Document:

Exhibit 10.1

 

AMENDMENT NO. 1

 

TO

 

AGREEMENT AND PLAN OF MERGER

 

THIS
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER (this “Amendment”)
is made and entered into this 24th day of February, 2010, by and between Resaca
Exploitation, Inc., a Texas corporation (“Parent”),
Resaca Acquisition Sub, Inc., a Delaware corporation and a wholly-owned
subsidiary of Parent (“Merger Sub”),
and Cano Petroleum, Inc., a Delaware corporation (“Target”).

 

W  I  T  N  E  S  S
E  T  H :

 

WHEREAS,
Parent, Merger Sub and Target are parties to that certain Agreement and Plan of
Merger dated September 29, 2009 (the “Original Agreement”);

 

WHEREAS,
Parent and Target desire to amend the Original Agreement to extend the
Termination Date to April 30, 2010; and

 

WHEREAS,
pursuant to Section 11.12 of the Original Agreement, the Original
Agreement may be amended if made in writing by Parent and Target.

 

NOW,
THEREFORE, in consideration of the premises, the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

Section 1.               Certain Definitions.  Terms used in this Amendment and not
otherwise defined shall have the meanings set forth in the Original
Agreement.  All references to the “Agreement”
in the Original Agreement shall be deemed to refer to the Original Agreement,
as amended by this Amendment.

 

Section 2.               Amendment and Restatement of Section 10.1(b).  Section 10.1(b) of the Original
Agreement is hereby amended and restated to read as follows:

 

“              (b)           by
either Parent or Target if the Effective Time has not occurred on or before April 30,
2010 (the “Termination Date”), provided that the
party seeking to terminate this Agreement pursuant to this Section 10.1(b) shall
not have breached in any material respect its obligations under this Agreement
in any manner that shall have proximately contributed to the failure to
consummate the Merger on or before the Termination Date;”

 

Section 3.               Ratification of the Original
Agreement.  The Original Agreement,
as amended by this Amendment, is hereby ratified and confirmed in all respects
and shall remain in full force and effect.

 

Section 4.               Counterparts.  This Amendment may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute the same instrument.

 

 

IN
WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the
day and year first above written.

 

	
   

  	
  RESACA
  EXPLOITATION, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Dennis Hammond

  
	
   

  	
  Name:

  	
  Dennis
  Hammond

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RESACA
  ACQUISITION SUB, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Dennis Hammond

  
	
   

  	
  Name:

  	
  Dennis
  Hammond

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CANO
  PETROLEUM, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  S. Jeffrey Johnson

  
	
   

  	
  Name:

  	
  S.
  Jeffrey Johnson

  
	
   

  	
  Title:

  	
  Chief
  Executive OfficerExhibit 10.59

 

CHANGE
OF CONTROL AGREEMENT

 

This
Change of Control Agreement made as of the 29th day of February, 2008.

 

BETWEEN:

 

NEXEN INC.

 

(hereinafter
referred to as the “Corporation”)

 

- and -

 

BRIAN REINSBOROUGH

 

(hereinafter
referred to as the “Executive”)

 

RECITALS:

 

1.                                       The Executive, as Senior Vice
President — US Oil and Gas of the Corporation,  is
considered by the Board to be an essential officer and employee of the
Corporation, who is integral to the operation and development of the
Corporation, has acquired outstanding skills and 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.                                       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)                                  “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,
offering to acquire, or voting 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).

 

(b)                                 “Affiliate” and “Associate”
have the meaning ascribed to such terms in National Instrument 45-106 for
purposes of Section 1.1(f); provided, however, that for all other purposes
of this Agreement, as well as Schedule A and the Final Release attached to this
Agreement, “Affiliate” and “Associate” shall mean any individual, corporation,
partnership, trust, unincorporated organization, association, or other business
entity that, directly or indirectly through one or more intermediaries, is
under common control with the specified person or entity; and provided further,
that “ERISA Affiliate” means any corporation
or trade or business that is considered to be a single employer with the
specified person or entity under section 414(b) or 414(c) of the U.S.
Internal Revenue Code of 1986, as amended.

 

(c)                                  “Agreement” means this change of control agreement
as it may be amended, restated 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 or an Affiliate of 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 under the annual bonus program of the Corporation or an Affiliate of the
Corporation, as determined by the Board to be in effect for the calendar year
in which a Change of Control occurs.

