EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT
10.36
BETWEEN:
GRAN
TIERRA ENERGY INC.,
a
Company governed by the laws of the Province of Alberta
(the
“Company”)
-
and
-
Xxxxxx
Xxxx,
an
individual ordinarily resident in the City of Calgary in the Province of
Alberta
(the
“Executive”)
(collectively
referred to as the “Parties”)
RECITALS:
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A.
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The
Executive has specialized knowledge and valuable skills and experience
which are critical to the management of the business and to the success
of
the business.
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B.
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The
Company wishes to secure the services of the Executive and to ensure
that
the Executive remains Chief Financial Officer of the
business.
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THEREFORE,
the
Parties agree as follows:
ARTICLE
1
DUTIES
AND RESPONSIBILITIES
1.1 Position
The
Company confirms the appointment of the Executive to the position of Chief
Financial Officer. The Executive will undertake those duties and
responsibilities set out in Schedule “A” to this Agreement as well as those
duties reasonably assigned to the Executive by the Board (the “Board”).
The
Executive will report to the President and Chief Executive Officer. The parties
agree that the relationship between the Company and the Executive created by
this Agreement is that of employer and employee.
1.2 Other
Engagements
The
Executive shall not engage in any other business, profession or occupation
which
would conflict with the performance of his duties and responsibilities under
this Agreement, either directly or indirectly, including accepting appointments
to the boards of other companies without the prior written consent of the
Board.
1.3 Reassignment
The
Company shall not reassign the Executive to another position within the Company
itself, or to a position within a subsidiary, affiliated or related corporate
entity (“Member
Company”
or
“Member
Companies”)
or
alter the duties, responsibilities, title, or reporting lines of the Executive
or change the location of the Executive’s employment unless the Executive agrees
to such reassignment or alteration.
1.4 Travel
The
Executive shall be employed at the Company’s location in Calgary, Alberta. The
Executive shall be available for such business related travel as may be required
for the purposes of carrying out the Executive’s duties and responsibilities.
The Executive shall be entitled to business class tickets for travel that
exceeds six hours. The Executive will be entitled to choose suitable
accommodations when travelling on Company business.
ARTICLE
2
TERM
OF EMPLOYMENT
This
Agreement will commence as of the date hereof and will continue for an initial
term of three years (the “Term”)
subject to Article 9. The Term may be extended upon mutual written agreement
of
the parties.
ARTICLE
3
BASE
SALARY
The
Executive will be paid an annual salary in the amount of $225,000, subject
to
applicable statutory deductions (the “Base
Salary”).
The
Executive’s Base Salary will be payable in accordance with Company practices and
procedures as they may exist from time to time. Base Salary will be reviewed
and
may be increased on an annual basis by the Board, with input from the
Executive.
ARTICLE
4
BONUS
4.1 Bonus
Eligibility
The
Executive shall be eligible to receive an annual bonus payment in addition
to
Base Salary and other compensation for each year of the Executive’s employment
after 2006 (the “Bonus”)
as
determined by the Board from time to time.
4.2 Bonus
Payment
The
Bonus
shall be payable within sixty (60) days of the end of the fiscal year, and
will
be based upon the Executive’s performance during the preceding
year.
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ARTICLE
5
BENEFITS
The
Executive shall be entitled to participate in and to receive all rights and
benefits under any life insurance, disability, medical, dental, health and
accident plans maintained by the Company for its employees and for its executive
officers specifically. The Company will continue to pay the Executive’s Base
Salary in the event the Executive becomes disabled until such time as the
Executive begins to receive long-term disability insurance
benefits.
ARTICLE
6
VACATION
The
Executive will be entitled to five weeks vacation per year. Payment of all
vacation pay will be at Base Salary. The Executive will arrange vacation time
to
suit the essential business needs of the Company. Unused vacation entitlement
will be carried over into the following calendar year to a maximum entitlement
of eight weeks in any one year. On leaving the employment of the Company for
whatever reason, the Company will compensate the Executive for any accrued
but
unused vacation entitlement based upon the Executive’s then current Base
Salary.
