AGREEMENT
THIS AGREEMENT dated effective as of the 1 st day of April,
1992, by and between Wainoco Oil Corporation, a Wyoming
corporation (the "Company"), and John B. Ashmun ("Ashmun");
R E C I T A L S:
Ashmun has served as Chairman of the Board and Chief
Executive Officer of the Company for many years and will cease to
be Chief Executive Officer of the Company as of April 1, 1992.
The Company desires to retain the services of Ashmun for
five years following the date hereof to have access to his
knowledge of the Company's business and to permit the orderly
transition of management. Ashmun is willing to be engaged by the
Company pursuant to the terms of this Agreement set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and
agreements herein contained, Ashmun and the Company agree as
follows:
1. Engagement
The Company hereby engages Ashmun to serve the Company
as described in Section 3 hereof for the compensation and on the
terms hereinafter expressed, and Ashmun hereby agrees faithfully
and diligently to render said services and generally conduct
himself in a manner consistent with the interests of the Company,
all upon the terms and for the consideration hereinafter
provided. Ashmun shall not be an employee or officer of the
Company, however, it is intended that Ashmun will serve as the
Chairman of the Board of Directors at the will of the Company's
Board of Directors, so long as Ashmun is a duly elected director
of the Company during the Engagement Period (as defined in
Section 2 hereof).
2. Term
The term of Ashmun's engagement under this Agreement
shall be for the period beginning April 1, 1992 through and
including March 31, 1997 unless sooner terminated as herein
provided (the "Engagement Period").
3. Duties
During the Engagement Period, Ashmun agrees to render
to the Company such services of an advisory or consultative
nature as the Board of Directors may reasonably request so that
the Company may have the benefit of his experience and knowledge
of the affairs of, and his support for, the Company, and of his
reputation and contacts in the oil and gas industry. Relative to
his activities on the Company's behalf, Ashmun shall report to
the Chief Executive Officer. Any duties assigned to Ashmun shall
be duties appropriate to Ashmun's previous position with the
Company and to the position of the Chairman of the Board of
Directors. The Company agrees that Ashmun shall not be required
to relocate his residence from Houston, Texas, in connection with
the performance of his duties hereunder, provided that the
foregoing shall not prevent Ashmun from relocating his residence
at his own initiative. The Company agrees that, so long as this
Agreement is in effect, it will undertake to nominate Ashmun to
the Board of Directors and, if Ashmun is elected, to recommend to
the Board of Directors that said Board elect Ashmun to be
Chairman of the Board and to have the duties specified in Section
3.14 of the Company's Bylaws.
4. Compensation
The Company shall pay to Ashmun during the Engagement
Period annual compensation of $250,000, payable monthly on the
first day of each month, subject to any withholding or deductions
required under any change in law after the date hereof. During
the Engagement Period so long as Ashmun is a director of the
Company, Ashmun shall be paid all fees and other benefits made
available to non-employee directors of the Company.
5. Club and Organization Dues. Expenses
During the Engagement Period, the Company shall pay
dues for Ashmun's memberships in the Calgary Golf & Country Club,
the Bayou Club, The Brook, the Maidstone Club, Houston Country
Club, the Tejas Club and the Calgary Petroleum Club. During the
Engagement Period, the Company shall pay Ashmun's dues in the
All-American Wildcatters, the Texas Mid-Continent Oil & Gas
Association and the National Petroleum Council. The Company shall
pay all expenses incurred by Ashmun during the Engagement Period
in furtherance of the business of the Company, including travel
and business entertainment expenses, consistent with the
Company's policies as of the date hereof
6. Office
During the Engagement Period, the Company will provide
Ashmun with (i) office facilities commensurate with his duties
and position and (ii) such secretarial assistance as is necessary
in the performance of his duties under Section 3 hereof. The
Company agrees that all office furnishings currently in Ashmun's
office shall be and remain the property of Ashmun.