 

2

 

(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 or within a period of sixty (60) days thereafter and whether or not
on condition or the 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 (i) or (ii) 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

 

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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:

 

(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 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, for
purposes of this Agreement, a Change of Control has occurred or is imminent.

 

(j)                                     “Common Shares” means the common shares of the
Corporation.

 

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(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,

 

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 terminates pursuant to Section 4.1, 5.1 or 6.1.

 

(m)                               “Disability” means and shall be deemed to occur when (i) the
Executive receives benefits under a long term disability plan maintained by the
Corporation or an Affiliate of the Corporation; or (ii) the Corporation’s
Board of Directors, upon the written report of a qualified physician designated
by the Corporation and the Executive (or his spouse or representative in the
event the Executive is incapacitated), shall have determined (after a complete
physical examination of the Executive at any time after he has been absent for
a period of at least 180 consecutive calendar days or 180 total days in any
one-year period) that the Executive has become physically or mentally incapable
of performing his essential job functions with or without reasonable
accommodation as required by law.

 

(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 or its Affiliate. 
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 or its Affiliate;

 

(iii)          the Executive’s entitlement to pension
benefits under the terms of any pension plan with the Corporation or its
Affiliate;

 

(iv)          the Executive’s entitlement to a monthly
car allowance from the Corporation or its Affiliate;

 

5

 

(v)                                 the Executive’s entitlement to employer
contributions to the savings plan maintained by the Corporation or its
Affiliate;

 

(vi)                              the Executive’s entitlement to receive
financial counseling services, at a cost of $10,500 per year (or as
the same may be increased from time to time by the Corporation or its
Affiliate); and

 

(vii)                           the Executive’s entitlement to receive 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)                                     Duties.  A material
diminution in the Executive’s authority, duties or responsibilities from those in
effect immediately prior to a Change of Control.

 

(ii)                                  Base Salary. 
A material diminution in the Executive’s Monthly Base Salary or as the
same may be increased after the Effective Date from time to time.

 

(iii)                               Relocation.  A material
change in the geographic location at which the Executive must perform services
from where the Executive is based at the time of a Change of Control, not
including reasonable business travel.

 

(iv)                              Breach.  Any other
action or inaction that constitutes a material breach by the Corporation of
this Agreement.

 

(q)                                 “Incentive Compensation Plan” means any bonus or incentive
compensation plan of the Corporation or its Affiliate 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 notice of such failure and a
30-day 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 expense of the
Corporation or its Affiliate.

 

(s)                                  “Monthly Base Salary” means the monthly salary payable to the
Executive by the Corporation or its Affiliate in effect at the end of the month
immediately preceding the Effective Date.

 

6

 

(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)                                 “Severance Period” means the twenty-four (24) month period
immediately following the Date of Termination.

 

(w)                               “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.

 

(x)                                   “Subsidiary” means any corporation, partnership,
trust, unincorporated organization, association, or other business entity that,
directly or indirectly through one or more intermediaries, is controlled by the
specified person or entity.

 

(y)                                 “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.  Other than expressly
provided for in this Agreement, this Agreement does not provide for any other
terms of the Executive’s employment with the Corporation or its Affiliates,
does not guarantee that the Executive shall be employed by the Corporation or
its Affiliates for any specific term, 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.  Nothing in this
Agreement shall require the Corporation to enter into any transaction resulting
in any Change of Control.

 

2.2                                 This Agreement shall automatically
terminate and have no further force or effect upon the termination of the
Executive’s employment with the Corporation and its Affiliates on account of
the death or the Disability of the Executive. 
In the event of the termination of Executive’s employment on account of
death or the Disability of the Executive, the Executive (or the Executive’s
estate) shall be entitled to receive from the Corporation or its Affiliates all
accrued and earned unpaid Annual Base Salary and reasonable business expenses,
and accrued and earned unpaid vacation pay up to and including the date of the
termination of Executive’s employment on account of death or the Disability of
the Executive, and the Corporation shall have no further obligations to the
Executive or the Executive’s estate under this Agreement.

