EXHIBIT 4.2
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") dated [ ] and effective as of
[ ] is between Petsec Energy Inc, a Nevada corporation (the "Company"),
and [name of executive] (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive and the Company wish to enter into an employment
agreement under the following terms and conditions.
NOW, THEREFORE the parties agree as follows:
1. EMPLOYMENT. Executive agrees to accept employment with either (a)
the Company directly or (b) any direct or indirect subsidiary of
Petsec Energy Ltd ("PEL"). Subject to the terms and conditions set
forth in this Agreement, the Executive agrees to provide the
services described in Section 2 below to either the Company or to
any direct or indirect subsidiary of PEL designated from time to
time and one or more times in the Company's sole discretion.
1.1. APPOINTMENT. The Company initially appointed the Executive to
the position of [executive position].
1.2. ACCEPTANCE. The Executive accepts the appointment to the
positions set forth in Section 1.1 above.
2. NATURE OF SERVICE. During the Executive's employment, the Executive
agrees to perform such services as are consistent with his position
or as from time to time shall be assigned to him by the [__________
or __________]. The Executive shall devote so much of his time,
attention and skills to the business of the Company as is necessary
to properly perform his duties and responsibilities exclusively for
the Company on a full time basis. The Executive shall not, during
the Executive's employment, be engaged in, or represent any party
other than the Company in connection with, any sale or the provision
of any services whatsoever without the prior written consent of the
[__________ or _____________]. The Executive shall perform his
duties under this Agreement diligently with fidelity and loyalty and
in a competent manner consistent with the level of his
responsibilities.
3. COMPENSATION.
3.1. BASE SALARY. During the Executive's employment, the Company
shall pay to the Executive a base salary in equal semi-monthly
instalments to be paid in accordance with the established
payroll practices of the Company. The executive's base salary
shall be [insert salary] per year. The Executive's base salary
shall be reviewed annually by the Remuneration Committee (the
"Committee") of the Petsec Energy Ltd Board of Directors (the
"Board"). The Committee may recommend increases to the
Executive's base salary, which if accepted by the Board, shall
be become effective in accordance with the Board's decision.
"Base Salary," as used hereinafter, shall mean the annualized
base salary being paid to the Executive at the relevant time
pursuant to this Section 3.1
3.2 INCENTIVE COMPENSATION PLAN. The Executive shall be entitled
to participate in the Company's Incentive Compensation Plan,
according to that Plan's terms as they may be amended from
time to time.
3.3 TAXES. All taxes and governmentally required withholdings
shall be deducted from any distributions in conformity with
applicable laws.
4. STOCK OPTIONS.
4.1 GRANT OF OPTION. As additional compensation to the Executive,
Petsec Energy Ltd has issued to the Executive as of the Start
Date incentive stock options to purchase [quantity] ordinary
shares of Petsec Energy Ltd (the "Options"). The Options are
governed by the Petsec Energy Ltd Employee Option Plan (the
"Option Plan"), and Executive agrees that the issue and
exercise of the Options are governed by the rules of the Plan,
as the same may be amended from time to time, and by the
additional terms and conditions set by the Committee and
described in the Options Certificates to be delivered to the
Executive with respect to the Options.
4.2 TAX CONSEQUENCES. The Executive shall be responsible for the
payment of all income or alternative minimum taxes that may
accrue on account of the issuance, exercise or sale of the
Options or the acquisition or sale of PEL stock acquired as a
result of the exercise of the Options by the Executive. The
Executive should consult his own tax advisor regarding the
specific tax consequences of the Stock Options and
participation in the Plan, including the application of any
federal, state and local tax laws and the effect of other
state and local laws, including community property laws. The
Executive agrees to defend and indemnify the Company for any
claims made against the Company or the Executive by any taxing
authority for taxes owed by the Executive on account of the
issuance, exercise or sale of the Options or the acquisition
or sale of any PEL stock acquired pursuant to the exercise of
any Options.
5. BENEFITS. The Executive shall receive the employee benefits as may
be provided by the Company from time to time to other executives and
employees of the Company, including 401(k), health, dental,
accidental death and dismemberment, long term disability and life
insurance benefits.
5.1. VACATION TIME. The Executive will be eligible for [___days]of
vacation time per year, together with all public holidays
recognized by the Company. The use and accrual of such
vacation time shall be governed by the Company's vacation
policy, as the same may be amended from time to time and one
or more times.
