EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit
10.61
Executive
Employment Agreement
among
Gran
Tierra Argentina S.A.
(“GTASA”),
an
Argentine company, a wholly-owned subsidiary of Gran Tierra (defined below),
Gran
Tierra Energy Inc.,
a
Nevada corporation (“Gran
Tierra”)
and
Xxxxxx
Orunesu
(hereinafter called the “Executive”,
collectively with GTASA and Gran Tierra, the “Parties”).
GTSASA and Gran Tierra are sometimes referred to herein as the “Company.”
RECITALS:
A. The
Executive has specialized knowledge and valuable skills and experience which
are
critical to the management and success of the business.
B. GTASA
and
Gran Tierra wish to secure the services of the Executive and to ensure that
the
Executive remains President of GTASA
C. The
Executive is currently an employee of GTASA pursuant to an employment agreement
between the Executive and GTASA dated March 1, 2005, as amended (the
“Prior Agreement”).
D. The
Parties wish to set forth their entire understanding and agreement with respect
to the subject matter hereof and replace the Prior Agreement in its entirety
with this Executive Employment Agreement (the “Agreement”).
Therefore,
the
Parties agree as follows:
ARTICLE
1
DUTIES
AND RESPONSIBILITIES
1.1 Position
GTASA
confirms the appointment of the Executive to the position of President of GTASA.
The Executive shall perform the duties and responsibilities as well as those
duties reasonably assigned to the Executive by the Board of Directors of Gran
Tierra (the “Board”).
The
parties agree that the relationship between GTASA and the Executive created
by
this Agreement is that of employer and employee.
1.2 Other
Engagements
The
Executive shall not engage in any other business, profession or occupation
which
would conflict with the performance of his duties and responsibilities under
this Agreement, either directly or indirectly, including accepting appointments
to the boards of other companies without the prior written consent of the
Board.
.
1.3 Reassignment
The
Executive shall not be reassigned to another position within GTASA itself,
or to
a position within another subsidiary or Gran Tierra, or other affiliated or
related corporate entity (a “Member
Company”
or
“Member
Companies”)
or
alter the duties, responsibilities, title, or reporting lines of the Executive
or change the location of the Executive’s employment unless the Executive agrees
to such reassignment or alteration.
1.4 Travel
The
Executive shall be available for such business related travel as may be required
for the purposes of carrying out the Executive’s duties and responsibilities.
The Executive shall be entitled to fly business class only for international
flights and shall use economy for domestic travel. The Executive will be
entitled to choose suitable accommodations when traveling on GTASA or Gran
Tierra business.
ARTICLE
2
TERM
OF EMPLOYMENT
The
Executive’s employment with GTASA is for no specified duration and constitutes
at-will employment. The Executive’s employment may be terminated at any time by
either GTASA or Executive, subject to the provisions of Article 9.
ARTICLE
3
BASE
SALARY
The
Executive will be paid an annual salary in
an
amount determined by the Board,
subject
to applicable statutory deductions (the “Base
Salary”).
The
Executive’s Base Salary will be payable in accordance with GTASA practices and
procedures as they may exist from time to time. Base Salary will be reviewed
and
may be increased on an annual basis by the Board, with input from the
Executive.
ARTICLE
4
BONUS
4.1 Bonus
Eligibility
The
Executive shall be eligible to receive an annual bonus payment in addition
to
Base Salary and other compensation for each year of the Executive’s employment
(the “Bonus”)
as
determined by the Board from time to time.
.
2.
4.2 Bonus
Payment
The
Bonus
shall be payable within sixty (60) days of the end of the fiscal year, and
will
be based upon the Executive’s performance during the preceding
year.
ARTICLE
5
BENEFITS
The
Executive shall be entitled to participate in and to receive all rights and
benefits under any life insurance, disability, medical, dental, health and
accident plans maintained by Gran Tierra for GTASA employees and for its
executives. GTASA will continue to pay the Executive’s Base Salary in the event
the Executive becomes disabled until such time as the Executive begins to
receive long-term disability insurance benefits.