7. Stock Options
Ashmun shall remain eligible to participate in the
Company's stock option plans (the "Plans") on the same basis as
if he remained an employee of the Company during the Engagement
Period with the title of Chairman of the Board and the annual
compensation set forth in Section 4. All of the existing options
and restricted stock awards held by Ashmun will be amended to
provide that the arrangements under this Agreement do not
constitute the retirement of Ashmun for purposes of such options
and awards. If participants in the Plans are offered the
opportunity to amend their existing options in any way and if
officers of the Company would be eligible to amend their existing
options, Ashmun shall be offered the same opportunity. The
foregoing shall not limit Ashmun's right to receive any stock
options or stock awards that are made to directors of the Company
who are not employees of the Company.
8. Medical Plan, Pension
It is understood that Ashmun will apply for Medicare
coverage to be effective as soon as possible after April 1, 1992.
The Company will continue Ashmun's medical coverage under the
current plan until Medicare coverage is in place. After such time
the Company will reimburse Ashmun the cost of a Medicare
supplement plan as well as a Medicare Part B plan for him and his
wife. The Company will pay for any increased costs of the above
coverage during the Engagement Period.
Commencing April 1, 1992, Ashmun shall be eligible for
and shall receive annual benefits of $23,852 in accordance with
the Company's Retirement Benefit Restoration Plan.
9. Termination of Agreement
This Agreement shall terminate the first to occur of
(a) March 31, 1997 or (b) the death of Ashmun.
10. Conflicting Interests
(a) It is understood and acknowledged that Ashmun may
engage from time to time in the oil and gas exploration,
development and production business, including the acquisition,
operation and management of oil and gas properties.
Notwithstanding the foregoing, Ashmun agrees that, during the
term of this Agreement, prior to engaging in any such activities
he will first offer ("Offer") in writing each opportunity that he
has to acquire or participate in the ownership, operation or
management of any oil and gas properties or otherwise engage in
oil and gas activities to the Company on the same terms that such
opportunities are available to Ashmun. Any such Offer provided by
Ashmun to the Company shall set forth, as may be applicable in
the circumstances, the price or other consideration for the
transaction, the identity of the other party to the transaction,
the closing date for the transaction and such other information
respecting the transaction which Ashmun reasonably believes would
be material to the exercise of the Company's rights hereunder.
For greater certainty, Ashmun shall be under no obligation to
present opportunities to the Company in which Ashmun does not
intend to participate as an investor. Ashmun makes no
representation or warranty that the other parties to the
transaction will permit the Company to participate in the
transaction, whether on the same terms as Ashmun or otherwise.
(b) If, after receipt of an Offer:
(i) the Company elects to not accept such
opportunity for its corporate account in full or in part, then
Ashmun shall thereafter be free to acquire and exploit such
opportunity to its full extent, including any and all activities
that may thereafter arise that directly relate to the opportunity
all activities that may thereafter arise that directly relate to
the opportunity offered to and rejected by the Company, provided
that the acquisition of such opportunity by Ashmun is completed
within 120 days of receipt of the Offer by the Company and is not
on terms that are more favorable to Ashmun than those offered to
the Company. If Ashmun shall not acquire such opportunity within
120 days of receipt of the offer by the Company then the
provisions of this section shall again apply to the acquisition
of or participation in such opportunity by Ashmun;
(ii) the Company elects to participate in full
in such opportunity, then Ashmun shall take all reasonable
efforts (but Ashmun shall not be required to incur any
out-of-pocket expense in doing so) to assist the Company in
acquiring or participating in such opportunity and Ashmun shall
not otherwise acquire or participate, directly or indirectly, in
such opportunity without the prior written consent of the Company
which consent shall not be unreasonably withheld; and
(iii) the Company elects to participate in part
only in such opportunity, then Ashmun shall take all reasonable
efforts (but Ashmun shall not be required to incur any
out-of-pocket expense in doing so) to assist the Company in
acquiring or participating in such opportunity and Ashmun shall
be entitled to acquire or participate in such opportunity to the
extent to which the Company does not do so.