5.2. DEATH BENEFITS. The Company and PEL shall, subject to the
Executive satisfying the requirements of insurers, procure if
it has not already done so, life insurance coverage for the
Executive, all to a standard not less than that which the
Company maintains for its Executive personnel from time to
time. Any disability benefits shall be paid directly by the
Company's insurance company.
6. REIMBURSEMENT OF BUSINESS EXPENSES. The Company shall reimburse the
Executive for all reasonable and proper travel and out-of-pocket
expenses (including but not limited to motor vehicle expenses,
industry association fees, and industry entertainment expenses)
incurred by him for the purpose of and in connection with the
performance of his duties pursuant to this Agreement during the
Executive's employment, all in accordance with the policies relating
to the allowable amount of such expenses and the provision of
itemized reports and receipts with respect thereto that may from
time to time be adopted by the Company.
7. TERMINATION.
7.1. TERMINATION BY THE COMPANY FOR CAUSE.
7.1.1. FOR CAUSE. The Company may terminate the Executive's
employment for cause at any time, effective immediately.
As used in this Agreement, "cause" means that the Board
in good faith either determines or has reasonable
suspicion that one or more of the following has
occurred: (1) the Executive has embezzled or
misappropriated funds of the Company; (2) the Executive
has committed a felony, has committed a misdemeanour
involving moral turpitude, has violated any statute,
rule or regulation under federal securities laws, or has
committed any other criminal act or unethical conduct
that would seriously impair the Executive's ability to
perform his duties hereunder or would impair the
business reputation of the Company; or (3) the Executive
has failed to fully and faithfully perform his
obligations under this Agreement in a material,
continuing fashion, after having first received written
notice from the [___________ or
___________] specifying in detail the reasons why the
Board believes that the Executive has not fully and
faithfully performed his duties or breached this
agreement and allowing the Executive 30 days to cure any
such default. If the Company terminates the Executive's
employment for cause under this Section 7.1.1, the
Executive shall be paid all compensation and other sums
due to him through the date of such termination,
including, without limitation, reimbursements for
allowable expenses incurred by the Executive.
7.1.2. WITHOUT CAUSE. The Company may terminate the
Executive's employment under this Agreement at any
time, in which case the Company shall pay to the
Executive all compensation and other sums due to
him through the date of such termination, and the
Company shall pay to the Executive a lump sum in
cash equal to [insert proportion] times the
Executive's annual Base Salary in effect on the
date immediately prior to the date of termination.
7.2. TERMINATION BY THE EXECUTIVE.
7.2.1. FOR CAUSE. The Executive may terminate his
employment under this Agreement if Company does
any one or more of the following: (1) Company
makes a material reduction in Executive's job
duties, authority or responsibilities with the
Company or a Controlled Subsidiary from that
exercised by him immediately prior to such change
(however, a reduction in the size of the Company
and/or in the number of employees working under
the supervision of Executive, shall not constitute
a material reduction hereunder); (2) a reduction
in Executive's Base Salary of more than [insert
percentage] in any [insert number] month period
from the highest Base Salary paid by the Company
or any Controlled Subsidiary to Executive during
the [insert number] months immediately preceding
such Base Salary reduction; (3) a change in
location of Executive's primary place of
employment by the Company by more than [insert
number] miles from the location where he was
primarily employed prior to such change; or (4)
Company otherwise fails to comply with any
material provision of this Agreement. Before
terminating his employment for cause under this
Section 7.2.1, the Executive shall first provide
the Company with written notice specifying in
detail the reasons why the Executive believes he
has the right to terminate his employment for
cause and allowing the Company thirty (30) days to
cure any such default. If the Executive provides
such a notice to the Company and then fails to
terminate his employment for cause within five
days after the expiration of the thirty (30) days
cure period, this Agreement shall continue in full
force and effect, but the Executive shall not be
deemed to have waived his right to terminate this
Agreement for the reasons specified in the notice,
except to the extent the same were cured or
specifically waived by the Executive in writing.
If Executive does terminate his employment for
cause under this Section 7.2.1, Executive will be
entitled to receive only the compensation provided
for in Section 7.1.2.
7.2.2. WITHOUT CAUSE. The Executive may terminate his
employment under this Agreement without cause by
giving the Company at least thirty (30) days prior
written notice of the effective date of his
termination of employment. If the Executive
terminates his employment under this Section
7.2.2, the Executive shall be paid all
compensation and other sums due to him through the
date of termination including, without limitation,
reimbursements for allowable expenses incurred by
the Executive.
