Document:

EX-10.2

 

Exhibit 10.2

EMPLOYMENT AGREEMENT

          This Employment Agreement (“Agreement”) is made, effective the 1st of January, 2007 (the
“Effective Date”), by and between BAYOU CITY EXPLORATION, INC. (“Company”), duly organized and
existing under the laws of the State of Nevada, having a usual place of business located at 10777
Westheimer, Houston, Texas 77042, and D. Edwin Suhr, Jr. (“Employee”), whose residential address is
10811 Pepper Lane, Houston, Texas 77079.

WITNESSETH:

          WHEREAS, the Company is engaged in the exploration for and production of oil and gas (the
“Business of the Company” or the “Business” hereinafter); and

          WHEREAS, the Company wishes to engage the employment services of Employee upon and subject to
the terms, provisions, and conditions set forth in this Agreement, including without limitation
the covenants in Sections 8 and 9; and

          WHEREAS, Employee wishes to become employed by and with the Company upon and subject to the
terms, provisions, and conditions set forth in this Agreement and acknowledges that such
employment is contingent upon the execution of this Agreement and/or that Employee was advised at
the inception of Employee’s employment that Employee would be required to execute this Agreement
and that Employee’s employment would be contingent upon the execution of this Agreement;

          NOW, THEREFORE, in consideration of the premises set forth above and the mutual exchange of
other good and valuable consideration by and between the parties, as described in further detail
below (including, without limitation, the Company’s agreement to employ Employee and the
advantages and benefits thereby inuring to Employee), the sufficiency of which is hereby
acknowledged, the Company and Employee do hereby agree, covenant, and contract as follows:

     1. Term of Agreement. Employee’s employment under this Agreement shall commence on
the Effective Date of this Agreement and shall continue for a term of 36 months unless sooner
terminated for cause by the Company, as hereinafter provided. Notwithstanding the foregoing,
Employee’s employment under this Agreement shall be extended automatically for successive 12-month
terms unless, at least 30 days prior to the expiration date, either party provides written notice
to the other that such party elects not to so extend Employee’s employment under this Agreement.
Should Employee or Company elect not to extend this Agreement as provided herein, at the Company’s
request, Employee shall remain employed pursuant to the terms of this Agreement for an additional
period of up to 90 days after the expiration of a term of employment, if the company makes such
request more than 30 days prior to the expiration of such term of employment. Employee’s covenants
in Sections 8 and 9 of this Agreement shall survive the termination of Employee’s
employment, regardless of the reason for such termination, or either party’s compliance with the
notice provisions of this Section 1.

     2. Duties of Employee. Employee shall perform all the duties that are from time to
time required of him by the Company faithfully, industriously, and, to the best of his ability,
experience,

 

 

D. Edwin Suhr, Jr.

Employment Contract

Effective January 1, 2007

skill, and talents. Employee’s performance of the duties assigned to him by the Company shall be
to the reasonable satisfaction of the Company. Employee shall at all times conduct himself in
accordance with the Company’s Employee Manual, such other statements of Company policy as may be
in effect from time to time, and the standards of conduct customarily applicable to a person
employed in Employee’s capacity. Employee expressly agrees that any failure to conduct himself in
accordance with these manuals, policies, and standards shall constitute a material breach
relieving the Company of any further performance under this Agreement. Employee shall promptly
report to the President of the Company any contacts, whether by telephone, e-mail, in-person visit
or otherwise, with a person engaged in the Business of the Company (as hereinafter defined), or
acting on behalf of a person engaged in the Business, if all or any portion of such contact
relates to the possibility of Employee working for such person.

          Employee will assume the title, position and responsibilities of Senior Vice President of
Land, as well as Corporate Secretary and will direct and manage all activities normally associated
with the position. As such, employee is entitled to all benefits provided by the Company for this
position. So long as Employee remains employed under the Agreement, as a part of Employee’s duties
set forth in the Agreement, and not by way of limitation, Employee shall perform the ongoing
duties typical of a senior executive in the oil and gas exploration and production industry with
respect to any and all wells drilled and/or operated by Company as well as all other business
activities of the Company.

     3. Compensation. The Company agrees to compensate Employee at the rates and upon the
terms, provisions, and conditions set forth on Schedule A, entitled “Compensation,” a copy of which
is attached to and made a part of this Agreement.

     4. Other Employment. Employee agrees that, while employed by the Company, he will
devote all of his working time, attention, knowledge, and skills solely to the business and
interest of the Company and that the Company shall be entitled to all of the benefits, profits, or
other results arising from or incidental to all work, services, and advice of Employee. Employee
further agrees that, during the course of his employment with the Company, he will not have an
interest in or be associated with, affiliated with, employed by, or in any manner whatsoever
engaged in any business, enterprise, or endeavor similar to, or in or potentially in direct or
indirect competition with, the Business of the Company; provided, however, that nothing in this
Section 4 shall be deemed to prevent or limit Employee’s right to invest any of his funds
in up to three percent of the outstanding stock or other securities of any corporation whose stock
or securities are publicly owned or are regularly traded on any public exchange.

     5. Beneficial Recommendations. Employee shall make all suggestions and
recommendations that will be of benefit to the operations and business of the Company.

