EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made this 27 day of
July 2006, between PACIFIC ENERGY RESOURCES LTD., a Delaware corporation ("PERL"
or the "COMPANY"), and XXXX X. XXXXXXXXX ("EMPLOYEE") (collectively the
"PARTIES") with reference to the following facts:
A. PERL is engaged in the acquisition and development of oil gas
properties. The Company's principal offices are located at 0000 Xxxx Xxxx X
Xxxxxx, Xxxx Xxxxx, XX 00000-0000.
B. The Company desires to employ Employee as the Executive Vice
President of the Company and Employee desires to accept such employment subject
to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the facts recited above, the
covenants contained in this Agreement, and other valuable consideration, the
parties agree as follows:
1. EMPLOYMENT.
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The Company hereby employs the Employee, and the Employee accepts such
employment, in the capacity of Executive Vice President of the Company in
accordance with the terms of this Agreement, the bylaws of the Company and
applicable law.
2. SERVICES AND DUTIES.
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Employee shall perform all services, acts or other things necessary or
advisable, and as may be determined and assigned from time to time by the Board
of Directors, to manage the business of the Company and have general
supervision, direction and control over the business and affairs of the Company
and its employees, subject to the control and direction of the Board of
Directors.
3. STANDARD OF PERFORMANCE.
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Employee agrees that at all times during the Employment Term (as
defined herein) he will diligently, competently, and to the best of his ability
and experience, perform all of the services and duties that are required as the
Executive Vice President of the Company.
4. EXCLUSIVE EMPLOYMENT.
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Employee shall not, while employed by the Company, render services of
any kind to others for compensation, or engage in any other business activity
without the prior written consent of the Board of Directors of the Company (in
the event Employee is a member of the Board of Directors at such time, he shall
not participate in the vote concerning such consent). During the Employment
Term, Employee shall not, directly or indirectly, whether as a partner,
employee, creditor, shareholder, or otherwise, promote, participate, or engage
in any activity or business competitive with the Company's business. However,
nothing in this Agreement shall be deemed to prevent or limit the right of the
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Employee to invest any of his funds in the capital stock or other securities of
any entity whose stock or securities are publicly owned or are regularly traded
on any public exchange, so long as (i) such entity does not engage in a business
that is in competition with the Company's business as of the date of such
investment; (ii) the investment does not exceed 2% of the outstanding voting
equity interests of such entity; and (iii) the management of that investment
does not materially interfere with the performance of his duties hereunder.
5. TERM OF EMPLOYMENT.
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Unless terminated earlier pursuant to this Section or SECTIONS 9 OR 10
of this Agreement, Employee shall be employed for a term commencing as of June
30, 2006 and ending on July 1, 2008 (the "EMPLOYMENT TERM"). Thereafter, the
Employment Term shall continue on an at-will basis until terminated at the
option of either party upon sixty (60) days prior written notice to the other
party.
This Agreement may be terminated at any time by written agreement of
the parties, or as provided in SECTIONS 9 OR 10. This Agreement will terminate
immediately upon Employee's death.
6. COMPENSATION.
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6.1 BASE SALARY. Company shall pay Employee a base annual salary of Two
Hundred Thousand Dollars ($200,000.00) (the "BASE SALARY") which annual Base
Salary shall increase (but not decrease) as of July 1st (the "ADJUSTMENT DATE")
of each subsequent employment year (commencing July 1, 2007) during the
Employment Term by the percentage increase, if any, in the "CURRENT INDEX" over
the "BASE INDEX."
The adjustments described above and described in Section 7.6 herein
shall be calculated on the basis of the United States Department of Labor,
Bureau of Labor Statistics, "Consumer Price Index For All Urban Consumers, Los
Angeles-Anaheim-Riverside Area" (the "INDEX"). The Index for April preceding the
immediately prior employment year shall be considered the "Base Index," and the
April preceding the employment year for which the adjustment shall become
effective shall be the "Current Index." Salary shall be payable in accordance
with the Company's usual payroll method for corporate executives.
6.2 ADDITIONAL COMPENSATION. Employee shall be entitled to an annual
bonus equal to 20% of his Base Salary (the "BONUS"), payable at the end of each
Company fiscal year.