ARTICLE
7
STOCK
OPTIONS
7.1 Stock
Options
The
Company will provide the Executive with the right to participate in stock option
plans and/or incentive award plans approved by the board of directors of the
Company.
ARTICLE
8
PERQUISITES
AND EXPENSES
The
Company recognizes that the Executive will incur expenses in the performance
of
the Executive’s duties. The Company shall reimburse the Executive for any
reasonable out of pocket expenses incurred in the course of
employment.
ARTICLE
9
TERMINATION
OF EMPLOYMENT
9.1 Termination
Without Notice
This
Agreement and the Executive’s employment with the Company may be terminated,
without the Company being obligated to provide the Executive with advance notice
of termination or pay in lieu of such notice, whether under contract, statute,
common law or otherwise, in the following circumstances:
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(a)
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Voluntary
Resignation
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In
the
event the Executive voluntarily resigns, except where the Executive resigns
for
Good Reason as provided for in this Agreement, the Executive will give a minimum
of ninety (90) days’ advance written notice to the Company. The Executive will
not be entitled to receive any further compensation or benefits whatsoever
other
than those which have accrued up to the Executive’s last day of active service
with the Company. The Company may, at its discretion, waive in whole or in
part
such notice with payment in lieu to the Executive;
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(b)
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Cause
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In
the
event the Executive’s employment is terminated for Cause, the Executive shall
not be entitled to receive any further compensation or benefits whatsoever
other
than those which have accrued up to the date of termination of employment.
For
purposes of this Agreement “Cause” means any grounds at common law for which an
employer is entitled to dismiss an employee.
9.2 Termination
by the Company without Cause
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(a)
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Separation
Package
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The
Company may terminate the Executive’s employment without Cause at any time prior
to the expiry of the Term or upon the expiry of the Term by not agreeing to
extend the Term by providing the Executive with a Separation Package (the
“Separation
Package”)
equal
to the greater of:
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(i)
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Total
Cash Compensation for whatever period of time is remaining in the
Term;
or
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(ii)
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One
years’ Total Cash Compensation.
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“Total
Cash Compensation” is defined as the annualized amount of Base Salary plus Bonus
Payment for the prior 12-month period.
The
Separation Package shall be payable in a lump sum within thirty (30) days of
termination.
9.3 Termination
by the Executive for Good Reason
Should
the Executive terminate his employment for Good Reason, as hereinafter defined,
he shall receive the Separation Package set out in section 9.2(a) and (b).
Failure of the Executive to terminate his employment on the occurrence, of
any
event which would constitute Good Reason shall not constitute waiver of his
right under this section 9.3. “Good Reason” is defined as the occurrence of any
of the following without the Executive’s express written consent:
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(a)
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an
adverse change in the Executive’s position, titles, duties (including any
position or duties as a director of the Company) or responsibilities
(including new, additional or changed formal or informal reporting
responsibilities) or any failure to re-elect or re-appoint him to
any such
positions, titles, duties or offices, except in connection with the
termination of his employment for
Cause;
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4
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(b)
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a
reduction by the Company of the Executive’s Base Salary or any change in
the basis upon which the Executive’s annual compensation is determined or
paid if the change is or will be adverse to the
Executive;
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(c)
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a
sale to a person (which, for all purposes hereof, shall include,
without
limitation, an individual, sole proprietorship, partnership,
unincorporated association, unincorporated syndicate, unincorporated
organization, trust, body corporate and a trustee, executor, administrator
or other legal representative) or group of persons not affiliated
with the
Company of all or substantially all of the assets of the
Company;
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(d)
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a
change in control of the Company occurs in any manner whatsoever,
including without limitation as a result of a take-over bid,
reorganization of capital, share exchange, arrangement, merger,
amalgamation or other combination of the Company with any other entity,
and for the purposes of this Agreement “control” means a relationship
between persons wherein one person (or group of persons acting jointly
and
in concert) has the ability to manage the affairs of, or to significantly
affect the management decisions of, another person, including without
limitation the beneficial ownership, directly or indirectly through
one or
more persons, of voting securities or securities convertible into
or
exchangeable for voting securities which are sufficient to determine
the
material business decisions of a
person;
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(e)
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any
breach by the Company of any provision of this
Agreement.
