Document:

exv10w2

 

Exhibit 10.2

EXECUTIVE EMPLOYMENT AGREEMENT

THIS AGREEMENT is made as of the 1st day of April, 2007

BETWEEN:

MARK
G. AVERY, a resident of the State of Texas (hereinafter called
the “Executive”)

-and-

AUSAM
ENERGY CORPORATION (hereinafter called “Ausam”), an Alberta, Canada Corporation, and its
wholly owned subsidiary, NORAM RESOURCES, INC. (hereinafter
called “Noram”), a Texas corporation,
both together hereinafter called the “Company”.

WHEREAS the Company is engaged in the business of oil and gas exploration and development and
other related businesses;

AND WHEREAS the Company wishes to retain the services of the Executive to assist in the
furtherance of its business;

NOW THEREFORE THIS AGREEMENT WITNESSES THAT IN CONSIDERATION of the mutual covenants and agreements
herein contained and for other good and valuable consideration, it is agreed by the parties hereto
as follows:

	1.	 	DEFINITIONS

	1.1	 	In this agreement, the following terms shall have the following meanings:

	 	(a)	 	“Accrued Pay” means, with respect to a termination of employment:

	 	(i)	 	all Base Salary earned but not yet paid up to the date of
termination or deemed termination of employment, less required withholdings;
	 
	 	(ii)	 	all accrued but unused vacation pay, less required
withholdings; and
	 
	 	(iii)	 	all expenses properly incurred up to the date of termination
in the carrying out of Executive’s duties.

	 	(b)	 	“Agreement” means this agreement;
	 
	 	(c)	 	“Change in Responsibilities” means the occurrence of any of the following:
(i) a material adverse change in the nature or scope of the Executive’s duties; (ii)
any reduction in the Executive’s Base Salary; (iii) any material reduction in bonus

 

 

			
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	 	 	 	opportunity or material withdrawal of benefits from the Executive not having
general applicability to comparably situated executives in the Company; or (v) any
other act which, based on objective considerations, reasonably leads the Executive
to believe his employment will be terminated involuntarily within the twelve month
period following a Change of Control, provided that the Executive gives written
notice to the Company within ten (10) days of the claimed Change in
Responsibilities occurring and the action complained of remains uncured after
thirty (30) days following such notice;
	 
	 	(d)	 	“Change of Control” means the purchase or acquisition of voting securities of
Ausam and/or securities convertible into or exchangeable or exercisable for such
voting securities, which results in a person, group of persons, persons acting jointly
or in concert (within the meaning of the Securities Act (Alberta)) or persons who are
associates of or affiliated with (within the meaning of the Securities Act (Alberta))
any such person, group of persons or any of such persons acting jointly or in concert,
beneficially owning or exercising control or direction over voting securities of Ausam
and/or securities convertible into or exchangeable or exercisable for such voting
securities, so as to, assuming the conversion, exercise or exchange of all such
securities, entitle such person, group of persons or persons acting jointly or in
concert to cast fifty percent 50% plus one of the votes attached to all voting
securities of Ausam;
	 
	 	(e)	 	“Effective Date” means 1 April 2007;
	 
	 	(f)	 	“Good Reason” means the occurrence, without the Executive’s written consent,
of any one or more of the following: (i) the relocation of Executive’s principal place
of employment to a location more than thirty (30) miles from his current residence and
the existing principal place of employment on the effective date of this Agreement;
(ii) a material reduction in the Executive’s Base Salary or bonus opportunity, or a
material reduction in the general level of his benefits not having general
applicability relative to other executives of the Company; or (iii) a material breach
by the Company of this Agreement; provided, however, “Good Reason” shall not exist
unless the Executive gives written notice specifying the

 

 

			
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	 	 	 	objectionable changes in conditions within thirty (30) business days of their
occurrence, and the Company thereafter fails to correct such conditions within
thirty (30) business days from the date on which it receives such notice.
	 
	 	(g)	 	“Just Cause”, when used in relation to the termination of employment of the
Executive, includes: (i) material failure by Executive to perform satisfactorily the
duties assigned to him by Ausam’s board of directors; (ii) conviction of or plea to
(including nolo contendre) a criminal offense by the Executive involving dishonesty or
fraud or which is likely to injure the Company’s business or reputation; (iii)
misappropriation of any of the Company’s property or assets; (iv) gross incompetence
or negligence in the performance of his duties and responsibilities; (v) a material
breach by the Executive of a material term of this Agreement which has not been cured
within ten (10) days of written notice to the Executive of such breach, and (vi) any
other conduct on the part of Executive which causes or creates a substantial risk of
causing serious financial or other injury to the Company or their respective
reputations or business interests.
	 
	 	(h)	 	“Permanent Disability” means that the mental or physical state of the
Executive is such, that:

	 	(i)	 	the Executive has, to a substantial degree, been unable, due
to illness, disease, mental or physical disability or similar cause, to
fullfil his obligations as an employee or officer of Ausam or Noram for any
period of ninety (90) days (whether or not consecutive) in any consecutive
twelve (12) month period; or
	 
	 	(ii)	 	a court of competent jurisdiction has declared the Executive
to be mentally incompetent or incapable of managing his affairs.

	2.	 	EMPLOYMENT & DUTIES

	2.1	 	The Executive shall be employed as President and Chief Executive Officer of Ausam and
Noram as of the Effective Date and such employment shall continue indefinitely until
terminated in accordance with this Agreement or unless as mutually agreed between the
Executive and the board of directors of Ausam.

 

 

			
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	2.2	 	The Executive shall carry out those duties and responsibilities which are assigned to him by
Ausam’s board of directors to whom he may be instructed to report, which duties shall be in
keeping with the Executive’s employment as President and Chief Executive Officer.
	 
	2.3	 	The Executive shall devote full time and attention to the business of the Company and
discharge and carry out such duties, functions and powers as are incidental to the position of
President and Chief Executive Officer; however, it shall not be a violation of this Section
2.3 for the Executive to engage in a voluntary activity or other public service that does not
interfere with the Executive’s duties under this Agreement. In the performance of his duties,
the Executive shall act honestly, in good faith and in the best interests of the Company, and
shall exercise the degree of diligence and responsibility that a person having the Executive’s
expertise and knowledge of the affairs of the Company would reasonably be expected to exercise
in comparable circumstances.
	 