7.3. TERMINATION UPON DEATH OR DISABILITY.
7.3.1. If the Executive becomes "disabled" to the extent that
he is unable to perform his duties under this Agreement,
at such time as he is determined to be disabled, his
employment shall be deemed terminated at the end of a
waiting period. For purposes of this Agreement, the term
"disabled" means the Executive's inability to perform
services by reason of illness or incapacity for the
waiting period
specified in the long term disability policy that must
be satisfied before long-term disability benefits begin
for an employee who meets the definition of disability
under that policy. The Executive shall be paid all
compensation and other sums due to him through the date
of termination under this Section 7.3.1 including,
without limitation, reimbursements for allowable
expenses incurred by the Executive.
7.3.2. If the Executive dies, his employment shall be deemed
to be terminated as of the date of his death and the
Executive and his heirs or successors shall receive all
compensation and other sums due to him through the date
of such termination as set out in Section 5.2,
including, without limitation, reimbursements for
allowable expenses incurred by the Executive.
7.4. PAYMENTS TO THE EXECUTIVE IN THE EVENT OF A CHANGE IN CONTROL
OR A SALE OF ASSETS.
7.4.1. AMOUNTS. If within [ ] months after a change in control
or sale of all assets (a) the Company terminates
Executive's employment or (b) Executive resigns his
employment with the Company for Cause (as defined in
Section 7.2.1), then the Company shall pay to Executive
in a lump sum: (1) [insert amount] times the base salary
Executive was receiving on the effective date of the
change in control, and (2) payment in respect of the
year in which the Executive was terminated of annual
incentive compensation (to the extent that incentive
compensation has not previously been paid for the year
to the Executive ) based on the plan that was in effect
on the effective date of the change in control applying
the same award pool computation and awarding Executive
the same percentage of the award pool as Executive was
awarded in the most recent incentive compensation
payment that was made before the change in control or
sale of all assets.
7.4.2. LIMITATION. Notwithstanding Section 7.4.1, the amount
payable to Executive under this Section 7.4 shall be
reduced to the lesser of (1) the amount payable under
Section 7.4.1 or (2) $1 below the amount that would
cause Executive to become liable for the excise tax in
section 4999 of the Internal Revenue Code (the "Code")
as a result of all parachute payments (as defined in
Code Section 280G(b)(2)) to Executive in connection with
the change in control or a sale of all assets.
7.4.3 CHANGE IN CONTROL. A "change in control" occurs when any
Person, other than (i) an Affiliate or (ii) a trustee or
other fiduciary holding securities under an employee
benefit plan of the Company or an Affiliate, becomes the
Beneficial Owner, directly or indirectly, of more
than 50% fifty percent (50%) of the combined voting
power of the ownership interests in the Company.
7.4.4. SALE OF ALL ASSETS. A "sale of all assets"occurs when
the Company sells or disposes of more than 98% of the
assets of the Company, other than exclusively to an
Affiliate or Affiliates of the Company, unless within
six months of such sale the Company takes material steps
to use the sale proceeds to purchase new assets for
exploration or to develop new production.
7.4.5. DEFINITIONS. For purpose of this Section 7.4, "Person"
has the same meaning as when that term is used in
Section 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act")). "Affiliate"
means any corporation or other entity that is a member
of the Company's controlled group within the meaning of
Sections 414(b) and 414(c) of the Internal Revenue Code
of 1986, as amended (the "Code"), including any entities
that would be part of that controlled group if they were
United States entities or were not excluded under Code
Section 1563(b)(2), except that "50%" shall be
substituted in place of "80%" in each place "80%" is
used. The term "Affiliate" shall also include those
entities that are, at the date of this Agreement or
thereafter, associated with the CEO, Mr. Terrence N.
Fern. "Beneficial Owner" has the same meaning as when
that term is used in Rule 13d-3 under the Exchange Act.
7.5. PAYMENTS TO THE EXECUTIVE IN THE EVENT OF TERMINATION.
7.5.1. BASE SALARY. Upon the termination of the Executive's
employment with the Company under circumstances set
forth in Sections 7.1.1, 7.2.1, 7.3, or 7.4.1, the
Company shall be obligated only to pay to the Executive
the compensation set forth in those Sections.