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ARTICLE
10
DIRECTORS/OFFICERS
LIABILITY
10.1 Indemnity
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(a)
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Subject
to the provisions of the Business
Companys Act
(Alberta),
the Company agrees to indemnify and save the Executive harmless from
and
against all costs, charges and expenses, including an amount paid
to
settle an action or satisfy a judgment, reasonably incurred by him
in
respect of any civil, criminal or administrative action or proceeding
to
which the Executive is made a party by reason of having been a director
or
officer of the Company, if
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(i)
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the
Executive acted honestly and in good faith with a view to the best
interests of the Company; and
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(ii)
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in
the case of a criminal or administrative action or proceeding that
is
enforced by a monetary penalty, the Executive had reasonable grounds
for
believing that his conduct was
lawful.
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(b)
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Subject
to the provisions of the Business
Companys Act
(Alberta), the Company agrees, with the approval of the court, to
indemnify and save the Executive harmless from and against all costs,
charges and expenses reasonably incurred by him in respect of an
action by
or on behalf of the Company to procure a judgment in the Company’s favour
to which the Executive is made a party by reason of having been a
director
or officer of the Company, if:
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(i)
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the
Executive acted honestly and in good faith with a view to the best
interests of the Company; and
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(ii)
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in
the case of a criminal or administrative action or proceeding that
is
enforced by a monetary penalty, the Executive had reasonable grounds
for
believing that his conduct was
lawful.
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10.2 Insurance
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(a)
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The
Company shall purchase and maintain, throughout the period during
which
the Executive acts as a director or officer o£ the Company or a Member
Company and for a period of two years after the date that the Executive
ceases to act as a director or officer of the Company or a Member
Company,
directors’ and officers’ liability insurance for the benefit of the
Executive and the Executive’s heirs, executors, administrators and other
legal representatives, such that the Executive’s insurance coverage is, at
all times, at least equal to or better than any insurance coverage
the
Company purchases and maintains for the benefit of its then current
directors and officers, from time to
time.
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(b)
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If
for any reason whatsoever, any directors’ and officers’ liability insurer
asserts that the Executive or the Executive’s heirs, executors,
administrators or other legal representatives are subject to a deductible
under any existing or future directors’ and officers’ liability insurance
purchased and maintained by the Company for the benefit of the Executive
and the Executive’s heirs, executors, administrators and other legal
representatives, the Company shall pay the deductible for and on
behalf of
the Executive or the Executive’s heirs, executors, administrators or other
legal representatives, as the case may
be.
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10.3 Survival
The
provisions of sections 10.1 and 10.2 of this Agreement shall survive the
termination of this Agreement or the employment of the Executive with the
Company and such provisions shall continue in full force and effect for the
benefit of the Executive.
ARTICLE
11
NON-COMPETITION
AND CONFIDENTIALITY
11.1 Non-Competition
The
Executive recognizes and understands that in performing the duties and
responsibilities of his employment as outlined in this Agreement, he will be
a
key employee of the Company and will occupy a position of high fiduciary trust
and confidence, pursuant to which he has developed and will develop and acquire
wide experience and knowledge with respect to all aspects of the services and
businesses carried on by the Company and its Member Companies and the manner
in
which such businesses are conducted. It is the expressed intent and agreement
of
the Executive and of the Company that such knowledge and experience shall be
used solely and exclusively in the furtherance of the business interests of
the
Company and its Member Companies and not in any manner detrimental to them.
The
Executive therefore agrees that so long as he is employed by the Company
pursuant to this Agreement he shall not engage in any practice or business
in
competition with the business of the Company or any of its Member
Companies.