	2.4	 	The Executive recognizes that his primary business obligation is to the Company and agrees
not to permit the pursuit of other interests to interfere with the fulfillment of his duties
in that position. The Executive shall disclose actual or potential business conflicts of
interest to the board of directors of the Company and which are included in Schedule B. Any
uncertainty as to whether such a conflict exists shall be raised by the Executive for
determination by the board of directors of Ausam, acting reasonably. The Executive shall
conduct himself so as to avoid an actual or potential conflict of interest.
	 
	3.	 	COMPENSATION
	 
	3.1	 	The Executive will be compensated for his services based on the attached Schedule A, which is
incorporated as a part of this Agreement.
	 
	4.	 	EXPENSES
	 
	4.1	 	The Company shall reimburse the Executive for all reasonable travel and other expenses and
professional fees actually and reasonably incurred in the performance of his duties on behalf
of the Company. Reimbursement will be made upon the submission of a written itemized expense
claim and proper supporting documentation within a reasonable time after such expenses have
been incurred.
	 
	5.	 	NON-DISCLOSURE & CONFIDENTIALITY

 

 

			
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	5.1	 	The Executive acknowledges that, as a result of the Executive’s employment by the Company,
the Executive shall be making use of or acquiring information about certain matters and things
which are confidential to the Company and which information is the exclusive property of the
Company or a third party with whom the Company does business or has pursued prospective
business, including all confidential information acquired by or made available to the
Executive by the Company or its representatives, which shall include trade secrets, offering
memoranda, financial information, plans, engineering reports, environmental reports, legal
opinions, names of shareholders, private investors, joint venture partners and limited
partners, geological information, land and lease information, well data, project data, seismic
information, gas, liquids or products processing, and marketing terms and arrangements or
other such information as may be material to the Company, which information is or may be
either applicable to or related in any way to the assets, business or affairs of the Company,
together with all analyses, compilations, notes, data, studies or other material documents or
copies thereof prepared by or for the Company (collectively, the “Confidential Information”).
	 
	5.2	 	Confidential Information shall not include any information that (i) was in the possession of
or known to the Executive, without any obligation to keep it confidential, before it was
disclosed to the Executive by the Company or through the Executive’s involvement with the
Company; or (ii) is or becomes public knowledge through no fault of the Executive; or (iii) is
disclosed by the Company to other persons without any restriction on its use or disclosure; or
(iv) is or becomes lawfully available to the Executive from a source other than the Company,
which source is legally permitted to disclose such information and is not under
confidentiality restrictions.
	 
	5.3	 	As a material inducement to the Company to employ the Executive and to pay to the Executive
compensation for such services to be rendered to the Company by the Executive, the Executive
agrees that the Executive shall not, except with the prior written consent of the Company, or
except if the Executive is acting as an employee of the Company solely for the benefit of
Company in connection with Company’s business and in accordance with the Company’s business
practices and employment policies, at any time during or following the term of the Executive’s
employment by the Company, directly or indirectly, disclose, reveal, report, publish, transfer
or use for any purpose any

 

 

			
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	 	 	of the Confidential Information which has been obtained or disclosed to Executive as a
result of the Executive’s employment by the Company.
	 
	5.4	 	Disclosure of any Confidential Information of the Company shall not be prohibited if the
disclosure is directly pursuant to a valid and existing order of a duly authorized court or
other governmental body or agency; provided, however, that the Executive shall give prompt
notice to the Company of any possible or prospective order (or proceeding pursuant to which
any order may result) requiring such disclosure so that the Company shall have a reasonable
opportunity to contest or limit any disclosure.
	 
	5.5	 	All documents (paper or electronic) or other tangible things that contain, reflect or refer
to Confidential Information shall be returned by Executive to the Company upon termination of
Executive’s employment, regardless of the reason or circumstances of such termination.
Executive’s return of such information and things, as well as any other property belonging to
the Company, shall be a pre-condition to payment of any sums or provision of any benefits to
Executive under the termination provisions of this Agreement.
	 
	6.	 	FIDUCIARY OBLIGATIONS
	 
	6.1	 	The Executive acknowledges and agrees that he is a fiduciary of the Company and he agrees to
be bound by his fiduciary obligations following his resignation or termination from the
Company for any reason.
	 
	7.	 	POST-TERMINATION COVENANTS
	 
	7.1	 	Non-Competition. The Executive, directly or indirectly, shall not engage in or participate in
the ownership, management, operations or control of, or be connected with, as a principal,
agent, independent contractor, consultant, director, officer, employee, advisor, stockholder,
partner, or in any other individual or representative capacity providing management or other
services, any entity or person engaging or seeking to engage in oil and gas exploration or
production activities with respect to any property in which the Company has, or had during
Executive’s employment, an interest or which was a prospect considered by the Company while
Executive was employed; provided, that it shall not be a violation of this section for the
Executive to become the registered or

 

 

			
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	 	 	beneficial owner of up to one percent (1%) of any class of the capital stock of a publicly
held corporation on the condition that the Executive does not actively participate in the
business of such corporation until such time as these restrictions expire.
	 
	7.2	 	Non-Solicitation of Business Opportunities. The Executive shall not, directly or
indirectly, for his benefit or for the benefit of any other person, firm, or business, solicit
from any property owner any interest in property for the purpose of oil or gas exploration or
production activities with respect to any property in which the Company has, or had during
Executive’s employment, an interest or which was a prospect offered to or considered by the
Company while the Executive was employed.
	 
	7.3	 	Restricted Period. The restrictions imposed by Sections 7.1 and 7.2 above shall be
effective during the period of the Executive’s employment by Noram and for twelve (12) months
following the termination (including by resignation) of the Executive’s employment, regardless
of the reason for or circumstances of such termination.
	 
	7.4	 	Non-Solicitation of Employees. The Executive agrees that for a period of twenty four (24)
months following the termination of the Executive’s employment for any reason (including by
resignation), the Executive shall not directly or indirectly solicit, divert, hire, retain,
employ or take away any employees or consultants of the Company, whether such new employment
or retainer is with or without compensation, unless as mutually agreed between the Executive
and the Company.
	 
