Document:

ex10_2.htm

EXHIBIT 10.2

 

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

BETWEEN:

GRAN TIERRA ENERGY INC., an Alberta corporation (“GTEI”) and Gran Tierra Energy Inc., a Nevada corporation (“Gran Tierra”)

 

(GTEI and Gran Tierra are collectively referred to herein as, the “Company”)

 

- and -

 

Duncan Nightingale, an individual ordinarily resident in the City of Calgary in the Province of Alberta

 

(the “Executive”)

 

(collectively referred to as the “Parties”)

 

RECITALS:

 

	
A.

	
The Executive has specialized knowledge and valuable skills and experience which are critical to the management and success of the business.

 

	
B.

	
The Company wishes to secure the services of the Executive as the Vice President, Exploration of the business.

  

	
C.

	
The Parties wish to set forth their entire understanding and agreement with respect to the subject matter herein in its entirety with this Executive Employment Agreement (the “Agreement”).

THEREFORE, the Parties agree as follows:

 

ARTICLE 1

DUTIES AND RESPONSIBILITIES

1.1 Position

 

The Company confirms the appointment of the Executive to the position of Vice President, Exploration. The Executive will undertake those duties and responsibilities set out in Schedule “A” to this Agreement as well as those duties reasonably assigned to the Executive by the Chief Operating Officer of the Company. The Executive will report to the Chief Operating Officer. The parties agree that the relationship between the Company and the Executive created by this Agreement is that of employer and employee.

 

  

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1.2 Other Engagements

 

The Executive shall not engage in any other business, profession or occupation which would conflict with the performance of his duties and responsibilities under this Agreement, either directly or indirectly, including accepting appointments to the boards of other companies without the prior written consent of the Company.

1.3 Reassignment

 

The Company shall not reassign the Executive to another position within the Company itself, or to a position within a subsidiary, affiliated or related corporate entity (“Member Company” or “Member Companies”) or alter the duties, responsibilities, title, or reporting lines of the Executive or change the location of the Executive’s employment unless the Executive agrees to such reassignment or alteration.

 

1.4 Travel

 

The Executive shall be employed at the Company’s location in Calgary, Alberta. The Executive shall be available for such business related travel as may be required for the purposes of carrying out the Executive’s duties and responsibilities. The Executive shall be entitled to business class tickets for domestic or international travel that exceed more than six hours. The Executive will be entitled to choose suitable accommodations when traveling on Company business.

 

ARTICLE 2

TERM OF EMPLOYMENT

 

The Executive’s employment with the Company is for no specified duration and constitutes at-will employment.  The Executive’s employment may be terminated at any time by either of the Parties, subject to the provisions of Article 9.

 

ARTICLE 3

BASE SALARY

 

The Executive will be paid an annual salary in the amount of $230,000.00 in Canadian currency, subject to applicable statutory deductions (the “Base Salary”). The Executive’s Base Salary will be payable in accordance with Company practices and procedures as they may exist from time to time. Base Salary will be reviewed and may be increased on an annual basis by the Company.

 

ARTICLE 4

BONUS

 

4.1Bonus Eligibility

 

The Executive shall be eligible to receive an annual bonus payment in addition to Base Salary and other compensation for each year of the Executive’s employment (the “Bonus”) as determined by the Company from time to time.

 

  

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4.2 Bonus Payment

 

The Bonus shall be payable within sixty (60) days of the end of the fiscal year, and will be based upon the Executive’s performance during the preceding year.

 

ARTICLE 5

BENEFITS

 

The Executive shall be entitled to participate in and to receive all rights and benefits under any life insurance, disability, medical, dental, health and accident plans maintained by the Company for its employees and for its executive officers specifically. The Company will continue to pay the Executive’s Base Salary in the event the Executive becomes disabled until such time as the Executive begins to receive long-term disability insurance benefits.

