EXECUTIVE EMPLOYMENT AGREEMENT
THIS
AGREEMENT
made
effective as of the ____ day of August, 2006.
BETWEEN:
CANWEST
PETROLEUM CORPORATION,
a body
corporate incorporated under the laws of the State of Colorado (hereinafter
called the "Corporation")
-
and
-
XXXXXXXXXXX
X. XXXXXXX,
an
individual resident in Calgary, Alberta (hereinafter called the
"Executive")
WHEREAS
the
Corporation wishes to employ the
Executive as the President and Chief Executive Officer of the
Corporation pursuant
to the terms of this Agreement;
AND
WHEREAS
the
Executive wishes to accept employment
with the Corporation as the President and Chief Executive Officer of
the
Corporation pursuant to the terms of this Agreement;
NOW
THEREFORE
in
consideration of the employment of the Executive by the Corporation, and for
other good and valuable consideration, the receipt and sufficiency of which
is
hereby acknowledged, the Parties agree as follows:
ARTICLE
I
DEFINITIONS
AND INTERPRETATION
1.1 In
this
Agreement, the following terms shall have the following meanings:
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(a)
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"Act"
means the Business
Corporations Act (Alberta),
as amended;
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(b)
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"affiliated"
has the meaning set out in the Act, and an "affiliate" means one
of two or
more affiliated bodies corporate;
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(c)
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"Agreement"
means this Executive Employment
Agreement;
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(d)
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"Base
Fee" means the amount paid to the Executive annually by the Corporation
pursuant to Article 5.1;
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(e)
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"Board
of Directors" means the board of directors of the
Corporation;
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(f)
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"Business"
means the business of the
Corporation;
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(g)
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"Cause"
means any reason which would entitle the Corporation to terminate
the
Executive's employment without notice or payment in lieu of notice
at
common law, or under the provisions of any other applicable law or
regulation and includes, without limiting the generality of the
foregoing:
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(i)
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fraud,
misappropriation of the Corporation's property or funds, embezzlement,
malfeasance, misfeasance or nonfeasance in office which is willfully
or
grossly negligent on the part of the Executive;
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(ii)
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the
willful allowance by the Executive of his duty to the Corporation
and his
personal interests to come in conflict in a material way in relation
to
any transaction or matter that is of a substantial nature;
or
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(iii)
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the
material breach by the Executive of any of his covenants or obligations
under this Agreement including, without limitation, any non-competition,
non-solicitation or confidentiality covenants with the
Corporation;
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(h)
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"Change
of Control" means the occurrence of any of the
following:
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(i)
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the
acquisition, by whatever means, 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
30% of
the combined voting power of the Corporation's then outstanding voting
securities and such person's previously owned rights to voting securities;
or
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(ii)
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the
amalgamation, consolidation or merger of the Corporation with any
other
corporation pursuant to which the shareholders of the Corporation
immediately prior to such transaction do not own voting securities
of the
successor or continuing corporation which would entitle them to cast
more
than 30% of the votes attaching to shares in the capital of the successor
or continuing corporation which might be cast to elect directors
of that
corporation; or
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(iii)
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the
election at a meeting of the Corporation's shareholders, as directors
of
the Corporation, of a number of persons, who were not included in
the
slate for election as directors proposed to the Corporation's shareholders
by the Corporation's prior Board of Directors, and who would represent
a
majority of the Board of Directors, or the appointment as directors
of the
Corporation, of a number of persons which would represent a majority
of
the Board of Directors, nominated by any holder of voting shares
of the
Corporation or by any group of holders of voting shares of the Corporation
acting jointly or in concert and not approved by the Corporation's
prior
Board of Directors;
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(i)
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"Company
Property" includes any and all proprietary technology, financial,
operating and training information, all works of expression and any
copyrights in such works, current or potential business contacts
and
contract development information, patentable inventions, discoveries
or
trade secrets, and any materials, tools, equipment, devices, records,
files, data, tapes, computer programs, computer disks, software,
communications, letters, proposals, memoranda, lists, drawings,
blueprints, correspondence, specifications or any other documents
or
property belonging to the Corporation or any Related
Corporations;
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(j)
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"Confidential
Information" means any information of a confidential nature which
relates
to the Business of the Corporation or any Related Corporation, including,
without limiting the generality of the foregoing, trade secrets,
technical
information, marketing strategies, sales and pricing policies, financial
information, business, marketing or technical plans, programs, methods,
techniques, concepts, formulas, documentation, intellectual property,
software, industrial designs, products, geophysical studies and data,
strategic studies, engineering information, customer and supplier
lists,
shareholder data and personnel information. Notwithstanding the foregoing,
Confidential Information shall not include any information
which:
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(i)
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was
in the possession of or known to the Executive prior to joining the
Corporation or any Related Corporation, without any obligation to
keep it
confidential, before it was disclosed to the Executive by the Corporation;
or
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(ii)
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is
or becomes public knowledge through no fault of the Executive;
or
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(iii)
