<PAGE>
EXHIBIT 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made this 11 day
of
August 2006, between PACIFIC ENERGY RESOURCES LTD., a Delaware
corporation
("PERL" or the "COMPANY"), and JEEVAN P. ANAND ("EMPLOYEE")
(collectively the
"PARTIES") with reference to the following facts:
A. PERL is engaged in the acquisition and development of oil
gas
properties. The Company's principal offices are located at 1065
West Pier E
Street, Long Beach, CA 90802-1015.
B. The Company desires to employ Employee as the Chief
Operating
Officer and Executive Vice President of the Company and Employee
desires to
accept such employment subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the facts recited above,
the
covenants contained in this Agreement, and other valuable
consideration, the
parties agree as follows:
1.
EMPLOYMENT.
----------
The Company hereby employs the Employee, and the Employee accepts
such
employment, in the capacity of Chief Operating Officer and
Executive Vice
President of the Company in accordance with the terms of this
Agreement, the
bylaws of the Company and applicable law.
2.
SERVICES AND DUTIES.
-------------------
Employee shall perform all services, acts or other things necessary
or
advisable, and as may be determined and assigned from time to time
by the Board
of Directors, to manage the business of the Company and have
general
supervision, direction and control over the business and affairs of
the Company
and its employees, subject to the control and direction of the
Board of
Directors.
3.
STANDARD OF PERFORMANCE.
-----------------------
Employee agrees that
at all times during the Employment Term (as
defined herein) he will diligently, competently, and to the best of
his ability
and experience, perform all of the services and duties that are
required as the
Chief Operating Officer and Executive Vice President of the
Company.
4.
EXCLUSIVE EMPLOYMENT.
--------------------
Employee shall not, while employed by the Company, render services
of
any kind to others for compensation, or engage in any other
business activity
without the prior written consent of the Board of Directors of the
Company (in
the event Employee is a member of the Board of Directors at such
time, he shall
not participate in the vote concerning such consent). During the
Employment
Term, Employee shall not, directly or indirectly, whether as a
partner,
employee, creditor, shareholder, or otherwise, promote,
participate, or engage
in any activity or business competitive with the Company's
business. However,
nothing in this Agreement shall be deemed to prevent or limit the
right of the
-1-
<page>
Employee to invest any of his funds in the capital stock or other
securities of
any entity whose stock or securities are publicly owned or are
regularly traded
on any public exchange, so long as (i) such entity does not engage
in a business
that is in competition with the Company's business as of the date
of such
investment; (ii) the investment does not exceed 2% of the
outstanding voting
equity interests of such entity; and (iii) the management of that
investment
does not materially interfere with the performance of his duties
hereunder.
5. TERM
OF EMPLOYMENT.
------------------
Unless terminated earlier pursuant to this Section or SECTIONS 9 OR
10
of this Agreement, Employee shall be employed for a term commencing
as of June
30, 2006 and ending on July 1, 2008 (the "EMPLOYMENT TERM").
Thereafter, the
Employment Term shall continue on an at-will basis until terminated
at the
option of either party upon sixty (60) days prior written notice to
the other
party.
This Agreement may be terminated at any time by written agreement
of
the parties, or as provided in SECTIONS 9 OR 10. This Agreement
will terminate
immediately upon Employee's death.
6.
COMPENSATION.
------------
6.1 BASE SALARY. Company shall pay Employee a base annual salary of
Two
Hundred Twenty Thousand Dollars ($220,000.00) (the "BASE SALARY")
which annual
Base Salary shall increase (but not decrease) as of July 1st (the
"ADJUSTMENT
DATE") of each subsequent employment year (commencing July 1, 2007)
during the
Employment Term by the percentage increase, if any, in the "CURRENT
INDEX" over
the "BASE INDEX."
The adjustments described above shall be calculated on the basis of
the
United States Department of Labor, Bureau of Labor Statistics,
"Consumer Price
Index For All Urban Consumers, Los Angeles-Anaheim-Riverside Area"
(the
"INDEX"). The Index for April preceding the immediately prior
employment year
shall be considered the "Base Index," and the April preceding the
employment
year for which the adjustment shall become effective shall be the
"Current
Index." Salary shall be payable in accordance with the Company's
usual payroll
method for corporate executives.
6.2 ADDITIONAL COMPENSATION. Employee shall be entitled to an
annual
bonus equal to 20% of his Base Salary (the "BONUS"), payable at the
end of each
Company fiscal year.
7.
BENEFITS.
--------
7.1 BENEFIT PLAN PARTICIPATION. Employee shall be entitled to
participate in, on the same basis as all other eligible employees,
in any profit
sharing, pension or other incentive plan adopted by the Company,
subject to the
terms, conditions and overall administration of any such plan.
Employee is
entitled to all the benefits awarded to former AERA Employees with
more than 25
years of service, including but not limited to, the providing of a
company
automobile.