     6. Employee Acknowledgments. Employee acknowledges that (A) in the course of
his employment under this Agreement, the Company will introduce Employee to various of the

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D. Edwin Suhr, Jr.

Employment Contract

Effective January 1, 2007

Company’s customers and clients whose identities are confidential, and that by virtue of his
employment, Employee will be placed in a position of confidence and trust with respect to such
customers and clients, and Employee will generate and have access to Confidential Information (as
hereinafter defined) of the Company; (B) the nature and period of the restrictions imposed by the
covenants contained in Sections 8 and 9 of this Agreement are fair, reasonable, and
necessary to protect and preserve for the Company the benefits of Employee’s services under this
Agreement; and (C) the Company would sustain great and irreparable loss and damage if Employee in
any manner were to breach any of such covenants.

     7. Confidential Information. “Confidential Information” as used in this Agreement
shall mean any information which relates to the Company, its business, its suppliers, customers,
or clients or the business, suppliers, customers, or clients of its affiliates, which is not
generally known by persons not employed by the Company and which Employee has learned as a
consequence of or during Employee’s employment with the Company, including but not limited to
prospect information and data, seismic data, financial information, strategic plans and
forecasts, marketing plans and forecasts, customer and client lists and data, customer and client
identities, customer and client contacts, prospective customer and client lists and data, and any
other information relating to the Company (whether constituting a trade secret or proprietary
information or otherwise) which has value to the Company and is treated by the Company as being
confidential.

     8. Trade Secrets and Confidential Information. Having made the acknowledgments
contained in Section 6 of this Agreement, Employee covenants and agrees with the Company
that he will not, directly or indirectly, both during his employment and after the termination of
his employment for any reason, disclose to any person or use or otherwise exploit for his own
benefit or for the benefit of any other person or entity any Confidential Information which was
disclosed to him or came within his knowledge during his employment with the Company; provided,
however, that this Section 8 shall not limit in any manner the protection of the
Company’s trade secrets otherwise afforded by law. The Company agrees to provide Employee with,
and to allow Employee to have access to, Confidential Information as reasonably required for
Employee to perform his job duties, as determined by the Company in its sole judgment.

     9. Solicitation of, and Doing Business With, Customers.

          (A) Having made the acknowledgments contained in Section 6 of this Agreement, Employee
covenants and agrees with the Company that he will not, directly or indirectly, during his
employment and through the period ending 2 year(s) after the termination of his employment for any
reason, actually or attempt to solicit, divert, or appropriate to any person or entity in the
business of oil and/or gas exploration and production, on his own behalf or in the service of or on
behalf of any other person or entity, the business of any person that was a customer or client or
prospective customer or client of the Company to whom Employee was introduced by the Company, or
with whom Employee otherwise had contact by virtue of having access to Confidential Information

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Employment Contract

Effective January 1, 2007

regarding such customer or client or prospective customer or client, or whose identity Employee
otherwise learned, in the course of his employment (“Restricted Client(s)” hereinafter). Employee
further covenants and agrees with the Company that he will not, directly or indirectly, during his
employment and through the period ending 2 year(s) after the termination of his employment for any
reason, transact or do any business regarding or related to oil and/or gas exploration and
production with any Restricted Client.

          (B) “Customer” and “client” for purposes of Section 7 of this Agreement and this
Section 9 shall mean investment bankers, broker-dealers, and/or passive investors in oil
and gas exploration and production ventures that invest in such venture solely by investing monies
or funds. The parties agree that excluded from such definition shall be oil and gas exploration
companies (i) that are actively engaged, beyond just investment of monies, in the drilling of oil
and/or gas wells, and (ii) are commonly recognized and known in the oil and gas exploration and
production industry as companies that are actively engaged in oil and gas exploration and
production.

     10. Enforcement of Restrictive Covenants.

          (A) Employee acknowledges that his breach of any covenant contained in Sections 8 or
9 of this Agreement will result in irreparable injury to the Company and that the Company’s
remedy at law for such breach will be inadequate. Accordingly, Employee agrees and consents that
the Company, in addition to all other remedies available at law and in equity, shall be entitled
to both preliminary and permanent injunctions to prevent and/or halt a breach or threatened breach
by Employee of any covenant contained therein.

          (B) Each covenant contained in this Agreement shall be construed as separate and independent
of any other covenant or provision of this Agreement, and the existence or assertion of any claim,
demand, action, or cause of action against the Company shall not constitute a defense to the
enforcement by the Company of any of the covenants contained in Sections 8 or 9 of this
Agreement. In the event that the provisions of Sections 8 or 9 of this Agreement should
ever be deemed to exceed the time, scope, or geographic limitations permitted by applicable law,
then such provisions shall be reformed to the maximum time, scope, and geographic limitations
permitted by such law. In the event the Company is required to enforce any of its rights under
this Agreement, the Company shall be entitled to recover from Employee its attorney’s fees, court
costs, and other expenses in connection therewith.

          (C) Notwithstanding anything else in this Agreement, the covenants contained in Sections
8 and 9 shall survive the expiration or termination of Employee’s employment or of this
Agreement.