7. BENEFITS.
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7.1 BENEFIT PLAN PARTICIPATION. Employee shall be entitled to
participate in, on the same basis as all other eligible employees, in any profit
sharing, pension or other incentive plan adopted by the Company, subject to the
terms, conditions and overall administration of any such plan.
7.2 GRANT OF SHARE OPTIONS. With the prior approval of the Company's
Compensation Committee, the Employee shall be granted under and pursuant to the
terms of the Company's 2006 Share Option Plan, options to purchase in the
aggregate 350,000 shares of stock of the Company and subject to the following
vesting schedule:
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(a) Options to purchase 150,000 shares shall be granted
shortly after the signing of this Agreement, and
(b) Options to purchase 200,000 shares shall be granted
to the Employee upon the one year anniversary of this
Agreement.
7.3 ILLNESS. Employee shall be entitled to five (5) days of sick leave
with pay during each employment year.
7.4 VACATIONS. Employee shall be entitled to four (4) weeks vacation
with pay during each employment year, to be taken at such times as may be
convenient to both the Company and Employee.
7.5 INSURANCE. Employee shall be entitled to participate in the
following insurance plans:
(a) participation for Employee in the Company's group medical and
dental insurance plan;
(b) participation for Employee in an executive medical
reimbursement plan if later adopted by the Company and under the terms
and conditions of any such plan if so adopted;
(c) such life insurance as is associated with the group medical
policy described above; and
(d) participation in the Company's group disability plan, as well
as the supplemental disability coverage as shall be made available to
Company executives.
7.6 MOVING EXPENSE. Should Employer request Employee to relocate
outside of Bakersfield, California, the Employer will pay moving and closing
costs on sale of a personal residence as is customary in the oil and gas
industry and will adjust Employee's Base Salary to take into account the
difference in the index between Bakersfield and the new location.
8. BUSINESS EXPENSES.
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Employee will be required to incur travel, entertainment and other
business expenses on behalf of the Company in the performance of Employee's
duties hereunder. Employee shall submit expense reports and supporting
documentation for all such expenses and be reimbursed for all reasonable and
necessary expenses paid by him. Use of a personal automobile shall be reimbursed
on a mileage basis. Employee shall reimburse Employer for any business expenses
disallowed for deduction under the Internal Revenue Code of 1986, as amended,
unless approved in writing by the Board of Directors of the Company (in the
event Employee is a member of the Board of Directors at such time, he shall not
participate in the vote concerning such approval).
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9. TERMINATION.
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The Company may, in writing and without prior notice, terminate
Employee's employment under this Agreement at any time but shall be liable for
and shall pay Employee's compensation earned to date under SECTION 6 herein.
10. CHANGE IN CONTROL.
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For purposes of this SECTION 10, "CHANGE IN CONTROL" shall mean any one
of the following: (i) when any "PERSON," as such term is used in Sections 13(d)
and 14(d) of the United States Securities Exchange Act of 1934, as amended
("EXCHANGE ACT") (other than (A) a greater than 5% shareholder of the Company on
the date of this Agreement, (B) a subsidiary or (C) a Company employee benefit
plan, (including any trustee of such plan acting as trustee)) becomes, after the
date of this Agreement, the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 35% or more of the combined voting power of the Company's then
outstanding voting equity securities; or (ii) the occurrence of a transaction
requiring stockholder approval and involving the sale of all or substantially
all of the assets of the Company or the merger of the Company with or into
another corporation.
This Agreement may be terminated by Employee upon sixty (60) days
notice if any of the events described above constituting a Change of Control
shall have occurred; such notice may be given for a period of up to one (1) year
from the date of such Change of Control or to the end of the Employment Term,
whichever is sooner.
11. OPTION VESTING UPON TERMINATION OR CHANGE IN CONTROL.
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In the event Employee's employment under this Agreement is terminated
other than pursuant to SECTION 9 or if a Change in Control occurs, all stock
options held by Employee shall automatically vest in full and be exercisable for
a period of one (1) year following the date of termination or Change in Control,
or such lesser time period as is or may be required under the rules or policies
of the stock exchange on which the Company's shares are listed and/or trading at
the date of termination or Change in Control.
12. NON-SOLICITATION.
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Employee hereby acknowledges and agrees that he will be exposed to a
significant amount of confidential information concerning the Company's business
methods, operations, and customers while employed under this Agreement, that
such information might be retained by Employee in tangible form, or simply
retained in Employee's memory, and that the protection of the Company's
exclusive rights to such confidential information, trade secrets, and customer
or client relationships can best be ensured by means of a restriction on
Employee's activities after termination of employment.
