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EXHIBIT 10(V)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made by and between SEVEN SEAS
PETROLEUM INC. ("Company") and SIR XXXX XXXXXXX, BT ("Executive") as of the 1st
day of August, 1999.
W I T N E S S E T H:
WHEREAS, Company is desirous of employing Executive in an executive
capacity on the terms and conditions, and for the consideration, hereinafter set
forth and Executive is desirous of being employed by Company on such terms and
conditions and for such consideration;
NOW, THEREFORE, for and in consideration of the mutual promises, covenants
and obligations contained herein, Company and Executive agree as follows:
ARTICLE 1: EMPLOYMENT AND DUTIES
1.1 EMPLOYMENT; EFFECTIVE DATE. Company agrees to employ Executive and
Executive agrees to be employed by Company, beginning as of the Effective Date
(as hereinafter defined) and continuing for the period of time set forth in
Article 2 of this Agreement, subject to the terms and conditions of this
Agreement. For purposes of this Agreement, the "Effective Date" shall be August
1, 1999.
1.2 POSITIONS. From and after the Effective Date, Company shall employ
Executive in a senior executive position. Executive currently serves on the
Board of Directors of Company (the "Board of Directors") as a full member
thereof. During the term of this Agreement, Company shall continue to cause
Executive to be nominated to serve on the Board of Directors and will use
reasonable efforts to secure Executive's election to the Board of Directors. It
is the intention of the parties that Executive will be elected to and will serve
on the Board of Directors while serving hereunder as a senior executive of the
Company and may be elected to and may serve on the Board of Directors after the
expiration of the Term provided in paragraph 2.1 upon agreement of the Company
and Executive.
1.3 DUTIES AND SERVICES. Executive agrees to serve in the positions
referred to in paragraph 1.2 and to perform diligently and to the best of his
abilities the duties and services appertaining to such offices, as well as such
additional duties and services appropriate to such offices which the parties
mutually may agree upon from time to time. Executive's employment shall also be
subject to the policies maintained and established by Company, as the same may
be amended from time to time.
1.4 OTHER INTERESTS. Executive agrees, during the period of his employment
by Company, to devote his primary business time, energy and best efforts to the
business and affairs of Company and its affiliates and not to engage, directly
or indirectly, in any other business or businesses, whether or not similar to
that of Company, except with the consent of the Board of Directors. The
foregoing notwithstanding, the parties recognize and agree that Executive may
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engage in passive personal investments ant other business activities that do not
conflict with the business and affairs of Company or interfere with Executive's
performance of his duties hereunder.
1.5 DUTY OF LOYALTY. Executive acknowledges and agrees that Executive owes
a fiduciary duty of loyalty, fidelity and allegiance to act at all times in the
best interests of Company and to do no act which is intended to intentionally
injure the business, interests, or reputation of Company or any of its
subsidiaries or affiliates. In keeping with these duties, Executive shall make
full disclosure to Company of all business opportunities pertaining to Company's
business and shall not appropriate for Executive's own benefit business
opportunities concerning the subject matter of the fiduciary relationship.
ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT
2.1 TERM. Unless sooner terminated pursuant to other provisions hereof,
Company agrees to employ Executive for the period (the "Term") beginning on the
Effective Date and ending on October 31, 2000. Should Executive serve the full
Term and remain employed by Company beyond the expiration of the Term, such
employment shall convert to a month-to-month, at-will relationship. Such at-will
relationship may be terminated at any time by either Executive or Company for
any reason whatsoever, with or without cause, upon ten (10) days' prior written
notice to the other party.