          (D) In the event of a violation by Employee of any covenant contained in Sections 8 or
9 of this Agreement, in calculating the term of the violated covenant(s), any period(s) of
time

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Effective January 1, 2007

required for litigation to enforce the violated covenant(s) shall not be included so that the
Company shall enjoy, for 2 year(s), the full benefit of such covenant(s) without violation by
Employee.

          (E) Employee shall present a copy of this Agreement to any prospective new employer but may
redact and/or withhold Schedule A (“Compensation”).

     11. Termination by Company.

          (A) Employee’s employment hereunder (1) shall be terminated by his death and, in accordance
with applicable law, may be terminated by Employee’s total disability and (2) may be terminated by
the Company at any time for cause. In the event of any such termination of employment, Employee
shall be paid his base salary through the date of death, disability, or termination for cause, as
the case may be, and shall not be entitled to receive any further compensation or benefits, and, in
particular, shall not receive any severance pay. Employee’s employment may be terminated for cause,
effective immediately, upon the giving of written notice to Employee by the Company’s President or
the President’s designee.

          (B) Whenever used herein,

               (1) “total disability” shall mean the failure or inability of Employee to perform
substantially all of his duties of employment as required hereunder for a total of 90 days
(whether consecutive or not) due to any physical or mental disorder; and

               (2) “cause” shall mean: (a) any willful or material breach or violation of any of Employee’s
covenants, duties, or obligations under this Agreement (including without limitation Employee’s
resignation), or willful or material neglect of or failure or refusal to perform any of such
covenants, duties, or obligations; (b) any willful or material misconduct, including, without
limitation, misconduct involving fraud or dishonesty in the performance of Employee’s covenants,
duties, or obligations under this Agreement or conduct which is deemed, in the sole judgment of
the Company, to be injurious to the Company; (c) Employee’s engagement in the illegal use of
drugs; (d) the commission by Employee of a crime; or (e) any willful violation or refusal to obey
the lawful directives or reasonable instructions of the Company’s President or the President’s
designee.

     12. Duties Upon Termination. Upon termination of Employee’s employment for any
reason, Employee shall promptly return to the Company any and all records, files, notes,
memoranda, reports, tape recordings, computer programs, disks, cassettes, copies, and other
physical
or virtual representations of any information relating to the Company or its affiliates whether or
not constituting Confidential Information. Employee hereby acknowledges that any and all such
items are and shall remain at all times the sole property of the Company.

     13. Inventions and Discoveries. During Employee’s employment and for a period of

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Employment Contract

Effective January 1, 2007

one year after the termination of Employee’s employment for any reason, any and all articles and
processes invented or discovered by or with the participation of Employee (whether or not patented
or patentable), trademarks, patents, designs, and theories of production, management, operations,
and marketing, and, in general, anything of value received or created by Employee, relating to the
Company or the Business of the Company or to any of its affiliates, or the business of its
affiliates, and all rights of every kind and nature whatsoever thereunder are and shall immediately
be and become the property of the Company and not of Employee. Employee shall promptly notify the
President of the Company of all such items and shall assign, transfer, and deliver to the Company
all patents, copyrights, royalties, designs, copy, and theories and any and all rights and
interests whatsoever thereto and thereunder, without further compensation, immediately upon the
request of the President.

     14. Modification. Except as otherwise provided herein, no waiver or modification of
this Agreement or of any covenant, condition, or limitation contained in this Agreement shall be
valid unless in writing and duly executed by the party to be charged therewith. No evidence of any
waiver or modification shall be offered or received in evidence in any proceedings, arbitration,
or litigation between the parties hereto arising out of or affecting this Agreement, or the rights
or obligations of the parties hereunder, unless such waiver or modification is in writing and duly
executed. The parties further agree that the provisions of this Section 14 may not be
waived except as set forth in this Section. No delay or failure by the Company in exercising any
of its rights, remedies, powers, or privileges under this Agreement, at law or in equity, and no
course of dealing between the Company and Employee or any other person, shall be deemed to be a
waiver by the Company of any such rights, remedies, powers, or privileges, even if such delay or
failure is continuous or repeated, nor shall any single or partial exercise of any right, remedy,
power, or privilege preclude any other or further exercise thereof by the Company or the exercise
of any other right, remedy, power, or privilege by the Company.

     15. Compliance With Other Agreements. In the performance of Employee’s duties
hereunder, Employee shall not disclose or use any confidential information obtained by or disclosed
to Employee during the course and scope of Employee’s employment with any other employer.

     16. Indemnification. Employee warrants and represents to the Company that he is not a
party to any existing written employment agreements, including without limitation any
employment-related noncompetition and/or nondisclosure agreements. Employee hereby indemnifies and
holds harmless the Company from and against any and all costs, expenses, or liabilities of
whatever name, nature, or description, including but not limited to reasonable attorney’s fees and
costs, arising from the Company’s employment of Employee in reliance on this representation by
Employee.

     17. Severability. Every portion of this Agreement is intended to be severable.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be
valid and enforceable under applicable law. However, with the exception of the provisions of 
Sections 8 or 9 of this Agreement, if any provision shall be determined by a court or other
tribunal of

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Employment Contract

Effective January 1, 2007

competent jurisdiction to be prohibited by or invalid under such law, such provision shall be
deemed severed herefrom and shall be unenforceable to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining provisions of this Agreement.
The provisions of Sections 8 or 9 of this Agreement shall be reformed, if necessary, in
accordance with applicable law.