Therefore, Employee agrees that for a period of two (2) years after the
termination of his employment with the Company, he shall not directly or
indirectly solicit the employment of or hire any employee of the Company, and
shall not attempt to persuade any employee to leave the employment of the
Company.
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13. INJUNCTIVE RELIEF.
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Employee hereby acknowledges and agrees that any violation of SECTION
12 above will cause damage to the Company in an amount difficult to ascertain.
Accordingly, in addition to any other relief to which the Company may be
entitled, the Company shall be entitled to temporary and/or permanent injunctive
relief for any breach or threatened breach by Employee of the terms of such
sections without proof of actual damages that have been or may be caused to the
Company as a result of such breach.
14. INDEMNIFICATION.
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The Company shall indemnify Employee pursuant to the terms and
conditions of the Indemnification Agreement attached hereto as EXHIBIT A, which
was executed and made effective on the date hereof.
15. POLICIES, RULES AND REGULATIONS.
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Employee at all times during the Employment Term shall strictly adhere
to and obey all policies, rules and regulations in effect, or as subsequently
modified governing the conduct of employees of the Company.
16. GENERAL PROVISIONS.
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16.1 FURTHER ASSURANCES. The Parties agree that, at any time and from
time to time during the Employment Term, they will take any action and execute
and deliver any document which any other party reasonably requests in order to
carry out the purposes of this Agreement.
16.2 AMENDMENT TO AGREEMENT. This Agreement may be amended or
supplemented only in writing, and no amendment or supplement will be effective
unless executed by all of the Parties.
16.3 NOTICES. Any notice, consent, waiver, demand, or other
communications required or permitted to be given by or to any person pursuant to
this Agreement (collectively, "NOTICE") will be in writing, and will be given
either by personal service, by certified mail (return receipt requested), or by
Federal Express or similar commercial overnight courier service, to a party at
the address set forth below:
If to the Company: Pacific Energy Resources Ltd.
0000 Xxxx Xxxx X Xxxxxx
Xxxx Xxxxx, XX 00000-0000
Attention: Executive Vice President
If to the Employee: Xxxx X. Xxxxxxxxx
000 Xxxxx Xxxxx Xxx
Xxxxxxxxxxx, XX 00000
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In the case of personal service, Notice will be deemed effective on the date of
service. In all other cases, Notice will be deemed effective on the date of
delivery, as shown on the return receipt or other written evidence of delivery,
if any, or three (3) days after dispatch if there is no return receipt or
written evidence of delivery. A party may change the address at which Notice is
to be given, at any time and from time to time, by giving Notice of the new
address to the other parties in accordance with this Section.
16.4 ENTIRE AGREEMENT. This Agreement and the Stock Option Agreements
entered into from time to time between Employee and the Company, contain the
entire understanding between the parties concerning the employment of Employee,
and supersede all prior understanding and agreements between them regarding its
subject matter. There are no oral or written representations, agreements,
arrangements, or understandings between the parties relating to the subject
matter of this Agreement which are not fully set forth herein.
16.5 BINDING EFFECT: ASSIGNMENT AND DELEGATION. This Agreement is
binding upon and inures to the benefit of the parties and their personal
respective heirs, executors, administrators, personal representatives,
successors, and assigns. Company may assign its rights or delegate its duties
under this Agreement at any time and from time to time. However, the parties
acknowledge that the availability of Employee to perform services was a material
consideration for Company to enter this Agreement. Accordingly, Employee may not
assign any of his rights or delegate any of his duties under this Agreement,
either voluntarily or by operation of law, without the prior written consent of
Company, which may be given or withheld by Company in its sole and absolute
discretion.
16.6 APPLICABLE LAW: CHOICE OF FORUM. This Agreement has been executed
under, and will be construed and interpreted in accordance with, the laws of the
State of California. The parties consent to the jurisdiction of the Superior
Court of the State of California and the United States District court located in
the State of California in any action or proceeding arising out of this
Agreement, and agree that in those actions or proceedings venue will be proper
in Orange County, California (if the action proceeding is brought in the
California Superior Court) or in the United States District Court for the
District in which Orange County is located (if the action is brought in the
United States District Court)
16.7 ATTORNEYS' FEES. In any action or proceeding to enforce or
interpret this Agreement, or arising out of this Agreement, the prevailing party
or parties are entitled to recover a reasonable allowance for fees and
disbursements of counsel and costs of suit to be determined by the court in
which the action or proceeding is brought.