	7.5	 	Reasonableness of Restrictions. The Executive agrees and acknowledges that the time
limitations and scope of the restrictions in this Article 7 are reasonable and properly
required for the adequate protection of the exclusive property and business of Noram and in
exchange for Noram’s agreement to employ Executive and the Confidential Information to be
provided to Executive in the course of his employment.
	 
	7.6	 	Remedies. Executive acknowledges and agrees that any threatened or actual violation on his
part of any of the covenants contained in this Article 7 would necessarily result in
irreparable harm and injury to the Company for which they would have no adequate remedy at
law, and that, consequently, the Company will be entitled to have any threatened or actual
breach of any restrictive covenant in this Article 7 enjoined. Such

 

 

			
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	 	 	injunctive relief shall be in addition to, and not in lieu of, any other relief at law or in
equity to which the Company may be entitled.
	 
	8.	 	TERMINATION BY EMPLOYER FOR JUST CAUSE
	 
	8.1	 	The Company may terminate this Agreement and the Executive’s employment at any time for Just
Cause without notice to the Executive and without payment to the Executive of any compensation
or severance in lieu of notice. Upon termination of employment for Just Cause, the Company
shall pay, and shall only be obligated to pay, to the Executive the Accrued Pay, which shall
be paid no later than thirty (30) days following termination of employment.
	 
	9.	 	TERMINATION BY EMPLOYER WITHOUT JUST CAUSE OR RESIGNATION FOR GOOD REASON
	 
	9.1	 	If the Executive’s employment is terminated by the Company for any reason other than Just
Cause and other than in accordance with Sections 10 or 11, or if the Executive resigns for
Good Reason, then the Company will pay to the Executive, in a lump sum no later than thirty
(30) days following termination of employment, an amount equal to one year of Base Salary
(using the higher salary the Executive has received at any time during the two (2) years
immediately prior to the termination), less required withholdings. Additionally, the Company
will continue to provide the Executive, for a maximum period of twelve (12) months, with such
medical and dental, short and long term disability, and life insurance coverages, on the same
terms and at the same cost to the Executive, as were in effect on the last day of his active
employment. This will be accomplished, with respect to medical and dental coverage, by
reimbursing the Executive for premiums he incurs (less the premiums he would have paid as an
active employee) based on the exercise of his right to continuation of coverage under COBRA.
If Executive’s continued participation in any of the Company’s other identified benefits plans
is not feasible for any reason, then the Company will reimburse the Executive, quarterly upon
his submission of proper documentation, for his incurred premium costs (less the premiums he
would have paid as an active employee) in obtaining comparable alternative coverages. The
Executive’s right to continued coverage under the Company’s above identified benefits plans,
and his right to reimbursement for premiums paid for comparable alternative coverages, shall
terminate upon his obtaining other employment

 

 

			
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	 	 	and becoming eligible for generally comparable benefits as a result of such new employment.
The Executive shall be solely responsible for any and all taxes owed on any benefits
received by or sums paid to him under this Section 9.1. The Executive shall not be entitled
to any other payments, compensation or benefits under this Agreement (except for Accrued
Pay). As conditions precedent to the Company’s obligation to make the above described
payment, the Executive shall (i) provide a written resignation of all director and officer
positions held in the Company and any of its (their) subsidiaries or other related entities,
(ii) comply in all respects with his obligations under Section 5 above, and (iii) deliver to
the Company a duly executed full and final release extinguishing all claims and potential
claims, regardless of their nature, against the Company, any of its affiliates, and their
respective directors, employees, agents and benefit plans, in a form reasonably satisfactory
to the Company.
	 
	 	 	The Company will also pay to the Executive the Accrued Pay no later than thirty (30) days
following termination of employment.
	 
	9.2	 	If the Executive is working outside of his country of citizenship at the time of termination,
he will be repatriated to his country of citizenship and the Company will pay all reasonable
expenses incurred in connection therewith as soon as practicable, but no later than sixty (60)
days following the date of termination of employment.
	 
	10.	 	TERMINATION — DEATH OF THE EXECUTIVE
	 
	10.1	 	This Agreement and the Executive’s employment shall be deemed to have terminated upon the
death of the Executive. The Company shall pay, and shall only be obligated to pay, to the
Executive’s spouse or legal representative, within five (5) business days of receipt of notice
of the Executive’s death:

	 	(a)	 	the Accrued Pay; and
	 
	 	(b)	 	an amount equal to the annual target bonus one hundred percent (100%) of Base
Salary) for the year in which the Executive’s death occurs multiplied by the fraction
of the year during which the Executive was employed, less required withholdings.

 

 

			
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	11.	 	TERMINATION UPON PERMANENT DISABILITY OF EXECUTIVE
	 
	11.1	 	In the event that the Executive shall suffer a Permanent Disability, the employment of the
Executive may be terminated by Noram upon the giving of Notice of at least thirty (30) days;
provided that such termination does not adversely affect the Executive’s entitlement to long-term
disability benefits under the Company’s employee benefit plan. In such case, the Company will pay
to the Executive, within thirty (30) days of termination of employment, (a) the Accrued Pay as of
the date of termination, and (b) an amount equal to the annual target bonus (one hundred percent
(100%) of Base Salary) for the year in which the Executive’s disability occurs multiplied by the
fraction of the year during which the Executive was employed, less required withholdings. The
Company shall have no further obligation under this Agreement.
	 
	12.	 	TERMINATION AFTER CHANGE OF CONTROL
	 
	12.1	 	Following a Change of Control or Change in Responsibilities that occurs within twelve (12)
months of a Change of Control and is not cured in accordance with Section 1.1(c), the Executive
shall have the right, for a period of sixty (60) days, to elect to terminate this Agreement and his
employment with the Company (or any successor) by providing notice to the Company (or its successor
in accordance with Section 15.1, following which notice:

	 	(a)	 	the Company (or its successor) shall pay to the Executive an amount equal to
one (1) years’ Base Salary as of the date of the Change of Control, plus his Accrued
Pay, within thirty (30) days of termination of employment;
	 
	 	(b)	 	the Company (or its successor) shall provide the Executive with those insurance
coverages listed in Section 9.1, on the same terms and conditions specified in Section
9.1, for a period of up to two (2) years following the Change of Control;
	 
	 	(c)	 	the Company (or its successor) promptly shall repatriate the Executive, if
applicable, in accordance with Section 9.2; and
	 
	 	(d)	 	All shares of restricted stock granted to the Executive shall be converted,
within thirty (30) days of termination of employment, to unrestricted shares, subject
to the terms and provisions of the restricted stock plan under which such shares were
granted and applicable law.