     18. Collateral Agreements. This Agreement and the most recently executed Schedule A
attached to it set forth the entire agreement and understanding of the parties concerning
their
employment relationship as of the Effective Date of this Agreement and the effective date stated
on such Schedule, and supersede all other agreements between the parties regarding their
employment relationship. The parties stipulate that neither has made any representations with
respect to the subject matter of this Agreement except those representations specifically set
forth in this Agreement and the incorporated Schedule. The parties acknowledge that any payments
or representations that may have been made by either of them prior to the Effective Date of this
Agreement, but which are not set forth or contained herein, are of no force and effect and neither
party has relied on any such payments or representations in entering into this Agreement.

     19. Choice of Law and Assignment. This Agreement, which may be executed in multiple
original copies, shall be governed by and construed in accordance with the laws of the State of
Texas without regard to conflicts of law principles. Claims arising out of or requiring the
interpretation of this Agreement shall be brought and litigated in the courts located within
Harris County, Texas, and Employee unconditionally consents and submits to the jurisdiction of
such courts. Employee acknowledges that the services to be rendered by him under this Agreement
are unique and personal. Accordingly, Employee shall not assign any of his rights or delegate any
of his duties or obligations under this Agreement. The rights and obligations of the Company under
this Agreement, including those rights which survive the expiration or termination of Employee’s
employment or of this Agreement, may be assigned or delegated by the Company to any subsidiary,
affiliate, or successor of the Company, and, in that event, shall inure to the benefit of and be
enforceable by any such assignee or delegate.

     20. Notices. All notices or other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be given either (i) in person, (ii) by
regular mail, certified or registered, return receipt requested, postage prepaid, or (iii) by
expedited delivery service with proof of delivery, to the parties at the addresses set forth below
their respective names on the signature page hereto (or at such other addresses as shall be
specified by the parties by like notice).

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D. Edwin Suhr, Jr.

Employment Contract

Effective January 1, 2007

          IN WITNESS WHEREOF, the parties hereto have set their hands to this Agreement, to be effective
as of the date and year first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	BAYOU CITY EXPLORATION, INC.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ W. Wayne Hardin	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 		 	 
	 

	 	Name:
	 	W. WAYNE HARDIN
	 	 	 		 	12-29-06	 	 
	 

	 	Title:
	 	PRESIDENT & CEO	 	 	 	 	 	Date
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Address for Notice Purposes:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	10777 Westheimer	 	 	 	 	 	 	 	 
	Suite 170	 	 	 	 	 	 	 	 
	Houston, Texas 77042	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	EMPLOYEE	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	/s/ D. Edwin Suhr, Jr.	 	 	 		 	12-29-06	 	 
	 	 	 	 	 	 		 	 
	Name:	 	D. EDWIN SUHR., JR.	 	 	 	 	 	Date	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Address for Notice Purposes:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	10811 Pepper Lane	 	 	 	 	 	 	 	 
	Houston, Texas 77079	 	 	 	 	 	 	 	 

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SCHEDULE
“A” 

Compensation

	1.	 	Base Salary: $15,000.00 per month, less all applicable withholdings, paid in
accordance with the Company’s regular payroll practices.
	 
	2.	 	Stock Grant: Within 30 days of each 12 month anniversary date of the Agreement,
Company shall grant to Employee shares of common stock of the Company as follows:

	 	 	 	January 1, 2008, a number of shares of Company’s common stock equal to $30,000.00
divided by the previous 30 day average price for a share of Company’s common
stock.
	 
	 	 	 	January 1, 2009, a number of shares of Company’s common stock equal to $30,000.00
divided by the previous 30 day average price for a share of Company’s common
stock.
	 
	 	 	 	January 1, 2010, a number of shares of Company’s common stock equal to $30,000.00
divided by the previous 30 day average price for a share of Company’s common
stock.

          If Employee’s employment is terminated for “cause” as defined in the Agreement at
any time during the term hereof, then no such grant of common stock shall be made for the
12-month term in which Employee’s employment is terminated.

	3.	 	Benefits: Employee and his dependents shall be eligible for coverage under any
healthcare plan which the Company offers to similarly situated employees on the same terms
and conditions as offered to such other employees. Employee shall be entitled to take up to
three (3) weeks’ paid vacation during any 12-month term under the Agreement, the scheduling
of which shall be subject to the operational needs and requirements of the Company as
determined by the Company in its sole discretion.
	 
	4.	 	Additional Benefits: Employee shall be eligible to participate in employee company
stock plans and all other incentive plans which from time to time the Company may offer to
similarly situated employees on the same terms and conditions as offered to such other
employees.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	BAYOU CITY EXPLORATION, INC.	 	 	 	EMPLOYEE
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ W. Wayne Hardin	 	 	 	/s/ D. Edwin Suhr, Jr.	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	W. WAYNE HARDIN
	 	 	 	D. EDWIN SUHR, JR.	 	 
	 