16.8 PROVISIONS SEVERABLE. Every provision of this Agreement is
intended to be severable from every other provision of this Agreement. If any
provision of this Agreement is held to be void or unenforceable, in whole or in
part, the remaining provisions will remain in full force and effect. If any
provision of this Agreement is held to be unreasonable or excessive in scope or
in duration, that provision will be enforced to the maximum extent permitted by
law.
16.9 WAIVER. The waiver by either party of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach of this Agreement.
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16.10 COMPUTATION OF TIME. If any period of time in this Agreement for
the performance of any action ends on a Saturday, Sunday, or legal holiday in
the State of California that period will be deemed extended to end on the next
day which is not a Saturday, Sunday or legal holiday in the State of California.
16.11 COUNTERPARTS. This Agreement and any amendment or supplement to
this Agreement may be executed in two or more counterparts, each of which will
constitute a single instrument. The parties have executed this Agreement at the
time and place set forth above.
16.12 APPROVALS. This Agreement has been approved by the Board of
Directors of the Company.
16.13 CONSENT TO DISCLOSURE OF INFORMATION. By providing personal
information to the Company, Employee is consenting to the Company's collection,
use and disclosure of that information for the purposes of completing this
Agreement and for corporate governance purposes. Employee acknowledges that from
time to time the Company may be required to disclose such personal information
to securities regulatory authorities and stock exchanges and, by providing such
personal information to the Company, Employee hereby expressly consents to such
disclosure.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first set forth above
COMPANY: PACIFIC ENERGY RESOURCES LTD.,
a Delaware corporation
By: /s/ Xxxxxxxx Xxxxx
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Xxxxxxxx Xxxxx
CEO
EMPLOYEE: /s/ Xxxx X Xxxxxxxxx
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XXXX X. XXXXXXXXX
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ANNEX A
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EXHIBIT A
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INDEMNIFICATION AGREEMENT
(attached hereto)
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INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT ("AGREEMENT") is made as of the date set
forth on the signature page to this Agreement, by and between Pacific Energy
Resources Ltd., a Delaware corporation ("COMPANY"), and the individual named on
the signature page to this Agreement ("INDEMNITEE"), an officer and/or a
director of the Company.
R E C I T A L S
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A. The Indemnitee is currently serving as an officer and/or director of
the Company and in such capacity renders valuable services to the Company.
B. The Company has investigated whether additional protective measures
are warranted to adequately protect its directors and officers against various
legal risks and potential liabilities to which such individuals are subject due
to their position with the Company and has concluded that additional protective
measures are warranted.
C. In order to induce and encourage highly experienced and capable
persons such as the Indemnitee to continue to serve as an officer and/or
director, the Board of Directors of the Company has determined, after due
consideration, that this Agreement is not only reasonable and prudent, but
necessary to promote and ensure the best interests of the Company and its
stockholders.
D. The Company's execution of this Agreement has been approved by the
Board of Directors of the Company.
E. Indemnitee has indicated to the Company that but for the Company's
agreement to enter into this Agreement, Indemnitee would decline to continue to
serve as an officer and/or a director of the Company.
A G R E E M E N T
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NOW, THEREFORE, in consideration of the recital set forth above and the
continued services of the Indemnitee, and as an inducement to the Indemnitee to
continue to serve as an officer and/or a director of the Company, the Company
and the Indemnitee do hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have the
meanings set forth below:
1.1 "PROCEEDING" shall mean any threatened, pending or completed
action, suit or proceeding, whether brought in the name of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, by reason of the fact that the Indemnitee is or was an officer and/or a
director of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another enterprise, whether or not he is
serving in such capacity at the time any liability or Expense is incurred for
which indemnification or advancement of Expenses (as defined in subparagraph (b)
below) is to be provided under this Agreement.
