SUPPLEMENTAL BENEFIT AGREEMENT
THIS AGREEMENT made effective as of the 31st
day of December, 1998.
BETWEEN:
NORTHSTAR ENERGY CORPORATION, a body corporate having
offices in the City of Calgary, in the Province of
Alberta (hereinafter referred to as "Northstar")
OF THE FIRST PART
XXXX X. XXXX, an individual residing in the City of
Calgary, in the Province of Alberta (hereinafter
referred to as "Xxxx")
OF THE SECOND PART BACKGROUND:
(a) Xxxx is presently employed as its Chairman;
(b) Xxxx has devoted considerable efforts on behalf of
Northstar as an employee of Northstar and its
predecessor corporations;
(c) the pension benefits that may be provided for Xxxx
through a registered plan are, due to maximum benefit
levels imposed by the Income Tax Act, not adequate to
provide Xxxx with a retirement income commensurate with his
contributions to the corporation; and
(d) Xxxx is currently a highly valued employee of Northstar
and Northstar wishes to provide Xxxx an incentive to remain
in the employ of Northstar and wishes to provide Xxxx with
an adequate retirement income in recognition of his
long service.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
INTERPRETATION
1.01 Definitions. In this Agreement, the following
words and phrases shall have the following meanings:
"Agreement" means this Supplemental Benefit Agreement;
"Compensation" means, in the respect of any calendar year,
the aggregate of:
(a) the annual base salary paid by Northstar to Xxxx during
that year; plus
(b) any remuneration paid by Northstar to Xxxx in that
year pursuant to any profit sharing or officer or employee
incentive, compensation or bonus program; but
(c) not including any amount paid under this Agreement,
any amount paid due to Xxxx'x termination of
employment, contributions made on behalf of Xxxx pursuant
to the Northstar Savings Plan, any amount included in
income attributable to the exercise of (or acceleration
of rights in) a stock option or receipt of a stock award;
"Corporation" means Northstar;
"Final Average Compensation" shall mean the average of
the highest annual Compensation earned by Xxxx during
the three consecutive calendar years of his employment
during the 10 calendar years immediately preceding his
attainment of age 60 or his earlier termination of
employment, as the case may be;
"Retirement Benefit" means the retirement benefit
payable by Northstar to Xxxx pursuant to paragraph 2.01
hereof; and
"Spouse" means Xxxx'x wife, Xxxxxxx Xxxxxxxx Xxxx.
1.02 Headings. The headings of the Articles and
paragraphs herein are inserted for convenience of reference
only and shall not affect the meaning or construction
hereof.
1.03 Applicable Law. This Agreement shall be construed
and interpreted in accordance with the laws of the
Province of Alberta and the federal laws of Canada
applicable therein. Each of the parties hereby
irrevocably attorn to the jurisdiction of the courts of the
Province of Alberta with respect to any matters arising out
of this Agreement.
ARTICLE II
RETIREMENT PAYMENT
2.01 Amount of Payment. Upon his retirement as an
employee of Northstar (as provided below), the Corporation
shall pay to Xxxx an annual Retirement Benefit in the
amount of 65% of his Final Average Compensation.
Provided, in the event that Xxxx terminates employment
prior to his retirement date (as provided below), then,
his Retirement Benefit shall be calculated as of such date
based on his then earned Final Average Compensation.
The Retirement Benefit shall commence upon Xxxx'x
retirement or upon Xxxx attaining the age of 60 years,
whichever is later. The Retirement Benefit shall be
payable to Xxxx for his lifetime, subject to the
survivor benefit payable to his Spouse pursuant to
paragraph 2.03 hereof.
2.02 Manner of Payment. The Retirement Benefit
payable hereunder at any point in time shall be calculated
in Canadian dollars but shall be paid in U.S. dollars
using the conversion rate in effect at the time of each
payment based on the rate of exchange as quoted by the
Bank of Canada (or, if not so quoted, the spot rate of
exchange quoted for wholesale transactions made by Bank of
America Canada at Toronto, Ontario), however, such exchange
rate shall not be less than a conversion rate of .70 or
greater than 1.00 from Canadian to U.S. dollars.
2.03 Survivor Benefit. In the event of Xxxx'x death
after commencement of the payment of the Retirement Benefit,
his Spouse will continue to receive 60% of the Retirement
Benefit during her lifetime.
In the event of Xxxx'x death, prior to commencement of the
payment of the Retirement Benefit, his Spouse's entitlement
to receipt of 60% of the Retirement Benefit shall commence
on the day that Xxxx would have attained the age of 60 years
or the date of his death, whichever occurs later, and such
shall be payable to her thereafter during her lifetime.
2.04 Disability Benefit. In the event that Xxxx is
disabled while employed by Northstar and is, as a result
thereof, unable to continue his employment with
Northstar, Xxxx'x then earned Retirement Benefit will
commence when Xxxx attains age 60. If the disability
occurs after Xxxx attains the age of 60, the Retirement
Benefit payments shall commence upon the occurrence of the
disability.
2.05 No Adjustment. Except as provided in paragraph 2.02
herein, with respect to currency conversion, there will
be no adjustment to the Retirement Benefit payable to Xxxx
after such payments commence, whether inflationary,
deflationary, or other wise.
