Exhibit 10.8
AMENDMENT NO. 2 TO
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
EMPLOYMENT AGREEMENT WITH XXXXXX X. XXXXX DATED MAY 1, 1989
Amendment dated as of the ____ day of November 1999, between AMERICAN
INTERNATIONAL PETROLEUM CORPORATION, a Nevada corporation with executive offices
located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 (the "Company"), and XXXXXX X.
XXXXX, residing at 00 Xxxx Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 (the
"Employee").
W I T N E S S E T H
WHEREAS, the Employee is currently the Chief Executive Officer and Chairman
of the Board of Directors of the Company and has served the Company pursuant to
an Employment Agreement dated May 1, 1989, as amended by Amendment No. 1 dated
October 13, 1995 (collectively the "Agreement"); and
WHEREAS, the Company desires to retain the Employee, and the Employee is
willing to continue to serve, as Chairman of the Board of the Company, on the
terms and subject to the conditions, set forth below:
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the adequacy and receipt of which are hereby
acknowledged, the Company and the Employee do hereby agree to amend the
Agreement (hereinafter referred to as the "New Amendment") as follows:
1. Section 1 of the Agreement is amended and restated in its entirety as at
the date set forth above to read as follows:
"1. Employment. The Company shall employ the Employee, and the
Employee shall serve, as Chairman of the Board of Directors of the Company.
In addition, the Company shall use its best efforts to cause the Board of
Directors (the "Board") to nominate the Employee as a Director until
December 31, 2004.
2. Section 2 of the Agreement is amended so as to extend the term of the
Agreement through December 31, 2002 (the "Initial Term"). Any further extension
thereof shall be in writing signed by the parties. Notwithstanding the above and
in no manner limiting any of the rights and privileges of Employee hereunder, if
the Initial Term is not extended beyond December 31, 2002, the Company agrees to
retain the Employee as a consultant for a period of two calendar years ending
December 31, 2004 (the "Consulting Term"), provided the Employee is then willing
to serve as a consultant. During the Consulting Term, the Company shall pay the
Employee fifty percent (50%) of his annual base salary as at December 31, 2002,
together with the benefits set forth in Section 3(c) of the Agreement. Employee
agrees to devote up to 50% of the time he devotes to the business and affairs of
the Company under the terms of this New Amendment during the Consulting Term.
3. Section 3(a) of the Agreement is amended to reduce the fixed
compensation of the Employee from $350,000 to $250,000 per year effective
January 1, 2000.
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4. Section 3(b) of the Agreement is amended and restated in its entirety as
at the date set forth above to read as follows:
"(b) Incentive Compensation. Employee shall be eligible to receive an
annual performance bonus up to a maximum of fifty percent (50%) of
Employee's then annual base salary. The performance criteria, the
measurement of performance, the mode of payment of any such performance
bonus (cash or otherwise) and the amount of such performance bonus shall be
as determined at the sole and absolute discretion of the Company's Board of
Directors. Employee shall be eligible to receive other bonuses, if any,
approved by the Board in accordance with the standard policies of Company
for compensation of senior executives or as the Parties may agree upon from
time to time."
5. Section 3(c)(iv) of the Agreement is amended and restated as at the date
set forth above to read as follows:
"3(c)(iv) Club Memberships. The Company will reimburse Employee for
the cost of membership in two New York City Clubs. The parties acknowledge
that such clubs are currently the Metropolitan and the University Clubs."
6. Section 3(v) of the Agreement is amended and restated as at the date set
forth above to read as follows:
"3(v). Medical Benefits. The Company shall provide Employee (and if
Employee shall predecease his spouse, his spouse) during the Initial Term,
and thereafter, unless Employee's employment is terminated by the Company
for cause or by Employee voluntarily prior to the end of the Initial Term,
with such medical and health insurance benefits as the Company normally
accords its executive officers. Such insurance shall cover the Employee and
his dependents (wife). To the extent Employee and his spouse cannot be
directly covered by the Company's insurance, the Company shall pay Employee
an equivalent amount in cash for the period he is not so covered."
7. Section 4 of the Agreement is amended and restated in its entirety as at
the date set forth above to read as follows:
"4. Duties; Time and Effort
(a) During the term of his employment hereunder, Employee shall
serve as Chairman of the Board. In that capacity, he shall preside at
meetings of the Board of Directors and have primary responsibility for
coordinating activities of the Board, as well as supervising investor
relations, corporate communications, regulatory compliance and other
legal matters and will report directly to the Board for such
activities.
(b) Employee shall devote only such time as he deems necessary to
perform the services described in Section 4(a). The Employee may
engage in other employment or activities during the term of this New
Amendment that do not conflict with the terms of Section (8) herein
below.
(c) The Employee's principal place of employment during the term
of this New Amendment will be at the Company's offices in New York,
New York."
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8. Section 5(a) of the Agreement is amended by adding at the end thereof,
the following language:
"Notwithstanding anything contained in this Section 5(a) to the
contrary, in the event Employee remains employed by the Company through the
end of the Initial Term, the restrictions set forth in this Section 5(a)
shall lapse and in its place for a period of 12 months after the
termination of his employment hereunder, Employee agrees not to directly,
or indirectly, (i) own any interest in (except for the permitted maximum
ownership interest permitted in Section 5(a) of the Agreement prior to the
execution of this New Amendment) any company or entity engaged in oil and
gas exploration or development activities within the same geological basin
as the Company has been so engaged within the preceding 12 month period, or
(ii) participate or engage in, assist, render any services (including,
without limitation, acting as an employee, consultant, advisor, agent,
independent contractor, officer or director) on behalf of any such company
or entity with respect to such oil and gas exploration or development
activities, unless approved by the Board."