 

ARTICLE 6

VACATION

 

The Executive will be entitled to five weeks vacation per year. Payment of all vacation pay will be at Base Salary. The Executive will arrange vacation time to suit the essential business needs of the Company. Unused vacation entitlement will be carried over into the following calendar year to a maximum entitlement of eight weeks in any one year. On leaving the employment of the Company for whatever reason, the Company will compensate the Executive for any accrued but unused vacation entitlement based upon the Executive’s then current Base Salary.

 

ARTICLE 7

STOCK OPTIONS

The Executive will be provided an initial stock options grant 250,000 shares of the common stock of Gran Tierra Energy Inc., in accordance with the terms and conditions of the 2007 Gran Tierra Energy Equity Incentive Plan. The stock options will be priced in accordance with the terms of the plan on the first date of employment of the Executive with the Company. The Executive will be eligible to participate in applicable future stock option plans and/or incentive award plans created by the Company in accordance with their terms and conditions.

 

ARTICLE 8

PERQUISITES AND EXPENSES

 

The Company recognizes that the Executive will incur expenses in the performance of the Executive’s duties. The Company shall reimburse the Executive for any reasonable out of pocket expenses incurred in the course of employment.

 

  

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ARTICLE 9

 

TERMINATION OF EMPLOYMENT

 

9.1 Termination Without Notice

 

This Agreement and the Executive’s employment with the Company may be terminated, without the Company being obligated to provide the Executive with advance notice of termination or pay in lieu of such notice, whether under contract, statute, common law or otherwise, in the following circumstances:

 

           (a)          Voluntary Resignation

 

In the event the Executive voluntarily resigns, except where the Executive resigns for Good Reason as provided for in this Agreement, the Executive will give a minimum of ninety (90) days’ advance written notice to the Company. The Executive will not be entitled to receive any further compensation or benefits whatsoever other than those which have accrued up to the Executive’s last day of active service with the Company. The Company may, at its discretion, waive in whole or in part such notice with payment in lieu to the Executive;

  

(b)          Cause

 

"Cause" is defined as any of the following:

(a) conviction of, or plea of nolo contendere to, a felony;

(b) participation in a fraud against the Company;

(c) participation in an act of dishonesty against the Company intended to result in your personal enrichment;

(d) willful material breach of the Company's written policies;

(e) intentional significant damage to the Company's property by you;

(f) material breach of this Agreement; or

(g) conduct by you that, in the good faith and reasonable determination of the Board, demonstrates gross unfitness to serve provided that in such event, the Company shall provide notice to you describing the nature of the gross unfitness and you shall thereafter have ten (10) days to cure such gross unfitness if such gross unfitness is capable of being cured.

  

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9.2 Termination by the Company without Cause

 

The Company may terminate the Executive’s employment without Cause at any time by providing the Executive with a separation package (the “Separation Package”) equal to one years’ Total Cash Compensation.

“Total Cash Compensation” is defined as the annualized amount of Base Salary plus Bonus Payment for the prior 12-month period.

 

The Separation Package shall be payable in a lump sum within thirty (30) days of termination.

9.3Termination by the Executive for Good Reason.

Should the Executive terminate his employment for Good Reason, as hereinafter defined, he shall receive the Separation Package set out in section 9.2.  Failure of the Executive to terminate his employment on the occurrence of any event which would constitute Good Reason shall not constitute waiver of his right under this section 9.3.  Notwithstanding the foregoing, the Executive may terminate his employment for Good Reason so long as the Executive tenders his resignation to the Company within thirty (30) days after the occurrence of the event that forms the basis for the resignation for Good Reason; provided, however, that the Executive must provide written notice to the Company describing the nature of the event that the Executive believes forms the basis for the resignation for Good Reason, and the Company shall thereafter have ten (10) days to cure such event.

