EXHIBIT 10.38
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), effective as of the 1st day of
March 1997, by and between SABA PETROLEUM COMPANY, a Colorado corporation
(hereinafter referred to as the "Company"), and ALEX S. CATHCART, an individual
(hereinafter referred to as the "Employee"), the following terms and conditions.
RECITALS
A. It is in the best interest of the Company to employ the services of
Employee as Executive Vice President of the Company and President and
Chief Operating Officer of the following subsidiaries of the Company:
(i) Sabacol, Inc.; (ii) Saba Offshore, Inc., and (iii) Saba Exploration
Company, subject to and in accordance with the terms and provisions set
forth below.
B. After independent review and consideration of the Agreement,
Employee desires to accept such employment subject to, and in
accordance with, the terms and provisions set forth below.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT RELATIONSHIP; TERM; RENEWAL
Subject to the other terms, conditions and provisions of this
Agreement, the Company hereby employs Employee and Employee hereby
accepts such employment for a period of two (2) years, commencing on
the Effective Date of this Agreement, as that term is defined below,
and subject to the termination provisions as provided herein below in
Paragraph 8. The Company shall have the option, in its sole discretion,
of extending this Agreement for an additional two (2) year term at the
expiration of the initial term.
2. COMPENSATION
2.1 Annual Compensation
Subject to the terms and provisions hereof, the Company shall
pay or cause to be paid to Employee during the term hereof an
annual salary plus a seven percent (7%) escalation per year as
described in Exhibit A hereto. Cash compensation shall be paid
in equal semi-monthly installments commencing on the Effective
Date hereof and provided only that such installments shall be
pro-rated in the event of any partial employment period
hereunder.
2.2 Additional Compensation
Employee may be further entitled to additional compensation in
the form of stock options in amounts and subject to the
conditions as set forth in Exhibit A attached hereto and
incorporated herein by reference.
2.3 Employment Taxes
All compensation and benefits shall be subject to customary
withholding taxes and other employment taxes as from time to time are
required by any governmental statute, ordinance, or regulation with
respect to such compensation paid by the Company to an employee.
3. EMPLOYEE BENEFITS AND REIMBURSEMENTS
A. Medical Insurance
During the term of this Agreement and the employment described
herein, the Company will pay the premium for standard medical
benefits for Employee and dependents. Such contribution to
begin with the Effective Date.
B. Reimbursement for Out-of-Pocket Expenses
Company shall, not less frequently than monthly, reimburse
Employee with respect to all ordinary out-of-pocket expenses
which, in the sole judgment of the Company, were incurred by
Employee in the course of and/or in the conduct of Company
business by Employee, provided Employee follows and complies
with Company reporting and receipts submission procedures.
C. Other Benefits
In addition to the foregoing, Employee shall also be provided
any other benefits of whatever kind or nature or shall be
permitted to participate in such other benefits or programs
which may, from time to time, be adopted or provided by the
Company and otherwise made available by the Company to other
employees or officers of Company under substantially the same
restrictions and limitations, if any and as applicable.
D. Relocation
Company will reimburse Employee for reasonable and necessary
moving costs incurred in the course of Employee relocation.
Company will make the final determination whether items of
moving costs are "reasonable and necessary."
E. Automobile
Employee shall receive the use of a suitable automobile.
4. SERVICES AND DUTIES OF EMPLOYEE
Employee agrees that, expressly in his capacity as an officer of the
Company, Employee will at all times loyally and conscientiously perform
all of the following duties, responsibilities, and obligations:
A. Those duties and responsibilities expressly or implicitly
contained in this Agreement;
B. Those duties and responsibilities customarily incident
to or required of such position(s)and/or office(s) as may,
from time to time, be assigned to Employee by the Board of
Directors;
C. Such other services, acts, or things necessary, prudent,
or advisable in the exercise of Employee's reasonable
judgment for the benefit of the Company and;
D. Such additional duties, responsibilities and
obligations and such other services,acts, and things
as, from time to time, may be designated by the Board of
Directors of the Company.
5. ALLOCATION OF EMPLOYEE TIME
By entering into this Agreement, it is the mutual intention of the
parties that Employee shall devote all of his productive time, ability,
and attention to the business of the Company and its subsidiaries,
including Beaver Lake Resources Corporation, and shall not, without the
prior written consent of the Board, which may be withheld for any
reason whatsoever, otherwise actively engage in other business
endeavors or pursuits, including, without limitation, the direct or
indirect rendition of any services of a business, commercial, or
professional nature to any other person or organization, whether for
compensation or otherwise. The President of the Company and its Board
of Directors shall consult with the Employee regarding the proper
allocation of Employee's time between the Company and its subsidiaries.