7.5.2. OPTIONS. Upon the Executive's termination of employment
for any reason, the Executive's rights and the Company's
obligations with respect to the Options shall be
governed by the Employee Option Plan.
8. CERTAIN COVENANTS OF THE EXECUTIVE.
8.1. The Executive agrees that during his employment, he will not
(i) directly or indirectly engage or invest in any business
other than the Company's business without the prior approval
of the [___________ or _________] or (ii) otherwise act as a
director, officer, employee, agent, owner, partner or
consultant to any such business. It is understood and agreed
that the Executive shall not be deemed to be in default with
respect to this Section 8 solely as a result of any investment
he may make in not more than (a) five percent of the
outstanding shares or other units of any security registered
pursuant to Section 12 of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), (b) fifty percent (50%) of the
outstanding shares or other units of any security not
registered pursuant to Section 12 or the 1934 Act, provided
(I) such unregistered shares or other units are not of an
entity whose business is in competition with the business of
the Company and (II) the Committee determines that Executive's
holding of the investment is not detrimental to the Company or
(c) any investments approved on the signing of this Agreement.
8.2. During the Executive's employment and for a period
("Prohibited Period") of (a) 15 months thereafter for
Proprietary Information (as defined below) and (b) perpetuity
thereafter for Trade Secrets (as defined below),and except in
the course of performing the duties of his employment, the
Executive shall not disclose or permit or cause to be
disclosed, either directly or indirectly, to any person any
Trade Secrets (as defined below) without first obtaining the
written consent of the Board. During the Prohibited Period,
the Executive shall not disclose or permit or cause to be
disclosed, either directly or indirectly, to any person any
Proprietary Information. Notwithstanding the foregoing, (i) if
any such Trade Secret or Proprietary Information is or becomes
generally available to the public (other than as a result of
unauthorized disclosure directly or indirectly by the
Executive), or (ii) if any such Trade Secret or Proprietary
Information is required to be disclosed by any federal or
state law, rule or regulation or by any applicable judgment,
order or decree or any court or governmental body or agency
having competent
jurisdiction, the Executive shall be under no obligation of
confidentiality with respect to such information (however,
Executive shall give Petsec written notice at least 30 days
before making such disclosure so that Petsec may seek a
protective order.) On termination of this Agreement, the
Executive promptly shall return all originals and copies of
such papers, lists, documents and records of the Company and
PEL that are in his possession, custody or control and shall
delete all such information from any computer owned by
Executive or his family). As used herein "Trade Secrets" means
the whole or any portion or phase of technical information,
design, process, procedure, formula or improvement known or
used by the Company, PEL or any of their affiliates that is
valuable and secret (in the sense that it is not generally
known to competitors of the Company). To the extent consistent
with the foregoing, Trade Secrets include (without limitation)
the specialized information and technology that provide the
Company, PEL or any of their affiliates with an advantage over
competitors or potential competitors in its industry. As used
herein, "Proprietary Information" means any and all general
and specific knowledge, experience and information and rights
with respect thereto, other than Trade Secrets, including,
without limitation, technical data, geological plays, data
bases, discoveries, plans, specifications and technical
information (patentable or unpatentable), that is confidential
or proprietary of the Company, PEL or any of their affiliates.
8.3. If the provisions contained in this Section 8 are more
restrictive than permitted by applicable law, the parties
agree that the covenants contained in this Section 8 shall be
enforceable and in force to the extent permitted by law.
9. AMENDMENT. This Agreement may not be modified or amended except by a
written instrument executed by or on behalf of each of the parties.
10. WAIVERS. Any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or
prospectively) by the party entitled to enforce such term, but such
waiver shall be effective only if in a writing signed by the party
or parties against which such waiver is to be asserted. Unless
otherwise expressly provided herein, no delay or omission on the
part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of any party of any right, power or privilege hereunder
operate as a waiver of any other right, power or privilege hereunder
nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege hereunder.
All remedies, either under this Agreement or by law or otherwise
afforded to any party, shall be cumulative and not alternative.
11. ENTIRE AGREEMENT. This Agreement and the documents expressly
referred to herein constitute the entire agreement between the
parties with respect to the matters covered hereby, and any other
prior or contemporaneous oral or written understandings or
agreements with respect to the matters covered hereby are expressly
superseded by this Agreement. There are no unwritten or oral
agreements between the parties.