	 	Title:
	 	PRESIDENT & CEO	 	 	 	Date:  12/29/06	 	 	 	 
	 

	 	Date:
	 	12-29-06	 	 	 	 	 	 	 	 

9EX-10.3

 

Exhibit 10.3

EMPLOYMENT AGREEMENT

          This Employment Agreement (“Agreement”) is made, effective the 1st of December, 2006 (the
“Effective Date”), by and between BAYOU CITY EXPLORATION, INC. (“Company”), duly organized and
existing under the laws of the State of Nevada, having a usual place of business located at 10777
Westheimer, Houston, Texas 77042, and JAMES G. BROWN (“Employee”), whose residential address is
21603 Cedar Cove Dr., Katy, TX 77450-5347.

WITNESSETH:

          WHEREAS, the Company is engaged in the exploration for and production of oil and gas (the
“Business of the Company” or the “Business” hereinafter); and

          WHEREAS, the Company wishes to engage the employment services of Employee upon and subject to
the terms, provisions, and conditions set forth in this Agreement, including without limitation
the covenants in Sections 8 and 9; and

          WHEREAS, Employee wishes to become employed by and with the Company upon and subject to the
terms, provisions, and conditions set forth in this Agreement and acknowledges that such
employment is contingent upon the execution of this Agreement and/or that Employee was advised at
the inception of Employee’s employment that Employee would be required to execute this Agreement
and that Employee’s employment would be contingent upon the execution of this Agreement;

          NOW, THEREFORE, in consideration of the premises set forth above and the mutual exchange of
other good and valuable consideration by and between the parties, as described in further detail
below (including, without limitation, the Company’s agreement to employ Employee and the
advantages and benefits thereby inuring to Employee), the sufficiency of which is hereby
acknowledged, the Company and Employee do hereby agree, covenant, and contract as follows:

     1. Term of Agreement. Employee’s employment under this Agreement shall commence on the
Effective Date of this Agreement and shall continue for a term of 36 months unless sooner
terminated for cause by the Company, as hereinafter provided. Notwithstanding the foregoing,
Employee’s employment under this Agreement shall be extended automatically for successive 12-month
terms unless, at least 30 days prior to the expiration date, either party provides written notice
to the other that such party elects not to so extend Employee’s employment under this Agreement.
Should Employee or Company elect not to extend this Agreement as provided herein, at the Company’s
request, Employee shall remain employed pursuant to the terms of this Agreement for an additional
period of up to 90 days after the expiration of a term of employment, if the company makes such
request more than 30 days prior to the expiration of such term of employment. Employee’s covenants
in Sections 8 and 9 of this Agreement shall survive the termination of Employee’s
employment, regardless of the reason for such termination, or either party’s compliance with the
notice provisions of this Section 1.

     2. Duties of Employee. Employee shall perform all the duties that are from time to
time required of him by the Company faithfully, industriously, and, to the best of his ability,
experience,

 

 

James G. Brown

Employment Contract

Effective December 1, 2006

skill, and talents. Employee’s performance of the duties assigned to him by the Company shall be
to the reasonable satisfaction of the Company. Employee shall at all times conduct himself in
accordance with the Company’s Employee Manual, such other statements of Company policy as may be
in effect from time to time, and the standards of conduct customarily applicable to a person
employed in Employee’s capacity. Employee expressly agrees that any failure to conduct himself in
accordance with these manuals, policies, and standards shall constitute a material breach
relieving the Company of any further performance under this Agreement. Employee shall promptly
report to the President of the Company any contacts, whether by telephone, e-mail, in-person visit
or otherwise, with a person engaged in the Business of the Company (as hereinafter defined), or
acting on behalf of a person engaged in the Business, if all or any portion of such contact
relates to the possibility of Employee working for such person.

          Employee will assume the title, position and responsibilities of Drilling and Production
Manager and will direct and manage all activities normally associates with the position. As such,
employee is entitled to all benefits provided by the Company for this position. So long as
Employee remains employed under the Agreement, as a part of Employee’s duties set forth in the
Agreement, and not by way of limitation, Employee shall perform the ongoing duties typical of a
petroleum engineer in the oil and gas exploration and production industry with respect to any and
all wells drilled and/or operated by Company.

     3. Compensation. The Company agrees to compensate Employee at the rates and upon the
terms, provisions, and conditions set forth on Schedule A, entitled “Compensation,” a copy of
which is attached to and made a part of this Agreement.

     4. Other Employment. Employee agrees that, while employed by the Company, he will
devote all of his working time, attention, knowledge, and skills solely to the business and
interest of the Company and that the Company shall be entitled to all of the benefits, profits, or
other results arising from or incidental to all work, services, and advice of Employee. Employee
further agrees that, during the course of his employment with the Company, he will not have an
interest in or be associated with, affiliated with, employed by, or in any manner whatsoever
engaged in any business, enterprise, or endeavor similar to, or in or potentially in direct or
indirect competition with, the Business of the Company; provided, however, that nothing in this
Section 4 shall be deemed to prevent or limit Employee’s right to invest any of his funds
in up to three percent of the outstanding stock or other securities of any corporation whose stock
or securities are publicly owned or are regularly traded on any public exchange.