9. Section 8(d) of the Agreement is amended and restated in its entirety as
at the date set forth above by adding a new subparagraph (d) to read as follows:
"(d) If Employee's employment is not renewed at the end of the Initial
Term or the Employee does not elect to serve as a consultant as
contemplated by Paragraph 2 of this New Amendment, or if the Employee
voluntarily terminates his employment or consulting services at any time
during the Initial Term or the Consulting Term, the Company shall be
obligated to pay the Employee, and the Employee shall be entitled to
receive from the Company, a severance payment in an amount equal to one
month's salary for each full year of employment beginning January 1, 1995.
The Employee's monthly base salary at December 31, 1999 shall be used in
calculating the amount of the severance payment payable hereunder. The
severance payment shall be due and payable within 30 days after written
notice from the Employee.
Anything to the contrary in the foregoing notwithstanding, except as
provided in Paragraph 10 of this New Amendment, if at any time prior to
December 31, 2004, the Board of Directors fails to nominate the Employee as
a Director, the Company shall be obligated to pay the Employee, and the
Employee shall be entitled to receive from the Company, in addition to any
severance payment to which he may be entitled under this section, all
compensation to which he is entitled under the terms of the Agreement and
this New Amendment through and including December 31, 2004 whether or not
the Employee serves as a consultant to the Company as contemplated by
Paragraph 2 of this New Amendment. Fifty percent of these amounts shall be
due and payable to the Employee within 30 days after the date upon which
the Board nominates directors for election with the balance due within 90
days of such date.
10. Section 9 of the Agreement shall be amended and reinstated, as at the
date set forth above to read as follows:
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"9. Change in Control. If, within three (3) months following the
occurrence of a Change in Control, Employee elects to terminate his
employment with the Company and/or is no longer Chairman of the Board of
the Company or its successor, then, in lieu of any severance payments
hereunder, the Company shall (1) pay the Employee, within 10 days after
Employee's election, a lump sum cash payment in an amount equal to the
Change in Control Payment and (2) provide Employee with Change in Control
Benefits. If Employee's employment is terminated prior to the date the
Employee elects to terminate but it is reasonably demonstrated that such
termination (a) was at the request of a third party who has taken steps
reasonably calculated to effect a Change in Control or (b) otherwise arose
in connection with or in anticipation of a Change in Control, then, for all
purposes of this paragraph, such termination shall be considered to have
occurred immediately following the Change in Control and Employee's
election to so terminate. As used herein, the following terms shall mean:
A "Change in Control" shall be deemed to have occurred if (i) there
shall be consummated (A) any consolidation or merger of the Company in
which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's common stock would be
converted in whole or in part into cash, securities or other property,
other than a merger of the Company in which the holders of the
Company's common stock immediately prior to the merger own immediately
after the merger a majority of the voting stock of the surviving
corporation, or (B) any sale, lease, exchange or transfer (in one
transaction or a series of related transactions) of all or
substantially all the assets of the Company, or (ii) the stockholders
of the Company shall approve any plan or proposal for the liquidation
or dissolution of the Company, or (iii) any "person" (as such term is
used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), other than the Company or a
subsidiary thereof or any employee benefit plan sponsored by the
Company or a subsidiary thereof, shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company representing 30% or more of the combined
voting power of the Company's then outstanding securities ordinarily
(and apart from rights accruing in special circumstances) having the
right to vote in the election of directors, as a result of a tender or
exchange offer, open market purchases, privately negotiated purchases
or otherwise, or (iv) at any time during a period of two consecutive
years, individuals who at the beginning of such period constituted the
Board of Directors of the Company shall cease to constitute at least a
majority thereof as a result of the election of individuals who were
not the nominees of the Board of Directors or (v) any other event
shall occur that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange
Act; provided, however, that the term "Change in Control" shall not
include (x) any of the foregoing events if approved by Employee or a
majority of the Board (for this purpose, consisting only of (1) the
individuals serving on the date of this Amendment, excluding
individuals who resign or do not stand for re-election after the
Effective Date, or (2) individuals as to whom Employee has signified
his acceptance in writing, or (y) any bona fide financing transaction
approved by the Board.
"Change in Control Benefits" shall mean continued coverage under the
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Company's medical, dental, and group life insurance plans for Employee
and those of Employee's dependents (including Employee's spouse) who
were covered under such plans on the day prior to Employee's
termination of employment with the Company for one year from the date
of such termination at no cost to Employee and Employee's dependents
(provided, however, that in the event that continued participation in
any such Company plan is for whatever reason impossible, Company shall
arrange upon comparable terms benefits substantially equivalent to
those that were provided under such Company plan).
"Change in Control Payment" shall mean an amount equal to 2.99 times
the greater of (i) $350,000 or (ii) Employee's annual base salary as
in effect on the date of termination.
All other terms of the Agreement remain in full force and effect.
IN WITNESS WHEREOF, the Company has caused this New Amendment to be
executed by a duly authorized officer and the Employee has signed this New
Amendment as of the day and year written below his signature hereto.
AMERICAN INTERNATIONAL
PETROLEUM CORPORATION
By: _____________________________
Xxxxxx Xxx
Chairman of the Compensation
Committee and on behalf of
The Board of Directors
EMPLOYEE:
_________________________________
Xxxxxx X. Xxxxx
Date: ___________________________
Last printed 11/18/99 12:55 PM
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