CONSULTING AGREEMENT
--------------------
This Agreement is made as of the lst day of June, 2000,
BETWEEN:
CENTURION ENERGY INTERNATIONAL INC., a corporation incorporated
under the laws of the Province of Alberta and having an office at
the City of Calgary, in the Province of Alberta (the
"Corporation")
OF THE FIRST PART
AND
ENHANCED MANAGEMENT SERVICES LTD.
(the "Consultant")
OF THE SECOND PART
WHEREAS:
1. The Corporation wishes to retain the Consultant to provide certain services
and advice to the Corporation; and
2. The Consultant is willing to render such services and advice on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the sufficiency of which is hereby acknowledged by the parties
hereto, the parties hereto agree as follows:
ARTICLE I
INTERPRETATION
1.1 Definitions
-----------
As used herein, including the preamble hereto, the following terms shall have
the meaning set forth below:
(a) "Affiliate" when used to indicate a relationship with any person,
corporation or entity has the meaning ascribed to it in the Business
Corporation Act (Alberta) as amended;
(b) "Compensation" shall have the meaning in clause 3. 1;
(c) "Disbursements" means all reasonable costs and expenses related directly
and solely to the operations of the Corporation or its Affiliates and paid
directly by the consultant on behalf of the Corporation or its Affiliates.
-1-
(d) "Change of Control" means the acquisition by any Person other than one or
more of the Present Shareholders (whether from the Corporation or from any
other Person) of Common Shares or other securities of the Corporation
having rights of purchase, conversion or exchange into Common Shares of the
Corporation which together with securities of the Corporation held by such
Person, exceeds twenty percent (20%) of the issued and outstanding Common
Shares of the Corporation at the time of such acquisition (assuming, for
either test, the purchase, conversion or exchange of such other securities,
whether then purchasable, convertible or exchangeable or not, into the
highest number of Common Shares of the Corporation, such Person or Persons
would be entitled to.)
(e) "Constructive Dismissal" includes, without in any way limiting the
interpretation under common law, any material adverse change, by the
Corporation and without the agreement of the Consultant, in any of the
duties, powers, rights, discretions, salary, bonuses and benefits, title,
lines of reporting or the requirement that the Consultant be based anywhere
other than Calgary, Alberta on a normal and regular basis, such that
immediately after such change or series of changes, the responsibilities
and status of the Consultant, taken as a whole, are not at least
substantially equivalent to those assigned to the Consultant immediately
prior to such change.
(f) "Just Cause" includes, without in any way limiting its interpretation under
common law, any conduct by the Consultant which is detrimental to the
Corporation or willful failure of the Consultant to properly carry out his
duties including, without limitation, severe or willful disobedience,
dishonesty, fraud, incompetence, breach of good faith, alcoholism or drug
addiction or any other reason which would be considered to amount to "just
cause" by a court of competent jurisdiction.
(g) "Severance Amount" means:
12 times the Monthly Base Fee of the Consultant payable by the Corporation
as at the end of the month immediately preceding the month in which the
termination of employment hereunder takes effect.
1.2 Headings
--------
The section headings hereof have been inserted for convenience of reference
only and shall not be construed to affect the meaning, construction or effect of
this Agreement.
1.3 Interpretation
--------------
For the purposes of this Agreement, a party shall be deemed to have given
its consent to any action taken on its behalf:
(a) if such action is within those described in Clause 2.1 hereof, or
(b) on the thirtieth day after receipt or deemed receipt of notice of such
action.
-2-
ARTICLE II
THE CONSULTANT
2.1 Consulting Services and Duties
---------------------------------
The Corporation agrees to retain the services of the Consultant, to be
provided in the manner and form that the Consultant deems appropriate and the
Consultant agrees to provide the services required to the best of the
Consultant's abilities. Such ser-vices shall include:
(a) advice to the Corporation and its Affiliates within the Consultant's area
of expertise which shall include management of the Corporation and
overseeing day to day operations of the Corporation;
(b) preparation of reports, projections, business plans, and other specific
projects relating to matters requested by the Corporation's Board of
Directors from time to time; and
(c) such other services as the Consultant shall agree from time to time to
under-take for and on behalf of the Corporation.
Notwithstanding the Consultant's right to carry on a general consulting
business in Alberta as described in Clause 5. 1, it is understood that the
Consultant will be available to provide necessary services to the Corporation
during all normal working days at the Corporation's request except for six weeks
each year which will be considered available to the Consultant for vacation
purposes.
2.2 Standard of Care
------------------
In exercising the Consultant's powers and discharging the Consultant's
duties under this Agreement, the Consultant shall exercise that degree of care,
diligence and skill that a reasonably prudent advisor and consultant would
exercise in comparable circumstances. It is acknowledged and understood by the
parties that the Consultant may delegate specific aspects of its obligations
hereunder to others provided that such delegation shall not relieve the
Consultant of any of the obligations under this Agreement.
