Exhibit 10.10
November 18, 1999
Xx. X.X. XxXxxxxx
0000 Xxxx Xxx Xxxx
Xxxxxxx, Xxxxx 00000
Dear Xxx Xxxx:
This letter, when countersigned by you, amends and supersedes the letter dated
July 21, 1999 (the "July 1999 Agreement") concerning the terms of your
employment with American International Petroleum Corporation ("AIPC or the
"Company").
1. Position: You will be employed as Chief Executive Officer and President of
AIPC. In addition, AIPC agrees to use its best efforts to cause your election to
its Board of Directors and as chairman of the Board of Directors of all its
subsidiaries. Further, AIPC will use its best efforts to cause your appointment
as President and Chief Executive Officer of the Operating Committee of AIPC,
which is comprised of certain of the senior executives of AIPC and/or its
affiliated companies.
2. Effective Date: This Agreement shall become effective as of December 1, 1999
and shall supersede the terms set forth in the 1999 Agreement.
3. Location: Your office shall be in AIPC's corporate office in Houston, Texas.
However, the nature of your position will require extensive travel overseas.
4. Responsibilities: As President and Chief Executive Officer of AIPC, you will
be responsible for directing the policies and management of AIPC and its
subsidiaries, as well as the general supervision and management of AIPC's daily
operations and for developing and implementing AIPC's business plan and budget
as approved by the Board of Directors. You shall report to the Company's Board
of Directors on all matters except with respect to investor relations, corporate
communications, regulatory compliance and legal matters you shall report to the
Chairman of the Board.
5. Compensation: Your base salary, $275,000 per year, will be increased to
$350,000 per year commencing January 1, 2000. In addition, you will be
entitled to bonuses (not to exceed 50% of your base compensation) and such
other incentive compensation as the Board of Directors in its sole and
absolute discretion may determine based upon your individual and AIPC's
performance.
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6. Shares: The 25,000 AIPC shares previously issued to you under the terms of
the July 1999 Agreement will become fully vested as of December 31, 1999.
7. Option: You will be eligible to participate in AIPC's stock option plans on
the same basis as other senior executives of AIPC and its affiliated companies.
In addition to the option to purchase 200,000 AIPC shares previously granted to
you in accordance with the terms of the July 1999 Agreement, you will be granted
options to purchase an additional 500,000 AIPC shares, 250,000 shares at an
exercise price of $1.00 per share and 250,000 shares of $0.50 per share. Options
to purchase 62,500 shares of each option will become exercisable on December 31,
1999, options to purchase a cumulative total of 125,000 shares of each option
will become exercisable on December 31, 2000, options to purchase a cumulative
total of 187,500 shares of each option will become exercisable on December 31,
2001 and options to purchase a cumulative total of 500,000 shares of each option
will become exercisable on December 31, 2002. Both options will expire on
December 31, 2004, or earlier upon your termination of employment in accordance
with the terms of the stock option plan.
8. Benefits: AIPC will include you and your direct eligible family members
within its medical and dental coverage subject to any applicable waiting period
and provisions concerning pre-existing medical conditions. Additionally, you
will be entitled to all other benefits that are made available to senior
executive of AIPC, including the right to participate in AIPC's 401(k)
Retirement Savings Plan but subject to any applicable eligibility requirements.
You will be entitled to an annual vacation of three (3) weeks. The company will
provide you with a full-size leased automobile, or at your option, you may elect
an equivalent amount as a car allowance up to $500/month. Business Class travel
will be allowed for all international flights and for all domestic flights over
four (4) hours in length. You will be reimbursed promptly for all reasonable
expenses which you incur in connection with your employment.
9. Executive Medical Evacuation Program. You will be included in the Executive
Medical Evacuation Program.
10. Term of Employment. This agreement shall have an initial term of three (3)
years commencing December 1, 1999 and ending November 30, 2003 and shall be
renewed automatically for successive periods of one (1) year each unless either
party gives the other notice of termination at least six months prior to the end
of the initial term or any renewal term. In such event, your employment will
terminate on the last day of the initial term or the renewal term, as the case
may be. Should the Company terminate your employment for cause, no notice will
be required and your employment and all of your options will terminate
immediately. However, should the Company terminate your employment without
cause, then all your options will vest immediately, except for options the
vesting of which are related to the attainment of specified objectives by you,
the Company or AIPC shares, which objectives have not been satisfied by the date
your employment is terminated.