 

7

 

ARTICLE 3

TERM
OF AGREEMENT; CHANGE OF CONTROL

 

3.1                                 Subject to earlier termination of this
Agreement according to the terms of this Agreement, 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. 
Notwithstanding any other provision in this Agreement to the contrary, (a) the
Corporation shall have the unilateral right to terminate this Agreement at any
time during the Executive’s employment with the Corporation and its Affiliates
and before a Change of Control by providing at least twelve (12) months’
advance notice to the Executive; (b) this Agreement shall immediately
terminate and have no further force or effect if (i) the Executive ceases
to be an officer of the Corporation at any time before a Change of Control; or (ii) the
Executive’s employment with the Corporation is terminated by either Party for
any reason before a Change of Control.

 

3.2                                 Upon the Effective Date and continuing
during the Term, the Corporation agrees that:

 

(a)                                  the Corporation shall, or shall cause its
Subsidiaries to, continue in effect any incentive compensation plan in which
the Executive participates, including, but not limited to, the Incentive Compensation
Plan and the Stock Option Plan and any other similar plans, at the time of 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); and the Corporation shall, or shall cause its
Subsidiaries to, continue the Executive’s participation therein on at least as
favorable 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;

 

(b)                                 the Corporation shall, or shall cause its
Subsidiaries to, continue to provide the Executive with Employment Benefits at
least as favorable on an aggregate basis 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 or its Affiliate’s life insurance, medical, health and accident,
disability or savings plans in which the Executive was participating at the
time a Change of Control occurs; the Corporation shall not, and shall cause its
Subsidiaries to not, 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, secretarial services, office space,
telephones, computer facilities, expense reimbursement, financial counseling,
and professional fees and club dues reimbursement, and the Corporation shall,
or shall cause its Subsidiaries to,

 

8

 

provide the Executive with the number of paid vacation days to which
the Executive is entitled in accordance with the normal vacation practice in
effect at the time a Change of Control occurs.

 

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 Corporation shall (or shall
cause its Affiliates to) within 30 days of the Date of Termination, pay to the
Executive, if not already paid, all accrued and earned but unpaid Annual Base
Salary and reasonable business expenses, and accrued and earned unpaid vacation
pay up to and including the Date of Termination, and thereafter, the
Corporation shall have no further obligations to the Executive under this
Agreement.  The Executive shall not be
deemed to have terminated employment with the Corporation following a Change of
Control for purposes of this Section 4.1 unless and until the Executive
has separated from service with the Corporation and all ERISA Affiliates of the
Corporation.

 

4.2                                 Nothing in this Agreement shall serve to
derogate from the vested rights of the Executive to pension benefits, Stock
Option Plans or any other Employment Benefits to which the Executive is
entitled up to the Date of Termination.

 

ARTICLE 5

TERMINATION
BY CORPORATION

 

5.1                                 If the Executive’s employment is
terminated by the Corporation within the twelve (12) month period following the
Effective Date for reasons other than Just Cause, death or Disability, the
Corporation shall (or shall cause its Affiliates to) pay to the Executive the
remuneration referred to in Article 7. 
The Executive’s employment with the Corporation shall not be deemed to
have terminated for purposes of this Section 5.1 unless and until the
Executive has separated from service with the Corporation and all ERISA Affiliates
of the Corporation.

 

ARTICLE 6

TERMINATION
FOR GOOD REASON

 

6.1                                 In the event of a Change of Control, the
Executive may terminate his employment with the Corporation for Good Reason;
provided, however, that the Executive will not be treated as having a termination
of employment for Good Reason unless (i) the condition giving rise to Good
Reason occurs after the Change of Control and during the Term of the Agreement,
(ii) the Executive gives notice to the Corporation in writing or other
medium acceptable to the Corporation of the existence of the condition within
the period ending 30 days after the initial existence of the condition, (iii) the
condition giving rise to Good Reason is not remedied by the Corporation or its
Affiliates within the 30-day period following receipt of such notice, and (iv) the
Executive’s termination of employment occurs within 14 days after the
expiration of such 30-day remedy period; and, provided further, that the
Executive shall not be deemed to have terminated

 

9

 

employment with the Corporation for purposes of this Section 6.1
unless and until the Executive has separated from service with the Corporation
and all ERISA Affiliates of the Corporation. 
Any termination of employment for Good Reason satisfying these
conditions shall be deemed to have been effective within the Term for purposes
of this Agreement.  Upon such termination
for Good Reason, the Corporation shall (or shall cause its Affiliates to) pay
to the Executive the remuneration referred to in Article 7.

