Exhibit 10.51
CHANGE
OF CONTROL AGREEMENT
This agreement made as of the 4 th
day of January, 2002.
BETWEEN:
NEXEN INC. (formerly known as
Canadian Occidental Petroleum Ltd.) , a corporation
incorporated under the laws of Canada
(hereinafter referred to as the
“Corporation”)
- and
–
GARY
NIEUWENBURG
(hereinafter referred to as the
“Executive”)
RECITALS:
1.
The Executive, as Vice President, Corporate Planning and Business
Development of the Corporation, is considered by the Board to be an
essential officer and employee of the Corporation, who is both
integral to the operation and development of the Corporation, and
has acquired outstanding skills, unique experience and possesses an
extensive background in, and knowledge of, the Corporation’s
business, operations and the industry in which it is engaged.
2.
In the event of a Change of Control, there is a possibility that
the employment of the Executive would be terminated without just
cause or adversely modified and the Executive has expressed concern
in that regard to the Corporation.
3.
The Board recognizes that it is essential and in the best interests
of the Corporation and its shareholders that the Corporation retain
the continued dedication of the Executive to the Executive’s
office and the Executive’s employment during the uncertain
period prior to, during and following a Change of Control.
4.
The Board further believes that the past service of the Executive
and the Executive’s integral role in the development and
operation of the Corporation requires that the Corporation ensure
that in the event of a Change of Control the Executive is treated
in a manner that is fair, reasonable, consistent with industry
standards and in the best interests of the Corporation.
5.
Both the Corporation and the Executive wish formally to agree on
the terms and conditions which will govern the termination or
modification of the employment of the Executive following a Change
of Control.
NOW THEREFORE , in
consideration of the mutual covenants and agreements set forth in
this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the
Parties, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1
For the purposes of this Agreement, the following terms mean as
follows:
(a)
“Affiliate” and “Associate”
have the meaning ascribed to such terms in the CBCA.
(b)
“Acting Jointly or in Concert” for the purposes
of this Agreement, a Person is acting jointly or in concert with
another Person if such Person has any agreement, arrangement or
understanding (whether formal or informal and whether or not in
writing) with such other Person for the purpose of acquiring, or
offering to acquire, any Common Shares of the Corporation (other
than customary agreements with and between underwriters and banking
group or selling group members with respect to a distribution of
securities by way of prospectus or private placement or pursuant to
a pledge of securities in the ordinary course of business).
(c)
“ Agreement ” means this agreement as it may be
amended or supplemented from time to time, and the expressions
“hereof”, “herein”, “hereto”,
“hereunder”, “hereby”, and similar
expressions refer to this Agreement and, unless otherwise
indicated, refer to Articles or Sections in this Agreement
only.
(d)
“Annual Base Salary” means the annual base
salary of the Executive payable by the Corporation at the end of
the month immediately preceding the Date of Termination.
(e)
“Annual Target Bonus” means the
Executive’s annual target bonus as determined by the Board to
be in effect for the calendar year in which a Change of Control
occurs.
(f)
“Beneficial Owner” for the purposes of this
Agreement, a Person shall be deemed to be the “Beneficial
Owner” and to have “Beneficial
Ownership” of and to “Beneficially
Own” :
(i)
any securities as to which such Person or any of such
Person’s Affiliates or Associates is the owner at law or in
equity;
(ii)
any securities as to which such Person or any of such
Person’s Affiliates or Associates has a right to acquire
(i) upon the exercise of any Convertible Securities or
(ii) pursuant to any agreement, arrangement or understanding,
whether such right is exercisable immediately within a period of
sixty (60) days thereafter and whether or not on condition or
the
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happening of any
contingency, (other than (a) customary agreements with and
between underwriters and banking group and selling group members
with respect to the distribution to the public or pursuant to a
private placement of securities, or (b) pursuant to a pledge
of securities in the ordinary course of business); and
(iii)
any securities which are Beneficially Owned within the meaning of
clauses (a) or (b) above by any other Person with which
such Person is Acting Jointly or in Concert,
provided, however,
that a Person shall not be deemed the “Beneficial
Owner” or to have “Beneficial Ownership” of or to
“Beneficially Own” any security where such Person is
the registered holder of securities as a result of carrying on the
business of or acting as nominee for a securities
depository.