ARTICLE
6
VACATION
The
Executive will be entitled to five weeks vacation per year. Payment of all
vacation pay will be at Base Salary. The Executive will arrange vacation time
to
suit the essential business needs of GTASA and Gran Tierra. Unused vacation
entitlement will be carried over into the following calendar year to a maximum
entitlement of eight weeks in any one year. On leaving the employment of GTASA
for whatever reason, GTASA will compensate the Executive for any accrued but
unused vacation entitlement based upon the Executive’s then current Base
Salary.
ARTICLE
7
STOCK
OPTIONS
Gran
Tierra will provide the Executive with the right to participate in stock option
plans and/or incentive award plans maintained by Gran Tierra and approved by
the
Board.
ARTICLE
8
PERQUISITES
AND EXPENSES
GTASA
recognizes that the Executive will incur expenses in the performance of the
Executive’s duties. GTASA shall reimburse the Executive for any reasonable out
of pocket expenses incurred in the course of employment.
ARTICLE
9
TERMINATION
OF EMPLOYMENT
9.1 Termination
Without Notice
This
Agreement and the Executive’s employment with GTASA may be terminated, without
GTASA being obligated to provide the Executive with advance notice of
termination or pay in lieu of such notice, whether under contract, statute,
common law or otherwise, in the following circumstances:
.
3.
| (a) |
Voluntary
Resignation
|
In
the
event the Executive voluntarily resigns, except where the Executive resigns
for
Good Reason as provided for in this Agreement, the Executive will give a minimum
of ninety (90) days’ advance written notice to GTASA and Gran Tierra. The
Executive will not be entitled to receive any further compensation or benefits
whatsoever other than those which have accrued up to the Executive’s last day of
active service with GTASA. GTASA may, at its discretion, waive in whole or
in
part such notice with payment in lieu to the Executive;
| (b) |
Cause
|
"Cause"
is defined as any of the following:
(a)
conviction of, or plea of nolo contendere to, a felony;
(b)
participation in a fraud against the Company;
(c)
participation in an act of dishonesty against the Company intended to result
in
your personal enrichment;
(d)
willful material breach of the Company's written policies;
(e)
intentional significant damage to the Company's property by you;
(f)
material breach of this Agreement; or
(g)
conduct by you that, in the good faith and reasonable determination of the
Board, demonstrates gross unfitness to serve provided that in such event, the
Company shall provide notice to you describing the nature of the gross unfitness
and you shall thereafter have ten (10) days to cure such gross unfitness if
such
gross unfitness is capable of being cured.
The
Partnership may not terminate your employment for Cause unless and until you
receive a copy of a resolution duly adopted by the affirmative vote of at least
a majority of the Board of Directors of Gran Tierra (the "Board")
finding that in the good faith opinion of the Board, that "Cause" exists and
specifying the particulars thereof in reasonable detail.
9.2 Termination
by GTASA without Cause
GTASA
may
terminate the Executive’s employment without Cause at any time by providing the
Executive with a separation package (the “Separation
Package”)
equal
to one years’ Total Cash Compensation.
“Total
Cash Compensation” is defined as the annualized amount of Base Salary plus Bonus
Payment for the prior 12-month period.
.
4.
The
Separation Package shall be payable in a lump sum within thirty (30) days of
termination.
9.3
Termination
by the Executive for Good Reason
Should
the Executive terminate his employment for Good Reason, as hereinafter defined,
he shall receive the Separation Package set out in section 9.2. Failure of
the
Executive to terminate his employment on the occurrence of any event which
would
constitute Good Reason shall not constitute waiver of his right under this
section 9.3. Notwithstanding the foregoing, Executive may terminate his
employment for Good Reason so long as Executive tenders his resignation to
GTASA
within thirty (30) days after the occurrence of the event that forms the basis
for the resignation for Good Reason; provided, however, that Executive must
provide written notice to GTASA and Gran Tierra describing the nature of the
event that Executive believes forms the basis for the resignation for Good
Reason, and GTASA and Gran Tierra shall thereafter have ten (10) days to cure
such event.