 

ARTICLE 7

COMPENSATION
UPON TERMINATION

 

7.1                                 If the Executive’s employment is
terminated in accordance with Section 5.1 or 6.1:

 

(a)                                  The Corporation shall (or shall cause its
Affiliates to) forthwith, but in any event within ten (10) business days
from receipt by the Corporation of a Release executed by the Executive and
delivered to the Corporation no later than forty-five (45) days following the
Date of Termination (and not revoked during the permitted seven (7)-day revocation
period) in the form of Schedule “A”, pay to the Executive:

 

(i)                                     if not previously paid, that portion of
the Executive’s accrued and earned but unpaid Annual Base Salary, any accrued
and earned but unpaid bonus to which the Executive is entitled for the
preceding calendar year under any Incentive Compensation Plan, all unpaid
reasonable business expenses and all accrued but unused vacation pay earned or
payable to the Executive by the Corporation or its Affiliates for the period
from the beginning of the Corporation’s then current fiscal year, up to and
including the Date of Termination;

 

(ii)                                  a lump sum payment equal to the Executive’s
Monthly Base Salary and one-twelfth (1/12) of the Executive’s Annual Target
Bonus for each month of the Severance Period;

 

(iii)                               a lump sum payment equal to thirteen
percent (13%) of the Executive’s Monthly Base Salary for each month of the
Severance Period representing the value of group health and welfare benefits
for the Severance Period;

 

(iv)                              a lump sum payment equal to 24 times the
value of the Executive’s monthly car allowance in effect immediately before a
Change of Control;

 

(v)                                 a lump sum payment representing (A) the
value of the employer contributions to the Nexen Pension Plan, or other pension
plan maintained by the Corporation or its Affiliate covering the Executive as
of the Effective Date, (the “Pension Plan”) for the Severance Period calculated
by reference to the contribution formula and other provisions relevant to the
calculation of contributions in effect under the Pension Plan immediately prior
to the Effective Date and determining the Executive’s compensation for such
purpose by reference to his Monthly Base Salary

 

10

 

and Annual Target Bonus and other items of
compensation as in effect immediately prior to the Effective Date, plus (B) the
related employer pension restoration contributions to the Nexen Restoration
Plan, or other similar excess benefit plan maintained by the Corporation or its
Affiliate covering the Executive as of the Effective Date, for the Severance
Period based on the employer’s practice, if any, of making such contributions
as in effect for the plan year ending immediately prior to the Effective Date;

 

(vi)                              a lump sum payment of $10,500
representing the value of the Executive’s entitlement to receive financial
counseling services in respect of the Severance Period;

 

(vii)                           a lump sum payment equal to 24 times the
monthly value of the Executive’s employer provided security monitoring services
at the Executive’s personal residence as in effect immediately preceding the
Effective Date;

 

(viii)                        a lump sum
payment representing the value of the employer matching contributions to the
Nexen Savings Plan, or other tax-qualified savings plan maintained by the Corporation or
its Affiliate covering the Executive as of the Effective Date, and related
matching contributions to the Nexen Restoration Plan, or other similar excess benefit plan
maintained by the Corporation or its Affiliate covering the Executive as of the
Effective Date, for the Severance Period, calculated at the same
level of pay, and the Executive’s actual contribution rate and matching
contribution rate in effect under said plans in respect of the Executive
immediately prior to the Date of Termination;

 

(ix)                              a lump sum
payment of $25,000 representing the value of executive outplacement counseling;
and

 

(x)                                 where the
Executive has been relocated at the request of the Corporation or its Affiliate
within the two (2) year period immediately prior to the Effective Date, a
lump sum payment of $50,000 representing the estimated cost of relocating
Executive back to the Executive’s prior location.

 

7.2                               The estimated value as of January 31,
2008 of Sections 7.l(a)(ii) to 7.1(a)(x) are set out in Schedule “B”.  Schedule “B” provides estimated values
only and actual values shall be calculated in accordance with this Agreement at
the time of entitlement or payment under this Agreement.

 

7.3                               If the Executive’s employment is
terminated in the circumstances described in Section 5.1 or 6.1 after a
Change of Control, the remuneration and benefits payable under this Article 7
shall not be reduced if the Executive obtains subsequent employment.