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is
independently developed by the Executive outside the scope of his
employment with the Corporation; or
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(iv)
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is
disclosed by the Corporation or any Related Corporation, to another
Person
without any restriction on its use or disclosure;
or
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(v)
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is
or becomes lawfully available to the Executive from a source other
than
the Corporation;
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(k)
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"Effective
Date" means the date of this Agreement, unless otherwise noted herein
or
agreed to by the Parties;
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(l)
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"Monthly
Base Fee" means the annual Base Fee paid to the Executive, divided
by
12;
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(m)
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"Notice"
means any notice given by one Party to the other Party in accordance
with
the provisions hereof;
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(n)
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"Notice
Period" shall be 18 months plus one month for each completed year
of
employment by the Executive (which for the purposes of this Agreement
shall be calculated from November 1, 2004), up to a maximum aggregate
of
24 months;
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(o)
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"Party"
means one or other of the Executive and the Corporation, and "Parties"
means the Executive and the
Corporation;
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(p)
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"Permanent
Disability" means a mental or physical disability whereby the Executive:
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(i)
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is
unable, due to illness, disease, mental or physical disability or
similar
cause, to fulfill his obligations as an officer of the Corporation
for any
consecutive 6 month period, or for any period of 12 or more months
(whether consecutive or not) in any consecutive 24 month period;
or
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(ii)
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is
declared by a Court of competent jurisdiction to be mentally incompetent
or incapable of managing his
affairs;
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(q)
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"Person"
includes an individual, partnership, association, body corporate,
trustee,
executor, administrator or legal representative, and "Persons" means
a
group of more than one Person;
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(r)
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"Related
Corporation" means any subsidiary, parent company, division, affiliate,
predecessor or successor of the
Corporation;
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(s)
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"Term"
means the period during which this Agreement remains in force pursuant
to
Article III;
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(t)
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"Termination
Date" means the last day actively worked by the Executive for the
Corporation; and
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(u)
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"Triggering
Events" means any one or more of the
following:
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(i)
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a
material change (other than those which are clearly consistent with
a
promotion) in the services, position or duties of the Executive with
the
Corporation, responsibilities (including, without limitation, the
office
to which the Executive reports and the personnel which report to
the
Executive), title or office, which includes any removal of the Executive
from or any failure to re-elect or re-appoint the Executive to any
such
positions or offices, without the prior consent of the
Executive;
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(ii)
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the
assignment by the Corporation to the Executive of any duties which
are
inconsistent with the Executive’s position, duties and responsibilities
within the Corporation, without the prior consent of the
Executive;
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(iii)
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any
failure by the Corporation to continue in effect any material benefit,
bonus, profit sharing, incentive, remuneration or compensation plan,
stock
ownership, stock option or stock purchase plan, pension plan or retirement
plan in which the Executive is participating or entitled to participate
or
the Corporation taking any action or failing to take any action that
would
adversely affect the Executive's participation in or reduce his rights
or
benefits under or pursuant to any such plan, without in any of the
foregoing events providing alternative rights or benefits of reasonably
equivalent or greater value, or the Corporation failing to increase
or
improve such rights or benefits on a basis consistent with practices
in
effect with respect to the other senior executives of the
Corporation;
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(iv)
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the
Corporation relocating the Executive to any place other than Calgary,
Alberta without the consent of the Executive, except for required
travel
on the Corporation's business to an extent substantially consistent
with
the Executive's current duties and
obligations;
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(v)
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the
sale, lease or transfer by the Corporation of all or substantially
all of
the assets of the Corporation to any Person other than a Related
Corporation;
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(vi)
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approval
by the shareholders of the Corporation of the liquidation, dissolution
or
winding-up of the Corporation;
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(vii)
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any
breach by the Corporation of any provision of this Agreement which
is not
rectified in all material respects within a reasonable period of
time
after notice of such breach has been provided by the Executive to
the
Corporation;
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(viii)
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the
failure of Xxxxxxxxxxx X. Xxxxxxx to hold a seat on the board of
directors
of the Corporation for any reason whatsoever, other than a voluntary
resignation by Xx. Xxxxxxx; or
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(ix)
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the
failure by the Corporation to obtain, in a form satisfactory to the
Executive, an effective assumption of his obligations under this
Agreement
by any successor to the
Corporation.
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1.2 The
headings in this Agreement are inserted for convenience and ease of reference
only, and shall not affect the construction or interpretation of this
Agreement.