     5. Beneficial Recommendations. Employee shall make all suggestions and
recommendations that will be of benefit to the operations and business of the Company.

     6. Employee Acknowledgments. Employee acknowledges that (A) in the course of his
employment under this Agreement, the Company will introduce Employee to various of the Company’s
customers and clients whose identities are confidential, and that by virtue of his

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James G. Brown

Employment Contract

Effective December 1, 2006

employment, Employee will be placed in a position of confidence and trust with respect to such
customers and clients, and Employee will generate and have access to Confidential Information (as
hereinafter defined) of the Company; (B) the nature and period of the restrictions imposed by the
covenants contained in Sections 8 and 9 of this Agreement are fair, reasonable, and
necessary to protect and preserve for the Company the benefits of Employee’s services under this
Agreement; and (C) the Company would sustain great and irreparable loss and damage if Employee in
any manner were to breach any of such covenants.

     7. Confidential Information. “Confidential Information” as used in this Agreement
shall mean any information which relates to the Company, its business, its suppliers, customers,
or clients or the business, suppliers, customers, or clients of its affiliates, which is not
generally known by persons not employed by the Company and which Employee has learned as a
consequence of or during Employee’s employment with the Company, including but not limited to
prospect information and data, seismic data, financial information, strategic plans and forecasts,
marketing plans and forecasts, customer and client lists and data, customer and client identities,
customer and client contacts, prospective customer and client lists and data, and any other
information relating to the Company (whether constituting a trade secret or proprietary
information or otherwise) which has value to the Company and is treated by the Company as being
confidential.

     8. Trade Secrets and Confidential Information. Having made the acknowledgments
contained in Section 6 of this Agreement, Employee covenants and agrees with the Company
that he will not, directly or indirectly, both during his employment and after the termination of
his employment for any reason, disclose to any person or use or otherwise exploit for his own
benefit or for the benefit of any other person or entity any Confidential Information which was
disclosed to him or came within his knowledge during his employment with the Company; provided,
however, that this Section 8 shall not limit in any manner the protection of the Company’s
trade secrets otherwise afforded by law. The Company agrees to provide Employee with, and to allow
Employee to have access to, Confidential Information as reasonably required for Employee to
perform his job duties, as determined by the Company in its sole judgment.

     9. Solicitation of, and Doing Business With, Customers.

          (A) Having made the acknowledgments contained in Section 6 of this Agreement, Employee
covenants and agrees with the Company that he will not, directly or indirectly, during his
employment and through the period ending 2 year(s) after the termination of his employment for any
reason, actually or attempt to solicit, divert, or appropriate to any person or entity in the
business of oil and/or gas exploration and production, on his own behalf or in the service of or on
behalf of any other person or entity, the business of any person that was a customer or client or
prospective customer or client of the Company to whom Employee was introduced by the Company, or
with whom Employee otherwise had contact by virtue of having access to Confidential Information
regarding such customer or client or prospective customer or client, or whose identity Employee
otherwise learned, in the course of his employment (“Restricted Client(s)” hereinafter). Employee

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Employment Contract

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further covenants and agrees with the Company that he will not, directly or indirectly, during his
employment and through the period ending 2 year(s) after the termination of his employment for any
reason, transact or do any business regarding or related to oil and/or gas exploration and
production with any Restricted Client.

          (B) “Customer” and “client” for purposes of Section 7 of this Agreement and this
Section 9 shall mean investment bankers, broker-dealers, and/or passive investors in oil
and gas exploration and production ventures that invest in such venture solely by investing monies
or funds. The parties agree that excluded from such definition shall be oil and gas exploration
companies (i) that are actively engaged, beyond just investment of monies, in the drilling of oil
and/or gas wells, and (ii) are commonly recognized and known in the oil and gas exploration and
production industry as companies that are actively engaged in oil and gas exploration and
production.

     10. Enforcement of Restrictive Covenants.

          (A) Employee acknowledges that his breach of any covenant contained in Sections 8 or
9 of this Agreement will result in irreparable injury to the Company and that the Company’s
remedy at law for such breach will be inadequate. Accordingly, Employee agrees and consents that
the Company, in addition to all other remedies available at law and in equity, shall be entitled
to both preliminary and permanent injunctions to prevent and/or halt a breach or threatened breach
by Employee of any covenant contained therein.

          (B) Each covenant contained in this Agreement shall be construed as separate and independent
of any other covenant or provision of this Agreement, and the existence or assertion of any claim,
demand, action, or cause of action against the Company shall not constitute a defense to the
enforcement by the Company of any of the covenants contained in Sections 8 or 9 of this
Agreement. In the event that the provisions of Sections 8 or 9 of this Agreement should
ever be deemed to exceed the time, scope, or geographic limitations permitted by applicable law,
then such provisions shall be reformed to the maximum time, scope, and geographic limitations
permitted by such law. In the event the Company is required to enforce any of its rights under this
Agreement, the Company shall be entitled to recover from Employee its attorney’s fees, court costs,
and other expenses in connection therewith.

          (C) Notwithstanding anything else in this Agreement, the covenants contained in Sections
8 and 9 shall survive the expiration or termination of Employee’s employment or of this
Agreement.