2.2 COMPANY'S RIGHT TO TERMINATE. Notwithstanding the provisions of
paragraph 2.1, Company shall have the right to terminate Executive's employment
under this Agreement at any time for any of the following reasons:
(i) upon Executive's death;
(ii) upon Executive's becoming incapacitated by accident, sickness
or other circumstance which renders him mentally or physically incapable
of materially performing the duties and services required of him hereunder
on a full-time basis for a period of at least 180 consecutive days;
(iii) for cause, which for purposes of this Agreement shall mean
Executive (A) has engaged in gross negligence or willful misconduct in the
performance of the duties required of him hereunder, (B) has been
convicted of a misdemeanor involving moral turpitude or convicted of a
felony, (C) has willfully refused without proper legal reason to
materially perform the duties and responsibilities required of him
hereunder, (D) has materially breached any corporate policy or code of
conduct established by Company, or (E) has willfully engaged in conduct
that he knows or should know is materially injurious to Company or any of
its affiliates;
(iv) for Executive's material breach of any material provision of
this Agreement which, if correctable, remains uncorrected for 30 days
following written notice to Executive by Company of such breach; or
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(v) for any other reason whatsoever, in the sole discretion of the
Board of Directors.
2.3 EXECUTIVE'S RIGHT TO TERMINATE. Notwithstanding the provisions of
paragraph 2.1, Executive shall have the right to terminate his employment under
this Agreement for any of the following reasons:
(i) within 60 days of and in connection with or based upon (A) a
material breach by Company of any material provision of this Agreement,
(B) a substantial and material reduction in the nature or scope of
Executive's duties and responsibilities, (C) the assignment to Executive
of duties and responsibilities that are materially inconsistent with the
positions referred to in paragraph 1.2; (D) a loss of title, loss of
office, loss of significant authority, power or control, or any removal of
Executive from, or any failure to reappoint or reelect him to, the Board
of Directors of the Company; provided, however, that, prior to Executive's
termination of employment under this paragraph 2.3(i), Executive must give
written notice to Company of any such breach, reduction or assignment and
such breach, reduction or assignment must remain uncorrected for 30 days
following such written notice;
(ii) upon the death of any of Executive's dependent children or the
mother of any of Executive's children;
(iii) upon the incapacitation by accident, sickness or other
circumstance which renders any of Executive's dependent children or the
mother of any of Executive's children mentally or physically disabled; or
(iv) at any time for any reason whatsoever, in the sole discretion
of Executive.
2.4 NOTICE OF TERMINATION. If Company or Executive desires to terminate
Executive's employment hereunder at any time prior to expiration of the Term
provided in paragraph 2.1, it or he shall do so by giving written notice to the
other party that it or he has elected to terminate Executive's employment
hereunder and stating the effective date and reason for such termination,
provided that no such action shall alter or amend any other provisions hereof or
rights arising hereunder, including, without limitation, the provisions of
Articles 4 and 5 hereof. Any notice of termination from Company to Executive
shall indicate the specific termination provision of this Agreement relied upon
and set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.
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ARTICLE 3: COMPENSATION AND BENEFITS
3.1 BASE SALARY. During the term of this Agreement, Executive shall
receive a minimum annual base salary of $450,000. Executive's annual base salary
shall be paid in equal installments in accordance with the Company's standard
policy regarding payment of compensation to executives but no less frequently
than twice monthly.
3.2 BONUSES. Executive shall receive a signing bonus of $107,660 and such
other bonuses, if any, as the Compensation Committee of the Board of Directors
shall determine in its sole discretion.
3.3 STOCK OPTION. Subject to this Agreement, the Executive has been
granted an option (the "Option") to purchase 350,000 shares of Company's common
stock ("Stock") pursuant to the 1997 Stock Option Plan (the "1997 Stock Option
Plan"). The purchase price for each share of Stock subject to the Option granted
is $4.21875, which is greater than the Fair Market Value (as such term is
defined in the 1997 Stock Option Plan) of a share of Stock on the Effective
Date, which date was the grant date of the Option. Subject to the terms of the
1997 Stock Option Plan and the agreements executed by Company and Executive
evidencing the options, (i) the Option shall have a term of 9 years and 7 months
(which term shall begin on the Effective Date), (ii) the options shall become
100% vested on the expiration of the Term (but not sooner except as provided in
paragraphs 6.2 and 6.3 hereof), (iii) the Option shall become vested and fully
exercisable by Executive upon the occurrence of a "Change in Control" (as such
term is defined in paragraph 3.5 hereof) while Executive is employed by Company,
and (iv) the Option shall constitute incentive stock options (within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended) to the maximum
extent permitted by law. Executive shall also be eligible to receive other stock
option grants at the discretion of the Company.