 

 

			
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	13.	 	TERMINATION BENEFITS HEREUNDER IN LIEU OF ALL OTHER RIGHTS
	 
	 	 	Any payments or benefits to which the Executive may be entitled under Articles 8 through 12 of
this Agreement shall be in lieu of (and not in addition to) any other payments or benefits to which
the Executive may otherwise be entitled upon termination of employment, whether under any severance
plan, policy or any other practice or agreement of the Company. As a condition of receiving
termination related payments and benefits under this Agreement, the Executive waives any and all
rights to payments and benefits from the Company under any other severance plan, policy or other
practice or agreement.
	 
	14.	 	SECTION 409A
	 
	 	 	Notwithstanding any provision in this Agreement to the contrary, if the payment of any
compensation or provision of any benefit hereunder upon termination of employment would be subject
to additional taxes and interest under Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), because the timing of such payment or benefit is not delayed as provided in
Section 409A(a)(2)(B) of the Code, then any such payment or benefit the Executive would otherwise
be entitled to during the first six months following the date of the Executive’s termination of
employment shall be accumulated and paid or provided, as applicable, on the date that is six (6)
months after the date of the Executive’s termination of employment (or if such date does not fall
on a business day of the Company, the next following business day of the Company), or such earlier
date upon which such amount or benefit can be paid or provided under Section 409A of the Code
without being subject to such additional taxes and interest. The preceding sentence shall apply
only to the extent required to avoid the Executive’s incurrence of any additional tax or interest
under Section 409A of the Code or the regulations or Treasury guidance promulgated thereunder.
	 
	15.	 	RESIGNATION
	 
	15.1	 	Unless otherwise provided for herein, the Executive shall provide the Company with 90 days
advance written notice of resignation. This notice may be waived in whole or in part by the
Company.
	 
	16.	 	GENERAL

 

 

			
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	16.1	 	This Agreement shall be construed and enforced in accordance with, and the rights of the
parties hereto shall be governed by, the laws of the State of Texas and, where applicable, the
federal laws of the United States. Each of the parties hereto consents to the exclusive
jurisdiction of the state and federal courts located in Harris County, Texas.
	 
	17.	 	NOTICES
	 
	17.1	 	Any notice or written communication which must be given or sent under this Agreement shall be
given or sent by hand or courier delivery or by facsimile transmission and if delivered:

	 	(a)	 	by hand or courier, it shall be deemed to have been validly given or received on the day
of delivery to the current address under this Section 17, provided that any delivery made
after 4:00 p.m. (local time) on a business day or on at any hour on a day other than a
business day shall be deemed to be received on the next following business day; or
	 
	 	(b)	 	by facsimile, it shall be deemed to have been validly given or received on the day sent,
if sent prior to 4:00 p.m. (local time) at the place of receipt on a business day with
written confirmation of receipt from the sending machine, and otherwise on the business day
following the day of transmission by facsimile, with written confirmation of receipt from
the sending machine, to the current fax number under this Section 16 as it may be changed
pursuant to this Section 17.

	17.2	 	A party may, at any time, change its named recipient, address or facsimile number for the
purposes of service by written notice to the other party hereto; provided that, until changed, the
contact details shall be:

	 	(a)	 	in the case of the Executive:

[Provision Omitted]

 

 

	 	(b)	 	in the case of the Company:

Ausam Energy Corporation

1122 Fourth Street — Suite 1430

Calgary, Alberta T2R 1M1

CANADA

 

 

			
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Tel: 1.403.215.2380

Fax: 1.403.206.1457

	18.	 	ENTIRE AGREEMENT
	 
	18.1	 	This Agreement constitutes the entire agreement between the parties hereto with respect to the
employment of the Executive with the Company, and cancels and supersedes all prior agreements and
understandings between the parties hereto with respect to the subject matter hereof. This Agreement
may not be amended or modified in any way except by written instrument signed by the parties
hereto.
	 
	19.	 	SEVERABILITY
	 
	19.1	 	In the event that any provisions of this Agreement shall be held by a court or another
tribunal of competent jurisdiction to be unenforceable, such provision will be reformed or
eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full
force and effect.
	 
	20.	 	TIME
	 
	20.1	 	Time shall in all respects be of the essence to this Agreement.
	 
	21.	 	NO ASSIGNMENT
	 
	21.1	 	This Agreement is a personal services agreement and may not be assigned by either party
without the prior written consent of the other party, except that this limitation shall not apply
to any successor of the Company.

 

 

			
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	22.	 	NO WAIVERS
	 
	22.1	 	The waiver by either party of any breach of the terms of this Agreement shall not operate or
be construed as a waiver by that party of any other breach of the same or any other term of this
Agreement.
	 
	23.	 	SURVIVAL
	 
	23.1	 	Sections 5, 6 and 7 shall survive the termination of this Agreement.
	 
	24.	 	THIRD-PARTY BENEFICIARY
	 
	24.1	 	The Executive and the Company intend that Ausam be a third-party beneficiary of this
Agreement and agree that, as such, Ausam shall be entitled to the benefit of and have the right to
enforce its provisions.

IN WITNESS WHEREOF the parties have executed this Agreement as of the date first written above.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	EXECUTIVE	 
	 
	 	 	 	 	 	 	 	 
	/s/ Illegible

	 	 	 	/s/ Mark G. Avery	 	 
	 

	 	 	 	 	 	 
	Witness

	 	 	 	Mark G. Avery	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	AUSAM ENERGY CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	BY:
	 	/s/ William M. Hitchcock	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	On Behalf of	 	 
	 

	 	 	 	 	 	The Board of Directors	 	 

 

 

Schedule A

Compensation

1. Base Salary:

The Executive will be paid a salary of $23,916.67 per month ($287,000.00 annualized), less
required withholdings (the “Base Salary”). The Base Salary is inclusive of an automobile allowance
in the amount of $1,000 per month. The Base Salary shall be payable in arrears in equal monthly or
bi-weekly instalments. The Base Salary shall be reviewed annually and may be increased in the sole
discretion of Noram.

