AMENDED AND RESTATED EMPLOYMENT AGREEMENT BETWEEN TETON ENERGY CORPORATION And Jonathan Bloomfield (Employee)
Exhibit
10.1
AMENDED
AND RESTATED
BETWEEN
TETON
ENERGY CORPORATION
And
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
(Employee)
THIS EMPLOYMENT AGREEMENT
(this “Agreement”), dated as of July 1, 2009, (the “Effective Date”) is entered
into by and between Teton Energy Corporation, a Delaware corporation (the
“Company”), and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, an individual with an address at ▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, (the “Employee”) (collectively, the “Parties,”
individually, a “Party”).
W I T N E
S S E T H:
WHEREAS,
Employee has substantial experience in the Company’s business and is currently
the Company’s Executive Vice President and Chief Financial Officer;
and
WHEREAS,
the parties desire to clarify certain portions of this Agreement and to modify
certain of the benefits and obligations provided hereunder; and
WHEREAS,
the Board has determined that it is in the best interest of the Company, its
affiliates, and its stockholders to assure that the Company will have the
continued dedication of the Employee, notwithstanding the possibility, threat,
or occurrence of a Change in Control (as defined Article Seven herein);
and
WHEREAS,
the Board has determined that it is in the best interests of the Company and its
stockholders to indemnify the Employee for claims for damages arising out of or
relating to the performance of such services to the Company in accordance with
the terms and conditions set forth in this Agreement and pursuant to Delaware
law; and
WHEREAS,
as an inducement to serve and in consideration for such services, the Company
has agreed to indemnify the Employee for claims for damages arising out of or
relating to the performance of such services to the Company in accordance with
the terms and conditions set forth in a separate agreement, which
indemnification agreement is attached as an exhibit hereto and is incorporated
herein by reference; and
WHEREAS,
in order to accomplish these objectives and establish the rights, duties and
obligations of the Parties, which shall be generally stated herein and which may
be more fully stated in other agreements between the Parties, including
equity-based agreements, indemnity agreements, and other employment or incentive
related agreements as the Company or the Board may adopt from time to time, the
Board has caused the Company to enter into this Agreement;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth herein, the Parties, intending to be legally bound, hereby
agree as follows:
ARTICLE
ONE
DEFINITIONS
1. Definitions. As used in
this Agreement:
1.1 The term
“Accrued Obligations,” shall mean the sum of (1) that portion of
Employee’s Base Salary that was not previously paid to the Employee from the
last payment date through the Date of Termination, and (2) an amount equal to
twelve (12) months salary at the level of the Employee’s Base Salary then in
effect, and (3) all equity-based awards that vest pursuant to the terms of each
plan under which they were awarded.
1.2 The term
“Automatic Extension” shall have the meaning set forth in Section 2.2
herein.
1.3 The term
“Base Salary”, shall have the meaning set forth in Section 3.1
herein.
1.4 The term
“Board” shall have the meaning set forth in the recitals.
1.5 The term
“Cash Bonus” shall mean the annual cash incentive awarded to Employee each year
and approved by the Compensation Committee as identified more fully in Section
3.2 herein.
1.6 The term
“Cause” shall have the meaning set forth in Section 4.3 herein.
1.7 The term
“Common Stock” shall mean the Common Stock, par value $0.001, of the
Company.
1.8 The term
“Compensation Committee” shall mean the Compensation Committee of the Board of
Directors of the Company.
1.9 The term
“Corporate Documents” shall mean the Company’s Certificate of Incorporation, as
amended and/or its Bylaws, as amended.
1.10
The term
“Effective Date” shall have the meaning set forth in the preamble.
1.11
The term
“Good Reason” shall have the meaning set forth in Section 4.4
herein.
1.12
The term
“Initial Term” shall have the meaning set forth in Section 2.2
herein.
1.13
The term
“Severance Benefit” shall have the meaning set forth in Section 4.7(a)(i)
herein.
1.14
The term
“Target Cash Bonus” shall mean the targeted bonus for the Employee in a specific
or current fiscal year as identified more fully in Section 3.2
herein.
