Document:

Exhibit 10.3

Exhibit 10.3

    EMPLOYMENT
      AGREEMENT

     

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

     

    RECITALS

    

    WHEREAS,
      the Company desires to employ Employee on the terms and conditions herein stated
      and Employee accepts such terms of employment.

     

    1. Position.
      During
      the term of this Agreement, the Company will employ the Employee, and the
      Employee will serve the Company in the capacity of Chief
      Financial Officer. 

     

    2. Duties.
      The
      Employee will perform duties described in Exhibit
      “A,” attached
      to this Agreement and incorporated by this reference, together with such
      additional reasonably related duties assigned by the Chief Executive Officer
      or
      the Board of Directors.

     

    3. Service.
      Except
      with respect to the matters specified below, Employee will devote substantial
      working time and efforts to the business and affairs of the Company. The
      foregoing shall not, however, preclude the Employee: (a) from engaging in
      appropriate civic, charitable or religious activities; (b) from serving on
      the boards of directors of other entities, with the consent of the Company,
      which consent shall not be unreasonably withheld; (c) from providing
      incidental assistance to family members on matters of family business, so long
      as the foregoing activities and service do not conflict with the Employee's
      responsibilities to the Company; and (d) from completing, managing and
      supervising Employee’s personal business affairs.

     

    4. Term
      of Agreement.
      The
      Company agrees to continue the Employee's employment, and the Employee agrees
      to
      remain in the employ of the Company, pursuant to the terms of this Agreement
      for
      a period of 12 months, but this Agreement shall be subject to extension for
      and
      up to an additional twelve (12) months after the Effective Date, unless the
      Employee’s employment is earlier terminated or modified pursuant to the
      provisions of this Agreement. 

     

    5. Compensation
      and Benefits.

     

    5.1 Compensation.

     

    5.1.1. Base
      Salary.
      Employee shall receive a salary of $5,000 per month (the “Base Salary”), in
      accordance with the general payroll practices of the Company. 

     

    5.1.2 Expenses.
      The
      Company will reimburse (monthly) the Employee for all reasonable and necessary
      expenses incurred by the Employee in connection with the Company's business
      including: entertainment, airfare, automobile, hotel and miscellaneous expenses
      incurred by Employee. Expenses exceeding $1,000 shall require approval by the
      CEO prior to the time such expenses are incurred.

     

    5.1.3 Common
      Stock Purchase Warrants.
      Common
      stock purchase warrants (in the form attached as Exhibit A) to purchase
      1,000,000 shares of the Company’s common stock at an exercise price equal to
      110% of the closing market price of the Company’s common stock as of April 24,
      2006. The warrants shall have a term of 5 years and shall vest to the holder
      at
      a rate of 250,000 warrants every 90 days.

    

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

    

    Example:

    

    
      	
              Assume
                that an Agreement was Executed on April 1, 2006

            
	 
	 	
              Well
                No. 1

            	
              Well
                No.2

            
	
              January
                1 to March 31

            	
              0

            	
              $100,000
                in Gross Sales

            
	
              April
                1 through June 30

            	
              $100,000
                in Gross Sales

            	
              $200,000
                in Gross Sales

            
	 
	
              Assume:
                (i) the two wells above were both located in Alberta, Canada and
                that
                there was a provincial tax equal to 20%; and (ii) there was a royalty
                arrangement with a landowner, paying this person 10%.

               

              Note
                that a “Royalty” shall not mean a production cost or a fee to an operator
                or other contractor providing services.

               

              Analysis:
                In the above example, the Employee with a 2.5% POB would receive,
                from the
                April 1 to June 30 period, $1,750 from Well 1 and $1,750 from Well
                2. Well
                1 would be considered new production and the Well 2 POB would be
                based on
                the increase in CWI from the preceding three month period.
                