2. Bonus:

The Executive shall be eligible for an annual cash bonus, at the discretion of the Company, based
on his performance and the performance of the Company. The target amount of such bonus will be one
hundred percent (100%) of annual Base Salary, but the amount, if any, to be awarded shall be at
the discretion of the Company, except that if the Company, in its discretion, determines that the
Executive, throughout the annual bonus period, has used his best efforts to achieve the company’s
objectives, then the Executive shall be entitled to a bonus of not less than fifteen (15%) of Base
Salary without regard to other criteria established for the purpose of determining the bonus
amount.

3. Benefits:

The Executive shall be eligible to participate in the Company’s benefit plans (Medical and Dental,
Group Term Life, Short and Long Term Disability, and 401k) on the same basis as the Company’s
comparably situated executive employees, subject to the terms and requirements of the respective
plans.

4. Vacation, Holidays and Leave:

     (a) The Executive shall be entitled to four (4) weeks of vacation in each full calendar year
of employment with the Company, such vacation to be taken within 12 months of each applicable year
end. During 2007, the Executive shall be entitled to four (4) weeks of vacation.

     (b) The Executive shall be entitled to ten (10) paid holidays annually, said holidays to be
determined by the Company. During 2007, the Executive shall be entitled to ten (10) paid holidays.

     (c) The Executive shall be entitled to ten (10) paid personal leave days, in lieu of sick
leave, annually During 2007, the Executive shall be entitled to ten (10) paid personal leave days.
The Executive may accumulate a maximum of twenty paid personal leave days.

 

 

			
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5.
Restricted Share Options:

The Executive shall be granted 1,605,835 share options for Ausam common stock, subject to the
following restrictions.

     (a) The grant shall have an anniversary date of 4 April 2007 and be contingent on execution of
this Agreement and commencement of employment.

     (b) The Executive shall not sell, assign, transfer, pledge or otherwise dispose of or encumber
any share options with respect to which the restrictions have not lapsed.

     (c) If the Executive’s employment is terminated by the Company for Just Cause or in accordance
with Sections 10 or 11, or if the Executive resigns for any reason, then all share options with
respect to which restrictions have not previously lapsed under the schedule provided below shall
expire and be cancelled. If the Executive’s employment is terminated by the Company for any other
reason, then the restrictions shall lapse with respect to any share options that remain restricted
as of the date of the termination of employment.

     (d) The restrictions will lapse, and the Executive will receive unrestricted share options as
follows: one-third of the total grant (i.e., 535,278 share options) on 4 April 2007; one-third of
the total grant on 4 April 2008, and one-third of the total grant on plus one (1) share option on 4
April 2009 unless as otherwise agreed between the Executive and the Company.

     (e) The Executive will have no rights as a stockholder and no rights to receive dividend or
equivalent payments with respect to share options that may be received by Executive upon the lapse
of restrictions until the restrictions have lapsed and those share options are exercised as
registered shares in Executive’s name on the books of Ausam’s transfer agent.

     (f) The Executive must pay any taxes that are required to be withheld by the Company in
respect of the within grant. Executive may pay such amounts in cash or make other arrangements
satisfactory to the Company for payment of such amounts. Executive agrees that the Company, in its
sole discretion and to the fullest extent permitted by law, shall have the right to demand that
Executive pay such amounts in cash, deduct such amounts from any payments of any kind otherwise due
to Executive, or withhold from share options for which restrictions have lapsed the number of
shares having an aggregate market value at the time equal to the amount Executive owes.

     (g) By accepting a grant of share options, Executive agrees that if the Company determines
that Executive engaged in Conduct Detrimental to the Company during his employment or during the
one-year period following the termination of Executive’s employment, Executive shall be required to
return to the Company, upon demand, and without compensation therefore, some or all of the share
options on which restrictions have lapsed and which are still owned or controlled by the Executive.
The Executive understands and agrees that the return of share options is in addition to and
separate from any other relief available to the Company due to Executive’s Conduct Detrimental to
the Company. Conduct Detrimental to the Company, as used in this section, means:

 

 

			
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(i) The Executive gives Just Cause for termination as defined in Section 1.1 (f) (whether
or not such cause is discovered by the Company prior to the termination of Executive’s
employment); (ii) Executive breaches his obligations to the Company under this Agreement
with respect to Confidential Information; (iii) Executive competes with the Company in
breach of this Agreement; or (iv) Executive solicits the Company’s employees or consultants
or business interests in breach of this Agreement.

     (h) The Executive understands and agrees that Section 5(g) does not prohibit Executive from
competing with the Company or soliciting the Company’s employees or business interests, but
requires only return of equity in the event of such competition or solicitation in violation of
other provisions of the Agreement of which this Schedule A is a part. The Executive further
acknowledges and agrees that the grant of an equity interest in Ausam gives rise to the Company,
and the Company’s shareholders’ need to protect themselves from Conduct Detrimental to the Company.

     (i) The Executive further acknowledges and agrees that the future value of the share options
he is to be granted is unknown and cannot be predicted with certainty; and that Executive will have
no rights to compensation or damages related to those shares in consequence of the termination of
Executive’s employment for any reason whatsoever, whether or not in breach of contract.

     (j) Upon termination of or resignation from employment for any reason, the Executive agrees
that the Company shall have the right of first refusal to purchase all share options in Ausam owned
by Executive, and that Executive shall offer such share options on the same terms, including price,
on which such share options may be purchased by any other person or entity, first to the Company at
least ninety (90) days in advance of any sale by Executive of such share options, with such offer
to remain open for at least thirty (30) days.

     (k) Except as may be otherwise expressly provided herein, the grant of share options shall be
subject to and governed by the terms and provisions of the stock option plan to be adopted by
Ausam. Notwithstanding any contrary provision contained herein, the grant and all conditions and
actions related to the share options shall be in compliance with all applicable legal requirements,
and any provisions contained herein which are contrary to such legal requirements shall be reformed
to comply with such requirements.

 

 

			
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Schedule B

Potential Business Conflicts

NONEexv10w3

 

Exhibit 10.3

EXECUTIVE EMPLOYMENT AGREEMENT

THIS AGREEMENT made as of the 1st day of April, 2007

BETWEEN:

ALASTAIR J. ROBERTSON, of the City of Calgary, in the Province of Alberta

(hereinafter called the “Executive”)

- and -

AUSAM ENERGY CORPORATION, a body corporate formed under the

laws of the Province of Alberta (hereinafter called “Ausam”).