1.3 All
words
in this Agreement importing the singular number include the plural, and vice
versa. All words importing gender include the masculine, feminine and neuter
genders.
1.4 All
monetary amounts are in Canadian dollars.
1.5 The
word
"including", when following any general statement or term, is not to be
construed as limiting the general statement or term to the specific items or
matters set forth or to similar items or matters, but rather as permitting
the
general statement or term to refer to all other items or matters that could
reasonably fall within its broadest possible scope.
1.6 A
reference to a statute includes all regulations made thereunder, all amendments
to the statute or regulations in force from time to time, and any statute or
regulation that supplements or supersedes such statute or
regulations.
1.7 A
reference to an entity includes any successor to that entity.
1.8 A
reference to "approval", "authorization" or "consent’ means written approval,
authorization or consent.
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1.9 A
reference to an Article is to an Article of this Agreement and the reference
to
a Section followed by a number or some combination of numbers and letters refers
to the section, paragraph, subparagraph, clause or subclause of this Agreement
so designated.
ARTICLE
II
EMPLOYMENT
OF EXECUTIVE
2.1 The
Corporation agrees to employ
the Executive as the President and Chief Executive Officer of the Corporation
and the Executive agrees to accept such employment in accordance with the terms
and conditions of this Agreement.
2.2 The
Parties agree that the relationship between the Corporation and the Executive
is
that of employer and employee.
ARTICLE
III
TERM
OF AGREEMENT
3.1 The
Term
of this Agreement shall be for an indefinite period commencing on the Effective
Date, unless earlier terminated by the Corporation or the Executive pursuant
to
the terms and conditions of this Agreement.
ARTICLE
IV
DUTIES
OF EXECUTIVE
4.1 The
Executive shall, during the Term:
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(a)
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perform
the duties and responsibilities of the President and Chief Executive
Officer, including all those duties and responsibilities customarily
performed by a person holding the same or an equivalent position,
or
performing duties similar to those to be performed by the Executive,
in
corporations of a similar size to the Corporation, in a similar Business
to that of the Corporation in Canada and publicly traded on a recognized
senior stock exchange, as well as such other related duties and
responsibilities as may be assigned to the Executive by the Board
of
Directors of the Corporation from time to time, provided that such
other
related duties and responsibilities are consistent with the Executive's
duties as the President and Chief Executive
Officer;
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(b)
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accept
such other office or offices to which he may be elected or appointed
by
the Board of Directors of the Corporation in addition to that of
the
President and Chief Executive Officer, provided that performance
of the
duties and responsibilities associated with such office or offices
shall
be consistent with the duties provided for in Article 4.1(a);
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(c)
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devote
the majority of his working time, attention, efforts and skill to
the
performance of his duties and responsibilities as set out herein,
and
truly and faithfully serve the best interests of the Corporation
at all
times. In particular, and without limiting the generality of the
foregoing, the Executive shall not engage in any personal activities
or
any employment, consulting work, trade or other business activity
on his
own account or on behalf of any other Person, or as a material investor
or
shareholder of any other business or Person that competes, conflicts
or
interferes with the Business or the performance of the Executive's
duties
under this Agreement in any way, whether directly or indirectly.
It shall
not be a violation of this Article 4.1(c) for the Executive to engage
in a
voluntary activity or other public service which does not interfere
with
the Executive's duties under this Agreement;
and
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(d)
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notwithstanding
paragraph 4.1(c), the Corporation agrees that the Executive may be
a
member of the board of directors of other companies provided that
the
holding of such position would not be in direct conflict with the
Business
and provided that the Board of Directors of the Corporation has granted
prior approval to such position.
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ARTICLE
V
BASE
FEE
5.1 During
the Term of this Agreement, the Corporation shall pay to the Executive a fee
of
$300,000 per annum (the "Base Fee"), less required statutory deductions, payable
in equal semi-monthly installments or as otherwise determined by the
Corporation. The Executive's Base Fee will be reviewed by the Board of Directors
of the Corporation from time to time, and may be increased (but not decreased)
at the sole discretion of the Board of Directors, based upon such factors as
the
Board of Directors in its sole discretion determines are relevant, which factors
may include the performance of the Corporation and the employment compensation
arrangements of other corporations carrying on a similar business and of a
similar size to the Corporation in Canada.
5.2 The
Corporation shall reimburse the Executive for all reasonable out-of-pocket
expenses incurred in the performance of his duties and in accordance with the
applicable policies and procedures of the Corporation, as may be amended by
the
Corporation at its sole discretion from time to time. All payments or
reimbursements of expenses shall be subject to the submission by the Executive
of appropriate vouchers, bills and receipts. It is expressly acknowledged that
the Executive shall have the right, at his option, when traveling on Business
related matters or functions, to travel business class on any airline flight
over three (3) hours and that the Corporation shall reimburse the Executive
reasonable travel expenses associated therewith.