“Good
Reason” is defined as the occurrence of any of the following without the
Executive’s express written consent:
| (a) |
an
adverse change in the Executive’s position, titles, duties or
responsibilities (including new, additional or changed formal or
informal
reporting responsibilities) or any failure to re-elect or re-appoint
him
to any such positions, titles, duties or offices, except in connection
with the termination of his employment for
Cause;
|
| (b) |
a
reduction by the Company of the Executive’s Base Salary except to the
extent that the annual base salaries of all other executive officers
of
the Company are similarly reduced or any change in the basis upon
which
the Executive’s annual compensation is determined or paid if the change is
or will be adverse to the Executive except that an award of annual
performance bonuses by the Company’s Compensation Committee (and approved
by the Board of Directors) are discretionary and in no instance shall
be
considered adverse to Executive if such performance bonus is reduced
from
a prior year or if an annual performance bonus is not
paid;
|
| (c) |
a
Change in Control (as defined below) of the Company occurs;
or
|
| (d) |
any
breach by the Company of any material provision of this
Agreement.
|
A
“Change
in Control” is defined as:
| (a) |
a
dissolution, liquidation or sale of all or substantially all of the
assets
of the Company;
|
| (b) |
a
merger or consolidation in which the Company is not the surviving
corporation;
|
.
5.
(c)
a
reverse merger in which the Company is the surviving corporation but the shares
of the Company’s common stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form
of
securities, cash or otherwise; or
(d)
the
acquisition by any person, entity or group within the meaning of Section 13(d)
or 14(d) of the Exchange Act, or any comparable successor provisions (excluding
any employee benefit plan, or related trust, sponsored or maintained by the
Company or any affiliate of the Company) of the beneficial ownership (within
the
meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable
successor rule) of securities of the Company representing at least fifty percent
(50%) of the combined voting power entitled to vote in the election of
directors.
ARTICLE
10
DIRECTORS/OFFICERS
LIABILITY
10.1 Indemnity
Gran
Tierra shall provide to the Executive indemnification in accordance with the
Indemnification Agreement entered into between Gran Tierra and the
Executive.
10.2 Insurance
| (a) |
Gran
Tierra shall purchase and maintain, throughout the period during
which the
Executive acts as a director or officer of Gran Tierra or a Member
Company
and for a period of two years after the date that the Executive ceases
to
act as a director or officer of Gran Tierra or a Member Company,
directors’ and officers’ liability insurance for the benefit of the
Executive and the Executive’s heirs, executors, administrators and other
legal representatives, such that the Executive’s insurance coverage is, at
all times, at least equal to or better than any insurance coverage
Gran
Tierra purchases and maintains for the benefit of its then current
directors and officers, from time to
time.
|
| (b) |
If
for any reason whatsoever, any directors’ and officers’ liability insurer
asserts that the Executive or the Executive’s heirs, executors,
administrators or other legal representatives are subject to a deductible
under any existing or future directors’ and officers’ liability insurance
purchased and maintained by Gran Tierra for the benefit of the Executive
and the Executive’s heirs, executors, administrators and other legal
representatives, Gran Tierra shall pay the deductible for and on
behalf of
the Executive or the Executive’s heirs, executors, administrators or other
legal representatives, as the case may
be.
|
6.
10.3 Survival
The
provisions of sections 10.1 and 10.2 of this Agreement shall survive the
termination of this Agreement or the employment of the Executive with the
Company and such provisions shall continue in full force and effect in
accordance with such Indemnification Agreement and the provisions of this
Agreement for the benefit of the Executive.