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1.2 "EXPENSES" means, all costs, charges and expenses incurred in
connection with a Proceeding, including, without limitation, attorneys' fees,
disbursements and retainers, accounting and witness fees, travel and deposition
costs, expenses of investigations, judicial or administrative proceedings or
appeals, and any expenses of establishing a right to indemnification pursuant to
this Agreement or otherwise, including reasonable compensation for time spent by
the Indemnitee in connection with the investigation, defense or appeal of a
Proceeding or action for indemnification for which he is not otherwise
compensated by the Company or any third party; PROVIDED, HOWEVER, that the term
Expenses includes only those costs, charges and expenses incurred with the
Company's prior consent, which consent shall not be unreasonably withheld; and
PROVIDED, FURTHER, that the term "EXPENSES" does not include (i) the amount of
damages, judgments, amounts paid in settlement, fines or penalties relating to
any Proceeding or (ii) excise taxes under the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), relating to any Proceeding, either
of which are actually levied against the Indemnitee or paid by or on behalf of
the Indemnitee.
2. AGREEMENT TO SERVE. The Indemnitee agrees to continue to serve as an officer
and/or a director of the Company at the will of the Company for so long as
Indemnitee is duly elected or appointed or until such time as Indemnitee tenders
a resignation in writing or is terminated as an officer and/or removed as a
director by the Company. Nothing in this Agreement shall be construed to create
any right in Indemnitee to continued employment with the Company or any
subsidiary or affiliate of the Company. Nothing in this Agreement shall affect
or alter any of the terms of any otherwise valid employment agreement or other
agreement between Indemnitee and the Company relating to Indemnitee's conditions
and/or terms of employment or service.
3. INDEMNIFICATION IN THIRD PARTY ACTIONS. The Company shall indemnify the
Indemnitee in accordance with the provisions of this Section 3 if the Indemnitee
is a party to or threatened to be made a party to or is otherwise involved in
any Proceeding (other than a Proceeding by or in the right of the Company to
procure a judgment in its favor), by reason of the fact that the Indemnitee is
or was an officer and/or a director of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
enterprise, against all Expenses, damages, judgments, amounts paid in
settlement, fines, penalties and ERISA excise taxes actually and reasonably
incurred by the Indemnitee in connection with the defense or settlement of such
Proceeding, to the fullest extent permitted by the Delaware General Corporation
Law ("DGCL"), whether or not the Indemnitee was the successful party in any such
Proceeding; PROVIDED, HOWEVER, that any settlement shall be approved in writing
by the Company.
4. INDEMNIFICATION IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The Company
shall indemnify the Indemnitee in accordance with the provisions of this Section
4 if the Indemnitee is a party to or threatened to be made a party to or is
otherwise involved in any Proceeding by or in the right of the Company to
procure a judgment in its favor by reason of the fact that the Indemnitee is or
was an officer and/or a director of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
enterprise, against all Expenses actually and reasonably incurred by Indemnitee
in connection with the defense or settlement of such Proceeding, to the fullest
extent permitted by the DGCL, whether or not the Indemnitee is the successful
party in any such Proceeding. The Company shall further indemnify the Indemnitee
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for any damages, judgments, amounts paid in settlement, fines, penalties and
ERISA excise taxes actually and reasonably incurred by the Indemnitee in any
such Proceeding described in the immediately preceding sentence, provided that
either (i) the Proceeding is settled with the approval of a court of competent
jurisdiction, or (ii) indemnification of such amounts is otherwise ordered by a
court of competent jurisdiction in connection with such Proceeding.
5. CONCLUSIVE PRESUMPTION REGARDING STANDARD OF CONDUCT. The Indemnitee shall be
conclusively presumed to have met the relevant standards of conduct required by
the DGCL for indemnification pursuant to this Agreement, unless a determination
is made that the Indemnitee has not met such standards (i) by the Board of
Directors of the Company by a majority vote of a quorum thereof consisting of
directors who were not parties to such Proceeding, (ii) by the stockholders of
the Company by majority vote, or (iii) in a written opinion of the Company's
independent legal counsel. Further, the termination of any Proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not, of itself, rebut such presumption that the Indemnitee met
the relevant standards of conduct required for indemnification pursuant to this
Agreement.
6. INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY. Notwithstanding any other
provision of this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise in defense of any Proceeding or in defense
of any claim, issue or matter therein, the Indemnitee shall be indemnified
against all Expenses incurred in connection therewith to the fullest extent
permitted by the DGCL. For purposes of this paragraph, the Indemnitee will be
deemed to have been successful on the merits if the Proceeding is terminated by
settlement or is dismissed with prejudice.