ARTICLE
VI
INCENTIVE
PAYMENTS
6.1 The
Executive shall be entitled to participate in the Corporation's long and short
term incentive plans (including stock option plans) and bonuses from time to
time, in amounts and on such terms and conditions as may be determined by the
Board of Directors of the Corporation at its sole discretion. Any such
participation by the Executive shall be subject to the terms and conditions
of
the relevant plan of the Corporation, as may be amended by the Board of
Directors of the Corporation at its sole discretion from time to time, and
by
the terms and conditions of any applicable agreement between the Executive
and
the Corporation made pursuant to such plan.
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ARTICLE
VII
BENEFITS
7.1 The
Executive shall be entitled to participate in all of the employment benefits
provided by the Corporation for its senior executive employees ("Benefits"),
subject to the terms and conditions of the applicable benefit plans established
by the Corporation, as may reasonably amended by the Corporation from time
to
time.
7.2 The
Executive shall be entitled to the use of a vehicle provided by the Corporation.
In the event that a vehicle is not made available to the Executive, the
Executive shall be entitled to a vehicle allowance in the amount of $1,500
per
month.
ARTICLE
VIII
VACATION
8.1 The
Executive shall be entitled to an annual paid vacation of 30 business days.
Vacation may be taken in such a manner and at such times as the Executive and
the Corporation mutually agree. In the event that the Executive is unable to
take the entitled vacation time, the Corporation and the Executive shall
negotiate a suitable arrangement to compensate the Executive.
ARTICLE
IX
TERMINATION
BY CORPORATION
9.1 Subject
to Section 9.3, the Corporation shall be entitled to terminate this Agreement
and the Executive's employment at any time, for any reason, upon written Notice
to the Executive, in which case the Corporation shall provide the Executive
with
the following (subject to the conditions set out in Article 9.2):
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(a)
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a
lump sum equal to the Monthly Base Fee as at the Termination Date,
multiplied by the number of months in the Notice
Period;
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(b)
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a
lump sum equal to the value of the Executive's Benefits (which value
shall
be deemed to be the monthly cost to the Corporation excluding GST
and
similar taxes), multiplied by the number of months in the Notice
Period;
and
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(c)
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a
further lump sum equal to the Executive's average annual bonuses
during
the last three fiscal years preceding the Termination Date (or, if
the
Executive has been employed for less than three fiscal years, then
for the
period of employment preceding the Termination Date), divided by
12 and
multiplied by the number of months in the Notice
Period.
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Payment
of the amounts set out in this Article 9.1 shall represent full and final
settlement of any claims by the Executive against the Corporation or any Related
Corporation, arising out of or in any way connected to the Executive's
employment with the Corporation or any Related Corporation, or the termination
of such employment, whether at common law or under the provision of any statute
or regulation, or pursuant to the terms of any agreement between the
Parties.
9.2 Payment
of the amounts set out in Article 9.1 shall be subject to the following
conditions:
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(a)
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the
prior execution by the Executive of a settlement agreement and release
and
indemnity in favour of the Corporation and any Related Corporations,
in a
form reasonably acceptable to the
Corporation;
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(b)
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any
withholdings or deductions required by law to be made by the Corporation;
and
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(c)
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the
Executive's right to receive payment under Article 9.1 shall not
be
subject to any duty to mitigate, nor affected by any actual mitigation
by
the Executive.
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9.3 The
Corporation shall be entitled to terminate this Agreement and the Executive's
employment with the Corporation at any time, without notice, pay in lieu of
notice or any other form of severance or termination pay, for
Cause.
9.4 Notwithstanding
any other term or provision of this Article 9, upon termination of the
Executive’s employment by the Corporation for any reason, the Executive shall
receive any Base Fee and Benefits earned up to the Termination
Date.
ARTICLE
X
TERMINATION
BY EXECUTIVE
10.1 The
Executive may terminate this Agreement and his employment with the Corporation
by providing 60 days' prior written Notice to the Corporation. Upon termination
of his employment pursuant to this Article 10.1, the Executive shall not be
entitled to receive any notice or pay in lieu of notice, or any other form
of
severance or termination pay pursuant to this or any other agreement between
the
Parties.
10.2 Notwithstanding
the provision in Article 10.1, the Executive may terminate his employment with
the Corporation and receive the payments set out in Article 10.3, upon the
occurrence of either a Change of Control or a Triggering Event, and subject
to
the conditions set out in Article 10.4.