ARTICLE III
CONSULTANT'S FEES AND EXPENSES
3.1 Consultant's Fee
-----------------
For services rendered by the Consultant to the Corporation, the Corporation
shall pay the Consultant a fee of $ 15,000.00 per month during the term of this
Agreement on the first day of each month commencing June 1, 2000.
3.2 Expenses and Disbursements
----------------------------
The consultant will be reimbursed by the Corporation for all expenses and
disbursements incurred in accordance with the terms hereof forthwith upon
presenting invoices in respect of such disbursements. For all such expenses and
disbursements, the Consultant shall provide to the Corporation such receipts as
may be reasonably required by the Corporation as evidence of the expenses and
disbursements.
-3-
3.3 Office Space and Services
----------------------------
The Corporation shall provide office space and services that the Consultant
will require to carry out the Consultant's services for the Corporation.
3.4 Parking
-------
The Corporation will provide parking stalls at a location of the
Corporation's choosing for use by the Consultant. The Consultant shall have
access and use of the parking spots provided by the Corp-oration during the
terms of this Agreement. If no parking stalls are provided by the Corporation
then the Corporation may reimburse the Consultant for all parking expenses
incurred.
3.5 Vehicle Expense Allowance
---------------------------
As a condition of the Consultant being retained by the Corporation, the
Consultant agrees to use Consultant's own private vehicle for any necessary
travel in connection with performing Consultant's duties herein.
ARTICLE IV
TERM
4.1 Term of Agreement
-------------------
This Agreement shall continue in full force and effect until the earlier
of:
(a) the termination hereof by mutual agreement of the Consultant and the
Corporation; and
(b) the cessation of employment or termination of employment of the Consultant
with the Corporation.
The obligation of the Corporation arising hereunder as a consequence of the
termination of the Consultant by the Corporation pursuant to Section 4.2 hereof
shall survive such termination.
4.2 Cessation of Employment
-------------------------
(a) Cessation of Employment with the Corporation for Just Cause, the voluntary
termination of employment by the Consultant, death, disability or
retirement.
Upon cessation of the Consultant's employment with the Corporation at any
time for:
(i) Just Cause;
(ii) the voluntary termination of employment by the Consultant;
(iii) death;
(iv) disability; or
(v) retirement;
-4-
the Consultant shall not be entitled to any Severance Amount other than
payment, if not theretofore paid, of the fraction of the Consultant's
Annual Base Fee earned by or payable to the Consultant by. the Corporation
during the then current calendar year of the Corporation for the period
from the beginning of such calendar year to and including the Effective
Date of such cessation together with any monies owing from earned and
unused vacation days together with any amount to which the
Consultant is entitled under the Employment Standards Code of Alberta as
amended or in force from time to time. As of the Effective Date of such
cessation, the Corporation shall not have any further obligations to the
Consultant under this Agreement, the employment relationship or the
cessation of the employment relationship, with the exception of any vested
pension entitlement, disability insurance coverage, share options and other
benefit and life and other insurance plans from or of the Corporation which
shall be governed by the agreements and documents relating to same.
(b) Termination of Employment.
If the Consultant's employment is terminated by the Corporation other than
for Just Cause, the voluntary termination of employment by the Consultant,
death, disability of retirement, the Consultant shall be entitled to
receive and the Corporation shall pay to the Consultant, or his designate,
immediately following- termination, a cash amount equal to the Severance
Amount (less required statutory deductions) and shall deliver to the
Consultant all vested Stock Options.
(c) Cessation of Employment following a Change of Control or Constructive
Dismissal.
If the Consultant's employment is terminated:
(i) by the Consultant in response to a Change of Control and subsequent
election pursuant to Section 4.2(d) hereof, or
(ii) by the Consultant in response to Constructive Dismissal within ninety
(90) days after the Constructive Dismissal has taken effect:
(1) the Consultant shall be entitled to receive and the Corporation
shall pay to the Consultant, immediately following cessation of
employment, a cash amount equal to the Severance Amount (less
required statutory deductions); and
(2) any and all unvested share options to purchase Common Shares
which have been granted to the Consultant by the Corporation for
Common Shares and unvested pension entitlements shall vest
subject to regulatory and other required approvals and the
Consultant shall have 120 days from the Effective Date of such
termination to exercise such share options to purchase Common
Shares.
(d) Election to Cease Employment following a Change of Control.
-5-
In the event of a Change of Control, the Consultant shall be entitled,
after not fewer than 30 days following a Change of Control, but before the
expiry of 120 days after a Change of Control, to elect by written notice to
the Corporation to cease employment with the Corporation and be paid and
accept the amounts set forth in paragraph 4.2(c) provided however that the
right to elect pursuant to this section 4.2(d) shall lapse and shall be of
no force and effect after the expiry of 120 days after a Change of Control.