7. ADVANCES OF EXPENSES. The Expenses incurred by the Indemnitee in connection
with any Proceeding shall be paid promptly by the Company in advance of the
final disposition of the Proceeding at the written request of the Indemnitee to
the fullest extent permitted by the DGCL; provided that the Indemnitee shall
undertake in writing to repay such amount to the extent that it is ultimately
determined that the Indemnitee is not entitled to indemnification by the
Company.
8. PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
Expenses, damages, judgments, amounts paid in settlement, fines, penalties or
ERISA excise taxes actually and reasonably incurred by Indemnitee in the
investigation, defense, appeal or settlement of any Proceeding but not, however,
for the total amount thereof, the Company shall nevertheless indemnify the
Indemnitee for the portion of such Expenses, damages, judgments, amounts paid in
settlement, fines, penalties or ERISA excise taxes to which the Indemnitee is
entitled.
9. INDEMNIFICATION PROCEDURE; DETERMINATION OF RIGHT TO INDEMNIFICATION.
9.1 Promptly after receipt by the Indemnitee of notice of the
commencement of any Proceeding with respect to which the Indemnitee intends to
claim indemnification or advancement of Expenses pursuant to this Agreement, the
Indemnitee will notify the Company of the commencement thereof. The omission to
so notify the Company will not relieve the Company from any liability which it
may have to the Indemnitee under this Agreement or otherwise.
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9.2 If a claim for indemnification or advancement of Expenses under
this Agreement is not paid by or on behalf of the Company within thirty (30)
days of receipt of written notice thereof, Indemnitee may at any time thereafter
bring suit in any court of competent jurisdiction against the Company to enforce
the right to indemnification or advancement of Expenses provided by this
Agreement. It shall be a defense to any such action (other than an action
brought to enforce a claim for Expenses incurred in defending any Proceeding in
advance of its final disposition where the required undertaking, if any is
required, has been tendered to the Company) that the Indemnitee has failed to
meet the standard of conduct that makes it permissible under the DGCL for the
Company to indemnify the Indemnitee for the amount claimed. The burden of
proving by clear and convincing evidence that indemnification or advancement of
Expenses is not appropriate shall be on the Company. The failure of the
directors or stockholders of the Company or independent legal counsel to have
made a determination prior to the commencement of such Proceeding that
indemnification or advancement of Expenses are proper in the circumstances
because the Indemnitee has met the applicable standard of conduct shall not be a
defense to the action or create a presumption that the Indemnitee has not met
the applicable standard of conduct.
9.3 The Indemnitee's Expenses incurred in connection with any action
concerning Indemnitee's right to indemnification or advancement of Expenses in
whole or in part pursuant to this Agreement shall also be indemnified in
accordance with the terms of this Agreement by the Company regardless of the
outcome of such action, unless a court of competent jurisdiction determines that
each of the material claims made by the Indemnitee in such action was not made
in good faith or was frivolous.
9.4 With respect to any Proceeding for which indemnification is
requested, the Company will be entitled to participate therein at its own
expense and, except as otherwise provided below, to the extent that it may wish,
the Company may assume the defense thereof, with counsel satisfactory to the
Indemnitee. After notice from the Company to the Indemnitee of its election to
assume the defense of a Proceeding, the Company will not be liable to the
Indemnitee under this Agreement for any Expenses subsequently incurred by the
Indemnitee in connection with the defense thereof, other than reasonable costs
of investigation or as otherwise provided below. The Company shall not settle
any Proceeding in any manner that would impose any penalty or limitation on the
Indemnitee without the Indemnitee's prior written consent. The Indemnitee shall
have the right to employ counsel in any such Proceeding, but the Expenses of
such counsel incurred after notice from the Company of its assumption of the
defense thereof and the Indemnitee's approval of the Company's counsel shall be
at the expense of the Indemnitee, unless (i) the employment of counsel by the
Indemnitee has been authorized by the Company, (ii) the Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company and the Indemnitee in the conduct of the defense of a Proceeding, or
(iii) the Company shall not in fact have employed counsel to assume the defense
of a Proceeding, in each of which cases the Expenses of the Indemnitee's counsel
shall be at the expense of the Company. Notwithstanding the foregoing, the
Company shall not be entitled to assume the defense of any Proceeding brought by
or on behalf of the Company or as to which the Indemnitee has concluded that
there may be a conflict of interest between the Company and the Indemnitee.