10.3 Upon
the
occurrence of either a Change of Control or a Triggering Event, and subject
to
the conditions set out in Article 10.4, the Executive shall receive the
following:
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(a)
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a
lump sum equal to the Monthly Base Fee as at the Termination Date,
multiplied by the number of months in the Notice
Period;
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(b)
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a
lump sum equal to the value of the Executive's Benefits (which value
shall
be deemed to be the monthly cost to the Corporation excluding GST
and
similar taxes), multiplied by the number of months in the Notice
Period;
and
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(c)
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a
further lump sum equal to the Executive's average annual bonuses
during
the last three fiscal years preceding the Termination Date (or, if
the
Executive has been employed for less than three fiscal years, then
for the
period of employment preceding the Termination Date), divided by
12 and
multiplied by the number of months in the Notice
Period.
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Payment
of the amounts set out in this Article 10.3 shall represent full and final
settlement of any claims by the Executive against the Corporation or any Related
Corporation, arising out of or in any way connected to the Executive's
employment with the Corporation or any Related Corporation, or the termination
of such employment, whether at common law or under the provision of any statute
or regulation, or pursuant to the terms of any agreement between the
Parties.
10.4 Payment
of the amounts set out in Article 10.3 shall be subject to the following terms
and conditions:
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(a)
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the
prior execution by the Executive of a settlement agreement and release
and
indemnity in favour of the Corporation and any Related Corporations,
in a
form reasonably acceptable to the Corporation;
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(b)
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the
tendering by the Executive of his resignation from any position he
may
hold as an officer or a director of the Corporation and any Related
Corporations;
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(c)
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any
withholdings or deductions required by law to be made by the Corporation
by law;
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(d)
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the
Executive's right to receive the payments under Article 10.3 shall
not be
subject to any duty to mitigate, nor affected by any actual mitigation
by
the Executive; and
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(e)
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the
receipt by the Corporation of written notice from the Executive,
within 60
days of the occurrence of a Change of Control or a Triggering Event,
as
the case may be, setting out the basis on which the Executive believes
that a Change of Control or a Triggering Event as the case may be,
has
occurred.
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10.5 The
Executive covenants and agrees to provide his full cooperation and assistance,
in connection with the termination of his employment upon a Triggering Event,
to
transfer his duties and responsibilities to a replacement.
10.6 Notwithstanding
any other term or provision of this Article 10, upon termination of the
Executive’s employment by the Executive for any reason, the Executive shall
receive any Base Fee and Benefits earned up to the Termination
Date.
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10.7 Payment
under Article 10 shall be made on the later of the date which is 30 calendar
days after receipt by the Corporation of the Notice referred to herein and
the
date which is 60 calendar days after the effective date of the Change of Control
or Triggering Event, as the case may be.
ARTICLE
XI
TERMINATION
UPON DEATH OR PERMANENT DISABILITY
11.1 This
Agreement shall automatically terminate upon the death of the
Executive.
11.2 In
the
event that the Executive shall suffer a Permanent Disability, the Corporation
may terminate this Agreement and the Executive's employment by providing at
least 30 days prior written Notice to the Executive. Upon termination of the
Executive's employment pursuant to this Article 11.2, the Corporation shall
have
no further obligation to the Executive, with the exception that the Executive
shall continue to be entitled to such insurance benefits as may be provided
under any long term disability insurance plan, and to any benefit or entitlement
arising from any pension plan of the Corporation.
ARTICLE
XII
STOCK
OPTIONS
12.1 Upon
the
termination of the Executive for Cause under Section 9.3 or if the Executive
terminates this Agreement pursuant to Section 10.1, only those stock options
and
other incentive interests held by the Executive (including, for the purposes
hereof, those stock options and other incentive interests granted to the
Executive by a Related Corporation) that are vested at such Termination Date
may
be exercised by the Executive in accordance with the terms of the relevant
agreement, stock option plan or other incentive plans of the Corporation in
effect at the time, as applicable, and the Executive shall have no claim to
the
acceleration of vesting or the exercise on any stock options and other incentive
interests which are not fully vested as at such Termination Date other than
under the terms of the relevant agreement, stock option plan or other incentive
plans of the Corporation in effect at the time, as applicable. All such
remaining unvested stock options and other incentive interests shall terminate,
be null and void and of no further force and effect notwithstanding the terms
of
the relevant agreement, stock option plan or other incentive plans of the
Corporation in effect at the time, as applicable.