“Good Reason” is defined as the occurrence of any of the following without the Executive’s express written consent:

	
  

	
(a)

	
an adverse change in the Executive’s position, titles, duties or responsibilities (including new, additional or changed formal or informal reporting responsibilities) or any failure to re-elect or re-appoint him to any such positions, titles, duties or offices, except in connection with the termination of his employment for Cause;

	
  

	
(b)

	
a reduction by the Company of the Executive’s Base Salary except to the extent that the annual base salaries of all other executive officers of the Company are similarly reduced or any change in the basis upon which the Executive’s annual compensation is determined or paid if the change is or will be adverse to the Executive except that an award of annual performance bonuses by the Company’s Compensation Committee (and approved by the Board of Directors) are discretionary and in no instance shall be considered adverse to Executive if such performance bonus is reduced from a prior year or if an annual performance bonus is not paid;

	
  

	
(c)

	
a Change in Control (as defined below) of the Company occurs; or

	
  

	
(d)

	
any breach by the Company of any material provision of this Agreement.

 

  

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A “Change in Control” is defined as:

 

(a) a dissolution, liquidation or sale of all or substantially all of the assets of the Company;

 

(b) a merger or consolidation in which the Company is not the surviving corporation;

 

(c) a reverse merger in which the Company is the surviving corporation but the shares of the Company’s common stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise; or

(d) the acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the Exchange Act, or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the Company or any affiliate of the Company) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of securities of the Company representing at least fifty percent (50%) of the combined voting power entitled to vote in the election of directors.

 

ARTICLE 10

NON-COMPETITION AND CONFIDENTIALITY

 

10.1 Non-Competition

 

The Executive recognizes and understands that in performing the duties and responsibilities of his employment as outlined in this Agreement, he will be a key employee of the Company and will occupy a position of high fiduciary trust and confidence, pursuant to which he has developed and will develop and acquire wide experience and knowledge with respect to all aspects of the services and businesses carried on by Gran Tierra and its Member Companies and the manner in which such businesses are conducted. It is the expressed intent and agreement of the Executive and of the Company that such knowledge and experience shall be used solely and exclusively in the furtherance of the business interests of Gran Tierra and its Member Companies and not in any manner detrimental to them. The Executive therefore agrees that so long as he is employed by the Company pursuant to this Agreement he shall not engage in any practice or business in competition with the business of Gran Tierra or any of its Member Companies.

 

10.2 Confidentiality

 

The Executive further recognizes and understands that in the performance of his employment duties and responsibilities as outlined in this Agreement, he will be a key employee of the Company and will become knowledgeable, aware and possessed of all confidential and proprietary information, know-how, data, strategic studies, techniques, knowledge and other confidential information of every kind or character relating to or connected with the business or corporate affairs and operations of Gran Tierra and its Member Companies and includes, without limitation, geophysical studies and data, market data, engineering information, shareholder data, client lists, compensation rates and methods and personnel information (collectively “Confidential Information”) concerning the business of Gran Tierra and its Member Companies. The Executive therefore agrees that, except with the consent of the Board, he will not disclose such Confidential Information to any unauthorized persons so long as he is employed by the Company pursuant to this Agreement and for a period of 24 months thereafter; provided that the foregoing shall not apply to any Confidential Information which is or becomes known to the public or to the competitors of Gran Tierra or its Member Companies other than by a breach of this Agreement.

 

  

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10.3 Following Termination of Agreement

 

Subject to this provision and without otherwise restricting the fiduciary obligations imposed upon, or otherwise applicable to the Executive as a result of the Executive having been a key employee of the Company, the Executive shall not be prohibited from obtaining employment with or otherwise forming or participating in a business competitive to the business of the Company after termination of this Agreement and the Executive’s employment with the Company.

 

ARTICLE 11

CHANGES TO AGREEMENT

 

Any modifications or amendments to this Agreement must be in writing and signed by all Parties or else they shall have no force and effect.  Notwithstanding the foregoing, the Company may assign this agreement to a Member Company, without the consent of the Executive.