 

7.4                               Unless expressly provided otherwise in
this Agreement, all payments to be made to the Executive under this Article 7
shall be subject to applicable withholdings and deductions.

 

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ARTICLE 8

CONFIDENTIAL
INFORMATION

 

8.1                               If the Executive’s employment is
terminated in any manner whatsoever due to or following a Change of Control,
the Executive agrees to keep confidential and not to disclose to any third
party all information of a confidential or proprietary nature concerning the Corporation,
its Affiliates, Associates and Subsidiaries and their respective operations,
opportunities, areas of present, past or future interests, assets, finances,
technology, intellectual property, business and affairs, and further agrees not
to use such information, data or technology for personal advantage or to
advantage any third party, provided that nothing herein shall prevent the
disclosure of information which is publicly available or which is required to
be disclosed by the Executive under appropriate statute, rules of law or
legal process.  For purposes of this
Agreement, information of a confidential or proprietary nature concerning the
Corporation, its Affiliates, Associates and Subsidiaries shall include without
limitation financial information, such as earnings, assets, debts, prices,
pricing structures, volume of purchases or sales or other financial data;
compilations of information, records, specifications and various geological
data, geological information, seismic data, maps, core samples, logs,
engineering data, computer programs and other similar data; information
disclosed to the Executive or known by the Executive as a consequence of or
through the Executive’s employment by the Corporation, its Affiliates,
Associates and Subsidiaries, not generally known in the industry in which
Corporation, its Affiliates, Associates and Subsidiaries, are or may become
engaged, about processes, services and activities, including, without
limitations, information relating to accounting, engineering and marketing:
proprietary data and technological information; sales forecasts or results of
marketing efforts or information about impending transactions; personnel
information, such as medical histories, compensation, or other terms of
employment, actual or proposed promotions, qualifications, performances,
hirings, resignations, disciplinary actions, terminations or reasons therefor,
or other employee personal information; customer information; software,
manuals, handbooks, files, patents, copyrights, trademarks, financial data,
business prospects, and business information regarding the business operations
or future plans of the Corporation, its Affiliates, Associates and
Subsidiaries,; trade secrets as defined by applicable law; and all other
information owned and used by the Corporation, its Affiliates, Associates and
Subsidiaries that is not generally known to the public and that allows them an
opportunity to obtain an advantage over competitors.  The Executive’s obligations concerning
confidential or proprietary information under this Agreement shall supplement,
rather than supplant, any obligations the Executive owes to the Corporation,
its Affiliates, Associates and Subsidiaries under any contract or applicable
policy.

 

ARTICLE 9

RIGHTS
AND OBLIGATIONS OF EXECUTIVE UPON TERMINATION

 

9.1                               Subject to Section 8.1, the
Executive shall not be prohibited from obtaining subsequent employment with or
otherwise forming or participating in a business competitive to the business of
the Corporation or its Affiliates after the termination of the Executive’s 

 

12

 

employment with the Corporation and its
Affiliates.  During the Executive’s
employment with the Corporation and its Affiliates and for twelve (12) months
after the termination of his employment with the Corporation and its
Affiliates, regardless of the reason for such termination, he shall not
directly or indirectly, on behalf of himself or any other Person, solicit,
induce, communicate with about employment, hire, or otherwise engage as an
employee, independent contractor, subcontractor, or otherwise, any person who
is an employee, independent contractor, or subcontractor of the Corporation or
its Affiliates or was an employee, independent contractor, or subcontractor of
the Corporation or its Affiliates during the final year of the Executive’s
employment with the Corporation and its Affiliates.

 

9.2                               Upon the termination of the Executive’s
employment for any reason, the Executive shall tender the Executive’s resignation
from any position the Executive may hold as an officer or director of the
Corporation, or any of its Affiliates, Associates or Subsidiaries.

 

9.3                               If the Executive’s employment is
terminated in the circumstances described in Section 5.1 or 6.1, the Corporation
shall (or shall cause its Affiliates to) continue to purchase and maintain, to
the extent available in the marketplace at reasonable cost, on behalf of the
Executive, director and officer liability insurance for the applicable
limitation period following the date upon which the Executive ceases to serve
as a director or officer of the Corporation or its Affiliates, and the
Executive’s existing agreement to receive indemnity from the Corporation and
its Affiliates for acts taken by the Executive in the Executive’s capacity as
an officer of the Corporation and its Affiliates shall remain in effect.