3.4 OTHER PERQUISITES. During his employment hereunder, Executive shall be
afforded the following benefits as incidences of his employment:
(i) BUSINESS AND ENTERTAINMENT EXPENSES -- Subject to Company's
standard policies and procedures with respect to expense reimbursement as
applied to its executive employees generally, Company shall reimburse
Executive for, or pay on behalf of Executive, reasonable and appropriate
expenses incurred by Executive for business related purposes, including
dues and fees to industry and professional organizations and costs of
entertainment and business development.
(ii) VACATION -- Executive shall be allowed vacation leave
aggregating twelve (12) weeks during the Term provided in paragraph 2.1,
any part or parts of which may be taken consecutively.
(iii) AIRLINE TICKETS -Executive shall be furnished, at the
Company's expense, four (4) economy class round trip tickets from Houston,
Texas to the United
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Kingdom, during the term of this Agreement. The Company shall also provide
each of Executive's dependent children four (4) economy class round trip
tickets from the United Kingdom to anywhere in the continental United
States during the term of this Agreement.
(iv) TAX RETURNS - The Company will, at its cost, cause the
Company's tax advisors to prepare Executive's United States income tax
returns for any year that includes the term of his employment hereunder.
(v) CLUB MEMBERSHIP -Executive may obtain membership in the
Houstonian Health Club in Houston, Texas and Company shall reimburse
Executive the $7,577 membership cost and shall pay Executive his
reasonable business expenses associated with the membership.
(vi) OTHER COMPANY BENEFITS - Executive and his dependents shall be
allowed to participate in all benefits, plans and programs, including
improvements or modifications of the same, which are now, or may hereafter
be, generally available to other executive employees of Company. Such
benefits, plans and programs may include, without limitation, profit
sharing plan, thrift plan, health insurance or health care plan, life
insurance, disability insurance, pension plan, supplemental retirement
plans, sick leave benefits, and the like. Company shall not, however, by
reason of this paragraph be obligated to institute, maintain, or refrain
from changing, amending, or discontinuing, any such benefit plan or
program, so long as such changes are similarly applicable to executive
employees generally.
3.5 CHANGE IN CONTROL BENEFITS. Upon the occurrence of a Change in Control
(as such term is hereafter defined) prior to expiration of the Term provided in
paragraph 2.1 , the Company shall (i) promptly pay Executive a single lump sum
cash bonus payment in an amount equal to the aggregate base salary that would be
payable by Company to Executive for the unexpired portion of the Term based upon
Executive's base salary in effect pursuant to paragraph 3.1 immediately prior to
such Change in Control without any present value reduction and (ii) cause all
outstanding stock options granted by Company to Executive (including, without
limitation, the Option) to become vested and immediately exercisable in full for
a period of 18 months following the Change in Control. For purposes of this
Agreement, the term "Change in Control" shall mean (1) any merger,
consolidation, or reorganization in which Company is not the surviving entity
(or survives only as a subsidiary of an entity), (2) any sale, lease, exchange,
or other transfer of (or agreement to sell, lease, exchange, or otherwise
transfer) all or substantially all of the assets of Company to any other person
or entity (in one transaction or a series of related transactions), (3)
dissolution or liquidation of Company, (4) when any person or entity, including
a "group" as contemplated by Section 13(d) of the Securities Exchange Act of
1934, as amended, acquires or gains ownership or control (including, without
limitation, power to vote) of more than 45% of the outstanding shares of
Company's voting stock (based upon voting power), or (5) as a result of or in
connection with a contested election of directors the persons who were directors
of Company before such election cease to constitute a majority of the Board of
Directors; provided, however, that the term "Change in Control" shall not
include any reorganization, merger, consolidation, sale, lease, exchange, or
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similar transaction involving solely Company and one or more previously
wholly-owned subsidiaries of Company.
