Exhibit 10(q)
FORM OF EXECUTIVE AGREEMENT
THIS AGREEMENT made the 28TH day of April, 1997.
BETWEEN:
SEVEN SEAS PETROLEUM INC., a corporation continued under the laws of
the Yukon and having an address at ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇
(herein called the "Company")
AND: OF THE FIRST PART
Name and Address of Executive
(herein called the "Employee")
OF THE SECOND PART
WITNESSES THAT WHEREAS:
A. The Employee is presently employed by the Company under
an Employment Contract;
B. The Company and the Employee are desirous of having certain rights
and benefits in the event that the Employee's employment with the Company is
terminated in a manner set forth hereinafter;
C. The Company wishes to retain the benefit of the Employee's services
and to ensure that the Employee is able to carry out his responsibilities with
the Company free from any distractions associated with any potential change in
the ownership or control of the Company or its assets;
NOW THEREFORE in consideration of the premises and the mutual covenants and
agreements hereinafter contained, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged by each of the
Employee and the Company, it is agreed by and between the Employee and the
Company as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement, the following words and terms with the initial
letter or letters thereof capitalized shall have the meanings set forth below:
(a) "Agreement" means this agreement as amended from time
to time;
(b) "Change in Control" means a transaction or series of
transactions whereby directly or indirectly:
(i) any person or combination of persons acquires a sufficient
number of securities of the Company to affect materially the
control of the Company, whether by way of acquisition of
previously issued securities or as a result of issuances from
treasury, or a combination thereof, and for the purposes of
this Agreement, a person or combination of persons holding
shares or other securities in excess of the number which,
directly or following the conversion or exercise thereof,
would entitle the holders thereof to cast 20% or more of the
votes attached to all shares of the Company which may be cast
to elect directors of the Company, shall be deemed to be in a
position to affect materially the control of the Company;
(ii) the Company shall consolidate or merge with or into,
amalgamate with, or enter into a statutory arrangement with
any other person, or any other person shall consolidate or
merge with or into, or amalgamate with or enter into a
statutory arrangement with the Company, and, in connection
therewith, all or part of the outstanding shares of the
Company which have voting rights attached thereto shall be
changed in any way, reclassified or converted into, exchanged
or otherwise acquired for shares or other securities of the
Company or any other person or for cash or any other property
(other than a transaction which has been approved by the
directors of the Company, a majority of whom are directors of
the Company holding office at the date of this Agreement);
(iii) there shall be a change in a majority of the board of
directors of the Company whether as a result of a shareholders
meeting or as a result of appointments made by the remaining
members of the board of directors of the Company in filling
vacancies caused by the resignation of the majority in number
of the board of directors of the Company;
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(iv) a majority of the board of directors shall have resigned or
otherwise been removed from office, whether or not the
vacancies created by such resignations or removals are filled;
or
(v) the Company shall sell or otherwise transfer, including by way
of the grant of a leasehold interest (or one or more
subsidiaries of the Company shall sell or otherwise transfer,
including by way of the grant of a leasehold interest)
property or assets (a) aggregating more than 50% of the
consolidated assets (measured by either book value or fair
market value) of the Company and its subsidiaries as at the
end of the most recently completed financial year of the
Company or (B) which during the most recently completed
financial year of the Company generated, or during the then
current financial year of the Company are expected to
generate, more than 50% of the consolidated operating income
or cash flow of the Company and its subsidiaries, to any other
person or persons (other than the Company or one or more
subsidiaries of the Company),
other than a transaction or series of transactions which involves a sale
of securities or assets of the Company with which the Employee is involved
as a purchaser in any manner, whether directly or indirectly, and whether
by way of participation in a corporation or partnership that is a
purchaser or by provision of debt, equity or purchase- leaseback
financing;
(c) "Expiry Date" means the date which is 12 months after a Change in
Control occurs;
(d) "Triggering Event" means any one of the following events which
occurs following a Change of Control without the express agreement
in writing of the Employee:
(i) an adverse change in any of the duties, powers, rights,
discretion or compensation of the Employee as they exist
immediately prior to the Change of Control; or
(ii) a change in the person or body to whom the Employee reported
immediately prior to the Change of Control provided that this
shall not include a change resulting from a promotion in the
normal course of business.