12. SEVERABILITY. If any provision of this Agreement, or the application
of such provision to any person or circumstance, shall be declared
judicially to be invalid, unenforceable or void, such decision will
not have the effect of invalidating or voiding the remainder of this
Agreement or affect the application of such provision to other
persons or circumstances, and the parties agree that the part or
parts of this Agreement so held to be invalid, unenforceable or void
will be deemed to have been stricken here from and the remainder of
this Agreement will have the same force and effect as if such part
or parts had never been included herein. Any such finding of
invalidity or unenforceability shall not prevent the enforcement of
such provision in any other jurisdiction to the maximum extent
permitted by applicable law.
13. NOTICES. Unless otherwise expressly provided herein, all notices and
required copies, requests, demands, consents, waivers, instructions,
approvals and other communications hereunder shall be in writing and
if given by the Company may be given by the [___________ or
_____________] or the Board and shall be deemed to have been duly
given if personally delivered to or mailed, certified mail, return
receipt requested, first-class postage paid, or delivered by
messenger service with receipt acknowledged, addressed as follows:
If to the Company:
3861 Ambassador Caffery, Suite 500
Lafayette, Louisiana 70503
[Name]
With a copy to:
Level 13, 1 Alfred Street
Sydney, NSW 1225, Australia
Attn: [Name]
If to the Executive:
[name of executive]
[address of executive]
or to such other address or to such other individuals as any party
shall have last designated by notice to the other party. All notices
and other communications given to any party in accordance with the
provisions of this Agreement shall be deemed to have been given when
delivered to the intended recipient thereof in accordance with the
provisions of this Section 13.
14. GOVERNING LAW; FORUM: CONSENT TO JURISDICTION. This Agreement shall
be construed in accordance with, and the rights of the parties
governed by Louisiana law without regard to the principles of
conflict of laws.
15. SUCCESSORS AND ASSIGNS.
15.1 Except as otherwise expressly provided herein, the Executive
agrees on behalf of himself and his executors and
administrators, heirs, legatees, distributees and any other
person or persons claiming any benefits under him by virtue of
this Agreement, that this Agreement and the rights, interests
and benefits hereunder shall not be assigned, transferred,
pledged or hypothecated in any way by the Executive or any
executor, administrator, heir, legatee, distributee or person
claiming under the Executive by virtue of this Agreement and
shall not be subject to execution, attachment or similar
process. Any attempt at assignment, transfer, pledge or
hypothecation or other disposition of this Agreement or of
such rights, interest and benefits contrary to the foregoing
provision, or the levy of any attachment or similar process
thereupon, shall be null and void and without effect.
15.2 The Company shall be permitted to assign this Agreement to its
successors and assigns and all covenants and agreements
hereunder shall inure to the benefit of and be enforceable by
or against such successors or assigns. The terms "successors"
and "assigns" shall include any person that buys all or
substantially all of the Company's assets, or at least fifty
percent (50%) of its voting equity, or with which the Company
merges or consolidates. If there is a successor to the
Company's rights under this Agreement or if the Company
assigns this Agreement, all references to the "Company" shall
be deemed to refer to the successor or assignee.
16. THIRD PARTY BENEFICIARIES. This Agreement does not create, and shall
not be construed as creating, any rights enforceable by any person
or entity not a party to this Agreement (except as otherwise
provided in Section 7.3.2).
17. HEADINGS. The section headings in this Agreement are for convenience
of reference only and shall not be deemed to alter or affect the
meaning or interpretation of any provisions hereof.
18. ARBITRATION. Any controversy or claim arising out of or relating to
this contract, or the breach thereof, shall be settled by
arbitration in Lafayette, Louisiana, in accordance with the
applicable Rules of the American Arbitration Association ("AAA")
using one (1) impartial arbitrator and
judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof. If unable to agree to an
arbitrator using the AAA's procedures, the presiding judge in the
15th Judicial District Court shall be asked to designate an
arbitrator.
19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and
all of which together shall be deemed to be one and the same
instrument.
20. CURRENCY REFERENCES. All references to "$" are to United States
currency unless otherwise specifically stated in the Agreement.
References to "A$" are to Australian currency.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to
be effective as of the date first above written.
WITNESSES:
__________________________________
Signature
__________________________________
Print Name
WITNESSES:
__________________________________
Signature
__________________________________
Print Name
COMPANY:
__________________________________
[Name}
EXECUTIVE:
__________________________________
[Name]