
this Agreement shall be interpreted as if such invalid agreements or covenants
were not contained herein.

        (f)     HEADINGS. The headings contained herein are for the convenience
of reference and are not to be used in interpreting this Agreement.

        (g)     INDEPENDENT LEGAL ADVICE. Employer has obtained legal advice
concerning this Agreement and has requested that Employee obtain independent
legal advice with respect to same before executing this Agreement. Employee, in
executing this Agreement, represents and warranties to Employer that he has been
so advised to obtain independent legal advice, and that prior to the execution
of this Agreement he has so obtained independent legal advice, or has, in his
discretion, knowingly and willingly elected not to do so.

        (h)     NO ASSIGNMENT. Employee may not assign, pledge or encumber his
interest in this Agreement nor assign any of his rights or duties under this
Agreement without the prior written consent of Employer.

        IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the Effective Date.

SOVEREIGN OIL, INC.                      EMPLOYEE-MAZEN KHATIB

By:  /s/ Sebastien C. DuFort             By:     /s/ Mazen Khatib
   -------------------------------           -------------------------------

Name:    Sebastien C. Dufort             Name:       Mazen Khatib
     -----------------------------             -----------------------------

Title:   President
      ----------------------------

Date:    6/18/07                         Date:       6/18/07
     -----------------------------            ------------------------------

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EXHIBIT 10(xix)

EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”) is entered into as of this 15th day of June, 2007,
by and between American Oil & Gas, Inc., a Nevada corporation (the “Company”), and Peter
Loeffler (“Employee”) to be effective commencing June 15, 2007 (the “Effective
Date”). Employee and Company are sometimes referred to individually as a “Party” and
collectively as the “Parties.”

     In consideration of the mutual covenants, promises and agreements herein contained, the
Company and Employee hereby covenant, promise and agree to and with each other as follows:

     1. Employment. The Company shall employ Employee and Employee shall perform services
for and on behalf of the Company upon the terms and conditions set forth in this Agreement.

     2. Positions and Duties of Employment. Employee shall be required to devote his full
energy, skill and best efforts as required to the furtherance of his duties with the Company as the
Company’s Vice President of Exploration and Development.

     Employee understands that his employment by the Company involves a high degree of trust and
confidence, that he is employed for the purpose of furthering the Company’s reputation and
improving the Company’s operations and profitability, and that in executing this Agreement he
undertakes the obligations set forth herein to accomplish such objectives. Employee agrees that he
shall serve the Company fully, diligently, competently and to the best of his ability. Employee
fully understands his right to discuss this Agreement with his attorney, that he has availed
himself of this right to the extent that he desires, that he has carefully read and fully
understands this entire Agreement, and that he is voluntarily entering into this Agreement.

     3. Duties.

          3.1 Employee shall serve as Vice President of Exploration and Development of the Company and
in that capacity shall work with the Company to pursue the Company’s plans as directed by the
Board. Employee shall have the responsibilities, duties, obligations, rights, benefits and
requisite authority as is customary for the position of Vice President of Exploration and
Development and as may be determined by the Board.

          3.2 During the term of this Agreement, Employee shall devote substantially all of Employee’s
business time, attention, knowledge and skills solely to the business and interests of the Company
and to the performance of Employee’s duties under this Agreement. Without limiting the foregoing,
Employee shall perform services on behalf of the Company for 40 hours per week, and Employee shall
be available at the reasonable request of the Company at other times, including weekends and
holidays, to meet the oil and gas related operational requirements of the Company.

 

 

          3.3 During the term of this Agreement, Employee shall office in Denver, Colorado or upon
authorization from the Board, a suburb of Denver.