 

ARTICLE 12

ENUREMENT

 

This Agreement shall enure to the benefit of and be binding upon the Parties and their respective successors and assigns, including without limitation, the Executive’s heirs, executors, administrators and personal representatives.

  

      ARTICLE 13

GOVERNING LAW

 

This Agreement shall be construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein.

  

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ARTICLE 14

NOTICES

 

14.1 Notice to Executive

 

Any notice required or permitted to be given to the Executive shall be deemed to have been received if delivered personally to the Executive or sent by courier to the Executive’s home address last known to the Company.

 

14.2 Notice to Company

 

Any notice required or permitted to be given to the Company shall be deemed to have been received if delivered personally to, sent by courier, or sent by facsimile to:

 

Gran Tierra Energy Inc.

300, 611-10th Avenue S.W.

Calgary, Alberta, Canada, T2R 0B2

Fax: (403) 265-3242

Attn:  Chief Operating Officer

 

ARTICLE 15

WITHHOLDING

 

All payments made by the Company to the Executive or for the benefit of the Executive shall be less applicable withholdings and deductions.

 

ARTICLE 16

INDEPENDENT LEGAL ADVICE

 

The Executive acknowledges that the Executive has been advised to obtain independent legal advice with respect to entering into this Agreement, that he has obtained such independent legal advice or has expressly deemed not to seek such advice, and that the Executive is entering into this Agreement with full knowledge of the contents hereof, of the Executive’s own free will and with full capacity and authority to do so.

 ARTICLE 17

 

         BACKGROUND CONFIRMATION

 

The Employee recognizes and acknowledges that this Employment Agreement is conditional on the company receiving clearance to its satisfaction of the employment and education background checks conducted by First Advantage (release form attached).

 

  

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 IN WITNESS OF WHICH the Parties have duly executed this Agreement as of the date set forth below, with an effective date as of July __ 2009.

 

	
GRAN TIERRA ENERGY INC., an Alberta

corporation

	

GRAN TIERRA ENERGY INC., a Nevada 

corporation

	 
	 	 	 	 
	By: 	/s/Dana Coffield	By: 	/s/Dana Coffield	 
	 	Name: Dana Coffield	 	Name : Dana Coffield	 
	 	Title:   President and CEO	 	Title : President and CEO	 
	 	Date: July 29, 2009	 	Date: July 29, 2009	 
	 	 	 	 	 
	 	 	EXECUTIVE	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	By: 	/s/ Duncan Nightingale	 
	 	 	 	Duncan Nightingale	 
	 	 	 	Date: July 30, 2009	 

 

 

SIGNED, SEALED & DELIVERED

In the presence of:

 

 /s/ [illegible]

________________________________                                                            

                         Witness                                            

 

  

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SCHEDULE A

VICE PRESIDENT, EXPLORATION

Duties & Responsibilities

 

	
  

	
·

	
Responsible overall for design, implementation and evaluation of the company’s explorations programsconsistent with the Gran Tierra Energy’s strategic plan;

	
  

	
·

	
Responsible for providing guidance and leadership to the geoscience team in the Calgary Office;

	
  

	
·

	
Also responsible for providing guidance and leadership (on a “dotted line” reporting relationship basis), to the most senior employee responsible for exploration in Colombia, Argentina, Peru Brazil, and other operating environments involving Gran Tierra Energy;

	
  

	
·

	
Participate with the executive management team in developing and executing strategic plans, and new venture initiatives in support of the strategic plan;

	
  

	
·

	
Participate in new venture evaluations, including corporate acquisitions and mergers, asset acquisitions, and acreage awards from host governments;

	
  

	
·

	
Provide leadership to direct reports and associates inside and outside the company by exhibiting the highest standard of personal ethics and integrity.