12.2 Upon
termination of the Executive by reason of death or Permanent Disability, only
those stock options and other incentive interests held by the Executive
(including, for the purposes hereof, those stock options and other incentive
interests granted to the Executive by a Related Corporation) which are vested
at
such Termination Date may be exercised by the Executive pursuant to the terms
of
the relevant agreement, stock option plan or other incentive plans of the
Corporation in effect at the time, as applicable, and the Executive shall have
no claim to the acceleration of vesting or to the exercise of any stock options
which are not fully vested as at such Termination Date, other than under the
terms of the relevant agreement, stock option plan or other incentive plans
of
the Corporation in effect at the time, as applicable. All such remaining
unvested stock options and other incentive interests shall terminate, be null
and void and of no further force and effect notwithstanding the terms of the
relevant agreement, stock option plan or other incentive plans of the
Corporation in effect at the time, as applicable.
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12.3 Upon
termination of the Executive for any reason other than Cause, voluntary
termination by the Executive, death or Permanent Disability, all stock options
and other incentive interests held by the Executive (including, for the purposes
hereof, those stock options and other incentive interests granted to the
Executive by a Related Corporation) shall vest immediately and may be exercised
pursuant to the terms of the relevant agreement, stock option plan or other
incentive plans of the Corporation in effect at the time, as
applicable.
12.4 Notwithstanding
subsections 12.2 and 12.3 hereof, the provisions of the Corporation's stock
option plan, the provisions of any stock option agreement entered into between
the Corporation (including a Related Corporation) and the Executive, and the
provisions of any other incentive plan of the Corporation in effect at the
time,
the Parties agree that upon termination of the Executive pursuant to Sections
9.1, 10.2, 11.1 or 11.2 hereof, the applicable vested stock options and other
incentive interests may be exercised by the Executive until the earlier of
(i)
the original date of expiry of the stock options and other incentive interests,
as the case may be; and (ii) two years after the Termination Date. All stock
options and other incentive interests which remain unexercised after this time
period shall terminate, be null and void and of no further force and effect
notwithstanding the terms of the relevant agreement, stock option plan or other
incentive plans of the Corporation in effect at the time, as
applicable.
ARTICLE
XIII
CONFIDENTIAL
INFORMATION AND NON-COMPETITION
13.1 The
Executive acknowledges and agrees that in performing the duties and
responsibilities of his employment pursuant to this Agreement, he will occupy
a
position of high fiduciary trust and confidence with the Corporation, pursuant
to which he will develop and acquire wide experience and knowledge with respect
to all aspects of the Business carried on by the Corporation and its Related
Corporations, and the manner in which such Business is conducted. It is the
express intent and agreement of the Executive and the Corporation that such
knowledge and experience shall be used solely and exclusively in furtherance
of
the Business interests of the Corporation and its Related Corporations, and
not
in any manner detrimental to them. The Executive therefore agrees that, so
long
as he is engaged by the Corporation pursuant to this Agreement, he shall not
engage in any practice or business that competes with the Business of the
Corporation or its Related Corporations. It shall not be considered a violation
of this Section 13.1 for the Executive to be involved as an investor or
shareholder in securities issued by corporations that compete directly or
indirectly with the Business, provided that such investment does not constitute
more than 5% of the outstanding securities of a business or corporation whose
shares trade on a recognized stock exchange.
13.2 The
Executive agrees that during the Term, and following the termination of the
Executive's employment for any reason, he shall treat confidentially all
Confidential Information belonging to the Corporation or its Related
Corporations, and shall not use or disclose the Confidential Information to
any
unauthorized persons, except with the prior express written consent of the
Corporation, or otherwise as required by law.
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13.3 The
Executive further acknowledges and agrees that pursuant to the terms of this
Agreement, it will acquire Company Property which is and shall remain the sole
and exclusive property of the Corporation. Upon termination of the Executive's
employment and this Agreement for any reason, the Executive shall return to
the
Corporation all Company Property, together with any copies or reproductions
thereof, which may have come into the Executive's possession during the course
of or pursuant to this Agreement, and shall delete or destroy all computer
files
on its personal computer which may contain any Confidential Information
belonging to the Corporation, or its Related Corporations.
13.4 Notwithstanding
the provision of 13.3 and 13.4, the Executive shall be permitted to disclose
Confidential Information as required by law, regulation, government body or
authority or by court order.