ARTICLE 4: PROTECTION OF INFORMATION
4.1 DISCLOSURE TO EXECUTIVE. Company shall disclose to Executive, or place
Executive in a position to have access to or develop, trade secrets or
confidential information of Company or its affiliates; and/or shall entrust
Executive with business opportunities of Company or its affiliates; and/or shall
place Executive in a position to develop business good will on behalf of Company
or its affiliates.
4.2 DISCLOSURE TO AND PROPERTY OR COMPANY. All information, ideas,
concepts, improvements, discoveries, and inventions, whether patentable or not,
which are conceived, made, developed, or acquired by Executive, individually or
in conjunction with others, during Executive's employment by Company (whether
during business hours or otherwise and whether on Company's premises or
otherwise) which relate to Company's business, products, or services (including,
without limitation, all such information relating to corporate opportunities,
research, financial and sales data, pricing terms, evaluations, opinions,
interpretations, acquisitions prospects, the identity of customers or their
requirements, the identity of key contacts within the customer's organizations
or within the organization of acquisition prospects, or marketing and
merchandising techniques, prospective names, and marks) shall be disclosed to
Company and are and shall be the sole and exclusive property of Company.
Moreover, all documents, drawings, memoranda, notes, records, files,
correspondence, manuals, models, specifications, computer programs, E-mail,
voice mail, electronic databases, maps, and all other writings or materials of
any type embodying any of such information, ideas, concepts, improvements,
discoveries, and inventions are and shall be the sole and exclusive property of
Company. Upon termination of Executive's employment by Company, for any reason,
Executive promptly shall deliver the same, and all copies thereof, to Company.
4.3 NO UNAUTHORIZED USE OR DISCLOSURE. Executive will not, at any time
during or after Executive's employment by Company, make any unauthorized
disclosure of any confidential business information or trade secrets of Company
or its affiliates, or make any use thereof, except in the carrying out of
Executive's employment responsibilities hereunder Affiliates of the Company
shall be third party beneficiaries of Executive's obligations under this
paragraph. As a result of Executive's employment by Company, Executive may also
from time to time have access to, or knowledge of, confidential business
information or trade secrets of third parties, such as customers, suppliers,
partners, joint venturers, and the like, of Company and its affiliates.
Executive also agrees to preserve and protect the confidentiality of such third
party confidential information and trade secrets to the same extent, and on the
same basis, as Company's confidential business information and trade secrets.
4.4 OWNERSHIP BY COMPANY. If, during Executive's employment by Company,
Executive creates any work of authorship fixed in any tangible medium of
expression which is the subject matter of copyright (such as videotapes, written
presentations, or acquisitions, computer programs, E-mail, voice mail,
electronic databases, drawings, maps, architectural renditions,
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models, manuals, brochures, or the like) relating to Company's business,
products, or services, whether such work is created solely by Executive or
jointly with others (whether during business hours or otherwise and whether on
Company's premises or otherwise), Company shall be deemed the author of such
work if the work is prepared by Executive in the scope of Executive's
employment; or, if the work is not prepared by Executive within the scope of
Executive's employment but is specially ordered by Company as a contribution to
a collective work, as a part of a motion picture or other audiovisual work, as a
translation, as a supplementary work as a compilation, or as an instructional
text, then the work shall be considered to be work made for hire and Company
shall be the author of the work. If such work is neither prepared by Executive
within the scope of Executive's employment nor a work specially ordered that is
deemed to be a work made for hire then Executive hereby agrees to assign, and by
these presents does assign, to Company all of Executive's worldwide right,
title, and interest in and to such work and all rights of copyright therein.
4.5 ASSISTANCE BY EXECUTIVE. Both during the period of Executive's
employment by Company and thereafter, Executive shall assist Company and its
nominee, at any time, in the protection of Company's worldwide right, title, and
interest in and to information, ideas, concepts, improvements, discoveries, and
inventions, and its copyrighted works, including without limitation, the
execution of all formal assignment documents requested by Company or its nominee
and the execution of all lawful oaths and applications for patents and
registration of copyright in the United States ant foreign countries.