-2-
<page>
7.2 GRANT OF SHARE OPTIONS. With the prior approval of the
Company's
Compensation Committee, the Employee shall be granted under and
pursuant to the
terms of the Company's 2006 Share Option Plan, options to purchase
in the
aggregate 450,000 shares of stock of the Company and subject to the
following
vesting schedule:
(a) Options to purchase 200,000 shares shall be granted shortly
after the signing of this Agreement, and
(b) Options to purchase 250,000 shares shall be granted to the
Employee upon the one year anniversary of this Agreement.
7.3 ILLNESS. Employee shall be entitled to five (5) days of sick
leave
with pay during each employment year.
7.4 VACATIONS. Employee shall be entitled to three (3) weeks
vacation
with pay during each employment year, to be taken at such times as
may be
convenient to both the Company and Employee.
7.5 INSURANCE. Employee shall be entitled to participate in the
following insurance plans:
(a) participation for Employee in the Company's group medical
and
dental insurance plan;
(b) participation for Employee in an executive medical
reimbursement plan if later adopted by the Company and under
the terms and conditions of any such plan if so adopted;
(c) such life insurance as is associated with the group medical
policy described above; and
(d) participation in the Company's group disability plan, as
well
as the supplemental disability coverage as shall be made
available to Company executives.
8.
BUSINESS EXPENSES.
-----------------
Employee will be required to incur travel, entertainment and
other
business expenses on behalf of the Company in the performance of
Employee's
duties hereunder. Employee shall submit expense reports and
supporting
documentation for all such expenses and be reimbursed for all
reasonable and
necessary expenses paid by him. Use of a personal automobile shall
be reimbursed
on a mileage basis. Employee shall reimburse Employer for any
business expenses
disallowed for deduction under the Internal Revenue Code of 1986,
as amended,
unless approved in writing by the Board of Directors of the Company
(in the
event Employee is a member of the Board of Directors at such time,
he shall not
participate in the vote concerning such approval).
-3-
<page>
9.
TERMINATION.
-----------
The Company may, in writing and without prior notice, terminate
Employee's employment under this Agreement at any time but shall be
liable for
and shall pay Employee's compensation earned to date under SECTION
6 herein.
10. CHANGE IN
CONTROL.
-----------------
For purposes of this SECTION 10, "CHANGE IN CONTROL" shall mean any
one
of the following: (i) when any "PERSON," as such term is used in
Sections 13(d)
and 14(d) of the United States Securities Exchange Act of 1934, as
amended
("EXCHANGE ACT") (other than (A) a greater than 5% shareholder of
the Company on
the date of this Agreement, (B) a subsidiary or (C) a Company
employee benefit
plan, (including any trustee of such plan acting as trustee))
becomes, after the
date of this Agreement, the "beneficial owner" (as defined in Rule
13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Company
representing 35% or more of the combined voting power of the
Company's then
outstanding voting equity securities; or (ii) the occurrence of a
transaction
requiring stockholder approval and involving the sale of all or
substantially
all of the assets of the Company or the merger of the Company with
or into
another corporation.
This Agreement may be terminated by Employee upon sixty (60)
days
notice if any of the events described above constituting a Change
of Control
shall have occurred; such notice may be given for a period of up to
one (1) year
from the date of such Change of Control or to the end of the
Employment Term,
whichever is sooner.
11. OPTION
VESTING UPON TERMINATION OR CHANGE IN CONTROL.
----------------------------------------------------
In the event Employee's employment under this Agreement is
terminated
other than pursuant to SECTION 9 or if a Change in Control occurs,
all stock
options held by Employee shall automatically vest in full and be
exercisable for
a period of one (1) year following the date of termination or
Change in Control,
or such lesser time period as is or may be required under the rules
or policies
of the stock exchange on which the Company's shares are listed
and/or trading at
the date of termination or Change in Control.
12.
NON-SOLICITATION.
----------------
Employee hereby acknowledges and agrees that he will be exposed to
a
significant amount of confidential information concerning the
Company's business
methods, operations, and customers while employed under this
Agreement, that
such information might be retained by Employee in tangible form, or
simply
retained in Employee's memory, and that the protection of the
Company's
exclusive rights to such confidential information, trade secrets,
and customer
or client relationships can best be ensured by means of a
restriction on
Employee's activities after termination of employment.
Therefore, Employee agrees that for a period of two (2) years after
the
termination of his employment with the Company, he shall not
directly or
indirectly solicit the employment of or hire any employee of the
Company, and
shall not attempt to persuade any employee to leave the employment
of the
Company.
-4-
<page>
13. INJUNCTIVE
RELIEF.
-----------------
Employee hereby acknowledges and agrees that any violation of
SECTION
12 above will cause damage to the Company in an amount difficult to
ascertain.
Accordingly, in addition to any other relief to which the Company
may be
entitled, the Company shall be entitled to temporary and/or
permanent injunctive
relief for any breach or threatened breach by Employee of the terms
of such
sections without proof of actual damages that have been or may be
caused to the
Company as a result of such breach.
