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Exhibit 10.8
EXECUTIVE EMPLOYMENT CONTRACT
THIS AGREEMENT is dated effective as of June 15, 1998.
BETWEEN:
GULF CANADA RESOURCES LIMITED
(hereinafter called the "Corporation")
OF THE FIRST PART
- and -
XXXXX X. XXXXX,
XX XXX XXXX XX XXXXXXX, XXXXXX
(hereinafter called the "Executive")
OF THE SECOND PART
WHEREAS
(a) The Executive is considered by the Board of Directors of the
Corporation to have outstanding and special skills and
abilities and an extensive background in and knowledge of the
Corporation's business and the industry in which it is engaged
and to be well-suited to the position of Senior Vice
President, Business Development and General Counsel of the
Corporation;
(b) The Board of Directors recognizes that it is essential and in
the best interests of the Corporation to attract and retain
the dedication of the Executive to his office and employment
and that the service of the Executive to the Corporation
requires that the Executive receive fair treatment,
particularly in the event of an actual or constructive
termination of his employment with the Corporation;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
mutual covenants herein contained and in consideration of the Executive
remaining in office and in the employment of the Corporation at the present time
and throughout the period of material change of ownership or organization of the
Corporation, it is hereby agreed as follows:
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1. DEFINITIONS
In this Agreement:
(a) "affiliate" means:
(i) one body corporate is an affiliate of another body
corporate if one of them is the subsidiary of the
other or both are subsidiaries of the same body
corporate or each of them is under the control of the
same person; and
(ii) two bodies corporate that are an affiliate of the
same body corporate at the same time are affiliates
of each other.
(b) "associate" has the meaning ascribed to that term in the
Canada Business Corporations Act.
(c) "change of control" means or shall be deemed to have occurred
if and when:
(i) the acquisition, by whatever means (including without
limitation, amalgamation, consolidation, liquidation,
arrangement or merger), by a person (or two or more
persons who in such acquisition have acted jointly or
in concert or intend to exercise jointly or in
concert any voting rights attaching to the securities
acquired), directly or indirectly, of the beneficial
ownership of such number of voting securities or
rights to voting securities of the Corporation, which
together with such person's then owned voting
securities and rights to voting securities, if any,
represent (assuming the full exercise of such rights
to voting securities) more than 20% of the combined
voting power of the Corporation's then outstanding
voting securities, together with the voting
securities acquired and such person's previously
owned rights to voting securities; or
(ii) individuals who were members of the Board of
Directors of the Corporation immediately prior to a
meeting of the shareholders of the Corporation
involving a contest for or on an item of business
relating to the election of directors shall not
constitute a majority of the Board of Directors
following such election.
(d) "Compensation Committee" means the Committee of the Board of
Directors of the Corporation from time to time appointed to
fix the remuneration of executives of the Corporation or, if
such Committee has not been appointed, means the Board of
Directors of the Corporation.
(e) "confidential information" means information, processes,
know-how, data, trade secrets, techniques, knowledge and other
confidential information not generally
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known to the public relating to or connected with the business
or corporate affairs and operations of the Corporation and its
affiliates.
(f) "constructive dismissal" means, unless consented to by the
Executive in writing, any action by the Corporation which
constitutes constructive dismissal of the Executive,
including, without limiting the generality of the foregoing:
(i) any material reduction in the Executive's office,
titles, positions, duties, responsibilities, powers
or reporting relationships;
(ii) any reduction in the annual salary of the Executive;
(iii) a requirement to relocate to another province, state
or country; and
(iv) any material reduction in the value of the
Executive's employee benefits plans and programmes,
including, without limiting the generality of the
foregoing, bonus arrangements.
(g) "control" has the meaning ascribed to that term in the Canada
Business Corporations Act.