1.15
The term
“Without Cause” shall have the meaning set forth in Section 4.3
herein.
1.16
The term
“Without Good Reason” shall have the meaning set forth in Section 4.5
herein.
ARTICLE
TWO
POSITION
& DUTIES
2. Employment.
2.1 Title. The
Employee shall serve as the Executive Vice President and Chief Financial Officer
of the Company and agrees to perform services for the Company and such other
affiliates of the Company, as described in Section 2 herein.
2.2 Term. The
Employee’s employment shall be for an initial term of one (1) year (“Initial
Term”), commencing on the Effective Date. The Employee’s employment shall be
automatically extended on the day after the anniversary of the Effective Date
(“Automatic Extension”), and on each anniversary date thereof, for an additional
one (1) year periods; provided, however, that the
outstanding term at any time shall never be greater than one (1)
year.
2.3 Duties and
Responsibilities. The Executive shall report to the President and COO and
in his capacity as an officer of the Company shall perform such duties and
services as may be appropriate for a senior executive and as are assigned to him
by the President and COO. During the term of this Agreement Executive
shall, subject to the direction of the President and COO of the Company, oversee
and direct such assigned operations of the Company and shall perform such duties
as are customarily performed by an Executive Vice President and Chief Financial
Officer of an oil and gas exploration company such as the Company or as are
otherwise delegated to him from time to time by the President and COO or such
other matters and projects as may from time to time be reasonably assigned to
him by the President and COO.
2.4 Performance of
Duties. During the term of the Agreement, except as otherwise approved by
the President and COO or as provided below, the Executive agrees to devote his
full business time, effort, skill and attention to the affairs of the Company
and its subsidiaries, will use his best efforts to promote the interests of the
Company, and will discharge his responsibilities in a diligent and faithful
manner, consistent with sound business practices. The foregoing shall
not, however, preclude Executive from devoting reasonable time, attention and
energy in connection with the following activities, provided that such
activities do not materially interfere with the performance of his duties and
services hereunder:
(a) serving
as a director or a member of a committee of any company or organization, if
serving in such capacity does not involve any conflict with the business of the
Company or any subsidiary and such other company or organization is not in
competition, in any manner whatsoever, with the business of the Company or any
of its subsidiaries;
(b) fulfilling
speaking engagements;
(c) engaging
in charitable and community activities;
(d) managing
his personal business and investments; and
(e) any other
activity approved of by the Board. For purposes of this Agreement,
any activity specifically listed on Schedule A shall be considered as having
been approved by the Board.
2.5 Representations and
Warranties of the Employee with Respect to Conflicts, Past Employers and
Corporate Opportunities. The Employee represents and warrants
that:
(a) his
employment by the Company will not conflict with any obligations which he has to
any other person, firm or entity;
(b) he has
not brought to the Company (during the period before the signing of this
Agreement) and he will not bring to the Company any materials or documents of a
former or present employer, nor will he knowingly bring any confidential
information or property of any other person, firm or entity; and
(c) he will
not, without disclosure to and approval of the Board, directly or indirectly,
assist or have an active interest in (whether as a principal, stockholder,
lender, employee, officer, director, partner, venturer, consultant or otherwise)
in any person, firm, partnership, association, corporation or business
organization, entity or enterprise that competes with or is engaged in a
business which is substantially similar to the business of the Company: provided, however, that
ownership of not more than two percent (2%) of the outstanding securities of any
class of any publicly held entity shall not be deemed a violation of this
Section 2.5; provided,
further, that any investment specifically listed on Schedule A shall not
be deemed a violation of this Section 2.5.
2.6 Activities and Interests
with Companies Doing Business with the Company. In addition to
those activities and interests of Employee disclosed on Schedule A attached
hereto, Employee shall promptly disclose to the Board, in accordance with the
Company’s policies, full information concerning any interests, direct or
indirect, he holds (whether as a principal, stockholder, lender, Employee,
director, officer, partner, venturer, consultant or otherwise) in any business
which, as reasonably known to Employee, purchases or provides services or
products to, the Company or any of its subsidiaries, provided that the Employee
need not disclose any such interest resulting from ownership of not more than
two (2%) of the outstanding securities of any class of any publicly held
entity.
