GulfWest Energy Inc. Director Compensation Policy Effective June 1, 2005

Summary

GulfWest Energy Inc. sets out compensation terms for its non-employee directors, effective June 1, 2005. Non-employee directors receive an annual retainer of $10,000, meeting attendance fees, and additional retainers for committee chair roles. They are also granted restricted stock awards, with vesting periods tied to initial appointment and re-election. Employee directors are not eligible for these payments. All directors are reimbursed for reasonable expenses related to board duties.

EX-10.6 2 a4952930ex10_6.txt EXHIBIT 10.6 Exhibit 10.6 GULFWEST ENERGY INC. Directors Compensation Annual Retainer and Meeting Fees. Effective June 1, 2005 each non-employee Director will receive an annual retainer of $10,000 payable quarterly in arrears, and board meeting attendance fees in the amount of $2,000 per meeting if attending in person or $1,000 per meeting if participating by phone (maximum annual amount of $8,000). Committee members will also receive meeting fees for committee meetings to the extent that those meetings are held on days other than scheduled meetings of the entire Board. The Chairman of the Audit Committee will receive an additional annual retainer in the amount of $5,000 and the Chairman of the Compensation Committee will receive an annual retainer in the amount of $2,500. Both the Audit Committee and Compensation Committee retainers will be paid semi-annually. No Director who is an employee of the Company will be compensated for service as a member of the Board of Directors or any committee of the Board of Directors. Share Awards. Effective June 1, 2005 each non-employee Director will receive an initial grant of $15,000 of restricted stock (based on the fair market value of the stock on the date of grant) with a two year vesting schedule. Upon re-election, each non-employee Director will receive an annual grant of $10,000 of restricted stock with a one year vesting schedule. Annual share awards received by non-employee Directors are in addition to the Annual Retainer and Meeting Fees discussed above. Expenses. Each member of the Board of Directors will be reimbursed for all direct expenses incurred in the performance of his/her duties as a Director, including reasonable travel expenses incurred in attending meetings of the board or its committees. GULFWEST ENERGY INC. Summary of Director Compensation -------------------------------- o Annual Retainer of $10,000 payable quarterly o Audit Committee Chairman Retainer of $5,000 payable semi-annually o Compensation Committee Chairman Retainer of $2,500 payable semi-annually o Board Meeting Attendance Fees of $2,000 per meeting if attended in person, $1,000 if participating by phone ($8,000 maximum per individual) o Initial grant of $15,000 Restricted Stock with two year vested o Subject to re-election, annual grant of $10,000 Restricted Stock with one year vested o Payment of reasonable travel expenses associated with Board Meeting attendance