(h) "executive superannuation undertakings" refers, for purposes
of section 2.6(c) of this Agreement, to a commitment given by
the Corporation in recognition of the fact that the retirement
benefits under the registered pension plans of the Corporation
and its affiliates are subject to a maximum pension limitation
as fixed from time to time under the Income Tax Act (Canada)
and the rules and regulations promulgated by Revenue Canada,
Taxation, from time to time thereunder. To the extent that
this limitation applies with respect to the registered pension
plans of the corporation or its affiliates for service prior
to January 1, 1996, the Corporation has undertaken to pay a
supplemental retirement allowance sufficient to provide the
Executive with an annual pension equal to the annual pension
to which the Executive would be entitled under the registered
pension plans of the Corporation and its affiliates if such
limitation did not apply to such plans. For service from
January 1, 1996 onwards, once the Revenue Canada contribution
limit has been reached contributions of the same amount as
required under the pension plan will be paid to the Executive
semi-monthly.
(i) "person" shall have the meaning ascribed to it in the Canada
Business Corporations Act.
(j) "subsidiary" of a corporation means, at any time, a
corporation of which the Corporation has control at that time,
whether directly or indirectly through one or more
subsidiaries.
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2. EMPLOYMENT
2.1 Position, Duties and Responsibilities of Executive
The Executive shall have such responsibilities and powers as the Board
of Directors of the Corporation or the by-laws of the Corporation or the
Executive's superiors may from time to time prescribe. Except as expressly
approved by the Board, the Executive shall devote the whole of his time to the
Executive's duties hereunder and shall use his best efforts to promote the
interests of the Corporation. As of the effective date of this Agreement, the
Board of Directors of the Corporation has agreed to allow the Executive to
retain his position as a Director of Equitorial Energy Inc. on the condition
that there is no conflict of interest with his role and responsibilities towards
the Corporation. The Executive shall, during the term of this Agreement:
(a) perform such managerial duties and responsibilities for the
Corporation as may be assigned to him by the Chief Executive
Officer and by the Board of the Directors of the Corporation,
and at no additional remuneration, shall serve in such other
comparable positions with affiliates and associates of the
Corporation as the Board of Directors of the Corporation may
from time to time determine, and
(b) accept such office or offices to which he may be elected or
appointed by the Chief Executive Officer of by the Board of
Directors of the Corporation in addition to those of Senior
Vice President, Business Development and General Counsel of
the Corporation, provided that the performance of the duties
of such offices shall be consistent with the scope of the
duties assigned in accordance with or as provided for in
section 2.1(a) above.
2.2 Term of Agreement
The Term of this Agreement shall commence on the date hereof, and shall
continue in effect to and including the earlier of:
(a) the date of voluntary retirement of the Executive in
accordance with the retirement policies established for senior
employees of the Corporation; or
(b) the voluntary resignation of the Executive other than a
voluntary resignation pursuant to section 2.6(b)(ii) or
section 2.6(b) (iii) hereof.
2.3 Termination of Agreement upon Disability of Executive
If at the end of any month the Executive is and has been for a period
of more than twelve (12) consecutive months unable to perform the duties
specified pursuant to this Agreement in the normal and regular manner due to
mental or physical disability, this Agreement
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may be terminated by the Corporation on 30 days notice. Notwithstanding anything
contained in this Section 2.3, the Executive shall be entitled to all benefits
provided under the disability and pension plans of the Corporation or its
affiliates applicable to the Executive at the date of this Agreement.
2.4 Termination of Agreement upon Death of Executive
If the Executive dies, this Agreement shall be terminated immediately
on the date of the Executive's death. Provided that the Executive is insurable
at reasonable premium rates, the Corporation shall cause to be obtained and
maintained during the term of this Agreement a life insurance policy naming
beneficiaries specified by the Executive, which life insurance policy shall
provide a lump sum payment of not less than two times the Executive's salary to
such beneficiaries in the event that the Executive dies during the term of this
Agreement. This insurance policy shall be in addition to and not in substitution
for any insurance policies provided to the Executive under the Corporation's
benefit plans and programmes.
2.5 Termination of Agreement by the Corporation for Cause
The Corporation may terminate this Agreement at any time without notice
in the event the Executive shall be convicted of a criminal act, or for other
sufficient cause, pursuant to written notice setting forth particulars of such
cause.