2.7 Other Business
Opportunities. Nothing in this Agreement shall be deemed to
preclude the Employee from participating in other business opportunities if and
to the extent that: (a) such business opportunities are not directly competitive
with, similar to the business of the Company, or would otherwise be deemed to
constitute an opportunity appropriate for the Company, (b) the Employee’s
activities with respect to such opportunities do not have a material adverse
effect on the performance of the Employee’s duties hereunder, and (c) the
Employee’s activities with respect to such opportunity have been fully disclosed
in writing to the Board.
2.8 Reporting
Location. For purposes of this Agreement, the Employee’s
reporting location shall be Denver, Colorado, which shall include the
metropolitan area within a 40-mile radius from the Company’s current
office.
ARTICLE
THREE
COMPENSATION
3. Compensation.
3.1 Base
Salary. Employee shall receive an annual base salary of One
Hundred Eighty-Seven Thousand, Five Hundred Dollars ($187,500.00), payable
according to the Company’s normal payroll policies and procedures, as in effect
from time to time (the “Base Salary”) and subject to all federal, state, and
municipal withholding requirements. The Base Salary shall be reviewed
by the President and COO, with input from the CEO, annually for any
increase.
3.2 Cash
Bonus. The Executive shall be eligible for a Cash Bonus equal
to an amount of up to one hundred percent (100%) of his Base Salary for each
fiscal year he is employed by the Company (pro rata for any fiscal year
consisting of less than 12 full months or with respect to which the Executive
has been employed by the Company for less than twelve (12) full
months). Each Cash Bonus shall be paid no later than the 75th day of
the fiscal year next following the fiscal year in respect of which the Cash
Bonus is awarded, unless the Executive shall elect to defer the receipt of such
Cash Bonus that may be approved by the Board from time to time.
3.3 Equity-Based
Compensation. The Employee shall be entitled to participate in
all equity-based compensation plans offered by the Company to the same extent as
provided to other Employees of the Company and as determined by the Board of
Directors.
(a) The
Employee understands that as of the date of this Agreement, the only stock-based
plan offered by the Company is the 2005 Long-Term Incentive Plan.
(b) Upon a
Change of Control, all equity-based compensation will be deemed to have vested
as of the Change of Control Effective Date (as defined Section 7.1
herein).
3.4 Participation In Benefit
Plans.
(a) Retirement
Plans. Employee shall be entitled to participate, without any
waiting or eligibility periods, in all qualified retirement plans provided to
other Employee officers and other key employees.
(b) Taxes. The
Company shall pay, on a grossed-up basis for federal, state, and local income
taxes, the amount of any excise tax payable by Employee as a result of any
payments triggered by this Agreement, or other compensation agreements between
Employee and the Company, or any of its subsidiaries and any income tax payable
by Employee as a result of any payments in Common Stock triggered by this
Agreement or other compensation agreements between Employee and the Company, or
any of its subsidiaries, except as might otherwise be provided by such benefit
plan.
(c) Employee Benefit Plans and
Insurance. The Employee shall have the right to participate in
employee benefit plans and insurance programs of the Company that the Company
may sponsor from time to time and to receive customary Company benefits, if
those benefits are so offered to other Employees of the
Company. Nothing herein shall obligate the Employee to accept such
benefits if and when they are offered.
(d) Vacation.
(i) The
Employee shall be entitled to four (4) weeks of vacation per calendar year,
which vacation level shall be reviewed by the President and COO from time to
time. No more than 1.5 times (1.5x) Employee’s authorized annual
vacation allocation may be accrued, at any given time. In the event
that Employee has reached his maximum authorized vacation allocation, accrual
will not re-commence until Employee uses some of his paid vacation credit and
thereby brings the balance below his maximum. Accrued paid vacation
credit forfeited because of an excess balance cannot be retroactively
reapplied.