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11.2 Confidentiality
The
Executive further recognizes and understands that in the performance of his
employment duties and responsibilities as outlined in this Agreement, he will
be
a key employee of the Company and will become knowledgeable, aware and possessed
of all confidential and proprietary information, know-how, data, strategic
studies, techniques, knowledge and other confidential information of every
kind
or character relating to or connected with the business or corporate affairs
and
operations of the Company and its Member Companies and includes, without
limitation, geophysical studies and data, market data, engineering information,
shareholder data, client lists, compensation rates and methods and personnel
information (collectively “Confidential
Information”)
concerning the business of the Company and its Member Companies. The Executive
therefore agrees that, except with the consent of the Board, he will not
disclose such Confidential Information to any unauthorized persons so long
as he
is employed by the Company pursuant to this Agreement and for a period of 24
months thereafter; provided that the foregoing shall not apply to any
Confidential Information which is or becomes known to the public or to the
competitors of the Company or its Member Companies other than by a breach of
this Agreement.
11.3 Following
Termination of Agreement
Subject
to this provision and without otherwise restricting the fiduciary obligations
imposed upon, or otherwise applicable to the Executive as a result of the
Executive having been a senior officer and key employee of the Company, the
Executive shall not be prohibited from obtaining employment with or otherwise
forming or participating in a business competitive to the business of the
Company after termination of this Agreement and the Executive’s employment with
the Company.
ARTICLE
12
CHANGES
TO AGREEMENT
Any
modifications or amendments to this Agreement must be in writing and signed
by
all Parties or else they shall have no force and effect.
ARTICLE
13
ENUREMENT
This
Agreement shall enure to the benefit of and be binding upon the Parties and
their respective successors and assigns, including without limitation, the
Executive’s heirs, executors, administrators and personal
representatives.
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ARTICLE
14
GOVERNING
LAW
This
Agreement shall be construed in accordance with the laws of the Province of
Alberta and the laws of Canada applicable therein.
ARTICLE
15
NOTICES
15.1 Notice
to Executive
Any
notice required or permitted to be given to the Executive shall be deemed to
have been received if delivered personally to the Executive or sent by courier
to the Executive’s home address last known to the Company.
15.2 Notice
to Company
Any
notice required or permitted to be given to the Company shall be deemed to
have
been received if delivered personally to, sent by courier, or sent by facsimile
to:
Gran
Tierra Energy Inc.
000,
000-00xx Xxxxxx X.X.
Xxxxxxx,
Xxxxxxx, Xxxxxx, X0X 0X0
Fax:
(000) 000-0000
ARTICLE
16
CURRENCY
All
dollar amounts set forth or referred to in this Agreement refer to Canadian
currency.
ARTICLE
17
WITHHOLDING
All
payments made by the Company to the Executive or for the benefit of the
Executive shall be less applicable withholdings and deductions.
ARTICLE
18
INDEPENDENT
LEGAL ADVICE
The
Executive acknowledges that the Executive has been advised to obtain independent
legal advice with respect to entering into this Agreement, that he has obtained
such independent legal advice or has expressly deemed not to seek such advice,
and that the Executive is entering into this Agreement with full knowledge
of
the contents hereof, of the Executive’s own free will and with full capacity and
authority to do so.
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IN
WITNESS OF WHICH the
Parties have duly executed this Agreement this 1st day of December,
2006.
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GRAN
TIERRA ENERGY INC.
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By:
/s/ Xxxx
Xxxxxxxx
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Name: Xxxx Xxxxxxxx
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Title: President and
CEO
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SIGNED,
SEALED & DELIVERED
In
the presence of:
/s/ Xxxxx
Xxxx
Witness
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/s/ Xxxxxx
Xxxx
Xxxxxx Xxxx
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SCHEDULE
A
Duties
& Responsibilities
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·
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Management
of financing, accounting, treasury, tax, risk management,
compliance/reporting and investor relations functions of Gran Tierra
Energy Inc. and its subsidiaries
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·
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Coordination
of financial functions of operating
subsidiaries
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