ARTICLE V
ACTIVITIES OF THE CONSULTANT
5.1 Conflicts
---------
The parties hereby acknowledge that the Consultant is engaged in and will
continue to be engaged in general consulting business in Alberta and elsewhere.
Accordingly, the Consultant will spend his time in fulfilling the obligations
under this Agreement and other obligations in which the Corporation or its
Affiliates will not have, or be entitled to, an interest. The parties hereto
consent to such activities and agree that nothing herein shall prevent the
Consultant from having other business interests or from engaging in any other
business activities or from rendering services or acting as a consultant to any
other person even though such person may have business interests similar to
those of the Corporation or its Affiliates. In the event that the interests of
the Consultant are not in conflict with those of the Corporation or its
Affiliates, the Consultant is obliged to make decisions acting in good faith.
5.2 No Liability for Advice
--------------------------
The Consultant shall not be liable, answerable or accountable for any loss
or damage resulting from the advice given by the Consultant or the exercise by
the Consultant of a discretion or his refusal to exercise a discretion, provided
that the Consultant has acted in a faithful, diligent and honest manner and has
---
not acted with willful misfeasance, bad faith, gross negligence or recklessness
and is not in breach of any of the Consultant's obligations hereunder.
ARTICLE VI
INDEMNIFICATION OF CONSULTANT
6.1 Indemnification
---------------
The Consultant shall be and is hereby indemnified by the Corporation
against all liabilities and expenses (including judgements, fines, penalties,
amounts paid in settlement and counsel fees) arising from or related in any
manner to this Agreement, proved that the Consultant is not finally adjudged in
any such action, suit or proceeding to be liable for or guilty of willful
misfeasance, bad faith, gross negligence or reckless disregard of duty to the
Corporation or provided that the Consultant is not finally adjudged to be in
breach of any material covenant and duty set forth herein.
For the purpose of the foregoing:
(a) "action, suit or proceeding" shall include every action, suit or
proceeding, civil, criminal or otherwise; and
(b) the right of indemnification conferred hereby shall extend to any
threatened action, suit or proceeding and the failure to institute it shall
be deemed its final determination.
-6-
The foregoing right of indemnification shall be in addition to any other rights
to which the Consultant may be entitled as a matter of law or which may be
lawfully granted to him.
6.2 Reliance
--------
The Consultant shall be entitled to relay on statements, advise or opinions
(including financial statement and auditor's reports) of other agents (any of
which may be persons with which the Consultant or an agent is Affiliated) whose
professions give authority to a statement made by them on the subject in
question and who are considered by the Consultant to be competent. The
Consultant may rely, and shall be protected in acting upon, any instrument or
other documents believed by him to be genuine and in force.
ARTICLE VII
MISCELLANEOUS
7.1 No Partnership or Joint Venture or Agenc
----------------------------------------------
The parties to this Agreement are not, and shall not be deemed to be,
partners or joint venturers with one another and nothing herein shall be
construed so as to impose any liability as such on any of them.
7.2 Amendments
----------
This agreement may not be amended or varied in its terms except by
instrument in writing executed by the duly authorized representatives of the
parties hereto or their respective successors or assigns.
7.3 Assignments
-----------
This Agreement is personal and may not be assigned.
7.4 Severability
------------
If any provision of this Agreement shall be held invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall attach only to
such provisions in such jurisdiction and shall not in any manner affect or
render invalid or unenforceable such provision in any other jurisdiction -or any
other provision of this Agreement in any jurisdiction.
7.5 Notices
-------
All notices required or permitted herein under this Agreement shall be in
writing and may be given by delivering same or mailing same by pre-paid
registered mail to the address set forth below. Any such notice or other
communication shall, if delivered, be deemed to have been given or made and
received on the date delivered, and, if mailed, shall be deemed to have been
given or made and received on the third (3rd) business day at the point of
delivery following the day on which it was so mailed. The parties hereto may
from time to time given written notice of change of address in the manner
aforesaid.
-7-
THE CORPORATION:
Centurion Energy International Inc.
Xxxxx 000, 000-0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx
X0X 0X0
CONSULTANT:
Enhanced Management Services Ltd.
0000 - 0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx
X0X 0X0
7.6 Governing Law
--------------
The provisions of this Agreement shall be governed by and construed in
accordance with the laws of the Province of Alberta.
IN WITNESS WHEREOF the parties herewith have properly executed this Agreement.
CENTURION ENERGY INTERNATIONAL INC.
Per: COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
/s/ Xxxxxxx X. Xxxxxx
------------------------
Xxxxxxx X. Xxxxxx, Director
/s/ Xxxxx Xxxxxxx
-------------------
Xxxxx Xxxxxxx, Director
/s/ Xxxxxx Xxxx
-----------------
Xxxxxx Xxxx, Director
ENHANCED MANAGEMENT SERVICES LTD.
Per: /s/ Xxxxx Xxxx
----------------
Xxxxx Xxxx
-8-