13.5 The
Executive acknowledges and agrees that the Corporation would suffer irreparable
harm in the event that any Confidential Information or other knowledge and
experience acquired by the Executive in relation to the business of the
Corporation were disclosed to a competitor of the Corporation or used for a
competitive purpose for a reasonable period of time following the termination
of
his employment. Accordingly, the Executive agrees that in the event his
employment with the Corporation is terminated for Cause by the Corporation,
or
in the event that the Executive voluntarily resigns his employment with the
Corporation, neither he nor any employee or agent of the Executive shall, for
a
period of four (4) months from the Termination Date:
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(a)
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be
engaged, either directly or indirectly in any manner including, without
limitation, as an officer, director, shareholder, owner, partner,
member,
joint venturer, employee, independent contractor, consultant, advisor
or
sales representative, in any business or enterprise which competes
with
the Business of the Corporation or any Related Corporation, as such
business was conducted as of the Termination Date, with the exception
that
the Executive may be involved as an investor or shareholder in securities
issued by corporations that compete directly or indirectly with the
Business, provided that such investment does not constitute more
than 5%
of the outstanding securities of a business or corporation whose
shares
trade on a recognized stock
exchange;
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(b)
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solicit,
entice or attempt to solicit or entice, either directly or indirectly,
any
customer or prospective customer of the Corporation or any Related
Corporation as at the Termination Date, to become a customer of any
business or enterprise which competes with the Corporation or any
Related
Corporation for any business as such business was conducted by the
Corporation or any Related Corporation as at the Termination Date;
or
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13
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(c)
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solicit
or entice, or attempt to solicit or entice, either directly or indirectly,
any employee of the Corporation or any Related Corporation as at
the
Termination Date, to become employed by or connected with any business
or
enterprise which competes with the Corporation or any Related Corporation
for any business as such business was conducted by the Corporation
or any
Related Corporation as at the Termination Date.
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The
restrictions set out in this Section 13.5 shall apply only within North America
or to any business that directly relates to North America.
13.6 The
Executive acknowledges and agrees that the Corporation will suffer harm in
the
event that the Executive breaches any of the obligations under this Article
13,
and that monetary damages would be difficult to quantify and may be inadequate
to compensate the Corporation for such a breach. Accordingly, the Executive
agrees that in the event of a breach or a threatened breach by the Executive
of
any of the provisions of this Article 13, the Corporation shall be entitled
to
seek, in addition to any other rights, remedies or damages available to the
Corporation at law or in equity, an interim and permanent injunction, in order
to prevent or restrain any such breach or threatened breach by the
Executive.
13.7 The
Executive hereby agrees that all restrictions contained in this Article
13 are
reasonable and necessary to protect the legitimate proprietary interests of
the
Corporation, and will not unduly restrict his ability to secure comparable
alternative employment following the termination of his employment for any
reason. If any covenant or provision of this Article 13 is determined to be
void
or unenforceable in whole or in part, for any reason, it shall be deemed not
to
affect or impair the validity of any other covenant or provision of this
Agreement, which shall remain in full force and effect.
13.8 The
provisions of this Article 13 shall remain in full force and effect
notwithstanding the termination of this Agreement for any reason.
ARTICLE
XIV
INDEMNIFICATION
14.1 The
Corporation covenants, both during and after the Executive's term of service,
to
indemnify and hold harmless the Executive and his heirs and legal
representatives, to the maximum extent permitted by Colorado law or other law
to
which the Corporation is subject (provided that the Executive acted honestly
and
in good faith with a view to the best interests of the Corporation and, in
the
case of a criminal or administrative action or proceeding that is enforced
by
monetary penalty, the Executive had reasonable grounds for believing that his
conduct was lawful), from and against:
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(a)
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all
costs, charges, liabilities and expenses whatsoever that the Executive
may
sustain or incur in or about or in relation to any action, suit or
proceeding that is brought, commenced or prosecuted against the Executive
for or in respect of any act, deed, matter or thing whatever made,
done or
permitted or not made, done or permitted by the Executive in or about
the
execution of his duties as a director or officer of the Corporation
or its
subsidiaries; and
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(b)
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all
other costs, charges, liabilities and expenses that the Executive
may
sustain or incur (including, without limitation, all income tax,
sales tax
and excise tax liabilities resulting from any payment made pursuant
to
this indemnity) in or about or in relation to the affairs of the
Corporation or its subsidiaries or his position as a director or
officer
of the Corporation or its
subsidiaries.
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14
14.2 The
Corporation further agrees that any costs, charges and expenses referred to
in
paragraph 14.1(a) above shall be paid in advance of the final disposition of
any
such action or proceeding upon receipt by the Corporation of a written
undertaking by the Executive to repay such amount if it shall ultimately be
determined that the Executive is not entitled to be indemnified in accordance
with the terms and conditions of this Indemnity and Colorado law.
14.3 The
Corporation further agrees, both during and after the Executive's term of
service, to use its reasonable best efforts to obtain any approval or approvals
necessary for such indemnification and to co-operate with the Executive and
to
provide the Executive with access to any evidence which the Corporation may
have
or control, which would enable the Executive to make application or obtain
any
approval or approvals necessary for such indemnification.