ARTICLE
11
NON-COMPETITION
AND CONFIDENTIALITY
11.1 Non-Competition
The
Executive recognizes and understands that in performing the duties and
responsibilities of his employment as outlined in this Agreement, he will be
a
key employee of GTASA and will occupy a position of high fiduciary trust and
confidence, pursuant to which he has developed and will develop and acquire
wide
experience and knowledge with respect to all aspects of the services and
businesses carried on by Gran Tierra and its Member Companies and the manner
in
which such businesses are conducted. It is the expressed intent and agreement
of
the Executive and of GTASA that such knowledge and experience shall be used
solely and exclusively in the furtherance of the business interests of Gran
Tierra and its Member Companies and not in any manner detrimental to them.
The
Executive therefore agrees that so long as he is employed by GTASA pursuant
to
this Agreement he shall not engage in any practice or business in competition
with the business of Gran Tierra or any of its Member Companies.
11.2 Confidentiality
The
Executive further recognizes and understands that in the performance of his
employment duties and responsibilities as outlined in this Agreement, he will
be
a key employee of the Company and will become knowledgeable, aware and possessed
of all confidential and proprietary information, know-how, data, strategic
studies, techniques, knowledge and other confidential information of every
kind
or character relating to or connected with the business or corporate affairs
and
operations of Gran Tierra and its Member Companies and includes, without
limitation, geophysical studies and data, market data, engineering information,
shareholder data, client lists, compensation rates and methods and personnel
information (collectively “Confidential
Information”)
concerning the business of Gran Tierra and its Member Companies. The Executive
therefore agrees that, except with the consent of the Board, he will not
disclose such Confidential Information to any unauthorized persons so long
as he
is employed by GTASA pursuant to this Agreement and for a period of 24 months
thereafter; provided that the foregoing shall not apply to any Confidential
Information which is or becomes known to the public or to the competitors of
Gran Tierra or its Member Companies other than by a breach of this
Agreement.
11.3 Following
Termination of Agreement
Subject
to this provision and without otherwise restricting the fiduciary obligations
imposed upon, or otherwise applicable to the Executive as a result of the
Executive having been a senior officer and key employee of GTASA, the Executive
shall not be prohibited from obtaining employment with or otherwise forming
or
participating in a business competitive to the business of Gran Tierra and
its
Member Companies after termination of this Agreement and the Executive’s
employment with GTASA.
.
7.
ARTICLE
12
CHANGES
TO AGREEMENT
Any
modifications or amendments to this Agreement must be in writing and signed
by
all parties or else they shall have no force and effect. Notwithstanding the
foregoing, GTASA may assign this agreement to Gran Tierra or a Member Company,
without the consent of the Executive.
ARTICLE
13
ENUREMENT
This
Agreement shall enure to the benefit of and be binding upon the parties and
their respective successors and assigns, including without limitation, the
Executive’s heirs, executors, administrators and personal
representatives.
ARTICLE
14
GOVERNING
LAW
This
Agreement shall be construed in accordance with the laws of the Province of
Alberta and the laws of Canada applicable therein.
ARTICLE
15
NOTICES
15.1 Notice
to Executive.
Any
notice required or permitted to be given to the Executive shall be deemed to
have been received if delivered personally to the Executive or sent by courier
to the Executive’s home address last known to the Company.
15.2 Notice
to Company.
Any
notice required or permitted to be given to the Company shall be deemed to
have
been received if delivered personally to, sent by courier, or sent by facsimile
to:
Gran
Tierra Energy Inc.
000,
000-00xx Xxxxxx X.X.
Xxxxxxx,
Xxxxxxx, Xxxxxx X0X 0X0
Fax:
(000) 000-0000
Attn:
Chief Executive Officer
.
8.
ARTICLE
16
WITHHOLDING
All
payments made by GTASA to the Executive or for the benefit of the Executive
shall be less applicable withholdings and deductions.