          (D) In the event of a violation by Employee of any covenant contained in Sections 8 or
9 of this Agreement, in calculating the term of the violated covenant(s), any period(s) of
time required for litigation to enforce the violated covenant(s) shall not be included so that the
Company shall enjoy, for 2 year(s), the full benefit of such covenant(s) without violation by
Employee.

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Employment Contract

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          (E) Employee shall present a copy of this Agreement to any prospective new employer but may
redact and/or withhold Schedule A (“Compensation”).

     11. Termination by Company.

          (A) Employee’s employment hereunder (1) shall be terminated by his death and, in accordance
with applicable law, may be terminated by Employee’s total disability and (2) may be terminated by
the Company at any time for cause. In the event of any such termination of employment, Employee
shall be paid his base salary through the date of death, disability, or termination for cause, as
the case may be, and shall not be entitled to receive any further compensation or benefits, and,
in particular, shall not receive any severance pay. Employee’s employment may be terminated for
cause, effective immediately, upon the giving of written notice to Employee by the Company’s
President or the President’s designee.

          (B) Whenever used herein,

               (1) “total disability” shall mean the failure or inability of Employee to perform
substantially all of his duties of employment as required hereunder for a total of 90 days
(whether consecutive or not) due to any physical or mental disorder; and

               (2) “cause” shall mean: (a) any willful or material breach or violation of any of Employee’s
covenants, duties, or obligations under this Agreement (including without limitation Employee’s
resignation), or willful or material neglect of or failure or refusal to perform any of such
covenants, duties, or obligations; (b) any willful or material misconduct, including, without
limitation, misconduct involving fraud or dishonesty in the performance of Employee’s covenants,
duties, or obligations under this Agreement or conduct which is deemed, in the sole judgment of the
Company, to be injurious to the Company; (c) Employee’s engagement in the illegal use of drugs; (d)
the commission by Employee of a crime; or (e) any willful violation or refusal to obey the lawful
directives or reasonable instructions of the Company’s President or the President’s designee.

     12. Duties Upon Termination. Upon termination of Employee’s employment for any
reason, Employee shall promptly return to the Company any and all records, files, notes,
memoranda, reports, tape recordings, computer programs, disks, cassettes, copies, and other
physical or virtual representations of any information relating to the Company or its affiliates
whether or not constituting Confidential Information. Employee hereby acknowledges that any and
all such items are and shall remain at all times the sole property of the Company.

     13. Inventions and Discoveries. During Employee’s employment and for a period of one
year after the termination of Employee’s employment for any reason, any and all articles and
processes invented or discovered by or with the participation of Employee (whether or not patented
or patentable), trademarks, patents, designs, and theories of production, management, operations,
and

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Employment Contract

Effective December 1, 2006

marketing, and, in general, anything of value received or created by Employee, relating to the
Company or the Business of the Company or to any of its affiliates, or the business of its
affiliates, and all rights of every kind and nature whatsoever thereunder are and shall immediately
be and become the property of the Company and not of Employee. Employee shall promptly notify the
President of the Company of all such items and shall assign, transfer, and deliver to the Company
all patents, copyrights, royalties, designs, copy, and theories and any and all rights and
interests whatsoever thereto and thereunder, without further compensation, immediately upon the
request of the President.

     14. Modification. Except as otherwise provided herein, no waiver or modification of
this Agreement or of any covenant, condition, or limitation contained in this Agreement shall be
valid unless in writing and duly executed by the party to be charged therewith. No evidence of any
waiver or modification shall be offered or received in evidence in any proceedings, arbitration, or
litigation between the parties hereto arising out of or affecting this Agreement, or the rights or
obligations of the parties hereunder, unless such waiver or modification is in writing and duly
executed. The parties further agree that the provisions of this Section 14 may not be
waived except as set forth in this Section. No delay or failure by the Company in exercising any of
its rights, remedies, powers, or privileges under this Agreement, at law or in equity, and no
course of dealing between the Company and Employee or any other person, shall be deemed to be a
waiver by the Company of any such rights, remedies, powers, or privileges, even if such delay or
failure is continuous or repeated, nor shall any single or partial exercise of any right, remedy,
power, or privilege preclude any other or further exercise thereof by the Company or the exercise
of any other right, remedy, power, or privilege by the Company.

     15. Compliance With Other Agreements. In the performance of Employee’s duties
hereunder, Employee shall not disclose or use any confidential information obtained by or
disclosed to Employee during the course and scope of Employee’s employment with any other
employer.

     16. Indemnification. Employee warrants and represents to the Company that he is not a
party to any existing written employment agreements, including without limitation any
employment-related noncompetition and/or nondisclosure agreements. Employee hereby indemnifies and
holds harmless the Company from and against any and all costs, expenses, or liabilities of
whatever name, nature, or description, including but not limited to reasonable attorney’s fees and
costs, arising from the Company’s employment of Employee in reliance on this representation by
Employee.