14.
INDEMNIFICATION.
---------------
The Company shall indemnify Employee pursuant to the terms and
conditions of the Indemnification Agreement attached hereto as
EXHIBIT A, which
was executed and made effective on the date hereof.
15. POLICIES,
RULES AND REGULATIONS.
-------------------------------
Employee at all times during the Employment Term shall strictly
adhere
to and obey all policies, rules and regulations in effect, or as
subsequently
modified governing the conduct of employees of the Company.
16. GENERAL
PROVISIONS.
------------------
16.1 FURTHER ASSURANCES. The Parties agree that, at any time and
from
time to time during the Employment Term, they will take any action
and execute
and deliver any document which any other party reasonably requests
in order to
carry out the purposes of this Agreement.
16.2 AMENDMENT TO AGREEMENT. This Agreement may be amended or
supplemented only in writing, and no amendment or supplement will
be effective
unless executed by all of the Parties.
16.3 NOTICES. Any notice, consent, waiver, demand, or other
communications required or permitted to be given by or to any
person pursuant to
this Agreement (collectively, "NOTICE") will be in writing, and
will be given
either by personal service, by certified mail (return receipt
requested), or by
Federal Express or similar commercial overnight courier service, to
a party at
the address set forth below:
If to the Company:
Pacific Energy Resources Ltd.
1065 West Pier E Street
Long Beach, CA
90802-1015
Attention: Chief
Financial Officer and
Executive Vice President
If to the Employee:
Jeevan P. Anand
5270 Stardust Road
La Canada Flintridge, CA 91011
-5-
<page>
In the case of personal service, Notice will be deemed effective on
the date of
service. In all other cases, Notice will be deemed effective on the
date of
delivery, as shown on the return receipt or other written evidence
of delivery,
if any, or three (3) days after dispatch if there is no return
receipt or
written evidence of delivery. A party may change the address at
which Notice is
to be given, at any time and from time to time, by giving Notice of
the new
address to the other parties in accordance with this Section.
16.4 ENTIRE AGREEMENT. This Agreement and the Stock Option
Agreements
entered into from time to time between Employee and the Company,
contain the
entire understanding between the parties concerning the employment
of Employee,
and supersede all prior understanding and agreements between them
regarding its
subject matter. There are no oral or written representations,
agreements,
arrangements, or understandings between the parties relating to the
subject
matter of this Agreement which are not fully set forth herein.
16.5 BINDING EFFECT: ASSIGNMENT AND DELEGATION. This Agreement
is
binding upon and inures to the benefit of the parties and their
personal
respective heirs, executors, administrators, personal
representatives,
successors, and assigns. Company may assign its rights or delegate
its duties
under this Agreement at any time and from time to time. However,
the parties
acknowledge that the availability of Employee to perform services
was a material
consideration for Company to enter this Agreement. Accordingly,
Employee may not
assign any of his rights or delegate any of his duties under this
Agreement,
either voluntarily or by operation of law, without the prior
written consent of
Company, which may be given or withheld by Company in its sole and
absolute
discretion.
16.6 APPLICABLE LAW: CHOICE OF FORUM. This Agreement has been
executed
under, and will be construed and interpreted in accordance with,
the laws of the
State of California. The parties consent to the jurisdiction of the
Superior
Court of the State of California and the United States District
court located in
the State of California in any action or proceeding arising out of
this
Agreement, and agree that in those actions or proceedings venue
will be proper
in Orange County, California (if the action proceeding is brought
in the
California Superior Court) or in the United States District Court
for the
District in which Orange County is located (if the action is
brought in the
United States District Court)
16.7 ATTORNEYS' FEES. In any action or proceeding to enforce or
interpret this Agreement, or arising out of this Agreement, the
prevailing party
or parties are entitled to recover a reasonable allowance for fees
and
disbursements of counsel and costs of suit to be determined by the
court in
which the action or proceeding is brought.
16.8 PROVISIONS SEVERABLE. Every provision of this Agreement is
intended to be severable from every other provision of this
Agreement. If any
provision of this Agreement is held to be void or unenforceable, in
whole or in
part, the remaining provisions will remain in full force and
effect. If any
provision of this Agreement is held to be unreasonable or excessive
in scope or
in duration, that provision will be enforced to the maximum extent
permitted by
law.
16.9 WAIVER. The waiver by either party of a breach of any
provision of
this Agreement shall not operate or be construed as a waiver of any
subsequent
breach of this Agreement.
-6-
<page>
16.10 COMPUTATION OF TIME. If any period of time in this Agreement
for
the performance of any action ends on a Saturday, Sunday, or legal
holiday in
the State of California that period will be deemed extended to end
on the next
day which is not a Saturday, Sunday or legal holiday in the State
of California.
16.11 COUNTERPARTS. This Agreement and any amendment or supplement
to
this Agreement may be executed in two or more