6. CONFIDENTIALITY AND TRADE SECRETS
Employee acknowledges and agrees that, in prior meetings with other
employees, representatives, officers and directors of the Company,
Employee has or will, during the term of employment, have access to,
become acquainted with, and/or develop or invent various Trade Secrets
and proprietary information consisting of and including, without
limitation, formulas, processes, plans, charts, concepts, procedures,
compilations, lists of data and information, records, specifications,
documents, contracts, reports, forms, manuals, names, addresses, and
telephone numbers and other information of customers, lenders,
investors, or identified prospective customers, lenders, or investors
(all of the foregoing sometimes collectively referred to as "Trade
Secrets") which are owned or have been or subsequently are developed,
compiled, organized or invented by the Company, the Employee, or the
Company's other employees. Employee, for the benefit of the Company and
as a condition of this Agreement, expressly agrees that Employee shall
not disclose any of the Trade Secrets, directly or indirectly; use them
in any way; or claim proprietary ownership interest therein, either
during or after the term of this Agreement except as required in the
performance of Employee's duties hereunder or as expressly authorized
by the written consent and permission of the Company after full
explanation and disclosure of any such proposed use or disclosure by
the Employee to the Company.
Employee further acknowledges and agrees that all Trade Secrets, as
defined above, whether now existing or hereafter developed are and
shall at all times be owned solely and exclusively by the Company and
Employee shall have no ownership interest therein or rights thereto.
7. EFFECTIVE DATE
The Effective Date of this Agreement shall be the day, month, and year
first set forth above.
8. TERMINATION UPON EVENT OF TERMINATION
8.1 Events of Termination
This Agreement shall terminate immediately upon the occurrence
of any of the following events:
A. Whenever the Company and Employee shall mutually
agree in writing to terminate this Agreement.
Employee to provide at least thirty (30) days notice
for termination;
B. Whenever the Company delivers written notice to
Employee terminating the Agreement for "cause"
including, among other things, Employee's material
gross negligence or intentional misconduct under the
terms of this Agreement, unless waived in writing and
signed by the Company in the Company's sole and
absolute discretion;
C. Upon the death of Employee;
D. Upon the permanent incapacity of Employee because of
illness, physical injury, other physical or mental
disability, or any reason such that it reasonably
appears that Employee will be unable to perform or
complete Employee's duties and responsibilities under
this Agreement.
If, for any reason other than those set forth immediately above, the
Company for any reason terminates this Agreement, then upon such
termination, in addition to the other provisions contained herein, the
Company shall pay to Employee as a severance allowance an amount equal
to six (6) months of the Employee's current salary.
8.2 Post-Termination Duties and Obligations
Upon termination for any of the foregoing Events;
A. Employee or the representative of Employee's estate,
in the event of the death of the Employee, shall be
entitled to receive that compensation earned by
Employee that Employee would otherwise be entitled to
up to the date of termination less such amounts as
are required by law to be withheld and deducted and;
B. Employee or the representative of Employee's estate,
in the event of the death of the Employee, shall
deliver to the Company all records, reports, files,
schedules, lists, equipment, tools, and any other
property in his possession or under his control
belonging to the Company and, as appropriate, in good
condition and repair, ordinary wear and tear
excepted.
9. COMPANY'S AUTHORITY
The Company expressly reserves the right to adopt and promulgate from
time to time, orally or in writing, Company rules, regulations,
directives and policies with respect to Company operations and systems,
business expense reimbursements, general employee standards, and
employee performance requirements and evaluation criteria (all of the
foregoing collectively referred to as "Company Policies"). Employee
agrees at all times to observe and comply with all Company Policies,
whether oral or in writing, as stated and as reasonably interpreted by
the Board of Directors.
10. PAID VACATION AND SICK LEAVE
A. Paid Vacation
Employee shall be entitled to a paid vacation of four weeks
per year.
B. Sick Leave
As determined by the Company, Employee shall be entitled to a
reasonable number of days of sick leave with full compensation
as specified in the current policy of the Company during each
calendar year. In determining what is a reasonable number of
days, the Company shall take into account previous periods of
illness or disability, the number of days of sick leave taken
in the current and preceding years, and any other relevant
factors it deems pertinent.
11. INDEMNIFICATION
The Company shall indemnify the Employee and hold him harmless for and
with respect to all costs and expenses incurred by Employee resulting
from any acts or decisions made by him in good faith while performing
services for the Company within the scope of his position and authority
hereunder.
12. NON-TRANSFERABILITY
This Agreement is personal to Employee and the services to be provided
by Employee are personal to and uniquely capable of performance by
Employee. Consequently, neither this Agreement nor any right, duties,
or obligations hereunder, or interests herein, shall be transferred,
assigned, conveyed, hypothecated, delegated or pledged, in whole or in
part, voluntarily or involuntarily, by operation of law or otherwise.
Any attempted transfer, assignment or delegation shall be null and
void.
13. NOTICES
All notices provided in or permitted pursuant to this Agreement shall
be in writing and shall be deemed to have been duly given when
delivered or mailed by United States certified mail, return receipt
requested, postage prepaid, addressed to Company at its principal
office address and to Employee at Employee's residence address on the
records of the Company or at such other addresses either party may have
furnished to the other party in writing in accordance herewith.