WHEREAS Ausam is engaged in the business of oil and gas exploration and development and other
related businesses;

AND WHEREAS Ausam wishes to retain the services of the Executive to assist Ausam in the furtherance
of its business;

NOW THEREFORE THIS AGREEMENT WITNESSES THAT IN CONSIDERATION of the mutual covenants and agreements
herein contained and for other good and valuable consideration, it is agreed by the parties hereto
as follows:

	1.	 	DEFINITIONS
	 
	1.1	 	In this agreement, the following terms shall have the following meanings:

	 	(a)	 	“Accrued Pay” means, with respect to a termination of employment:

	 	(i)	 	all Base Salary earned but not yet paid up to the date of
termination or deemed termination of employment, less required withholdings;
	 
	 	(ii)	 	all accrued but unused vacation pay, less required
withholdings; and
	 
	 	(iii)	 	all expenses properly incurred up to the date of termination
in the carrying out of his duties.

	 	(b)	 	“Agreement” means this agreement;
	 
	 	(c)	 	“Change in Responsibilities” means constructive dismissal, including the
occurrence of any of the following: (i) a material adverse change in the
Executive’s office of employment; (ii) any material change in the nature or scope

 

 

			
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of the
Executive’s duties; (iii) any requirement, without the Executive’s agreement, to change
his place of employment; (iv) any reduction in the Executive’s remuneration; (v) any
material withdrawal of benefits from the Executive; or (vi) any other act which
reasonably leads the Executive to believe his employment will be terminated at the end
of the twelve month period following a Change of Control;

	 	(d)	 	“Change of Control” means the purchase or acquisition of voting securities of
Ausam and/or securities convertible into or exchangeable or exercisable for such voting
securities, which results in a person, group of persons, persons acting jointly or in
concert (within the meaning of the Securities Act (Alberta)) or persons who are
associates of or affiliated with (within the meaning of the Securities Act (Alberta))
any such person, group of persons or any of such persons acting jointly or in concert,
beneficially owning or exercising control or direction over voting securities of Ausam
and/or securities convertible into or exchangeable or exercisable for such voting
securities, so as to, assuming the conversion, exercise or exchange of all such
securities, entitle such person, group of persons or persons acting jointly or in
concert to cast 50% plus one of the votes attached to all voting securities of Ausam;
	 
	 	(e)	 	“Effective Date” means April 1, 2007;
	 
	 	(f)	 	“Just Cause”, when used in relation to the termination of employment of the
Executive, includes: (i) any matter that would constitute lawful just cause for
dismissal from employment at common law, (ii) conviction of or plea to by the Executive
of a criminal offence involving dishonesty or fraud or which is likely to injure
Ausam’s business or reputation, (iii) misappropriation of any of Ausam’s property or
assets, (iv) gross incompetence or negligence, (v) a material and wilful breach by the
Executive of a material term of his employment or this

 

 

			
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Agreement which has not been cured within ten days of notice to the Executive of
such breach, and (vi) any information, reports, documents or certificates being
wilfully and intentionally furnished by the Executive to the board of directors or
any committee thereof which are intentionally false or misleading either because
they include or fail to include material facts;

	 	(g)	 	“Permanent Disability” means that the mental or physical state of the Executive
is such, that:

	 	(i)	 	the Executive has, to a substantial degree, been unable, due to
illness, disease, affliction, mental or physical disability or similar cause,
to fulfil his obligations as an employee or officer of Ausam either for any
consecutive four month period or for any period of six months (whether or not
consecutive) in any consecutive 12 month period; or
	 
	 	(ii)	 	a court of competent jurisdiction has declared the Executive to
be mentally incompetent or incapable of managing his affairs.

	2.	 	EMPLOYMENT & DUTIES
	 
	2.1	 	The Executive shall be employed as Chief Financial Officer of Ausam as of the Effective Date
and such employment shall continue indefinitely until terminated in accordance with this
Agreement or unless as mutually agreed between the Executive and Ausam.

	2.2	 	The Executive shall carry out such duties and responsibilities as directed by the President
and CEO in consultation with the board of directors of Ausam, which duties shall be in keeping
with the Executive’s employment as Chief Financial Officer of Ausam.

	2.3	 	The Executive shall devote full time and attention to the business of Ausam and discharge and
carry out such duties, functions and powers as are incidental to the position of Chief
Financial Officer of Ausam; however, it shall not be a violation of this Section 2.3 for the
Executive to engage in a voluntary activity or other public service that does not interfere
with the Executive’s duties under this Agreement. In the performance of his duties, the
Executive shall act honestly, in good faith and in the best interests of Ausam, and shall
exercise the degree of diligence and responsibility that a person having the
Executive’s expertise and knowledge of the affairs of Ausam would reasonably be expected to
exercise in comparable circumstances.

 

 

			
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	2.4	 	The Executive recognizes that his primary business obligation is to Ausam and agrees not to
permit the pursuit of other interests to interfere with the fulfillment of his duties in that
position. The Executive shall disclose actual or potential business conflicts of interest to
the board of directors of Ausam. Any uncertainty as to whether such a conflict exists shall be
raised by the Executive for determination by the board of directors of Ausam, acting
reasonably. The Executive shall conduct himself so as to avoid an actual or potential conflict
of interest.
	 
	3.	 	REMUNERATION

	3.1	 	The Executive will be paid an annual salary (the
“Base Salary”) of Canadian $240,000, less
required withholdings. The Base Salary shall be payable in arrears in equal monthly or
bi-weekly instalments. The Base Salary shall be reviewed annually and may be increased in the
sole discretion of Ausam.

	3.2	 	The Executive shall participate in such of Ausam’s benefit plans as may be provided from time
to time by Ausam to its other executives.

	3.3	 	The Executive shall be entitled to four weeks of vacation in each year of employment with
Ausam, such vacation to be taken within 12 months of each applicable year end.

	3.4	 	The Executive shall be entitled to participate in any bonus plans or option plans that may be
put in place as amended from time to time by Ausam.

	3.5	 	The Executive shall be entitled to a monthly automobile allowance of $1,000 per calendar
month, and parking shall be provided by Ausam.
	 