1.2 PLURAL AND GENDER
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Whenever used in this Agreement, words importing the singular number
only shall include the plural and vice versa and words importing the masculine
gender shall include the feminine gender.
1.3 BINDING EFFECT
This Agreement shall be binding on the successors and assigns of the
Company and shall enure to the benefit of the successors and assigns of the
Employee.
1.4 MONETARY AMOUNTS
All references to monetary amounts in this Agreement are to lawful
money in the United States of America.
2. RIGHTS OF EMPLOYEE
2.1 RIGHT UPON OCCURRENCE OF TRIGGERING EVENT
(a) RIGHT: If a Change in Control occurs and if, in respect of the
Employee, a Triggering Event occurs on or before the Expiry Date,
the Employee shall be entitled to elect to terminate his employment
with the Company and to receive a payment from the Company in the
amount equal to:
(i) the remaining annual base salary payable to the Employee for
the term of the Employment Contract; and
(ii) the amount equal to the most recent annual bonus paid to the
Employee by the Company, for each year, or part of a year
remaining on the Employment Contract, provided that such
payment shall only be made in respect of any year that the
Company otherwise declares and pays bonuses to some or all of
its employees.
(b) CONDITION: The right of the Employee provided for in Section
2.1(a) hereof is conditional upon the Employee electing to
exercise such right by notice given to the Company within six
months after the Triggering Event.
2.2 TERMINATION RIGHT
If a Change in Control occurs and the Employee has not received
notice of the termination of his employment with the Company or a Triggering
Event has not otherwise occurred, then, during the six month period after the
Change of Control, the Employee may, notwithstanding the absence of a Triggering
Event,
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give notice to the Company of the intention of the Employee to terminate his
employment with the Company. If such notice is given by the Employee, the
termination of his employment will become effective on a date indicated in the
notice, but in any event not later than 120 days following the Employee giving
notice to its intention to terminate his employment with the Company and in such
case the Employee shall be entitled to a payment from the Company in the amount
calculated in accordance with Section 2.1(a) hereof.
2.3 RIGHT UPON TERMINATION
The Employee shall be entitled to a payment from the Company in the
amount calculated in accordance with Section 2.1(a) hereof if his employment
with the Company is terminated by the Company within 12 months after a Change of
Control other than for cause as defined in the Employment Contract. The Company
shall not terminate the employment of the Employee for any reason unless such
dismissal is specifically approved by the directors of the Company.
2.4 STOCK OPTIONS
In the event that the Employee is entitled to a payment pursuant to
Section 2.1, 2.2 or 2.3 hereof, the term during which any option to purchase
common shares of the Company granted to the Employee by the Company or any
subsidiary of the Company may be exercised shall be extended to the earlier of
the expiry date of the option and 18 months after the date of the giving of
notice by the Employee pursuant to Section 2.1 or 2.2 hereof or the termination
of his employment by the Company as referred to in Section 2.3 hereof, as the
case may be. In addition, in such event, any provisions of such an option which
restricts the number of common shares of the Company which may be purchased
before a particular date shall be waived. Subject to required regulatory
approvals, in the event that the exercise price of any option granted at the
same time as the option was granted to the Employee is repriced downwards, the
exercise price of the option held by the Employee shall be similarly repriced.
The terms of any option agreement evidencing such option shall be deemed to be
amended to reflect the provisions of this Section 2.4.
2.5 HEALTH BENEFITS
If the Employee is entitled to a payment pursuant to Section 2.1,
2.2 or 2.3 hereof, the Company shall also continue to pay the Employee's health
insurance premiums for a period which is the lesser of one year from termination
or until the Employee has otherwise secured comparable health insurance.