(c) The time period in which the Company may accept
or reject any Offer shall be not greater than 30 days from
receipt of the Offer, but may be such lesser time period as shall
be reasonable under the circumstances related to such opportunity
and as is specified in the Offer. Any notice by the Company
accepting or rejecting any such opportunity shall be effective if
executed on behalf of the Company by the President or any
Vice-President.
(d) Ashmun agrees that the rights associated with and
benefits of any opportunity acquired by him otherwise than in
compliance with the terms hereof shall be held by him in trust
for the benefit of the Company subject to the terms of this
Agreement and the Company shall have the right to participate in
such opportunity in full or in part upon payment to Ashmun of a
pro rata share of the consideration and related acquisition costs
and/or assumption of the liabilities and obligations directly
associated with such opportunity, as may be applicable in the
circumstances.
(e) Subject to applicable law, the Company shall not
by reason only of the relationship between the Company and Ashmun
created by this Agreement prohibit or disqualify Ashmun from
participating in the acquisition of any oil and gas properties
disposed of by the Company; provided that the Company shall be
under no obligation to notify Ashmun of any proposed disposition
or to accept any offer from Ashmun.
11. Indemnification
The Company has entered into a separate indemnification
agreement dated as of January 1, 1992 with Ashmun and nothing in
this Agreement shall affect the terms and provisions of such
indemnification agreement.
12. Assignment
This Agreement shall not be assignable by either party
without the consent of the other party. Any assignment of this
Agreement in violation of this Section 12 shall be null and void.
13. Waiver of Default
Any waiver by either party of a breach of any provision
of this Agreement by the other party shall not operate, or be
construed, as a waiver of any subsequent breach.
14. Governing Law
This Agreement shall be construed in accordance with
the laws of the State of Texas.
15. Jurisdiction
The parties hereto agree that in the event that any
legal suits, actions or proceedings arising out of this Agreement
are instituted by any party hereto, such suits, actions or
proceedings shall be instituted only in the state or federal
courts in the County of Harris in the State of Texas. The parties
hereto hereby consent to the jurisdiction of such courts and
waive any objection which they may now or hereafter have to the
venue of any such suits, actions or proceedings; provided,
however, that any party hereto shall have the right to institute
proceedings in another jurisdiction if the purpose of such
proceedings is to enforce or realize upon any final court
judgment arising out of this Agreement.
16. Construction of Agreement
The headings in this Agreement are inserted for
convenience of reference only and shall not be a part of, or
control or affect the meaning of, this Agreement. This Agreement
contains the entire agreement of the parties and no party shall
be liable or bound except as expressly provided herein. In the
event any one or more of the provisions contained in this
Agreement shall, for any reason, be judicially declared to be
invalid, illegal, unenforceable or void in any respect, such
declaration shall not have the effect of invalidating or voiding
the remainder of this Agreement, and the parties hereto agree
that the part or parts of this Agreement so held to be invalid,
illegal, unenforceable or void will be deemed to have been
stricken herefrom and the remainder will have the same force and
effectiveness as if such part had never been included herein.
17. Notice
All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given if
delivered personally or sent by certified mail, return receipt
requested, postage prepaid, or by telex or other telegraphic
means:
(a) If to the Company as follows:
Wainoco Oil Corporation
1200 Smith Street, Suite 1500
Houston, Texas 77002
Attention: James R. Gibbs, Chief Executive Officer
(b) If to Ashmun as follows:
John B. Ashmun
Wainoco Oil Corporation
1200 Smith Street, Suite 1500
Houston, Texas 77002
IN WITNESS WHEREOF, this Agreement has been executed as of
the date first above written.
WAINOCO OIL CORPORATION
By /s/ J. R. Gibbs
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/s/ John B. Ashmun
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