 

9.4                               If either Party breaches this Agreement,
or if a dispute arises between the Parties based on or involving this
Agreement, the Party that enforces its rights under this Agreement against the
breaching party, or that prevails in the resolution of such dispute, is
entitled to recover from the other party its reasonable attorneys’ fees, court
costs, and expenses incurred in enforcing such rights or resolving such
dispute.

 

ARTICLE 10

JURY-TRIAL
WAIVER

 

10.1                        NOTWITHSTANDING ANY OTHER
PROVISION IN THIS AGREEMENT TO THE CONTRARY, THE EXECUTIVE SHALL, AND HEREBY
DOES, IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY DISPUTE,
CONTROVERSY, CLAIM, OR CAUSE OF ACTION AGAINST THE CORPORATION, OR ANY
AFFILIATE OR ANY SUBSIDIARY OF THE CORPORATION, INCLUDING WITHOUT LIMITATION
ANY DISPUTE, CONTROVERSY, CLAIM, OR CAUSE OF ACTION ARISING OUT OF OR RELATING
TO THE EXECUTIVE’S EMPLOYMENT WITH THE CORPORATION OR ANY AFFILIATE OF THE
CORPORATION, THE TERMINATION OF THAT EMPLOYMENT, OR THIS AGREEMENT (EITHER
ALLEGED BREACH OR ENFORCEMENT).

 

13

 

ARTICLE 11

GENERAL

 

11.1                        The headings of the Articles and
paragraphs in this Agreement are inserted for convenience only and shall not
affect the meaning or construction of this Agreement.

 

11.2                        This Agreement shall be construed and
interpreted in accordance with the laws of the State of Texas.

 

11.3                        If any provision of this Agreement is
determined to be void or unenforceable in whole or in part, it shall be and be
deemed to be severed from this Agreement without affecting or impairing the
validity of any other provision herein; provided, however, that if any such
provision may be made enforceable by limitation thereof, then such provision
shall be deemed to be so limited and shall be enforceable to the maximum extent
permitted by applicable law.

 

11.4                        Any notice required or permitted to be
given under this Agreement shall be in writing and shall be properly given if
delivered, by hand delivery or mail or other form of electronic communication
capable of transmission confirmation, to the following address:

 

a.                                      in the case of the Corporation
to:

 

Nexen Inc.

801 7th Avenue S.W.

Calgary, AB  T2P
3P7

 

Attention:     General
Manager - Compensation and Benefits 

 

b.                                      in the case of the Executive
to:

 

the last address of the Executive in the records of
the Corporation or to such other address as the Parties may from time to time
specify by notice given in accordance herewith.

 

11.5                        This Agreement shall enure to the benefit
of and be binding upon the Executive and the Executive’s heirs, executors and
administrators and upon the Corporation and its successors and assigns.  The parties acknowledge and agree that the
Executive’s rights under this Agreement are personal to the Executive and shall
not be assigned to any person or entity without prior written consent from the
Corporation.

 

11.6                        This Agreement constitutes the entire
agreement relating to the respective rights and obligations of the Parties upon
the occurrence of a Change of Control and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to
these subject matters.  No amendment or
waiver of this Agreement shall be binding unless executed in writing by the
Parties.  In entering into this
Agreement, the Executive is not relying on any written or oral statements,
promises, or representations of the Corporation, or their representatives
concerning this Agreement other than contained in this Agreement.

 

14

 

11.7                        The Parties agree that the rights,
entitlements and benefits set out in this Agreement to be paid to the Executive
upon a Change of Control shall be in full satisfaction of all rights of the
Executive under applicable law in effect from time to time as a result thereof.

 

11.8                        Neither Party can waive or shall be
deemed to have waived any right it has under this Agreement except to the
extent that such waiver is in writing.

 

The Parties have executed this Agreement effective the
date first written above.

 

 

	
   

  	
   

  	
  NEXEN INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
  (signed)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
  (signed)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED, SEALED & DELIVERED

  	
   

  	
   

  	
   

  
	
  in the presence of

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (signed)

  	
   

  	
  (signed)

  
	
  WITNESS

  	
   

  	
  BRIAN REINSBOROUGH

  

 

15

 

SCHEDULE
“A”

 

CHANGE
OF CONTROL AGREEMENT

 

In order to receive the entitlements referred to in
this Agreement, the Executive shall execute the attached Release.