	4.	 	EXPENSES

	4.1	 	Ausam shall reimburse the Executive for all reasonable travel and other expenses and
professional fees actually and reasonably incurred in the performance of his duties on behalf
of Ausam. Reimbursement will be made upon the submission of a written itemized
expense claim and proper supporting documentation within a reasonable time after such
expenses have been incurred.

 

 

			
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	5.	 	NON-DISCLOSURE & CONFIDENTIALITY

	5.1	 	The Executive acknowledges that, as a result of the Executive’s employment by Ausam, the
Executive shall be making use of or acquiring information about certain matters and things
which are confidential to Ausam and which information is the exclusive property of Ausam,
including all confidential information acquired by or made available to the Executive by Ausam
or its representatives, which shall include offering memoranda, financial information, plans,
engineering reports, environmental reports, legal opinions, names of shareholders, private
investors, joint venture partners and limited partners, geological information, land and lease
information, well data, project data, seismic information and gas processing and marketing
terms and arrangements or other such material as maybe material to Ausam, which information is
or may be either applicable to or related in any way to the assets, business or affairs of
Ausam, together with all analyses, compilations, notes, data, studies or other material
documents or copies thereof prepared by or on behalf of Ausam (collectively, the “Confidential
Information”).

	5.2	 	Confidential Information shall not include any information that (i) was in the possession of
or known to the Executive, without any obligation to keep it confidential, before it was
disclosed to the Executive by Ausam or through the Executive’s involvement with Ausam; or (ii)
is or becomes public knowledge through no fault of the Executive; or (iii) is disclosed by
Ausam to another person without any restriction on its use or disclosure; or (iv) is or
becomes lawfully available to the Executive from a source other than Ausam, which source, to
the best of the Executive’s knowledge, is legally permitted to disclose such information and
is not under confidentiality restrictions.

	5.3	 	As a material inducement to Ausam to employ the Executive and to pay to the Executive
compensation for such services to be rendered to Ausam by the Executive, the Executive agrees
that the Executive shall not, except with the prior written consent of Ausam, or except if the
Executive is acting as an employee of Ausam solely for the benefit of Ausam in connection with
Ausam’s business and in accordance with Ausam’s business practices and employment policies, at
any time during or following the term of the
Executive’s employment by Ausam, directly or indirectly, disclose, reveal, report, publish,
transfer or use for any purpose any of the Confidential Information which has

 

 

			
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been obtained
or disclosed to Ausam as a result of the Executive’s employment by Ausam.

	5.4	 	The Executive shall assign to Ausam any interest in any and all inventions, improvements and
ideas (whether or not patentable) which the Executive may make or conceive during the period
of his employment with Ausam, and which relate or are applicable to any phase of Ausam’s
business, and the Executive hereby agrees to execute any reasonable document and do any
reasonable act reasonably necessary to perform the Executive’s duties under this Section 5.
Any such invention, improvement, or idea shall be the exclusive property of Ausam and its
successors and assigns. The Executive also affirms that if any such invention, improvement, or
idea shall be deemed confidential by Ausam, he will not disclose any such invention,
improvement, or idea without prior written authorization from Ausam. The Executive hereby
waives any moral rights to any invention, improvement.

	5.5	 	Disclosure of any Confidential Information of Ausam shall not be prohibited if the disclosure
is directly pursuant to a valid and existing order of a court or other governmental body or
agency within Canada; provided, however, that the Executive shall first have given prompt
notice to Ausam of any possible or prospective order (or proceeding pursuant to which any
order may result), and Ausam shall have been afforded a reasonable opportunity to prevent or
limit any disclosure.
	 
	6.	 	FIDUCIARY OBLIGATIONS

	6.1	 	The Executive acknowledges and agrees that he is a fiduciary of Ausam and he agrees to be
bound by his fiduciary obligations following his resignation or termination from Ausam for any
reason.
	 
	7.	 	NON-SOLICITATION

7.1 The Executive agrees that for a period of 12 months following his resignation or the
termination of the Executive’s employment for any reason, the Executive shall not directly or
indirectly solicit, divert, hire, retain, employ or take away any employees or consultants of
Ausam, whether such new employment or retainer is with or without compensation, unless as mutually
agreed between the Executive and Ausam.

 

 

			
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	7.2	 	The Executive agrees and acknowledges that the time limitation in Section 7.1 is reasonable
and properly required for the adequate protection of the exclusive property and business of
Ausam.
	 
	8.	 	TERMINATION BY EMPLOYER FOR JUST CAUSE

	8.1	 	Ausam may terminate this Agreement and the Executive’s employment at any time for Just Cause
without notice to the Executive and without payment to the Executive of any compensation or
severance in lieu of notice. Upon termination of employment for Just Cause Ausam shall pay,
and shall only be obligated to pay, to the Executive the Accrued Pay.
	 
	9.	 	TERMINATION BY EMPLOYER WITHOUT JUST CAUSE

	9.1	 	If the Executive’s employment is terminated by Ausam for any reason other than Just Cause and
other than in accordance with Section 11, at the Executive’s option, either:

	 	(a)	 	Ausam will provide to the Executive pay in lieu of notice equal to the annual
Base Salary, plus the average amount paid or payable as bonus, if any, to the Executive
over the preceding two years, less required withholdings; or
	 
	 	(b)	 	any options granted to the Executive shall immediately vest, subject to
applicable law;

     provided that the Executive shall, in either case:

	 	(c)	 	provide a written resignation of all director and officer positions held in
Ausam or its subsidiaries; and
	 
	 	(d)	 	deliver to Ausam a duly executed full and final release in favour of Ausam, in
a form reasonably satisfactory to Ausam.

     In either case, Ausam will also pay to the Executive the Accrued Pay.

 

 

			
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	9.2	 	If the Executive is working outside of his country of citizenship at the time of termination,
he will be repatriated to his country of citizenship and Ausam will pay all reasonable
expenses incurred in connection therewith.
	 
	10.	 	TERMINATION — DEATH OF THE EXECUTIVE

	10.1	 	This Agreement and the Executive’s employment shall be deemed to have terminated upon the
death of the Executive. Ausam shall pay, and shall only be obligated to pay, to the
Executive’s spouse or legal representative, within five business days of receipt of notice of
the Executive’s death:

	 	(a)	 	the Accrued Pay; and
	 
	 	(b)	 	one times the annual Base Salary paid or payable over the immediately preceding
year, less required withholdings.