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10. RETROACTIVE EFFECT. Notwithstanding anything to the contrary contained in
this Agreement, the Company's obligation to indemnify the Indemnitee and advance
Expenses to the Indemnitee shall be deemed to be in effect since the date that
the Indemnitee first commenced serving in any of the capacities covered by this
Agreement.
11. LIMITATIONS ON INDEMNIFICATION. No payments pursuant to this Agreement shall
be made by the Company:
11.1 to indemnify or advance Expenses to the Indemnitee with respect to
actions initiated or brought voluntarily by the Indemnitee and not by way of
defense, except with respect to actions brought to establish or enforce a right
to indemnification or advancement of Expenses under this Agreement or any other
statute or law or otherwise as required under the DGCL, but such indemnification
or advancement of Expenses may be provided by the Company in specific cases if
approved by the Board of Directors by a majority vote of a quorum thereof
consisting of directors who are not parties to such action;
11.2 to indemnify the Indemnitee for any Expenses, damages, judgments,
amounts paid in settlement, fines, penalties or ERISA excise taxes for which
payment is actually made to the Indemnitee under a valid and collectible
insurance policy, except in respect of any excess beyond the amount paid under
such insurance;
11.3 to indemnify the Indemnitee for any Expenses, damages, judgments,
amounts paid in settlement, fines, penalties or ERISA excise taxes for which the
Indemnitee has been or is indemnified by the Company or any other party
otherwise than pursuant to this Agreement; or
11.4 to indemnify the Indemnitee for any Expenses, damages, judgments,
fines or penalties sustained in any Proceeding for an accounting of profits made
from the purchase or sale by Indemnitee of securities of the Company pursuant to
the provisions of Section 16(b) of the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder or similar provisions of any
federal, state or local statutory law;
12. MAINTENANCE OF DIRECTORS' AND OFFICERS' INSURANCE.
12.1 Upon the Indemnitee's request, the Company hereby agrees to
maintain in full force and effect, at its sole cost and expense, directors' and
officers' liability insurance ("D&O INSURANCE") by an insurer, in an amount and
with a deductible reasonably acceptable to the Indemnitee, covering the period
during which the Indemnitee is serving in any one or more of the capacities
covered by this Agreement and for so long thereafter as the Indemnitee shall be
subject to any possible claim or threatened, pending or completed Proceeding by
reason of the fact that the Indemnitee is serving in any of the capacities
covered by this Agreement.
12.2 In all policies of D&O Insurance to be maintained pursuant to
Paragraph 12(a) above, the Indemnitee shall be named as an insured in such a
manner as to provide Indemnitee with the greatest rights and benefits available
under such policy.
12.3 Notwithstanding the foregoing, the Company shall have no
obligation to maintain D&O Insurance if the Company determines, in good faith,
that (i) such insurance cannot be obtained on terms which are commercially
reasonable, (ii) the premium costs for such insurance is significantly
disproportionate to the amount of coverage provided, (iii) the coverage provided
by such insurance is limited by exclusions so as to provide an insufficient
benefit, or (iv) the Company, after using best efforts, is otherwise unable to
obtain such insurance.
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13. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The indemnification and advancement
of Expenses provided by this Agreement shall not be deemed to limit or preclude
any other rights to which the Indemnitee may be entitled under the Company's
certificate of incorporation or bylaws, any agreement, any vote of stockholders
or disinterested directors of the Company, the DGCL, or otherwise.
14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and shall
inure to the benefit of (i) the Indemnitee and Indemnitee's heirs, devisees,
legatees, personal representatives, executors, administrators and assigns and
(ii) the Company and its successors and assigns, including any transferee of all
or substantially all of the Company's assets and any successor or assign of the
Company by merger or by operation of law.