     4. Term. Unless terminated earlier as provided for in this Agreement, the term of
this Agreement shall commence on the Effective Date and end on the fifth anniversary of the
Effective Date (the “Term”). If the employment relationship is terminated by either Party,
Employee agrees to cooperate with the Company and with the Company’s new management with respect to
the transition of the new management in the operations previously performed by Employee. Upon
Employee’s termination, Employee agrees to return to the Company all non-public Company documents
(and all copies thereof), any other Company property in Employee’s possession or control, and any
materials of any kind that contain or embody any proprietary or confidential material of the
Company. The foregoing notwithstanding, the Employee may retain personal copies of his employment,
performance and benefit records, such as this Agreement.

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

          (a) A salary at the annual rate of $165,000, subject to a performance review by the Board at
the initial six month anniversary of employment for purposes of potentially increasing salary.
Additional possible increases in salary could occur from time to time in the discretion of the
Board, or a committee selected by the Board, payable in accordance with the Company’s customary
payroll practices.

          (b) At the discretion of the Board, or a committee selected by the Board, performance-based
bonus(es).

          (c) Employee shall be entitled to participate in the Company’s 2006 Stock Incentive Plan.
Employee and the Company are concurrently entering into a Stock Option Agreement and a Restricted
Stock Agreement.

          (d) Company shall include Employee, if otherwise eligible, in any profit sharing plan,
executive stock option plan, pension plan, retirement plan medical, dental and/or hospitalization
plans and any and all other benefit plans, which may be placed in effect by the Company for the
benefit of the Company’s employees during the Term.

          (e) The Company shall provide Employee with four weeks vacation leave per each year of
Employee’s employment and with sick leave consistent with Company plans and policies in effect for
Employees from time to time.

          (f) Any payments which the Company shall make to Employee pursuant to this Agreement shall be
reduced by standard withholding and other applicable payroll deductions, including but not limited
to federal, state or local income or other taxes, Social Security and Medicare Taxes, State
Unemployment Insurance, State Disability Insurance, and the like.

          (g) During the term of his employment, Employee shall be reimbursed for reasonable expenses
that are authorized by the Company and that are incurred by Employee for the benefit of the Company
in accordance with the standard reimbursement practices of the Company. Any direct payment or
reimbursement of expenses shall be made only upon

2

 

presentation of an itemized accounting conforming in form and content to standards prescribed
by the Internal Revenue Service relative to the substantiation of the deductibility of business
expenses.

     6. Confidentiality. Employee hereby warrants, covenants and agrees that, Employee may
not disclose confidential information, including but not limited to (a) information, memoranda,
plans or other documents concerning Company’s business or development plans, customers or
suppliers, (b) Company’s development, or sales and marketing methods or techniques, or (c)
Company’s trade secrets and other “know-how” or information not of a public nature, regardless of
how such information came to the custody of Employee. For purposes of this Agreement, such
information shall include, but not be limited to, information, including a prospect, property,
formula, pattern, compilation, program, device, method, technique or process, that (i) derives
independent economic value, present or potential, from not being generally known to, and not being
readily ascertainable by proper means by, other persons who can obtain economic value from its
disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy. The warranty, covenant and agreement set forth in this paragraph shall
not expire, shall survive this Agreement, and shall be binding upon Employee without regard to the
passage of time or other events.