            

    

    

    6. Termination.

     

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

    

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

    

    6.1.2 Thirty
      (30) days after the date of a written notice sent to the Employee stating the
      Company's determination, made in good faith that, due to a mental or physical
      incapacity, the Employee has been unable to perform his duties under this
      Agreement for a period of not less than six (6) consecutive months (“Termination
      for Disability”); or

     

    6.1.3 Upon
      the
      Employee's death (“Termination Upon Death”); or

     

    6.1.4 Thirty
      (30) days after the date of a notice sent to the Employee stating that the
      Company is terminating his employment, without Cause, which notice can only
      be
      given by the Company at any time after the Effective Date at the Company's
      sole
      discretion, for any reason or for no reason (“Termination Without Cause”);
      or

     

    6.1.5 The
      date
      of a notice sent to the Company from the Employee stating that the Employee
      is
      electing to terminate his employment with the Company (“Voluntary
      Termination”).

     

    6.2 “Cause”
      Defined.
      For
      purposes of this Agreement, “Cause” for the Employee's termination will exist at
      any time after the occurrence of one or more of the following
      events:

     

    6.2.1 Any
      willful act or acts of dishonesty undertaken by the Employee intended to result
      in substantial gain or personal enrichment of the Employee at the expense of
      the
      Company;

     

    6.2.2 Any
      willful act of gross misconduct which could reasonably be expected to materially
      and demonstrably result in damage to the Company. No act, or failure to act,
      by
      the Employee shall be considered “willful” if done, or omitted to be done, by
      him in good faith and in the reasonable belief that his act or omission was
      in
      the best interest of the Company and/or required by applicable law,
      or

     

    6.2.3 Employee
      is charged with the commission of a felony involving moral
      turpitude.

     

    6.2.4 Any
      violation of the Company’s Code of Ethics (Attached as Exhibit B)

     

    6.2.5. Any
      violation of Sections 8 or 10 of this Agreement during the term of employment
      with the Company.

     

    6.3 “Termination
      Without Cause”
shall
      mean:

     

    6.3.1 Termination
      of the Employee’s employment with the Company for any reason other than
      Cause.

     

    6.4 Effect
      of Termination.

     

    6.4.1 Termination
      for Cause or Voluntary Termination.
      In the
      event of any termination of the Employee's employment pursuant to
      Section 6.1.1 or Section 6.1.5, the Company shall immediately pay to
      the Employee the compensation and benefits accrued and otherwise payable to
      the
      Employee under Section 5 through the date of termination. The Employee's
      rights under the Company's benefit plans, is one should exist, shall be
      determined under the provisions of those plans.

     

    6.4.2 Termination
      for Disability.
      In the
      event of termination of employment pursuant to Section 6.1.2:

     

    6.4.2.1 The
      Company shall immediately pay to the Employee the compensation and benefits
      accrued and otherwise payable to the Employee under Section 5 through the date
      of termination; and 

     

    6.4.2.2 The
      Employee shall receive any other benefit payments as provided in the Company's
      standard benefit plans applicable to disability, should such a plan
      exist.

     

    6.4.3 Termination
      Upon Death.
      In the
      event of termination of employment pursuant to Section 6.1.3, all
      obligations of the Company and the Employee shall cease, except the Company
      shall immediately pay to the Employee (or to the Employee's estate) the
      compensation and benefits accrued and otherwise payable to the Employee under
      Section 5 through the date of termination.

     

    7.5 Termination
      Without Cause.
      In the
      event of any termination of this Agreement pursuant to
      Section 6.1.4:

     

    7.5.1 The
      Company shall immediately pay to the Employee the compensation and benefits
      accrued and otherwise payable to the Employee under the entire term of this
      Agreement.

     

    7.5.2 Provided
      that Employee is not in violation of Section 8 or 10 of this Agreement during
      the time of Employment and for the period of time during which the POB is
      payable to Employee, the Company shall pay to the Employee the POB under Section
      5.1.4 as follows:

     

    7.5.2.1  Fifty
      percent (50%) of the POB for a period of 12 months following the expiration
      of
      the term of this Agreement.

     

    7.5.2.1  Twenty
      five percent (25%) of the POB for the period beginning on a date which begins
      on
      the date which is 12 months from the date of expiration of this Agreement and
      ending on a date which is 24 months from the expiration of this
      Agreement.

