Item
5.02 Departure of
Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers
As
previously disclosed, Tidelands Oil & Gas Corporation (the “Company”)
entered into an agreement dated December 8, 2006 with Michael Ward relating
to
Mr. Ward’s resignation and separation from the Company (the “Separation
Agreement”). On July 9, 2006, the Company’s wholly-owned subsidiary,
Tidelands Exploration & Production, Inc. (“TEPI”) entered into a
Participation Agreement and Joint Operating Agreement with Regency Energy,
Inc. Regency subsequently assigned its rights pursuant to the terms
of the Participation and Joint Operating Agreement to Bentley Energy
Corp. On May 17, 2007, Mr. Ward filed a lawsuit against the Company,
Michael R. Ward v. Tidelands Oil Gas Corporation, Case No.
2007-CI-07451 in the District Court located in Bexar County, Texas,
alleging the Company’s breach of the Separation Agreement. On August
6, 2007, Bentley filed a lawsuit against TEPI, Bentley Energy Corp v.
Tidelands Exploration & Production, Inc., Case No. 2007-CI-11661, in
the District Court located in Bexar County, Texas, regarding the Participation
Agreement and Joint Operating Agreement. TEPI and the Company filed cross
complaints and third party petitions against Michael Ward, Regency, Bentley
and
Royis Ward.
On
September 11, 2007, in the course of court ordered mediation, the Company
and
TEPI entered into a Final Release and Settlement Agreement (“Settlement”) with
Michael Ward, Royis Ward, Bentley and Regency to settle and dismiss both
of the
above-referenced lawsuits. Pursuant to the Settlement, Mr. Ward paid
the Company the sum of $280,000 on October 1, 2007. In connection
with such payment, the rights, benefits and obligations of TEPI pursuant
to the
terms of the Participation Agreement and Joint Operating Agreement, and all
leases thereunder, were assigned to Michael Ward.
In
addition, the Company and Michael Ward agreed to terminate all provisions
of the
Settlement Agreement, including any remaining severance payments, except
for Mr.
Ward’s right of first refusal with respect to the Company’s subsidiary, Sonterra
Energy Corporation, which right of first refusal shall continue in accordance
with the original Separation Agreement.
The
foregoing summary of the terms of the Settlement Agreement is qualified in
its
entirety by reference to the full and complete terms of the Final Release
and
Settlement Agreement, which is attached hereto as Exhibit 10.1.
Item
8.01 Other
Events
See
disclosure above in Item 5.02 regarding the amendment of an agreement with
Mr.
Ward, the Company’s former Chief Executive Officer and Director, and the
settlement of certain litigation.
Item
9.01 Financial Statements
and Exhibits
Exhibit
No.
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Description
of Exhibit
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10.1
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Final
Release and Settlement
Agreement
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned, hereunto
duly authorized.
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TIDELANDS
OIL & GAS CORPORATION
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Date:
October
5, 2007
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By:
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/s/ James
B. Smith |
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James
B. Smith
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President
and Chief Executive Officer
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