	11.	 	TERMINATION UPON PERMANENT DISABILITY OF EXECUTIVE
	 
	11.1	 	In the event that the Executive shall suffer a permanent disability, the employment of the
Executive may be terminated by Ausam upon the giving of Notice of at least 30 days; provided
that such termination does not adversely affect the Executive’s entitlement to long-term
disability benefits under the Ausam employee benefit plan. In such case, Ausam will pay to the
Executive the Accrued Pay.
	 
	12.	 	CHANGE OF CONTROL

	12.1	 	The Executive shall have the right, for a period of six months following any event causing a
Change of Control and a Change in Responsibilities, to elect to terminate this Agreement and
his employment with Ausam by providing notice to Ausam in accordance with Section 15.1,
promptly following which notice period:

	 	(a)	 	Ausam shall pay to the Executive the amounts set out in Section 9.1(a), on the
terms therein prescribed and the Accrued Pay;
	 
	 	(b)	 	Ausam shall repatriate the Executive in accordance with Section 9.2; and
	 
	 	(c)	 	Any and all options granted to the Executive shall immediately vest, subject to
applicable law.

 

 

			
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	12.2	 	Ausam and the Executive recognize that a Change of Control and Change in Responsibilities
occurred in connection with the acquisition of assets from SKH Management L.P and certain of
its affiliates on February 8, 2007 (the “SKH Acquisition”), and Ausam and the Executive
recognize that, subsequent to the SKH Acquisition, the future focus of Ausam will be in the
United States. It is further recognized by the parties hereto that, over a period of
approximately 12 months from the date hereof, there will be a transfer of senior management
functions to Houston, Texas and, specifically, the appointment of a new Chief Financial
Officer based in Houston, Texas. Ausam and the Executive agree that, upon the resignation of
the Executive and the appointment of a new Chief Financial Officer in Houston, Texas, Ausam
shall pay to the Executive all amounts set forth in section 9.1(a) hereof on the terms
prescribed therein, as well as the Accrued Pay.

	12.3	 	Ausam and the Executive agree that, upon resignation of the Executive pursuant to section
12.2 hereof and subject to the approval of the board of directors of Ausam, the Executive
shall continue as a director of Ausam and all existing stock options granted to the Executive
shall continue. In the event that such approval is not obtained, any and all options granted
to the Executive shall vest immediately, subject to applicable law.
	 
	13.	 	RESIGNATION

	13.1	 	The Executive shall provide Ausam with 90 days advance written notice of resignation. This
notice may be waived in whole or in part by Ausam.
	 
	14.	 	GENERAL

	14.1	 	This Agreement shall be construed and enforced in accordance with, and the rights of the
parties hereto shall be governed by, the laws of the Province of Alberta and the federal laws
of Canada applicable therein. Each of the parties hereto hereby irrevocably attorns to the
jurisdiction of the courts of the Province of Alberta.
	 
	15.	 	NOTICES

	15.1	 	Any notice or written communication which must be given or sent under this Agreement shall be
given or sent by hand or courier delivery or by facsimile transmission and if delivered:

 

 

			
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	 	(a)	 	by hand or courier, it shall be deemed to have been validly given or received
on the day of delivery to the current address under this Section 15, provided that any
delivery made after 4:00 p.m. (local time) on a business day or on a day other than a
business day shall be deemed to be received on the next following business day; or
	 
	 	(b)	 	by facsimile, it shall be deemed to have been validly given or received on the
day sent, if sent prior to 4:00 p.m. (local time) at the place of receipt on a business
day with written confirmation of receipt from the sending machine, and otherwise on the
business day following the day of transmission by facsimile, with written confirmation
of receipt from the sending machine, to the current fax number under this Section 15 as
it may be changed pursuant to Section 15.2.

	15.2	 	A party may, at any time, change its named recipient, address or facsimile number for the
purposes of service by written notice to the other party hereto; provided that, until changed,
the contact details shall be:

	 	(a)	 	in the case of the Executive:
	 
	 	 	 	311 Varsity Estates Bay NW

Calgary, Alberta

Canada T3B 2W6

Attention: Alastair J. Robertson

Fax: 1.403.538.5191
	 
	 	(b)	 	in the case of Ausam:
	 
	 	 	 	Ausam Energy Corporation

1430, 1122 — 4th Street S.W.

Calgary, Alberta T2R 1M1

Attention: President and Chief Executive Officer

Facsimile: 1.403.206.1457

	16.	 	ENTIRE AGREEMENT

	16.1	 	This Agreement constitutes the entire agreement between the parties hereto with respect to
the employment of the Executive with Ausam, and cancels and supersedes all prior agreements
and understandings between the parties hereto with respect to the subject matter hereof. This
Agreement may not be amended or modified in any way except by written instrument signed by the
parties hereto.

 

 

			
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	17.	 	SEVERABILITY

	17.1	 	In the event that any provisions of this Agreement shall be held by a court or another
tribunal of competent jurisdiction to be unenforceable, such provision will be eliminated to
the minimum extent necessary so that this Agreement shall otherwise remain in full force and
effect.
	 
	18.	 	TIME
	 
	18.1	 	Time shall in all respects be of the essence of this Agreement.
	 
	19.	 	NO ASSIGNMENT

	19.1	 	This Agreement is a personal services agreement and may not be assigned by either party
without the prior written consent of the other party.
	 
	20.	 	NO WAIVERS

	20.1	 	The waiver by either party of any breach of the terms of this Agreement shall not operate or
be construed as a waiver by that party of any other breach of the same or any other term of
this Agreement.
	 
	21.	 	SURVIVAL
	 
	21.1	 	Sections 5, 6 and 7 shall survive the termination of this Agreement.

IN WITNESS WHEREOF the parties have executed this Agreement as of the date first written above.

	 	 	 	 	 
	 
	 	 	 	 
	/s/ Illegible
	 	 	 	/s/ Alastair J. Robertson
	 

	 	 	 	 
	Witness

	 	 	 	ALASTAIR J. ROBERTSON
	 
	 	 	 	 
	 

	 	 	 	AUSAM ENERGY CORPORATION
	 
	 	 	 	 
	 

	 	Per:	 	/s/ Mark G. Avery
	 

	 	 	 	 
	 

	 	 	 	Mark G. Avery

President & CEO

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