     7. Non-Compete.

          (a) Employee acknowledges and recognizes the highly competitive nature of the Company’s
business and that Employee’s duties hereunder justify restricting Employee’s further employment.
The Employee agrees that so long as the Employee is employed by the Company, Employee, except when
acting at the request of the Company on behalf of or for the benefit of the Company, (i) will not
induce customers, agents or other sources of distribution of the Company’s business under contract,
doing business with the Company, or in negotiations to do business with the Company to terminate,
reduce, alter or divert business with or from the Company, (ii) will not, directly or indirectly,
solicit or induce, or enter into any discussions that would have the effect of soliciting or
inducing, any individual that is, or was, within ninety days prior to the termination of this
Agreement, an employee of Company or any of Company’s affiliates to leave the Company or such
affiliate of the Company, (iii) will not, directly or indirectly, employ any individual that is, or
was, within ninety days prior to the termination of this Agreement, an employee of either the
Company or an affiliate of the Company, and (iv) shall not, directly or indirectly, either as a
principal, agent, employee, employer, consultant, partner, member or manager of a limited liability
company, shareholder of a company that does not have securities registered under the Securities
Exchange Act of 1934, as amended (the “1934 Act”), or shareholder in excess of one percent
of a company that has securities registered under the 1934 Act, corporate officer or director, or
in any other individual or representative capacity, engage or otherwise participate in any manner
or fashion in any business that is engaged in the oil and gas industry or is otherwise engaged in
competition in any manner whatsoever with the business activities of Company, including, without
limitation, involvement with areas in which the Company is developing a property or properties and
in areas that the Company is analyzing or has analyzed to determine if development and exploration
is feasible in such areas. Employee further covenants and agrees that the restrictive covenant set
forth in this paragraph is reasonable as to duration, terms, and geographical area and that the
same protects the legitimate interests of Company, imposes no undue hardship on Employee, and is
not injurious to the public.

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Ownership by Employee, for investment purposes only, of less than one percent of any class of
securities of a corporation if said securities are listed on a national securities exchange or
registered under the 1934 Act shall not constitute a breach of the covenant set forth under (iv)
above. It is the desire and intent of the Parties that the provisions of this paragraph be
enforced to the fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any particular portion of this
paragraph shall be adjudicated to be invalid or unenforceable, this paragraph shall be deemed
amended to apply in the broadest allowable manner and to delete therefrom the portion adjudicated
to be invalid or unenforceable, such amendment and deletion to apply only with respect to the
operation of paragraph in the particular jurisdiction in which that adjudication is made.

          (b) In the event that Employee’s employment with Company is terminated pursuant to Section
8(a) below, the provisions in Section 7(a) above shall continue to apply for a period of 12 months
following the date of termination, however, such provisions will be limited geographically to any
areas that Company is currently developing, or any areas that Company has, during the 12 month
period prior to the date of termination, analyzed to determine if development and exploration is
feasible in such area. Company shall, no later than thirty days after the termination of
Employee’s employment pursuant to Section 8(a) below, provide Employee with a list of areas to
which Section 7(a) is limited.

     8. Termination.

          (a) In the event that Employee’s employment with the Company is terminated for Cause, by
reason of Employee’s death or disability, or due to Employee’s resignation or voluntary
termination, then all compensation and benefits will cease as of the effective date of such
termination, and Employee shall receive no severance benefits, or any other compensation; provided
that Employee, or his estate, shall be entitled to receive all compensation earned and all benefits
and reimbursements due through the effective date of termination.

          For purposes of this Agreement, “Cause” shall mean that the Board, acting in good faith based
upon the information then known to the Company, determines that Employee has engaged in or
committed any of the following: willful misconduct, gross negligence, theft, fraud, or other
illegal conduct; refusal or unwillingness to perform Employee’s duties; performance by Employee of
Employee’s duties determined by the Board to be inadequate in a material respect; breach of any
applicable non-competition, confidentiality or other proprietary information or inventions
agreement between Employee and the Company; inappropriate conflict of interest; insubordination;
failure to follow the directions of the Board or any committee thereof; or any other material
breach of this Agreement. Indictment or conviction of any felony, or any entry of a plea of nolo
contendre in a felony proceeding, under the laws of the United States or any State shall also be
considered “Cause” hereunder.

          (b) In the event that the Board determines, in its sole discretion, that it is in the best
interests of the Company to terminate the Employee’s employment with the Company, and the Board
does not desire to base such termination on the provisions of Section 8(a) regardless of whether it
is unable or does not desire to do so, then, subject to compliance with Section 8(c), Employee
shall continue to be paid compensation at his salary on the date of termination and benefits for a
period of six months after the date of such termination. Employee

4

 

shall receive no other severance benefits, and payments shall be made in accordance with the
Company’s regular customary payroll practices.