ARTICLE III
FUNDING AND TERMINATION
3.01 Funding Policy. The Retirement Benefit
payable hereunder shall not be funded by Northstar in any
way, in advance of payment to Xxxx. The Retirement
Benefit shall be unsecured contractual obligation of
Northstar, payable from the available funds of Northstar,
and with payment of the annual Retirement Benefit being
made to Xxxx in equal monthly installments. The Survivor
Benefit payable to his Spouse shall similarly be paid. Xxxx
may, at his sole option, require Northstar to provide
reasonable security for the ongoing obligations
of the Corporation to make the Retirement Benefit payments,
at the time of his retirement or thereafter, but not prior
thereto.
3.02 Commutation. Northstar may, with the written
agreement of Xxxx or his Spouse, as the case may be, at any
time after the date of the first payment of the Retirement
Benefit, commute into a lump sum the value of the remaining
Retirement Benefit payable under this Agreement and pay such
commuted lump sum value to Xxxx or his Spouse, as
applicable.
3.03 Continuation of Employment. In consideration for
the benefits payable hereunder, Xxxx agrees to
continue his employment with Northstar from January 1,
1999 through December 31, 2000 in the capacity as he
presently serves as of the date this Agreement is
executed. However, notwithstanding any provision herein to
the contrary, Xxxx will forfeit no benefits payable under
the terms of this Agreement in the event that his
employment with Northstar terminates for any reason
prior to December 31, 2000.
3.04 Termination Of Employment. The Retirement
Benefit payable to Xxxx, and the Survivor Benefit payable
to his Spouse, as the case may be, shall, subject to the
provisions of paragraph 2.01 hereof, be payable by Northstar
notwithstanding the date of Xxxx'x retirement or whether
his employment is terminated voluntarily or involuntarily
at any time.
ARTICLE IV
GENERAL
4.01 Confidentiality. Xxxx shall not at any time use
for his own purposes or purposes other than those of
Northstar, or improperly divulge or communicate to anyone,
confidential information which he receives or obtains in
relation to the business or affairs of Northstar, other
than information which is in the public domain or
which enters the public domain other than through the
act or failure to act on the part of Xxxx.
4.02 Non-Competition. Xxxx agrees that, at the time of
his retirement or termination of his employment, he
will make available to Northstar, at reasonable times, the
benefits of his experience and advice in a consulting
capacity, provided that Northstar pays to Xxxx the
costs and expenses, including travelling expenses,
incurred by him in connection with rendering such services.
In addition, Xxxx agrees that he will not, within a two year
period following commencement of payment of Retirement
Benefits hereunder, without prior written approval from the
board of directors of Northstar, either individually or in
partnership or in conjunction with any person or entity,
carry on or be engaged in or connected with any business
that is in direct competition with the business carried on
by Northstar at the time of Xxxx'x retirement. Nothing
herein contained shall restrict or prohibit Xxxx from making
equity investments in any company or other business entity
in the oil and gas industry or in any other industry sector
in which Northstar is carrying on business at the time of
Xxxx'x retirement, provided that the investment is
passive in nature and Xxxx is not involved in the
management, direction or ongoing operation of that company
or other business entity.
4.03 Severable. If any provision of this Agreement
shall be held to be invalid, illegal or unenforceable,
the validity, legality or enforceability of the remaining
provisions of this Agreement shall not in any way be
affected or impaired thereby.
4.04 Entire Agreement. This Agreement constitutes
the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes
all prior agreements, understandings, negotiations and
discussions, whether oral or
written, among the parties with respect to the subject
matter of this Agreement.
4.05 Amendments. No amendment or modification of
this Agreement shall be binding unless in writing, signed by
each of the parties hereto.
4.06 Waiver. No waiver by either party hereto of any
breach of any of the provisions of this Agreement shall
take effect or be binding upon the party unless in writing
and signed by such party. Unless otherwise provided
therein, such waiver shall not limit or affect the rights
of such party with respect to any other breach.
4.07 Successors and Assigns. This Agreement
shall be non-assignable but shall enure to the benefit and
be binding upon the parties hereto and their respective
heirs, executors, administrators, other legal personal
representatives.
4.08 Guarantee By Devon Energy. Devon Energy
Corporation, an Oklahoma corporation, does hereby guarantee
the performance of all of the obligations of Northstar to
Xxxx under the terms of this Agreement.
4.09 Effect of Agreement on Prior Related Agreement. This
Agreement supersedes and replaces that certain agreement
between Northstar and Xxxx entitled "Supplemental Benefit
Agreement" and dated January 1, 1996.
4.10 Further Acts. The parties hereto agree to execute
and deliver such further and other documents and perform and
cause to be performed such further and other acts and
things as may be necessary or desirable in order to give
full effect to this Agreement and every part hereof.
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the day and year first above written.
Executed this 17th day of February, 1999.
NORTHSTAR ENERGY CORPORATION
Per:__________________________
/s/ Xxxx X. Xxxx
Xxxx X. Xxxx
ACCEPTED AND AGREED TO THIS 17th DAY OF FEBRUARY, 1999:
DEVON ENERGY CORPORATION
Per: /s/Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