2.6 Severance Entitlement upon Termination of Employment of the Executive
(a) The provisions of sub-section 2.6(c) shall not apply to, and
the Executive shall not be entitled to receive any severance
payments or other benefits as provided for in this Agreement
as a result of any circumstance where the termination of the
Executive's employment arises from the occurrence of any event
described in any of sections 2.2, 2.3, 2.4 or 2.5 hereof.
(b) The provisions of sub-section 2.6(c) shall, except as
specifically provided in sub-section 2.6(a) hereof, apply in
all circumstances where the Executive's employment with the
Corporation terminates, including, without limiting the
generality of the foregoing, any of the following
circumstances:
(i) where the Corporation terminates the employment of
the Executive for any reason other than for cause;
or,
(ii) where the Executive, by notice in writing to the
Corporation, terminates his employment with the
Corporation within ninety (90) days following
constructive dismissal of the Executive.
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(iii) where the Executive, by notice in writing to the
Corporation, terminates his employment with the
Corporation within ninety (90) days following a
change of control of the Corporation as described in
section 1(c)(i).
(c) In the event of the termination of the Executive's employment
as provided in sub-section 2.6(b) hereof, the following
provisions shall apply:
(i) the Executive shall be entitled to receive and the
Corporation shall forthwith pay to the Executive, a
retiring allowance (hereinafter called the "Retiring
Allowance") in an undiscounted cash amount equal to
one (1) month's base salary, inclusive of the foreign
service supplement, multiplied by the number of years
of service of the Executive with the Corporation
subject to a minimum entitlement and payment equal to
twenty-four (24) months' base salary and a maximum
entitlement and payment equal to thirty (30) months'
base salary;
(ii) in addition, the Executive shall be entitled to
receive and the Corporation shall forthwith pay to
the Executive an undiscounted cash amount equal to
the value to the Executive of all those benefits
plans and programmes provided by the Corporation to
its regular employees resident in Canada and listed
in Schedule "B" as they currently exist attached
hereto for a period of time equal to one (1) month
for every year of service of the Executive with the
Corporation at the time of termination with a minimum
entitlement and payment equal to twenty-four (24)
months of benefits value and a maximum entitlement
and payment equal to thirty (30) months of benefits
value. All amounts payable under this sub-section
2(c)(ii) shall be determined by a Fellow of the
Canadian Institute of Actuaries acceptable to the
Corporation and the Executive;
(iii) In addition, the Executive shall be entitled to
receive and the Corporation shall forthwith pay an
undiscounted amount equal to the product obtained by
multiplying by two (2) the Executive's target bonus
under the Corporation's total compensation plan or
such other plan that may have replaced the total
compensation plan for the year in which the
Executive's employment is terminated;
(iv) the Executive shall also be entitled to receive on
termination the normal and any supplementary pension
benefits in effect on the date of this Agreement
according to the terms of the Corporation's
registered pension plans and executive superannuation
undertakings, or according to similar provisions of
any successor plan, of which the Executive is a
member at
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the date of termination of the Executive's employment
(collectively hereinafter called the "Plans"). The
Executive's total pension entitlement shall be
determined on the basis that the Executive had two
(2) additional years of credited service and age
under the Plans in which he is participating at his
date of termination of employment over and above his
actual age or years of credited service. In addition,
such additional years of credited service shall be
included for the purpose of determining final or best
average earnings assuming that the Executive's
monthly base salary at the date of termination of
employment would have continued unchanged during the
period of additional credited service. Any portion of
the total pension entitlement of the Executive not
eligible to be paid under the provisions of the
registered pension plans of the Corporation shall be
payable as supplementary payments in accordance with
the executive superannuation undertakings. If the
Executive has not vested in any or all of the Plans
on the date of termination of his employment, he
shall be or shall be deemed to be vested in any of
the Plans in which he is not vested on the date of
termination of his employment;
(v) all options for the purchase of shares of the
Corporation which have been granted by the
Corporation to the Executive under the Incentive
Stock Option Plan (1990) or such other plan that may
have replaced the Incentive Stock Option Plan (1990)
or otherwise to the date of termination of the
Executive but not yet vested shall immediately vest
on the date of termination of the Executive and the
Executive shall be entitled to exercise any or all
options for the purchase of shares of the Corporation
for a period of two (2) years from the date of
termination of the Executive whether such options to
purchase vested on or before the date of termination
of the Executive;
(vi) the Corporation and the Executive agree that the
provisions of section 2.6(c) are fair and reasonable
and that the amounts payable by the Corporation to
the Executive pursuant to section 2.6(c) are
reasonable estimates of the damages which will be
suffered by the Executive in the event of the
termination of his employment with the Corporation in
any and all of the circumstances set out in section
2.6(b) and shall not be construed as a penalty; and,
(vii) all amounts paid by the Corporation to the Executive
pursuant to section 2.6(c) shall satisfy and forever
discharge all liabilities, claims or
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actions that the Executive may or shall have against
the Corporation arising from the termination of
employment of the Executive whether at common law or
under statute or otherwise and such payment shall be
made against delivery by the Executive to the
Corporation of a release in form and terms reasonably
satisfactory to the Corporation and the Executive.