 

 

FINAL
RELEASE

 

KNOW
ALL MEN BY THESE PRESENTS that I, BRIAN REINSBOROUGH,
in consideration of the amounts and other consideration provided in that
certain Change of Control Agreement (the “Agreement”) dated as of the ____
day of February, 2008 between myself and NEXEN INC. (the “Corporation”) and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, do for myself, my executors and assigns hereby remise,
release and forever discharge to the maximum extent permitted by applicable law
the Corporation, and any associated, affiliated, predecessor, parent, or
subsidiary corporation or other business entity of the Corporation and their
present and former directors, officers, agents, employees, representatives,
owners, members, managers, shareholders, partners, fiduciaries, trustees,
employee benefit plans, insurers, or attorneys (the “Releasees”),
including each of their respective successors, heirs, administrators and
assigns, from all manner of actions, causes of action, debts, obligations,
covenants, claims or demands, whatsoever which I may ever have had, now have,
or can, shall or may hereafter have against the Releasees or any of them, by
reason of or arising out of any cause, matter or thing whatsoever done,
occurring or existing up to and including the present date and, in particular,
without in any way restricting the generality of the foregoing, in respect of
all claims of any nature whatsoever, past, present or future, directly or indirectly
related to or arising out of or in connection with my relationship with the
Releasees, as an employee, officer or director, and the termination of my
employment from the Corporation and the Releasees including, but not limited
to, any claims related to any entitlement I may have or may have had to any
payment or claim either at common law or under the Employment
Standards Code, Human Rights, Citizenship and Multiculturalism Act, the
Fair Labour Standards Act, the Employee Retirement Income Security Act of 1974 as amended,
the Age Discrimination in Employment Act of
1964, as amended, and any other federal, state, or local laws prohibiting
employment discrimination, or governing or related to my employment with the
Releasees.

 

AND
FOR THE SAID CONSIDERATION, I,  BRIAN REINSBOROUGH, represent and warrant that I have not
assigned to any person, firm or corporation any of the actions, causes of

 

 

action,
claims, suits, executions or demands which I release by this Release, or with
respect to which I agree not to make any claim or take any proceeding herein.

 

IT
IS FURTHER ACKNOWLEDGED that the payment and other consideration offered to
me under the Agreement is in addition to anything of value to which I am
already entitled to receive from the Corporation or the other Releasees; that
the Corporation has advised me, through this paragraph, of my right to consult
with an attorney of my choice before signing this Release; that I have at least
21 days within which to consider whether to sign this Release; that I have
seven days after I sign this Release within which I may revoke my acceptance by
notifying the Corporation’s General Manager - Compensation and Benefits of my
revocation in writing; that this Release shall not become effective or
enforceable until the seven-day revocation period expires; and that if I timely
revoke my acceptance of this Agreement within the seven-day revocation period,
I will not receive the payment or other consideration offered to me in the
Agreement.

 

IT
IS FURTHER ACKNOWLEDGED that the payment and other consideration offered to
me under the Agreement includes full compensation and consideration for the
loss of my employment benefits, as provided by the Releasees, and that all of
my employment benefits and privileges shall cease on the date of termination of
my employment, except as otherwise provided in the Agreement.  I further acknowledge that I have received
all benefits due to me and have no further claim against the Releasees for such
benefits.  I further accept sole
responsibility to replace such benefits which I wish to continue or to exercise
conversion privileges where applicable with respect to such benefits and, in
particular any life insurance and long-term disability benefits.  In the event that I become disabled following
termination of my employment, I covenant not to sue the Releasees for insurance
or other benefits or loss of same and hereby release the Releasees from any and
all further obligations or liabilities arising therefrom.