     17. Severability. Every portion of this Agreement is intended to be severable.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be
valid and enforceable under applicable law. However, with the exception of the provisions of

Sections 8 or 9 of this Agreement, if any provision shall be determined by a court or
other tribunal of competent jurisdiction to be prohibited by or invalid under such law, such
provision shall be deemed severed herefrom and shall be unenforceable to the extent of such
prohibition or invalidity without invalidating the remainder of such provision or the remaining
provisions of this Agreement. The

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Employment Contract

Effective December 1, 2006

provisions of Sections 8 or 9 of this Agreement shall be reformed, if necessary, in
accordance with applicable law.

     18. Collateral Agreements. This Agreement and the most recently executed Schedule A
attached to it set forth the entire agreement and understanding of the parties concerning their
employment relationship as of the Effective Date of this Agreement and the effective date stated
on such Schedule, and supersede all other agreements between the parties regarding their
employment relationship. The parties stipulate that neither has made any representations with
respect to the subject matter of this Agreement except those representations specifically set
forth in this Agreement and the incorporated Schedule. The parties acknowledge that any payments
or representations that may have been made by either of them prior to the Effective Date of this
Agreement, but which are not set forth or contained herein, are of no force and effect and neither
party has relied on any such payments or representations in entering into this Agreement.

     19. Choice of Law and Assignment. This Agreement, which may be executed in multiple
original copies, shall be governed by and construed in accordance with the laws of the State of
Texas without regard to conflicts of law principles. Claims arising out of or requiring the
interpretation of this Agreement shall be brought and litigated in the courts located within
Harris County, Texas, and Employee unconditionally consents and submits to the jurisdiction of
such courts. Employee acknowledges that the services to be rendered by him under this Agreement
are unique and personal. Accordingly, Employee shall not assign any of his rights or delegate any
of his duties or obligations under this Agreement. The rights and obligations of the Company under
this Agreement, including those rights which survive the expiration or termination of Employee’s
employment or of this Agreement, may be assigned or delegated by the Company to any subsidiary,
affiliate, or successor of the Company, and, in that event, shall inure to the benefit of and be
enforceable by any such assignee or delegate.

     20. Notices. All notices or other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be given either (i) in person, (ii) by
regular mail, certified or registered, return receipt requested, postage prepaid, or (iii) by
expedited delivery service with proof of delivery, to the parties at the addresses set forth below
their respective names on the signature page hereto (or at such other addresses as shall be
specified by the parties by like notice).

          IN WITNESS WHEREOF, the parties hereto have set their hands to this Agreement, to be effective
as of the date and year first above written.

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James G. Brown

Employment Contract

Effective December 1, 2006

BAYOU CITY EXPLORATION, INC.

	 	 	 	 	 
	By:

	 	/s/ D. Edwin Suhr, Jr.
		11/16/06
	 

	 	 

Name: D. Edwin Suhr, Jr.
	 	Date  
	 

	 	Title:   SR. VP LAND & OPER.	 	 

Address for Notice Purposes:

10777 Westheimer

Suite 170

Houston, Texas 77042

EMPLOYEE

	 	 	 	 
	/s/ James G. Brown
		11/16/06
	 

Name:  JAMES G. BROWN
	 	Date  

Address for Notice Purposes:

21603 Cedar Cove Dr

Katy, Texas 77450-5347

8

 

SCHEDULE
“A” 

Compensation

	1.	 	Base Salary: $14,000.00 per month, less all applicable withholdings, paid in
accordance with the Company’s regular payroll practices.

	2.	 	Stock Grant: Within 30 days of each 12 month anniversary date of the Agreement,
Company shall grant to Employee shares of common stock of the Company as follows:

December 1, 2007, a number of shares of Company’s common stock equal to $20,000.00
divided by the previous 30 day average price for a share of Company’s common
stock.

December 1, 2008, a number of shares of Company’s common stock equal to $20,000.00
divided by the previous 30 day average price for a share of Company’s common
stock.

December 1, 2009, a number of shares of Company’s common stock equal to $20,000.00
divided by the previous 30 day average price for a share of Company’s common
stock.

     If Employee’s employment is terminated for “cause” as defined in the Agreement at
any time during the term hereof, then no such grant of common stock shall be made for the
12-month term in which Employee’s employment is terminated.

	3.	 	Benefits: Employee and his dependents shall be eligible for coverage under any
healthcare plan which the Company offers to similarly situated employees on the same terms and
conditions as offered to such other employees. Employee shall be entitled to take up to three
(3) weeks’ paid vacation during any 12-month term under the Agreement, the scheduling of which
shall be subject to the operational needs and requirements of the Company as determined by the
Company in its sole discretion.

	4.	 	Additional Benefits: Employee shall be eligible to participate in employee company
stock plans and all other incentive plans which from time to time the Company may offer to
similarly situated employees on the same terms and conditions as offered to such other
employees.

	 	 	 	 	 	 	 	 	 
	BAYOU CITY EXPLORATION, INC.	 	 	 	JAMES G. BROWN	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ D. Edwin Suhr, Jr.
	 	 	 	/s/ James G. Brown	 	 
	 

	 	 

Name: D. Edwin Suhr, JR.
	 	 Date:
	 	 

11/16/06
	 	 
	 

	 	Title:   SR. VP LAND & OPER.	 	 	 	 	 	 
	 

	 	Date:   11/16/06

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