     

    8. Non-Disclosure.
      The
      Employee acknowledges that during the course of his employment by the Company,
      the Company will provide, and the Employee will acquire, knowledge of special
      and unique value with respect to the Company's business operations, including,
      by way of illustration, the Company's existing and contemplated product line,
      trade secrets, compilations, business and financial methods or practices, plans,
      hardware and software technology products, systems, programs, projects and
      know-how, pricing, cost of providing service and equipment, operating and
      maintenance costs, marketing and selling techniques and information, customer
      data, customer names and addresses, customer service requirements, supplier
      lists, and confidential information relating to the Company's policies,
      employees, and/or business strategy (all of such information herein referenced
      to as the “Confidential Information”). The Employee recognizes that the business
      of the Company is dependent upon Confidential Information and that the
      protection of the Confidential Information against unauthorized disclosure
      or
      use is of critical importance to the Company. The Employee agrees that, without
      prior written authorization of the President of the Company, the Employee will
      not, during his employment, divulge to any person, directly or indirectly,
      except to the Company or its officers and agents or as reasonably required
      in
      connection with the Employee’s duties on behalf of the Company, or make any
      independent use of, except on behalf of the Company, any of the Company's
      Confidential Information, whether acquired by the Employee during his employment
      or not. The Employee further agrees that the Employee will not, at any time
      after his employment has ended, use or divulge to any person directly or
      indirectly any Confidential Information, or use any Confidential Information
      in
      subsequent employment of any nature. If the Employee is subpoenaed, or is
      otherwise required by law to testify concerning Confidential Information, the
      Employee agrees to notify the Company upon receipt of a subpoena, or upon belief
      that such testimony shall be required. This nondisclosure provision shall
      survive the termination of this Agreement for any reason. The Employee
      acknowledges that the Company would not employ the Employee but for his
      covenants and promises contained in this Section 8.

     

    9. Return
      of Documents.
      The
      Employee agrees that if the Employee’s relationship with the Company is
      terminated (for whatever reason), the Employee shall not remove or take with
      the
      Employee, but will leave with the Company or return to Company, all Confidential
      Information, records, files, data, memoranda, reports, customer lists, customer
      information, product information, price lists, documents and other information,
      in whatever form (including on computer disk), and any and all copies thereof,
      or if such items are not on the premises of the Company, the Employee agrees
      to
      return such items immediately upon the Employee's termination or the request
      of
      the Company. The Employee acknowledges that all such items are and remain the
      property of the Company.

     

    10. No
      Interference or Solicitation.
      The
      Employee agrees that during his employment, and for a period of six (6) months
      following the termination of his employment (for whatever reason), that neither
      he nor any individual, partner(s), limited partnership, corporation or other
      entity or business with which he is in any way affiliated, including, without
      limitation, any partner, limited partner, director, officer, shareholder,
      employee, or agent of any such entity or business, will: (i) request, induce
      or
      attempt to influence, directly or indirectly, any employee of the Company to
      terminate their employment with the Company; or (ii) employ any person who
      as of
      the date of this Agreement was, or after such date is or was, an employee of
      the
      Company. The Employee further agrees that during the period beginning with
      the
      commencement of the Employee’s engagement with the Company and ending six (6)
      months after the termination of the Employee’s employment with the Company (for
      whatever reason), he shall not, directly or indirectly, as an employee, agent,
      consultant, stockholder, director, partner or in any other individual or
      representative capacity of the Company or of any other person, entity or
      business, solicit or encourage any present or future customer, supplier,
      contractor, partner or investor of the Company to terminate or otherwise alter
      his, his or its relationship with the Company. This provision shall survive
      the
      termination of this Agreement for any reason.

    

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

    

    12. Miscellaneous.

    

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

    

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

    

    12.3 Severability.
      If any
      provision of this Agreement shall be found by any arbitrator or court of
      competent jurisdiction to be invalid or unenforceable, then the parties hereby
      waive such provision to the extent that it is found to be invalid or
      unenforceable and to the extent that to do so would not deprive one of the
      parties of the substantial benefit of its bargain. Such provision shall, to
      the
      extent allowable by law and the preceding sentence, be modified by such
      arbitrator or court so that it becomes enforceable and, as modified, shall
      be
      enforced as any other provision hereof, all the other provisions continuing
      in
      full force and effect.