4.6 REMEDIES. Executive acknowledges that money damages would not be
sufficient remedy for any breach of this Article by Executive, and Company shall
be entitled to enforce the provisions of this Article by specific performance
and injunctive relief as remedies for such breach or any threatened breach such
remedies shall not be deemed the exclusive remedies for a breach of this
Article, but shall be in addition to all remedies available at law or in equity
to Company, including the recovery of damages (pound)rom Executive and his
agents involved in such breach and remedies available to Company pursuant to
other agreements with Executive.
ARTICLE 5: STATEMENTS CONCERNING COMPANY
5.1 IN GENERAL. Executive shall refrain, both during the employment
relationship and after the employment relationship terminates, from publishing
any oral or written statements about Company, any of its affiliates, or any of
such entities' officers, employees, agents or representatives that are intended
by Executive to be slanderous, libelous, or defamatory, or that disclose private
or confidential information about Company, any of its affiliates, or any of such
entities' business affairs, officers, employees, agents, or representatives; or
that place Company, any of its affiliates, or any of such entities' officers,
employees, agents, or representatives in a false light before the public; or
that constitute a misappropriation of the name or likeness of Company, any of
its affiliates, or any of such entities' officers, employees, agents, or
representatives. A violation or threatened violation of this prohibition may be
enjoined by the courts. The rights afforded Company and its affiliates under
this provision are in addition to any and all rights and remedies otherwise
afforded by law.
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ARTICLE 6: EFFECT OF TERMINATION ON COMPENSATION
6.1 BY EXPIRATION. If Executive's employment hereunder shall terminate
upon expiration of the Term provided in paragraph 2.1 hereof, then, except as
specifically provided herein, all unaccrued compensation and all benefits to
Executive hereunder shall terminate contemporaneously with termination of his
employment. Upon any termination of the employment relationship by either
Executive or Company after the expiration of the Term provided in paragraph 2.1,
Executive shall be entitled to pro-rata salary through the date of such
termination and any and all other compensation to which Executive is entitled
under this Agreement shall cease and terminate.
6.2 BY COMPANY. If Executive's employment hereunder shall be terminated by
Company pursuant to paragraph 2.2 prior to expiration of the Term provided in
paragraph 2.1, then, upon such termination, all unaccrued compensation and
benefits to Executive hereunder shall terminate contemporaneously with the
termination of such employment; provided, however, if the employment is
terminated pursuant to clauses (i), (ii) or (v) of paragraph 2.2, the Option
shall become vested in an amount proportional to the length of Executive's
employment and the Term provided in paragraph 2.1.
6.3 BY EXECUTIVE. If Executive's employment hereunder shall be terminated
by Executive prior to the expiration of the Term provided in paragraph 2.1,
then, upon such termination, regardless of the reason therefor, all unaccrued
compensation and benefits to Executive hereunder shall terminate
contemporaneously with the termination of such employment; provided, however,
that if Executive's employment hereunder shall be terminated by Executive
pursuant to paragraph 2.3(ii) or (iii), Executive's Option to purchase stock
granted in paragraph 3.3 shall become vested in an amount proportional to the
length of Executive's employment and the Term provided in paragraph 2.1.
6.4 NO DUTY TO MITIGATE LOSSES. Executive shall have no duty to find new
employment following the termination of his employment under circumstances which
require Company to pay any amount to Executive pursuant to this Article 6. Any
salary or remuneration received by Executive from a third party for the
providing of personal services (whether by employment or by functioning as an
independent contractor) following the termination of his employment under
circumstances pursuant to which this Article 6 apply shall not reduce Company's
obligation to make a payment to Executive (or the amount of such payment)
pursuant to the terms of this Article 6.
6.5 LIQUIDATED DAMAGES. In light of the difficulties in estimating the
damages for an ear}y termination of this Agreement, Company and Executive hereby
agree that the payments, if any, to be received by Executive pursuant to this
Article 6 shall be received by Executive as liquidated damages.