(ii) Pay will
only be provided for any unused, accrued paid vacation credit at the time of
Employee’s separation from the business by the Company.
(e) Paid
Holidays. The Employee shall be entitled to such paid holidays
as are generally available to all employees. As of the date of this
Agreement, the Company’s employees are permitted to observe ten (10) paid
holidays.
(f) Reimbursement of
Expenses. Employee shall be entitled to reimbursement within a
reasonable time for all properly documented and approved expenses for
travel. The Company shall reimburse business expenses of Employee
directly related to Company business, including, but not limited to, airfare,
lodging, meals, travel expenses, medical expenses while traveling not covered by
insurance, business entertainment, expenses associated with entertaining
business persons, local expenses to governments or governmental officials,
tariffs, applicable taxes outside of the United States, special expenses
associated with travel to certain countries, supplemental life insurance or
supplemental insurance of any kind or special insurance rates or charges for
travel outside the United States (unless such insurance is being provided by the
Company), rental cars and insurance for rental cars, and any other expenses of
travel that are reasonable in nature or that have been otherwise
pre-approved. Employee shall be governed by the travel and
entertainment policy in effect at the Company.
3.5 Relocation
Expenses. In the event that Employee is required to move from
his primary residence and consents to such move, then Employee shall be provided
with relocation assistance as provided below:
(a) Housing and Temporary
Lodging. The Company will pay the costs for the Employee and
his family of house-hunting trips and the cost of transporting Employee, his
spouse, furniture, household effects, and vehicles, to the area in which the
Company will be headquartered, in the event that the Company shall move its
corporate headquarters from the Denver, Colorado metropolitan
area. In addition, the Company will pay the cost of Employee’s
travel, temporary living expenses, including housing, whether hotel or
apartment, and meals, during the period prior to Employee’s move to the city in
which the Company will be headquartered.
3.6 Severance
Benefit. In the event that Employee’s employment is
terminated, other than for Cause, Employee shall receive compensation pursuant
to Section 4.7 herein.
3.7 Payroll Procedures and
Policies. All payments required to be made by the Company to
the Employee pursuant to this Article Three shall be paid on a regular basis in
accordance with the Company’s normal payroll procedures and policies as then in
effect.
ARTICLE
FOUR
TERMINATION
OF EMPLOYMENT
4.1 Death. The Employee’s
employment shall terminate automatically upon the Employee’s death during the
Employment Term.
4.2 Disability. If the
Company determines in good faith that the Disability (as defined below) of the
Employee has occurred during the Employment Term, the Company may give the
Employee notice of its intention to terminate the Employee’s employment. In such
event, the Employee’s employment hereunder shall terminate effective on the
30th
day after receipt of such notice by the Employee (the “Disability Effective
Date”); provided, that, within the 30-day
period after such receipt, the Employee shall not have returned to full-time
performance of the Employee’s duties. For purposes of this Agreement,
“Disability” shall mean the absence of the Employee from the Employee’s duties
hereunder on a full-time basis for an aggregate of 180 days within any
given period of 270 consecutive days (in addition to any statutorily required
leave of absence and any leave of absence approved by the Company) as a result
of the incapacity of the Employee, despite any reasonable accommodation required
by law, due to bodily injury or disease or any other mental or physical illness,
which will, in the opinion of a physician selected by the Company or its
insurers and acceptable to the Employee or the Employee’s legal representative,
be permanent and continuous during the remainder of the Employee’s
life.
4.3 Termination by
Company.
(a) Termination
for Cause.
The
Company may terminate the Employee’s employment hereunder for Cause (as defined
below). For purposes of this Agreement, “Cause” shall mean:
(i) the
willful and continued failure of the Employee to perform substantially the
Employee’s duties hereunder (other than any such failure resulting from bodily
injury or disease or any other incapacity due to mental or physical illness)
after a written demand for substantial performance is delivered to the Employee
by the Board, the Chief Executive Officer, or the Chief Operating Officer of the
Company, which specifically identifies the manner in which the Board, Chief
Executive Officer, Chief Operating Officer, of the Company believes the Employee
has not substantially performed the Employee’s duties; or
(ii) the
willful engaging by the Employee in illegal conduct or gross misconduct that is
materially and demonstrably detrimental to the Company and/or its affiliated
companies, monetarily or otherwise.