2.7 DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
Unless otherwise agreed between the parties hereto, the Corporation
shall purchase and maintain, or cause to be purchased and maintained, while the
Executive remains an officer of the Corporation and for a period of 10 years
thereafter, directors' and officers' errors and omissions insurance for the
benefit of the Executive on terms no less favourable in terms of coverage, and
amounts, to the extent available on reasonable commercial terms, than such
insurance maintained in effect by the Corporation on the date thereof.
3. COMPENSATION
The Executive shall be entitled to receive compensation set by the
Compensation Committee of the Board. The Executive shall also be entitled to
receive the benefits listed in Schedule "A", as amended from time to time, in
accordance with the Corporation's policies on benefits.
4. INTEGRATION
Except for the Executive's rights to continued participation in the
Corporation's employee benefit plans, including, without limitation, the
Corporation's or its affiliates' stock option plans and savings plans and
conditions of employment generally available to other employees of the
Corporation or its affiliates, this Agreement contains the entire agreement
between the parties and supersedes all prior oral and written agreements,
understanding, commitments and practices between the parties, including all
prior employment agreements, whether or not fully performed by the Executive
before the date of this Agreement. No amendments to this Agreement may be made
except in writing signed by both parties.
5. CONFIDENTIAL INFORMATION AND NON-COMPETITION CLAUSES
(a) In the event of termination of employment of the Executive, the
Executive agrees to keep confidential all information of a confidential
or proprietary nature concerning the Corporation, its subsidiaries and
affiliates and their respective operations, assets, finances, business
and affairs and further agrees not to use such information for personal
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advantage or the advantage of an employer, provided that nothing herein
shall prevent disclosure of information which is publicly available or
which is required to be disclosed under appropriate statutes, rules of
law or legal process. In the event of termination of employment of the
Executive, the Executive shall return to the Corporation all documents,
computer disks and other media which contains information which is
proprietary to the Corporation.
(b) In the event of Termination, the Executive agrees that, without the
prior written consent of the Board of Directors of the Corporation, for
a period of 18 months following Termination, neither Executive nor any
of Executive's agents, employees, affiliates or other representatives
(including any person or entity directly or indirectly, through one or
more intermediaries, directing the Executive or controlled by the
Executive or affiliated with the Executive) (collectively referred to
as the "Representatives"), will, nor will they encourage any person to
(i) purchase, offer or agree to purchase, directly or indirectly, any
securities or material assets of the Corporation, (ii) make, or in any
way participate, directly or indirectly, in any "solicitation" of
"proxies" to vote or "consents" (as such terms are used in the rules
and regulations of the Securities and Exchange Commission) with respect
to the Corporation's Ordinary Shares; (iii) directly or indirectly make
any public announcement with respect to any transaction involving the
Corporation or its securities or assets of any subsidiary thereof; (iv)
form, join or in any way participate in a "group" within the meaning of
Section 13(d)(3) of the U.S. Securities Exchange Act of 1934, as
amended, in connection with any of the foregoing; (v) otherwise act,
alone or in concert with others, to seek to control or influence the
management, Board of Directors or policies of The Corporation; (vi)
assist, advise or encourage any other person in doing any of the
foregoing.