    12.4 No
      Waiver.
      The
      failure by either party at any time to require performance or compliance by
      the
      other of any of its obligations or agreements shall in no way affect the right
      to require such performance or compliance at any time thereafter. The waiver
      by
      either party of a breach of any provision hereof shall not be taken or held
      to
      be a waiver of any preceding or succeeding breach of such provision or as a
      waiver of the provision itself. No waiver of any kind shall be effective or
      binding, unless it is in writing and is signed by the party against whom such
      waiver is sought to be enforced.

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

    

    
      	
              “COMPANY”

               

              Quest
                Oil Corporation

              A
                Nevada corporation

               

               

               

              _________________________________

              By:
                James B. Panther, II

              Its:
                President

               

            	
              “Employee”

               

               

               

               

               

              _________________________________

              Joseph
                Wallen

            

    

    

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      “A”

    TO

    EMPLOYMENT
      AGREEMENT

    

    DUTIES
      OF EMPLOYEE

    

    

    

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

            

    

     

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      “B”

    TO

    EMPLOYMENT
      AGREEMENT

    

     

    CODE
      OF
      ETHICSExhibit 10.4

Exhibit 10.4

    2006
      DIRECTORS ANNUAL COMPENSATION PROGRAM

     

    

    Quest
      Oil
      Corporation, a Nevada corporation (the “Company”) has established the 2006
      Directors Annual Compensation Program (the “Program”) to compensate the
      directors of the Company for their service to the Board of Directors (the
“Board”) and its committees.  The terms of the Program are as set forth
      herein.

    

    1. Eligibility. 
      Any member of the Board shall be entitled to the compensation specified herein
      and shall be a “Participant” in the Program from and after January 1, 2006
      or, if later, the date on which such person becomes a member of the Board and
      is
      otherwise eligible to participate in the Program.  Members of the Board who
      become Participants after January 1 of any year shall be entitled to pro
      rated compensation.

    

    2.            
      Cash
      Compensation. 
      Each Participant shall be entitled to a cash amount determined annually by
      the
      Compensation Committee of the Board (the “Committee”). Participants may elect to
      receive common shares of the Company in lieu of the cash compensation that
      would
      otherwise be payable to them by notifying the Company of such election prior
      to
      January 1 of the year for which the election will be effective. 

    

    3.            
      Equity
      Compensation. 
      Each Participant shall be entitled to:

    

    a. An
      award
      of $10,000 of the Company’s restricted stock every 90 days of service. The
      number of shares of restricted stock awarded shall be determined using 110%
      of
      the closing market price of the Company’s common stock as of April 24, 2006 for
      the year 2006 and the closing market price of the Company’s common stock on the
      tenth business day after January 1 of each following year.

    

    b. Series
      D
      Common Stock Purchase Warrants to purchase 1,000,000 shares of the Company’s
      common stock at an exercise price equal to 110% of the closing market price
      of
      the Company’s common stock as of April 24, 2006. The warrants shall have a term
      of 5 years and shall vest to the holder at a rate of 250,000 warrants every
      90
      days. The Series D Warrants shall have a cashless exercise feature.

    

    4.  Interpretation
      of Program. 
      The Committee shall have the authority to administer the Program, to
      conclusively make all determinations under the Program and to interpret the
      Program.  Any such determinations or interpretations made by the Committee
      shall be binding on all persons.

    

    5. Governing
      Law. 
      The Program shall be governed by the laws of Nevada.

    

    6. Successors. 
      All obligations of the Company under the Program shall be binding on any
      successor to the Company, whether the existence of such successor is the result
      of a direct or indirect merger, consolidation, purchase of all or substantially
      all of the business and/or assets of the Company or otherwise.

    

    7. Amendment
      and Termination. 
      This Program may be amended or terminated at any time by the Board; provided,
      that no amendment shall be given effect to the extent that it would have the
      effect of reducing a Participant’s existing awards under the
      Program.

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