14.4 The
Corporation shall maintain a directors and officers insurance policy in such
amounts as may be customary for corporations of a similar size and business
and
risk profile as the Corporation in Canada, and the Executive shall be entitled
to the benefit of such insurance policy during the Term of the Agreement and
for
so long after termination of the Agreement for any reason as may be agreed
to by
the parties acting reasonably, for the purpose of providing continued insurance
coverage for the benefit of the Executive for all acts or omissions covered
by
Article 14 that occur prior to the Termination Date.
14.5 The
provisions of this Article 14 shall remain in full force and effect
notwithstanding the termination of this Agreement for any reason.
ARTICLE
XV
NOTICES
15.1 Any
Notice required to be given hereunder may be provided by personal delivery,
by
registered mail or by facsimile to the Parties hereto at the following
addresses:
To
the
Corporation:
CanWest
Petroleum Corporation
Xxxxx
000, 000 - 0xx
Xxxxxx
X.X.
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention: Chairman
of the Board
Fax: (000)
000-0000
15
To
the
Executive:
Xxxxxxxxxxx
X. Xxxxxxx
000
Xxxxxxxxx Xxxxx XX
Xxxxxxx,
Xxxxxxx X0X 0X0
e-mail:
xxxxxxxx00@xxxxxxx.xxx
Any
Notice, direction or other instrument shall, if delivered, be deemed to have
been given and received on the business day on which it was so delivered, and
if
not a business day, then on the business day next following the day of delivery,
and, if mailed, shall be deemed to have been given and received on the fifth
day
following the day on which it was so mailed, and, if sent by facsimile
transmission, shall be deemed to have been given and received on the next
business day following the day it was sent.
15.2 Either
Party may change its address for notice in the aforesaid manner.
ARTICLE
XVI
GENERAL
16.1 This
Agreement shall be construed and enforced in accordance with the laws of the
Province of Alberta, and the Parties hereby attorn to the non-exclusive
jurisdiction of Alberta Courts. Should provisions in this Agreement fail to
comply with the applicable legislation, the Agreement shall be interpreted
in
accordance with those statutory requirements.
16.2 This
Agreement and any other agreements expressly incorporated by reference herein,
constitute the entire agreement between the Parties with respect to the subject
matter hereof, and supercede and replace any and all prior agreements,
undertakings, representations or negotiations pertaining to the subject matter
of this Agreement. The Parties agree that they have not relied upon any verbal
statements, representations, warranties or undertakings in order to enter into
this Agreement. In the event of a conflict between this Agreement and any other
agreement expressly incorporated by reference herein, the terms of this
Agreement shall prevail.
16.3 This
Agreement may not be amended or modified in any way except by written instrument
signed by the Parties hereto.
16.4 This
Agreement shall enure to the benefit of and be binding upon the Parties hereto,
together with their personal representatives, successors and permitted
assigns.
16.5 This
Agreement is a personal services agreement and may not be assigned by either
Party without the prior written consent of the other Party.
16.6 The
waiver by either Party of any breach of the provisions of this Agreement shall
not operate or be construed as a waiver by that Party of any other breach of
the
same or any other provision of this Agreement.
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16.7 The
Parties agree to execute and deliver such further and other documents, and
perform or cause to be performed such further and other acts and things as
may
be necessary or desirable in order to give full force and effect to this
Agreement.
16.8 The
Executive agrees that following the termination of the Executive's employment
with the Corporation for any reason, the Executive shall tender his resignation
from any position he may hold as an officer or director of the Corporation
or
any Related Corporation.
16.9 In
the
event of a Change of Control, the Corporation will use its reasonable commercial
efforts to obtain and pay for directors' and officers' liability insurance
on a
"trailing" or "run off" basis for the Executive, covering claims made prior
to
or within six years from the date of the Change of Control, such insurance
to
provide coverage substantially equivalent in scope and coverage to that provided
by the Corporation's directors and officers insurance policy, if any, in effect
immediately prior to the Change of Control.
16.10 The
Corporation agrees to co-operate with the Executive, to the extent permitted
by
applicable tax laws, so as to permit the Executive to consider payments
hereunder on termination of employment to be retirement benefits.
16.11 Should
any provision in this Agreement be found to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remaining
provisions of the Agreement shall not be affected or impaired thereby in any
way.
IN
WITNESS WHEREOF the Parties hereto acknowledge and agree that they have read
and
understand the terms of this Agreement, and that they have had an opportunity
to
seek independent legal advice prior to entering into this Agreement, and that
they have executed this Agreement with full force and effect from the date
first
written above.
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CANWEST
PETROLEUM CORPORATION
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Per:
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Per:
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Witness
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XXXXXXXXXXX
X. XXXXXXX
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