 

Notwithstanding
anything contained herein, this Release shall not extend to or affect, or
constitute a release of, my right to sue, claim against or recover from the
Releasees and shall not constitute an agreement to refrain from bringing,
taking or maintaining any action against the Releasees in respect of:

 

2

 

(a)                                 any corporate indemnity
existing by statute, contract or pursuant to any of the constating documents of
the Corporation or its affiliates provided in my favour in respect of my having
acted at any time as a director, officer or both of the Corporation or its
affiliates;

 

(b)                                 my entitlement to any
insurance maintained for the benefit or protection of the directors and/or
officers of the Corporation or its affiliates, including without limitation,
directors’ and officers’ liability insurance;

 

(c)                                  my entitlement to any amounts
or compensation due to me under the terms of the Agreement or my entitlement to
vested rights, if any, as of the date my employment terminated under any compensation
or equity plans or related written agreements of the Corporation or its
affiliates; or

 

(d)                                 any rights or claims I may
have against the Releasees that arise under the Age
Discrimination in Employment Act of 1964, as amended, after the date
I sign this Release.

 

IT
IS HEREBY AGREED that the terms of the Agreement and of this Release
shall be kept confidential.  No party
hereto shall communicate any such terms to any third party under any
circumstances whatsoever, excepting any necessary communication with my legal
and financial advisors, as required, on the express condition that they
maintain the confidentiality thereof, and any disclosure which is required or
permitted by law, although either party shall be at liberty to disclose to
third parties that a mutually acceptable Release was agreed upon.  During my employment with the Corporation and
its affiliates and following any termination of such employment, I shall not
make any disparaging statements about the Corporation, any of the Releasees, or
their business or personnel practices to any third parties.  Following the termination of my employment
with the Corporation and its affiliates, I shall also return all property of
the Corporation and its affiliates in my possession or under my control to the
Corporation or its respective affiliate in good condition.  This Release shall not in any way be
construed as an admission by the Corporation or any of the Releasees of any
improper or illegal acts.  The invalidity
and unenforceability of any provision of this Release shall not affect the
validity or enforceability of any other provision of this Release, which shall
remain in full force and effect.

 

3

 

I
HEREBY DECLARE AND AGREE that I have read all of this Release, fully
understand the terms of this Release, and voluntarily accept the consideration
stated herein or under the Agreement as the sole consideration for this Release
for the purpose of making a full and final settlement with the Releasees; that my
signing of this Release is knowing and voluntary and that I have been given an
adequate period of time to obtain independent legal counsel regarding the
meaning and the significance of the terms herein and the covenants mutually
exchanged; that this Release contains the entire understanding and agreement
between me and the Corporation regarding my release of claims against the
Releasees and supersedes all prior statements, understandings, and agreements
regarding this subject matter; that, in signing this Release, I am not relying
on any written or oral statement or promise from the Releasees other than as
set forth above and in the Agreement; and that this Release is not assignable
by me without prior written permission by the Corporation and shall be governed
by Texas law.

 

IT
IS HEREBY AGREED THAT as a term of the termination of my employment from the
Corporation and its affiliates, and in consideration of the amount noted above,
I hereby resign as officer and director of the Corporation and its affiliates,
as applicable.

 

IN WITNESS WHEREOF, I have hereunto set my hand
and seal this _____ day of ______________ in the year _________.

 

	
   

  	
   

  
	
   

  	
   

  
	
  BRIAN REINSBOROUGH

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  WITNESS (signature)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  WITNESS
  (print name)

  	
   

  

 

4

 

SCHEDULE
“B”

 

Estimated1 Entitlement
to Compensation

Pursuant to Article 7 of the Agreement

 

	
   

  	
   

  	
  US Dollars

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Monthly Base Salary (24 Months)

  	
   

  	
  $680,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Bonus Target Value

  	
   

  	
  306,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Benefits Uplift (13%)

  	
   

  	
  88,400

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Car Allowance

  	
   

  	
  28,800

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Pension Plan Amount

  	
   

  	
  102,665

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Financial Counselling Services

  	
   

  	
  10,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Security Monitoring Services

  	
   

  	
  2,400

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Savings Plan Amount

  	
   

  	
  40,800

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Executive Outplacement

  	
   

  	
  25,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Relocation (contingent)

  	
   

  	
  50,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL ESTIMATED ENTITLEMENT
  under the Agreement

  	
   

  	
  $1,334,565

  	
   

  

 

	
   

  	
   

  

 

1                 As stated in Section 7.2 of the Agreement, the
above calculations represent only the current estimated value (as of
January 31, 2008) of the Executive’s entitlement to compensation upon a
Change of Control.  Accordingly, the
above calculations are for illustrative purposes only.

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