For
purposes of this provision, no act, or failure to act, on the part of the
Employee shall be considered “willful” unless done, or omitted to be done, by
the Employee in bad faith or without reasonable belief that the Employee’s
action or omission was in the best interests of the Company. Any act, or failure
to act, based upon authority given pursuant to a resolution duly adopted by the
Board, upon the instructions of the Chief Executive Officer or the Chief
Operating Officer, or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Employee in good
faith and in the best interests of the Company and its affiliated companies. The
cessation of employment of the Employee shall not be deemed to be for Cause
unless and until there shall have been delivered to the Employee a copy of a
resolution duly adopted by the affirmative vote of not less than two-thirds of
the entire membership of the Board then in office at a meeting of the Board
called and held for such purpose (after reasonable notice is provided to the
Employee and the Employee is given an opportunity, together with counsel, to be
heard before the Board) finding that, in the good faith opinion of the Board,
the Employee is guilty of the conduct described in subparagraph (i) or
(ii) above, and specifying the particulars thereof in detail.
(iii) the
Employee’s conviction of, or plea of nolo contendere to, any felony of theft,
fraud, embezzlement or violent crime.
(b) Termination
Without Cause.
All
terminations by the Company that are not for Cause, shall be considered Without
Cause.
4.4 Termination by
Employee. The Employee may terminate the Employee’s employment
hereunder at any time during the Employment Term for Good Reason (as
defined below). For purposes of this Agreement, “Good Reason” shall
mean any of the following (without the Employee’s express written
consent):
(a) The
assignment to the Employee of any duties inconsistent in any respect with the
Employee’s position (including status, offices, titles and reporting
requirements), duties, functions, responsibilities or authority as contemplated
by Section 2.3 of this Agreement, or any other action by the Company that
results in a diminution in such position, duties, functions, responsibilities or
authority, excluding for this purpose an isolated, insubstantial and inadvertent
action not taken in bad faith and which is remedied by the Company promptly
after receipt of notice thereof given by the Employee;
(b) Any
failure by the Company to comply with any of the provisions of Section 2.3 of
this Agreement, other than an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Employee;
(c) The
Company’s requiring the Employee to be based at any office or location other
than as provided in Section 2.8 of this Agreement or the Company’s requiring the
Employee to travel on the Company’s or its affiliated companies’ business to a
substantially greater extent than during the three-year period immediately
preceding the Effective Date;
(d) Any
failure by the Company to provide Employee with the compensation provided for in
Article Three, which is not promptly remedied by the Company after notice
thereof given by Employee;
(e) Any
failure by the Company to comply with and satisfy Section 8.1 of this Agreement;
or
(f) Any
purported termination by the Company of the Employee’s employment hereunder
otherwise than as expressly permitted by this Agreement, and for purposes of
this Agreement, no such purported termination shall be effective.
For
purposes of this Section 4.4, any good faith determination of “Good Reason” made
by the Employee shall be conclusive.
4.5 Notice of
Termination. Any termination of the Employee’s employment hereunder by
the Company or by the Employee (other than a termination pursuant to Section
4.1) shall be communicated by a Notice of Termination (as defined below) to the
other party hereto. For purposes of this Agreement, a “Notice of Termination”
shall mean a notice which (a) indicates the specific termination provision
in this Agreement relied upon, (b) in the case of a termination for Cause
or Good Reason, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employee’s employment under
the provision so indicated, and (c) specifies the Date of Termination (as
defined in Section 4.7 below); provided, however, that
notwithstanding any provision in this Agreement to the contrary, a Notice of
Termination given in connection with a termination (i) for Cause shall be given
by the Company, or (ii) for Good Reason shall be given by the Employee, within a
reasonable period of time, not to exceed 120 days, following the occurrence
of or the discovery of the event giving rise to such right of termination. The
failure by the Company or the Employee to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Disability, Cause or
Good Reason shall not waive any right of the Company or the Employee hereunder
or preclude the Company or the Employee from asserting such fact or circumstance
in enforcing the Company’s or the Employee’s rights hereunder.