3. PAYMENTS AND REVIEW
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3.1 PAYMENTS UNDER THIS AGREEMENT
Subject to any arrangements made pursuant to Section 4.2 hereof, any
payment to be made by the Company pursuant to the terms of this Agreement shall
be paid by the Company in cash in a lump sum within five business days of the
giving of notice by the Employee pursuant to Section 2.1 or 2.2 hereof or within
five business days of the termination of employment by the Company as referred
to in Section 2.3 hereof, as the case may be. Any such payment shall be
calculated, in the case of Section 2.1 or 2.2 hereof, at the date of giving
notice pursuant to Section 2.1 or 2.2 hereof, as the case may be, and, in the
case of Section 2.3 hereof, at the date of termination of the Employee's
employment.
3.2 AGREEMENT SUPPLEMENTAL
This Agreement shall be supplemental to the Employment Contract that
exists between the Company and the Employee, except insofar as the Employment
Contract relates to the termination of the Employee's employment after a Change
of Control, in which case this Agreement shall supersede the termination
provisions of the Employment Contract.
4. MISCELLANEOUS
4.1 ASSIGNMENT AND ASSUMPTION
This Agreement shall be assigned by the Company to any successor
corporation of the Company and shall be binding upon such successor corporation.
For the purposes of this Section 4.1, "successor corporation" shall include any
person referred to in paragraphs 1.1(b)(ii) or (iii) hereof. The Company shall
use its best efforts to ensure that the successor corporation shall continue the
provisions of this Agreement as if it were the original party in place of the
Company; provided however that the Company shall not thereby be relieved of any
obligation to the Employee pursuant to this Agreement. In the event of a
transactions or series of transactions as described in paragraphs 1.1(b)(ii) or
(iii) hereof, appropriate arrangements shall be made by the Company for the
successor corporation to honour this Agreement as if the Employee had exercised
his maximum rights hereunder as of the effective date of such transaction.
4.2 FURTHER ASSURANCES
Each of the Company and the Employee agrees to make, do and execute
or cause to be made, done and executed all such further and other things, acts,
deeds, documents, assignments and assurances as may be necessary or reasonably
required to carry out the intent and purpose of this Agreement fully and
effectually. Without limiting the generality of the foregoing,
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the Company shall take all reasonable steps in order to structure the payment or
payments provided for in this Agreement in the manner most advantageous to the
Employee with respect to the provisions of the INTERNAL REVENUE CODE (U.S.).
4.3 NOTICE
Any notice required or permitted to be given under this Agreement
will be in writing and may be given by delivering, sending by telegram, sending
by telecopier, or sending by prepaid registered mail posted in Canada, the
notice to the following address or telecopier number:
If to the Company:
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: ▇-▇▇▇-▇▇▇-▇▇▇▇
If to the Employee:
As set out in the Employment Agreement or as thereafter advised by
Employee.
(or to such other address or telecopier number as any party may specify by
notice in writing to another party).
Any notice delivered or sent by telegram or sent by telecopier on a
business day will be deemed conclusively to have been effectively given on the
day the notice was delivered, or the telegram was filed with the telegraph
company, or the telecopy transmission was sent successfully to the telecopier
number set out above, as the case may be.
Any notice sent by prepaid registered mail will be deemed
conclusively to have been effectively given on the third business day after
posting but if at the time of posting or between the time of posting and the
third business day thereafter there is a strike, lockout, or other labour
disturbance affecting postal service, then the notice will not be effectively
given until actually delivered.
4.4 COSTS
The Company shall pay all costs and expenses, including legal fees,
incurred by the Employee in connection with the entering into and the
interpretation of the provisions of this Agreement.
4.5 GOVERNING LAW
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This Agreement shall be governed by and be construed in accordance
with the laws of the State of Texas.
4.6 SEVERABILITY
Any provision of this Agreement which contravenes any applicable law
or which is found to be unenforceable shall, to the extent of such contravention
or unenforceablity, be deemed severable and shall not cause this Agreement to be
held invalid or unenforceable or affect any other provision or provisions of
this Agreement.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
as of the date first above written.
SEVEN SEAS PETROLEUM INC.
By:___________________________________c/s
___________________________________
Name of Executive
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