15. SEVERABILITY. Each provision of this Agreement is a separate and distinct
agreement and independent of the other, so that if any provision hereof shall be
held to be invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof. To the extent required, any provision of this Agreement may
be modified by a court of competent jurisdiction to preserve its validity and to
provide the Indemnitee with the broadest possible indemnification and
advancement of Expenses permitted under the DGCL. If this Agreement or any
portion thereof is invalidated on any ground by any court of competent
jurisdiction, then the Company shall nevertheless indemnify Indemnitee as to
Expenses, damages, judgments, amounts paid in settlement, fines, penalties and
ERISA excise taxes with respect to any Proceeding to the fullest extent
permitted by any applicable portion of this Agreement that shall not have been
invalidated or by any applicable provision of the DGCL or any other applicable
law.
16. HEADINGS. The headings used herein are for convenience only and shall
not be used in construing or interpreting any provision of the Agreement.
17. GOVERNING LAW. The DGCL shall govern all issues concerning the relative
rights of the Company and the Indemnitee under this Agreement. All other
questions and obligations under this Agreement shall be construed and enforced
in accordance with the internal laws of the State of California, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of California or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of California. In any
action, dispute, litigation or other proceeding concerning this Agreement
(including arbitration), exclusive jurisdiction shall be with the courts of
California, with the County of Orange being the sole venue for the bringing of
the action or proceeding.
18. AMENDMENTS AND WAIVERS. No amendment, waiver, modification, termination or
cancellation of this Agreement shall be effective unless in writing and signed
by the party against whom enforcement is sought. The indemnification rights
afforded to the Indemnitee hereby are contract rights and may not be diminished,
eliminated or otherwise affected by amendments to the Company's certificate of
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incorporation, bylaws or agreements, including any D&O Insurance policies,
whether the alleged actions or conduct giving rise to indemnification hereunder
arose before or after any such amendment. No waiver of any provision of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof, whether or not similar, nor shall any waiver constitute a continuing
waiver.
19. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each party and
delivered to the other.
20. NOTICES. All notices and communications shall be in writing and shall be
deemed duly given on the date of delivery or on the date of receipt of refusal
indicated on the return receipt if sent by first class mail, postage prepaid,
registered or certified, return receipt requested, to the following addresses,
unless notice of a change of address is duly given by one party to the other, in
which case notices shall be sent to such changed address:
If to the Company:
Pacific Energy Resources Ltd.
0000 Xxxx Xxxx X Xxxxxx
Xxxx Xxxxx, XX 00000-0000
Attn: Xxxxxxxx Xxxxx, Chief Executive Officer
with a copy, which shall not constitute notice to the Company, to:
Xxxxx & Xxxxxx, LLP
000 Xxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx Xxxx, XX 00000
Attn: Xxxxx X. X'Xxxx, Esq.
If to the Indemnitee, to the address set forth on the signature
page to this Agreement.
21. SUBROGATION. In the event of any payment under this Agreement to or on
behalf of the Indemnitee, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of the Indemnitee against any person,
firm, corporation or other entity (other than the Company) and the Indemnitee
shall execute all papers requested by the Company and shall do any and all
things that may be necessary or desirable to secure such rights for the Company,
including the execution of such documents necessary or desirable to enable the
Company to effectively bring suit to enforce such rights.
22. SUBJECT MATTER AND PARTIES. The intended purpose of this Agreement is to
provide for indemnification and advancement of Expenses, and this Agreement is
not intended to affect any other aspect of any relationship between the
Indemnitee and the Company and is not intended to and shall not create any
rights in any person as a third party beneficiary hereunder.
23. CONSENT TO DISCLOSURE OF INFORMATION. By providing personal information to
the Company, the Indemnitee is consenting to the Company's collection, use and
disclosure of that information for the purposes of completing this Agreement and
for corporate governance purposes. The Indemnitee acknowledges that from time to
time the Company may be required to disclose such personal information to
securities regulatory authorities and stock exchanges and, by providing such
personal information to the Company, the Indemnitee hereby expressly consents to
such disclosure.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of 27
JULY, 2006.
"Indemnitee" Signature: /s/ Xxxx X Xxxxxxxxx
-----------------------------
Print Name: Xxxx X. Xxxxxxxxx
----------------------------
Address for Notices: 000 Xxxxx Xxxxx Xxx
-------------------
Xxxxxxxxxxx, Xx 00000
----------------------------------------
----------------------------------------
"Company" PACIFIC ENERGY RESOURCES LTD.,
a Delaware corporation
By: /s/ Xxxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxxx Xxxxx
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Its: CEO
-----------------------------------
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