14. VALIDITY
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
15. AMENDMENTS
Any modification to or amendment of this Agreement shall be effective
only if:
A. It is in writing;
B. It expressly refers to this Agreement; and
C. It is signed by all parties hereto.
16. CONSTRUCTION
This Agreement shall be construed without regard to any presumption or
other rule requiring construction against the party drafting a
document. It shall be construed neither for nor against any party, but
each provision shall be given reasonable interpretation in accordance
with the plain meaning of its terms and the expressed intent of the
parties.
17. ENTIRE AGREEMENT
This Agreement supersedes any and all prior agreements between the
parties thereto, if any, whether oral or written, with respect to the
employment of Employee by the Company and contains all of the
covenants, conditions, and agreements between the parties with respect
to the rendition of such services as herein contemplated or to be
performed hereunder. Each party acknowledges for the benefit of the
other;
A. That no representations, inducements, promises, or agreements,
orally or in writing, have been made by any party, or any person acting
or claiming to be acting on behalf of the other party and;
B. That no other agreement, statement, or promise with respect to such
employment which is not set forth herein shall be valid or binding.
18. ATTORNEY'S FEES
In the event of any dispute or disagreement under this Agreement
whether or not suit is instituted, or if any action is instituted, at
law or in equity, including, without limitation, an action for
declaratory or injunctive relief to enforce or interpret the provisions
of this Agreement, the prevailing party shall be entitled to be
reimbursed for all costs and expenses, including, without limitation,
reasonable attorneys' fees, which may be set by the court in the same
action if any action has been so commenced or in a separate action
brought for that purpose. Such right of reimbursement shall be in
addition to any other relief to which that party may be entitled.
19. GOVERNING LAW AND VENUE
Irrespective of the place of execution or performance, this Agreement
will be governed by and construed in accordance with the laws of the
State of California. The venue of any and all such actions brought
under or pursuant to this Agreement shall be Santa Barbara County,
California.
20. WAIVER
No provision of this Agreement may be modified, waived or discharged
unless such waiver modification or discharge is agreed to in writing
and signed by Employee and such Officer as may be authorized by the
Board. No waiver by either party thereto at any time of any breach of
any condition or provision of this Agreement shall be deemed a waiver
of or to the subsequent enforcement of each term and provision of this
Agreement.
21. BOARD OF DIRECTORS APPROVAL
This Agreement shall be subject to the approval of the Compensation
Committee of the Company's Board of Directors. If not so approved this
Agreement shall be null and void.
22. COORDINATION WITH BEAVER LAKE RESOURCES CORPORATION EMPLOYMENT AGREEMENT
This Agreement shall be coordinated with Employee's employment
agreement with Beaver Lake Resources Corporation ("BLRC"), such that
the compensation provisions of this Agreement shall govern and
supercede those provisions of Employee's agreement with BLRC.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day,
month, and year first set forth above.
"COMPANY"
SABA PETROLEUM COMPANY
a Colorado CorporationBY: _____________________________
Ilyas Chaudhary, President
"EMPLOYEE"
- -----------------------------
Alex S. Cathcart
EXHIBIT A: COMPENSATION/OPTIONS GRANTED
EXHIBIT "A"
ANNUAL COMPENSATION - STOCK OPTIONS
Exercise Price Number of
Year Salary Per Share (1) Option Shares
- -------------------------- ------------------------------ ---------------------------- ---------------------------
Initial Term
1 $115,000.00 $20.00 25,000
2 $123,000.00 $20.00 25,000
3 $123,000.00 $20.00 25,000
(Optional Term)
75,000
(1) To be adjusted to 110% of the market price on May 30, 1997.
* The Employee may exercise the Option Shares in whole or in part at any time on
or after the Employment Anniversary date of the Employee in each of the two (2)
years of employment. For example: the option to purchase 25,000 shares of the
Company's common stock @ the subscribed price may be exercised by the Employee
giving the Company written notice of the Employee's intention to do so at any
time on or after March 1, 1998. Similarly, the second year option could not be
exercised until on or after March 1, 1999. The right to exercise Option Shares
shall vest on respective Employment Anniversary Dates, and shall accumulate. In
the event the employment of the Employee is terminated for any reason, by the
Employee or by the Company, with or without cause, Employee's rights hereunder
shall be limited to those Option Shares which have vested.
These Option Shares are granted pursuant to the Company's 1996 Incentive
Equity Plan and are subject to all the terms and conditions of said plan,
which is incorporated by reference herein.
The Company will prepare, or cause to be prepared and filed with the
appropriate regulatory agencies a registration statement(s) which will
cause the Employee's Option Shares to be registered under Section 12(g) of
the Securities Act of 1933; to be freely transferable; and, to be
represented by stock certificates without any restrictive legends.