For purposes of
this Agreement, the percentage of Common Shares Beneficially Owned
by any Person, shall be and be deemed to be the product determined
by the formula:
100 x
A/B
Where:
A =
the number of votes for the election of all directors generally
attaching to the Common Shares Beneficially Owned by such Person;
and
B =
the number of votes for the election of all directors generally
attaching to all outstanding Common Shares.
For the purposes
of the foregoing formula, where a Person Beneficially Owns unissued
Common Shares which may be acquired pursuant to Convertible
Securities, such Common Shares shall be deemed to be outstanding
for the purpose of calculating the percentage of Common Shares
Beneficially Owned by such Person in both the numerator and the
denominator, but no other unissued Common Shares which may be
acquired pursuant to any other outstanding Convertible Securities
shall, for the purposes of that calculation, be deemed to be
outstanding.
(g)
“Board” means the Board of Directors of the
Corporation as constituted from time to time.
(h)
“CBCA” means the Canada Business Corporations
Act , as amended from time to time, and any successor
legislation thereto.
(i)
“Change of Control” means the occurrence of any
of:
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(i)
the purchase or acquisition of any Common Shares or Convertible
Securities by a Beneficial Owner which results in the Beneficial
Owner owning, or exercising control or direction over, Common
Shares or Convertible Securities such that, assuming only the
conversion of Convertible Securities Beneficially Owned or over
which control or direction is exercised by the Beneficial Owner,
the Beneficial Owner would own, or exercise control or direction
over, Common Shares carrying the right to cast more than
thirty-five percent (35%) of the votes attaching to all Common
Shares; or
(ii)
the substantial completion of: (i) the liquidation,
dissolution or winding-up of the Corporation; or (ii) the
sale, lease or other disposition of all or substantially all of the
assets of the Corporation; or
(iii)
a situation in which individuals who were members of the Board
immediately prior to:
(A)
a meeting of the shareholders of the Corporation involving a
contest for, or an item of business relating to, the election of
directors; or
(B)
an amalgamation, arrangement, merger or other consolidation or
combination of the Corporation with another Person,
shall not
constitute a majority of the Board following such election or
transaction; or
(iv)
the completion of any transaction or the first of a series of
transactions which would have the same or similar effect as any
transaction or series of transactions referred to in paragraphs
(i), (ii) or (iii) above; or
(v)
a determination by the Board that there has been a change, whether
by way of a change in the holding of the Common Shares, in the
ownership of the Corporation’s assets or by any other means,
as a result of which any Person, or group of Persons Acting Jointly
or in Concert, is in a position to effect a Change of Control.
(j)
“Common Shares” means the common shares of the
Corporation.
(k)
“Convertible Securities” means:
(i)
any right (contractual or otherwise and regardless of whether such
right constitutes a security) to acquire Common Shares from the
Corporation; or
(ii)
any security issued by the Corporation from time to time (other
than the rights issued pursuant to a shareholders’ rights
protection plan, if any) carrying any exercise, conversion or
exchange right,
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which is then
exercisable or exercisable within a period of sixty (60) days from
that time pursuant to which the holder thereof may acquire Common
Shares or other securities which are convertible into or
exercisable or exchangeable for Common Shares (in each case,
whether such right is then exercisable or exercisable within a
period of sixty (60) days from that time and whether or not on
condition or the happening of any contingency).
(l)
“Date of Termination” means the date upon which
the Executive’s employment is terminated pursuant to
Section 4.1, 5.1 or 6.1. For greater clarity, the Date
of Termination means the date upon which the Corporation provides
the Executive with written, verbal or other notice that the
Executive’s employment has been or will be terminated
pursuant to Section 4.1 or 5.1 or the date upon which the
Executive provides the Corporation with written notice terminating
the Executive’s employment pursuant to Section 4.1 or
for Good Reason pursuant to Section 6.1.
(m)
“Disability” means, where due to a physical or
mental condition, the Executive is rendered totally and permanently
unable to perform the Executive’s duties for a consecutive
period of two (2) years or more during which the Executive has
been in receipt of long term disability insurance benefits from the
insurance carrier normally utilized by the Corporation.