ARTICLE
17
INDEPENDENT
LEGAL ADVICE
The
Executive acknowledges that the Executive has been advised to obtain independent
legal advice with respect to entering into this Agreement, that he has obtained
such independent legal advice or has expressly deemed not to seek such advice,
and that the Executive is entering into this Agreement with full knowledge
of
the contents hereof, of the Executive’s own free will and with full capacity and
authority to do so.
ARTICLE
18
REPLACEMENT
OF PRIOR AGREEMENT
The
parties acknowledge that the Prior Agreement is hereby replaced in its entirety
by this Agreement. Pursuant to Section 8.1 of the Prior Agreement, this
Agreement shall be effective, and the Prior Agreement shall be terminated,
upon
the execution of this Agreement by each of the parties to the Prior Agreement.
Upon such execution, all provisions of the Prior Agreement are hereby superseded
in their entirety and replaced herein and shall have no further force or
effect.
(remainder
of page intentionally left blank)
.
9.
In
Witness Whereof
the
parties hereto have executed this Agreement as of the date set forth below,
with
an effective date as of June 17, 2008.
|
Gran
Tierra Argentina S.A., an
Argentine
corporation
|
|||
|
By:
|
/s/
Xxxx Xxxxxxxx
|
||
|
Name:
|
Xxxx
Xxxxxxxx
|
||
|
Title:
|
President
|
||
|
Date:
|
17
June 08
|
||
|
Gran
Tierra Energy Inc., a Nevada
corporation
|
|||
|
By:
|
/s/
Xxxx Xxxxxxxx
|
||
|
Name:
|
Xxxx
Xxxxxxxx
|
||
|
Title:
|
President
|
||
|
Date:
|
17
June 08
|
||
|
/s/
Xxxxx Xxxxxxx
|
/s/ Xxxxxx Orunesu | ||
|
Witness
|
Xxxxxx Orunesu | ||
|
Date:
|
17
June 2008
|
||
.
Schedule
A
Executive’s
duties
Duties
and Responsibilities for President
|
·
|
President
of Gran Tierra Energy Argentina shall report directly to the President
and
CEO of Gran Tierra Energy Inc.
|
|
·
|
Strategic
leadership – formulate and recommend strategies to the President and CEO
to maximize shareholder value and long-term success of the Company
in
Argentina; implement capital and operating plans; identify principal
risks
to the Company’s business and take appropriate steps to manage these
risks; keep the President and CEO fully informed on all significant
operational, financial and other matters relevant to the
Company.
|
|
·
|
Technical
Leadership – ensure a rigorous and disciplined approach to technical work
of the Company with regard to geology geophysics and related disciplines;
encourage technical innovation, imagination and
pragmatism.
|
|
·
|
Financial
Leadership – develop annual capital commitment and expenditure budgets for
approval by the President and CEO; develop annual operating forecasts;
authorize the commitment of funds sanctioned by the President and
CEO;
authorize the commitment of contracts, transactions and arrangements
in
the ordinary course of business; take reasonable steps to ensure
the
Company’s assets are adequately
safeguarded.
|
|
·
|
Administrative
Leadership – develop and maintain a sound and effective organizational
structure; ensure all members of the organization have clear
responsibilities.
|
|
·
|
Public
Leadership – maintain effective communications and appropriate
relationships with host government, ministry, industry associates,
communities and other in-country stakeholders; manage interactions
between
the Company and the public in
Argentina.
|
|
·
|
Compliance
Leadership – establish effective control and coordination mechanisms for
all operations arid activities of the Company in Argentina in coordination
and support with those controls and procedures established by Corporate
in
Calgary; take reasonable steps to ensure the safe, efficient operation
of
the Company and its employees/workers; ensure all operations and
activities are in compliance with laws, regulations and the Company’s code
of business conduct and ethics and other policies and practices approved
by Corporate; xxxxxx a high performance corporate culture that promotes
ethical practices and encourages individual and corporate integrity
and
responsibility.
|
.
2.