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6.6 INCENTIVE AND DEFERRED COMPENSATION. This Agreement governs the rights
and obligations of Executive and Company with respect to Executive's base salary
and certain perquisites of employment. Executive's rights and obligations both
during the term of his employment and thereafter with respect to stock options,
restricted stock, incentive and deferred compensation, life insurance policies
insuring the life of Executive, and other benefits under the plans and programs
maintained by Company shall be governed by the separate agreements, plans and
other documents and instruments governing such matters except to the extent
expressly set forth herein.
ARTICLE 7: MISCELLANEOUS
7.1 NOTICES. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered or when mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
IF TO COMPANY TO: Seven Seas Petroleum Inc.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx, III, Chairman
IF TO EXECUTIVE TO: Sir Xxxx Xxxxxxx, Bt
Seven Seas Petroleum Inc.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
or to such other address as either party may furnish to the other in writing in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.
7.2 APPLICABLE LAW. This Agreement is entered into under, and shall be
governed for all purposes by, the laws of the State of Texas without regard to
its conflicts of law principles.
7.3 NO WAIVER. No failure by either party hereto at any time to give
notice of any breach by the other party of, or to require compliance with, any
condition or provision of this Agreement shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.
7.4 SEVERABILITY. If a court of competent jurisdiction determines that any
provision of this Agreement is invalid or unenforceable, then the invalidity or
unenforceability of that provision shall not affect the validity or
enforceability of any other provision of this Agreement, and all other
provisions shall remain in full force and effect.
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7.5 COUNTERPART. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
7.6 WITHHOLDING OF TAXES AND OTHER EMPLOYEE DEDUCTIONS. Company may
withhold from any benefits and payments made pursuant to this Agreement all
federal, state, city and other taxes as may be required pursuant to any law or
governmental regulation or ruling and all other normal employee deductions made
with respect to Company's employees generally.
7.7 HEADINGS. The paragraph headings have been inserted for purposes of
convenience and shall not be used for interpretive purposes.
7.8 GENDER AND PLURALS. Wherever the context so requires, the masculine
gender includes the feminine or neuter, and the singular number includes the
plural and conversely.
7.9 AFFILIATE. As used in this Agreement, the term "affiliate" shall mean
any entity which owns or controls, is owned or controlled by, or is under common
ownership or control with, Company.
7.10 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of Company and any successor of Company, by merger or otherwise. Except
as provided in the preceding sentence, this Agreement, and the rights and
obligations of the parties hereunder, are personal and neither this Agreement,
nor any right, benefit, or obligation of either party hereto, shall be object to
voluntary or involuntary assignment, alienation or transfer, whether by
operation of law or otherwise, without the prior written consent of the other
party.
7.11 TERM. This Agreement has a term co-extensive with the term of
employment provided in paragraph 2.1. Termination shall not affect any right or
obligation of any party which is accrued or vested prior to such termination.
Without limiting the scope of the preceding sentence, the provisions of Articles
4 and 5 shall survive any termination of the employment relationship and/or of
this Agreement.
7.12 ENTIRE AGREEMENT. Except as provided in (i) the written benefit plans
and programs referenced in paragraph 3.4(iii), and (ii) any signed written
agreement contemporaneously or hereafter executed by Company and Executive, this
Agreement constitutes the entire agreement of the parties with regard to the
subject matter hereof, and contains all the covenants, promises,
representations, warranties and agreements between the parties with respect to
employment of Executive by Company. Without limiting the scope of the preceding
sentence, all prior understandings and agreements among the parties hereto
relating to the subject matter hereof are hereby null and void and of no further
force and effect. Any modification of this Agreement will be effective only if
it is in writing and signed by the party to be charged.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written, to be effective as of the Effective Date.
SEVEN SEAS PETROLEUM INC.
______________________________________
Xxxxxx X. Xxxxxx III
Chairman
"COMPANY"
______________________________________
Sir Xxxx Xxxxxxx, Bt
"EXECUTIVE"
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