 

10ex10_3.htm

EXHIBIT 10.3

 

 

 

December 7, 2010

 

PERSONAL & CONFIDENTIAL

Duncan Nightingale

c/o Gran Tierra Energy Inc

300, 625-11th Avenue SW

Calgary, AB T2R 0E1

Dear Duncan:

RE: EXPATRIATE ASSIGNMENT TO GRAN TIERRA ENERGY COLOMBIA LTD. (“GTEC”)

We are very pleased that you are willing and able to take on an expatriate assignment in the Bogota office of GTEC. In accordance with our discussions, this letter summarizes the terms and conditions of that assignment. You will remain an employee of Gran Tierra Energy Inc. (“GTEI”), but will be seconded to GTEC, and will be considered on an international assignment to Bogota, Colombia.

Please note that this assignment is conditional on you being granted all necessary permits and approvals to work in Colombia, including a valid Work Permit and Residency Visa by the applicable Colombia authorities. This assignment is also conditional on you complying with all Canadian and Colombia laws and regulations, including all tax and security laws and regulations.

	
  

	
1.

	
EFFECTIVE DATE – January 1st, 2011

 

	
  

	
2.

	
POSITION – Senior Manager, Planning & Project Management.  The position description is attached.  This is the same position description you discussed with Dana Coffield, Julian Garcia and I.

 

	
  

	
3.

	
DURATION – The duration of this assignment will be for a period at the discretion of GTEI, up to a maximum of 36 months.  If you and GTEI agree, your assignment in Bogota may extend beyond December  31, 2013.  However, in that event, you will automatically convert to local compensation, terms and conditions of employment effective January 01, 2014, and none of the expatriate compensation outlined in this letter will be continued after December 31, 2013.

 

	
  

	
4.

	
REPORTING TO: The President of GTEC. As a secondee to GTEC, you are required as a term of your employment to comply with all policies, practices and security protocols that apply to the employees and staff of GTEC.

 

  

Page 1 of 4

  

 

	
  

	
5.

	
COMPENSATION –

 

A. Your base salary of CDN$ 236,900.00 remains the same.   Your base salary will be reviewed on an annual basis as part of the normal salary planning process.   A hypothetical tax, as explained below in section 8 will be deducted from this base pay

 

B. Your eligibility and Short Term Incentive Bonus (STI) target of 50% of base salary remains the same.  A hypothetical tax rate of 39% will be deducted from any bonus paid because this is the highest marginal tax bracket for Alberta.  This 39% STI tax deduction is in addition to the hypothetical tax referenced below in section 8.

 

C. Your eligibility for the Long Term Incentive Plan (LTIP) remains the same.  You are responsible for all taxation implications with respect to your LTIP.

 

D. We have created an employee Benefits plan approximately equivalent to what you received under the GTE Canada Group Benefits Plan immediately prior to your assignment date.  A unique Benefits plan for yourself has been created with Norfolk Mobility Benefits of Calgary.  The premiums will be fully paid by the company.  A summary of your employee benefits coverage provided through Norfolk Mobility Benefits will be provided.

 

E. Out-of-country health care coverage provided through Medex 360.

 

F. Hardship Location Payment of 20% of annual base salary, to be reviewed annually.

 

G. Goods and Services Differential of CDN$41, 664 per year, to be reviewed annually.

 

H. Vacation of 5 weeks per year.

 

I. Leased company vehicle with escort driver trained in security and approved by GTEC security personnel and management.

 

J. A club membership at the El Rancho Club is provided by GTEI and is valued at USD$12,700 per year..

 

Attached please find the AIRINC International Compensation Worksheet which illustrates your compensation package.

 

These compensation components are based on the currently existing terms and conditions applicable to employees of your position in Canada and Colombia and will be reviewed annually. GTEI retains the right to amend, change or discontinue any policy or program as it deems necessary. The changes will apply to you in the same manner as they apply to other employees.

 

	
  

	
6.