(n)
“Effective Date” means the date upon which a
Change of Control occurs.
(o)
“Employment Benefits” means the employment
benefits to which the Executive is entitled by virtue of any
written, oral or implied agreement with the Corporation. For
the purposes of this Agreement, “Employment Benefits”
shall include, but is not limited to, the following:
(i)
the Executive’s entitlement to any dental or general medical
care;
(ii)
the Executive’s entitlement to receive long term disability
benefits from the insurance carrier normally utilized by the
Corporation;
(iii)
the Executive’s entitlement to pension benefits under the
terms of any pension plan with the Corporation;
(iv)
the Executive’s entitlement to a monthly car allowance from
the Corporation;
(v)
the Executive’s entitlement to contributions by the
Corporation to the Corporation’s savings plan;
(vi)
the Executive’s entitlement to receive from the Corporation
financial counseling services, at a cost of 3,500.00 per year (or
as the same may be increased from time to time by the Corporation);
and
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(vii)
the Executive’s entitlement to receive from the Corporation
security monitoring services at the Executive’s personal
residence.
(p)
“Good Reason” means any of the following, unless
the Executive shall have given the Executive’s express
written consent thereto:
(i)
Inconsistent Duties . The assignment to the Executive
of any duties inconsistent with the Executive’s status as an
executive officer of the Corporation or a material alteration in
the nature or status of the Executive’s responsibilities or
duties or reporting relationship from those in effect immediately
prior to a Change of Control;
(ii)
Reduced Salary . A reduction by the Corporation in the
Executive’s Annual Base Salary in effect on the Effective
Date or as the same may be thereafter increased from time to time
or the failure by the Corporation to grant the Executive salary
increases at a rate commensurate with the increases accorded to
other executives of the Corporation;
(iii)
Relocation . The Corporation requiring the Executive
to be based anywhere other than where the Executive is based at the
time a Change of Control occurs, except for required travel on the
Corporation’s business to an extent substantially consistent
with the Executive’s business travel obligations in the
ordinary course of business immediately prior to a Change of
Control;
(iv)
Incentive Compensation Plans . The failure by the
Corporation to continue in effect any incentive compensation plan
in which the Executive participates, including, but not limited to,
the Incentive Compensation Plan or the Stock Option Plan or any
other similar plans adopted prior to a Change of Control, unless
the Executive is eligible to participate in, and is entitled to the
opportunity to receive a comparable level of benefits under, an
ongoing, substitute or alternative plan (it being understood that
the manner or method of payment and the form of consideration need
not be the same as existed in the original plans); or the failure
by the Corporation to continue the Executive’s participation
therein on at least as favourable a basis, both in terms of the
amount of benefits available to the Executive and the level of the
Executive’s participation relative to other participants, as
existed at the time a Change of Control occurs;
(v)
Employment Benefits and Perquisites . The failure by
the Corporation to continue to provide the Executive with
Employment Benefits at least as favourable as those enjoyed by the
Executive immediately prior to a Change of Control, including any
pension plan, benefit plan or any retirement arrangement
established for the Executive, or any of the Corporation’s
life insurance, medical, health and accident, disability or savings
plans in which the Executive was participating at the time a
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Change of Control
occurs; the taking of any action by the Corporation that would
directly or indirectly materially reduce any such benefits or
deprive the Executive of any material perquisite enjoyed by the
Executive at the time a Change of Control occurs, including,
without limitation and to the extent applicable, the use of a car,
aircraft, secretarial services, office space, telephones, computer
facilities, expense reimbursement, financial counseling, and
professional fees and club dues reimbursement; or the failure by
the Corporation to provide the Executive with the number of paid
vacation days to which the Executive is entitled in accordance with
the Corporation’s normal vacation practice in effect at the
time a Change of Control occurs;
(vi)
No Assumption by Successor . The failure of the
Corporation to obtain a satisfactory agreement from a successor to
assume and agree to perform this Agreement. Alternatively, if
the business or undertaking in connection with which the
Executive’s services are principally performed is sold at any
time after a Change of Control occurs, and the Executive’s
employment is transferred as a result, the failure or refusal of
the purchaser of such business or undertaking to provide the
Executive with the same or a comparable position, duties,
compensation and benefits, as described in paragraphs (iv) and
(v) above, as provided to the Executive by the Corporation
immediately prior to a Change of Control;
(vii)
Disposition of “All or Substantially All”
. The disposition by the Corporation of all or substantially
all of the assets of the Corporation, as contemplated herein,
notwithstanding that the Executive’s services were or were
not principally performed for such business.