11. Severance Pay. You shall be entitled to one month of salary as a severance
payment for each full year of employment with the Company, unless your
employment is terminated for cause. The severance payment shall be due and
payable within thirty (30) days.
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12. Change in Control. If, within three (3) months following the occurrence of a
Change in Control (as defined below), you elect to terminate your employment
with the Company and/or are no longer the President and Chief Executive Officer
of the Company or its successor, then, in lieu of any severance payments
hereunder, the Company shall (1) pay you, within 10 days after your election, a
lump sum cash payment in an amount equal to the Change in Control Payment (as
defined below) and (2) provide you with Change in Control Benefits (as defined
below). If your employment is terminated prior to the date you elect to
terminate but it is reasonably demonstrated that such termination (a) was at the
request of a third party who has taken steps reasonably calculated to effect a
Change in Control or (b) otherwise arose in connection with or in anticipation
of a Change in Control, then, for all purposes of this paragraph, such
termination shall be considered to have occurred immediately following the
Change in Control and your election to so terminate. As used herein, the
following terms shall mean:
A "Change in Control" shall be deemed to have occurred if (i) there shall
be consummated (A) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to which
shares of the Company's common stock would be converted in whole or in part
into cash, securities or other property, other than a merger of the Company
in which the holders of the Company's common stock immediately prior to the
merger own immediately after the merger a majority of the voting stock of
the surviving corporation, or (B) any sale, lease, exchange or transfer (in
one transaction or a series of related transactions) of all or
substantially all the assets of the Company, or (ii) the stockholders of
the Company shall approve any plan or proposal for the liquidation or
dissolution of the Company, or (iii) any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), other than the Company or a subsidiary
thereof or any employee benefit plan sponsored by the Company or a
subsidiary thereof, shall become the beneficial owner (within the meaning
of Rule 13d-3 under the Exchange Act) of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities ordinarily (and apart from rights accruing in
special circumstances) having the right to vote in the election of
directors, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise, or (iv) any other
event shall occur that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act;
provided, however, that the term "Change in Control" shall not include (x)
any of the foregoing events if approved a majority of the Board or (y) any
bona fide financing transaction approved by the Board.
"Change in Control Benefits" shall mean continued coverage under the
Company's medical, dental, and group life insurance plans for you and those
of your dependents (including your spouse) who were covered under such
plans on the day prior to your termination of employment with the Company
for one year from the date of such termination at no cost to you and your
dependents (provided, however, that in the event that continued
participation in any such Company plan is for whatever reason impossible,
the Company shall arrange
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upon comparable terms benefits substantially equivalent to those that were
provided under such Company plan).
"Change in Control Payment" shall mean an amount equal to 2.99 times your
annual base salary as in effect pursuant to paragraph 5 immediately prior
to your termination of employment with the Company.
13. Ownership of Information. All documents, drawings, memoranda, notes,
records, files correspondence, manuals, models, specifications, computer
programs, E-mail, voice mail, electronic databases, maps and all other writings
or materials of any type embodying any of information pertaining to the business
of AIPC which you have developed, utilized or had access to are and shall be the
sole and exclusive property of AIPC. Upon termination of your employment by
AIPC, for any reason, you shall promptly deliver the same, and all copies
thereof, to AIPC.
14. Non-Solicitation. During the term of your employment and for a period of two
(2) years thereafter, you will not, directly or indirectly, solicit or contact
any employee of AIPC, with a view to inducing or encouraging such employee to
leave the employ of AIPC for the purpose of being hired by you, an employer
affiliated with you or any competitor of AIPC, or during the term of this
agreement and for a period of one year thereafter engage in or be interested in
(as an owner, partner, 2% shareholder in a publicly traded company, employee,
officer, director, agent, consultant or otherwise), solicit any business from,
or contact any person or entity engaged in oil and gas exploration or
development activities within the same geological basin as the Company has been
operating or has been actively seeking to be so engaged.
15. Applicable Law. This Agreement is entered into under, and shall be governed
for all purposes by, the laws of the State of Texas.
If the foregoing sets forth the agreement between us, please countersign a
copy of this letter and return the same to me.
Very truly yours,
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Xxxxxx X. Xxxxx, Chairman
AMERICAN INTERNATIONAL
PETROLEUM CORPORATION
ACCEPTED AND AGREED this
____ day of November, 1999
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X. X. XXXXXXXX
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