(c) In addition, Executive agrees that for a period of 18 months following
Termination, the Executive and its Representatives shall not hire any
employee or former employee of The Corporation provided however that
the foregoing provision will not prevent the Executive or its
Representatives from hiring any such employee or former employee who
contacts the Executive on his or her own initiative or is discovered
through a general solicitation for employment.
6. SEVERABILITY
The invalidity and unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provisions of this
Agreement, which shall remain in full force and effect.
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7. BENEFIT OF AGREEMENT
This Agreement shall enure to and be binding upon the Corporation and
its successors and the Executive and his legal representatives but otherwise it
is not assignable. It shall be a condition of any transfer by the Corporation of
the Executive to any affiliate or associate of the Corporation that, on request
of the Executive, such affiliate or associate agree to observe all the covenants
of and be bound by all obligations imposed on the Corporation under this
Agreement. The failure to do so shall be deemed to constitute a constructive
dismissal of the Executive for the purposes of section 2.6.
8. CHOICE OF LAW
This Agreement shall be governed and interpreted in accordance with the
laws of the Province of Alberta, which Province shall be the sole and proper
forum with respect to any suit brought with respect to this Agreement.
9. COPY OF AGREEMENT
The Executive hereby acknowledges having received a copy of this
Agreement duly signed by the Corporation.
IN WITNESS WHEREOF the parties hereto have duly executed and delivered
this Agreement.
GULF CANADA RESOURCES LIMITED
\s\ Xxxxx Xxxxx
-----------------------------------
\s\ Xxxxxxx Xxxxxxxxxx
-----------------------------------
\s\ Xxxxxx Xxxxxxxxx \s\ Xxxxx Xxxxx
---------------------------------- -----------------------------------
Witness Xxxxx X. Xxxxx
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SCHEDULE "A"
CANADIAN BENEFITS
GROUP LIFE INSURANCE:
Life Insurance Plan (for all employees hired on or after May 1, 1989):
Basic coverage equal to two times annual salary - 100% Corporation paid.
Additional voluntary insurance and dependent coverage also available.
BUSINESS ACCIDENT INSURANCE:
The Corporation pays the premium for accident insurance while on Corporation
business or travel. The amount of the insurance is three times annual salary to
a maximum benefit of $200,000.00.
LONG TERM DISABILITY:
The plan provides coverage to two-thirds of salary to a maximum of $6,000.00 per
month. Premiums cost shared - Corporation pays 2/3 and employee pays 1/3.
SUPPLEMENTARY HEALTH BENEFIT:
The Plan provides 100% semi-private hospital and out-patient expenses. After an
annual $25.00 deductible per family, the plan pays 85% of eligible expenses,
including drugs. 50% cost sharing arrangement between Corporation and employee.
VISION CARE:
The plan covers 85% of cost for glasses and/or contact lenses to maximum of
$175.00 per person every two calendar years. 100% Corporation paid.
DENTAL PLAN:
The plans pays 80% of routine dental care and 50% of major dental care, to a
maximum of $1,000.00 per year per person. 100% Corporation paid.
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PROVINCIAL HEALTH CARE:
The Corporation shares the cost of health care premiums in Alberta.
PERQUISITE ALLOWANCE:
Senior Managers of the Corporation are eligible for a $12,000.00 annual
perquisite allowance.
LUNCHEON CLUBS:
All employees have the privilege of joining a luncheon club. Luncheon club
memberships are taken in the Corporation's name so that they may be reassigned
to other individuals in the event the incumbent retires or leaves the
Corporation.
HEATED PARKING:
One underground parking stall shall be provided.
SAVINGS ALLOWANCE:
The Corporation provides all employees with a savings allowance equal to 4.5% of
their annual salary.
OUTPLACEMENT:
Outplacement services in accordance with the Corporation's policies and
practices.