	
BOGOTA ACCOMMODATION – GTEI will provide an accommodation allowance of CDN$ 7853/month.  This accommodation allowance is to be used by you to lease a fully furnished two bedroom apartment in Bogota.  The apartment must be chosen in conjunction with and approved by GTEC security personnel and management. You are responsible for paying for all accommodation costs relating to the apartment, including rent, electricity, gas, water, condominium fees, telephone, television, and internet.  GTEI’s only obligation in this regard is to pay you the accommodation allowance.

 

  

Page 2 of  4

  

 

	
  

	
7.

	
CALGARY PROPERTY MANAGEMENT FEES - GTEI will pay your property management fees in Calgary to a maximum of 16% of the gross rent each month for the duration of your expatriate assignment in Bogota.  In addition, GTEI will pay a one time lease management fee of CDN$500.00 and a one time advertisement fee of up to CDN$500.00.

 

	
  

	
8.

	
TAXATION– GTEI will ensure that your income tax obligations with respect to your GTEI sourced income are no greater or less than they would have been had you remained employed on your existing financial terms in Calgary.  This will be achieved through:  1) a deduction of a hypothetical income tax from your assignment income, and 2) the payment by GTEI of your tax liabilities on all company income subject to Canadian and Colombian taxation. The tax equalization will be calculated on the basis of information provided by Ernst and Young.

 

As noted above, a 39% hypothetical tax will be deducted from any STI payments made to you, and is over and above the hypothetical tax deducted on your behalf.

 

As noted above, you are responsible for all taxation implications associated with your LTIP.  LTIP tax considerations are over and above the hypothetical tax deducted on your behalf.

 

At the end of each calendar year, Ernst and Young will prepare Canada and Colombia income tax filings for you as required, and prepare a tax reconciliation with the intention of keeping you tax equalized to Canada for the duration of your assignment.  GTEI does not assume any responsibility for any other personal taxes you may be liable for in Canada, Colombia, or any other jurisdiction.  You will be expected to cooperate with Ernst and Young fully and in a timely basis in filing tax returns.

 

	
  

	
9.

	
HOME VISITS – For personal use, you will be provided CDN$6000 to be used for airfare to Calgary per 12 month period. In case of immediate family medical emergencies, you will be provided with additional return airfares to Calgary or equivalent.

 

	
  

	
10.

	
BOGOTA SETTLEMENT ALLOWANCE – You will receive a settlement allowance of one month’s current base salary. In the event that you request to terminate your Bogota assignment or your employment with GTEI is terminated for cause within one year from January 1, 2011, this settlement allowance will be prorated for the portion of the one year period that you we engaged in the assignment and the balance will be payable to GTEI and may be offset against any funds owed by GTEI to you.

 

	
  

	
11.

	
SHIPPING – As you will be on assignment on a single status basis you are not expected to move any furniture, etc.  Only your clothing and other personal effects will be shipped to Bogota on air freight by GTEI, to a maximum weight of 150 kg.

 

	
  

	
12.

	
LANGUAGE TRAINING - You will be provided with Spanish language training in Bogota to a maximum of  USD$11,200 per year.

 

  

Page 3of 4

  

 

	
  

	
13.

	
REPATRIATION – At the end of your assignment, you will be relocated back to Calgary. You will be provided with a business class airfare and all your clothing and personal effects (excluding furniture, appliances, etc.) will be shipped to Calgary, to a maximum air shipment weight of 150 kg.   A re-settlement allowance of 50% of one month’s base salary will be paid to you at that time.

 

This is the entire agreement between you and GTEI for this temporary assignment to Bogota. If you have any questions, please contact me.

 

 

Sincerely,

 

/s/ Shane O’Leary

 

Shane O’Leary

Chief Operating Officer

 

I accept the above terms and conditions: /s/ Duncan Nightingale  Date December 7, 2010

 

 

 

Attached:                      Position Description

AIRINC International Compensation Worksheet

 

 

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