(q)
“Incentive Compensation Plan” means any bonus or
incentive compensation plan of the Corporation in which the
Executive is entitled to receive benefits in the month immediately
preceding a Change of Control.
(r)
“Just Cause” means:
(i)
the failure by the Executive to substantially perform the
Executive’s duties according to the terms of the
Executive’s employment in existence immediately prior to a
Change of Control after the Corporation has given the Executive
reasonable notice of such failure and a reasonable opportunity to
correct it; or
(ii)
where the Executive engages in any criminal act or dishonesty
resulting or intended to result, directly or indirectly, in the
personal gain of the Executive at the Corporation’s
expense.
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(s)
“Monthly Base Salary” means the monthly salary
payable to the Executive by the Corporation in effect at the end of
the month immediately preceding the Effective Date.
(t)
“Parties” means the Corporation, and its
successors and permitted assigns, and the Executive and the
Executive’s heirs, executors and administrators and “
Party ” means either one of them.
(u)
“Person” includes an individual, partnership,
association, body corporate, trustee, executor, administrator,
legal representative and any national, provincial, state or
municipal government or any agency thereof.
(v)
“Securitization Procedure” means the Statement
of Company Procedure Regarding the Securitization of Nexen Inc.
Restated Executive Benefit Plan, as amended from time to time.
(w)
“Severance Period” means the twenty-four (24)
month period immediately following the Date of Termination.
(x)
“Stock Option Plan” means any stock option plan
or plans of the Corporation pursuant to which the Executive is
granted options by the Corporation to acquire Common Shares.
(y)
“Subsidiary” has the meaning ascribed to it in
the CBCA.
(z)
“Term” has the meaning referred to in
Section 3.1.
ARTICLE 2
SCOPE OF AGREEMENT
2.1
The Parties intend that this Agreement sets out their respective
rights and obligations upon the occurrence of a Change of
Control. This Agreement does not provide for any other terms
of the Executive’s employment with the Corporation, and shall
create no rights or obligations of the Parties prior to, or in
circumstances other than, a Change of Control or beyond the
Term.
2.2
This Agreement shall automatically terminate upon the death of the
Executive or where due to the Disability of the Executive, the
Executive is materially incapacitated from performing the
Executive’s duties. In the event of the death or
Disability of the Executive, the Executive (or the
Executive’s estate) shall be entitled to receive from the
Corporation all unpaid Annual Base Salary, Employment Benefits,
unpaid business expenses and vacation entitlement accrued to the
date of the death or Disability of the Executive. The
Executive (or the Executive’s estate) shall also be entitled
to receive any and all death or Disability benefits in a manner
consistent with, and at least equal in amount to, those provided by
the Corporation to senior executives (or their estate) under such
plans, programs and policies in effect at the date of Disability or
death of the
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Executive, and the
Corporation shall have no further obligations to the Executive or
the Executive’s estate under this Agreement.
2.3
If the Executive’s employment is terminated by either Party,
for any reason, prior to a Change of Control in any manner, other
than expressly provided for in this Agreement, this Agreement shall
automatically terminate and the Corporation shall have no
obligations to the Executive hereunder.
ARTICLE 3
TERM OF AGREEMENT
3.1
Subject to termination of this Agreement prior to a Change of
Control, this Agreement shall remain in effect for a period
concluding twelve (12) months following the Effective Date (the
“Term”), at which time this Agreement shall terminate;
provided however that the payment of compensation and benefits to
the Executive under this Agreement shall continue beyond the end of
the Term in accordance with the applicable provisions of this
Agreement.
ARTICLE 4
TERMINATION FOR JUST CAUSE OR FOR OTHER THAN GOOD
REASON
4.1
If the Executive’s employment is terminated for Just Cause,
or is terminated by the Executive, other than for Good Reason,
following a Change of Control, the Corpor
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