          (c) Employee agrees that the payments contemplated by this Agreement shall constitute the
exclusive and sole remedy for any termination of employment, and Employee covenants not to assert
or pursue any other remedies, at law or in equity, with respect to any termination of employment.
Prior to payment of severance pursuant to Section 8(b) Employee shall execute and deliver to
Company a release agreement provided by Company to the Employee.

          (d) Any party terminating this Agreement shall give prompt written notice (“Notice of
Termination”) to the other party hereto advising such other party of the termination of this
Agreement stating in reasonable detail the basis for such termination.

     9. Remedies. If there is a breach or threatened breach of any provision of Section 6
or Section 7 of this Agreement, the Company will suffer irreparable harm and shall be entitled to
an injunction restraining Employee from such breach. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies for such breach or threatened breach.

     10. Severability. It is the clear intention of the Parties to this Agreement that no
term, provision or clause of this Agreement shall be deemed to be invalid, illegal or unenforceable
in any respect, unless such term, provision or clause cannot be otherwise construed, interpreted,
or modified to give effect to the intent of the Parties and to be valid, legal or enforceable. The
Parties specifically charge the trier of fact to give effect to the intent of the Parties, even if
in doing so, information of a specific provision of this Agreement is required consistent with the
foregoing stated intent. In the event that such a term, provision, or clause cannot be so
construed, interpreted or modified, the validity, legality and enforceability of the remaining
provisions contained herein and other application(s) thereof shall not in any way be affected or
impaired thereby and shall remain in full force and effect.

     11. Waiver of Breach. The waiver by the Company or Employee of the breach of any
provision of this Agreement by the other Party shall not operate or be construed as a waiver of any
subsequent breach by that Party.

     12. Entire Agreement. This document contains the entire agreement between the Parties
and supersedes all prior oral or written agreements, if any, concerning the subject matter hereof
or otherwise concerning Employee’s employment by the Company. This Agreement may not be changed
orally, but only by agreement in writing signed by the Parties.

     13. Governing Law. This Agreement, its validity, interpretation and enforcement,
shall be governed by the laws of the State of Colorado, excluding conflict of laws principles.
Employee hereby expressly consents to personal jurisdiction in the state and federal courts located
in Denver County, Colorado for any lawsuit filed there against him by the Company arising from or
relating to this Agreement, and Employee agrees that any action brought by him against the Company
will be brought in the state or federal courts located in Denver County, Colorado.

5

 

     14. Notices. Any notice pursuant to this Agreement shall be validly given or served
if that notice is made in writing and delivered personally or sent by certified mail or registered,
return receipt requested, postage prepaid, to the following addresses:

			
	          If to Company:          	 	American Oil & Gas, Inc.

1050 17th Street, Suite 2400

Denver, CO 80265

Attention: Andy Calerich, President

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

     All notices so given shall be deemed effective upon personal delivery or, if sent by certified
or registered mail, five business days after date of mailing. Either party, by notice so given,
may change the address to which his or its future notices shall be sent.

     15. Assignment and Binding Effect. This Agreement shall be binding upon Employee and
the Company and shall benefit the Company and its successors and assigns. This Agreement shall not
be assignable by Employee.

     16. Headings. The headings in this Agreement are for convenience only; they form no
part of this Agreement and shall not affect its interpretation.

     17. Construction. Employee represents he has (a) read and completely understands this
Agreement and (b) had an opportunity to consult with any legal and other advisers as he has desired
in connection with this Agreement. This Agreement shall not be construed against any one of the
Parties.

* * * * * *

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     IN WITNESS WHEREOF, the parties have executed this Agreement to be effective on the day and
year first above written.

	 	 	 
	EMPLOYEE

	 	AMERICAN OIL & GAS, INC.

	/s/ Peter Loeffler 

Peter Loeffler, Individually

	 	/s/ Andrew P. Calerich

Name: Andrew P. Calerich
	9571 E. Silent Hills Place

	 	Title: President and Director
	Littleton, CO 80124
	 	 

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