4.6 Date of Termination.
For purposes of this Agreement, the “Date of Termination” shall mean the
effective date of termination of the Employee’s employment hereunder, which date
shall be (a) if the Employee’s employment is terminated by the Employee’s
death, the date of the Employee’s death, (b) if the Employee’s employment
is terminated because of the Employee’s Disability, the Disability Effective
Date, (c) if the Employee’s employment is terminated by the Company (or
applicable affiliated company) for Cause or by the Employee for Good Reason, the
date on which the Notice of Termination is given, and (d) if the Employee’s
employment is terminated for any other reason, the date specified in the Notice
of Termination, which date shall in no event be earlier than the date such
notice is given; provided,
however, that if within 30 days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the other party
that a dispute exists concerning the termination, the Date of Termination shall
be the date on which the dispute is finally determined, either by mutual written
agreement of the parties or by a final judgment, order or decree of a court of
competent jurisdiction (the time for appeal therefrom having expired and no
appeal having been perfected).
4.7 Obligations of the Company
upon Termination.
(a) Change of Control.
If, during the employment Term, the Company (or applicable affiliated company)
shall terminate the Employee’s employment hereunder in the event of a Change of
Control:
(i) the Company shall pay to the Employee in a lump
sum the sum of (A) Employee’s Base
Salary, if any, which has been earned but not paid through the Termination Date,
(B) an amount equal to one and
three-fourths times (1.75x) Employee’s Base
Salary, (C) an amount equal to the product of (x) the greater of the Target Cash
Bonus in the then current fiscal year or the average Cash Bonus received for the
prior three (3) years; (provided, however, that if Employee has been
employed by the Company for fewer than three (3) years, then the average of the
Cash Bonus actually paid by the Company for prior period shall be used;
provided, further, that in the event the Employee has not
received a Cash Bonus then the Target Cash Bonus shall be used)
times (y) one and three-fourths
(1.75), and (D) any accrued vacation
or other pay pursuant to the Company’s vacation policy, to the extent not
previously paid or taken; provided,
further, that the benefit provided by this Section 4.7(a)(i) shall not be
available to the Employee in the event of a termination of employment other than
in the event of a Change of Control;
(ii) all
stock options, stock appreciation rights, and restricted stock shall immediately
vest;
(iii) all
stock options and stock appreciation rights shall be payable in Common
Stock;
(iv) all
outstanding performance share units shall immediately vest and
(v) the
Company shall pay, on a grossed-up basis (as determined in the same manner as
under Section 3.4(b) herein) the amount of any excise and income taxes payable
by Employee as a result of any payments in Common Stock triggered by this
Agreement, or other agreements between Employee and the Company, or any of its
subsidiaries.
To the
extent not theretofore paid or provided, the Company shall timely pay or provide
to the Employee any other amounts or benefits required to be paid or provided or
which the Employee is eligible to receive under any plan, program, policy,
practice or arrangement or contract or agreement of the Company and its
affiliated companies (such other amounts and benefits hereinafter referred to as
the “Other Benefits”).
(b) Death. If the
Employee’s employment is terminated by reason of the Employee’s death during the
employment Term, this Agreement shall terminate without further compensation
obligations to the Employee’s legal representatives under this Agreement, other
than for (i) payment of Accrued Obligations (which shall be paid to the
Employee’s estate or beneficiary, as applicable, in a lump sum in cash within
90 days of the Date of Termination) and the timely payment or settlement of
any other amount pursuant to the Other Benefits and (ii) treatment of all other
compensation under existing plans as provided by the terms and rules of those
plans; provided, that the Company and the Employee agree that Award Agreements
issued under the Company’s 2005 Long-term Incentive Plan shall continue to
provide for accelerated vesting upon a participant’s death or disability on the
same terms that those Award Agreements currently provide for such vesting for so
long as this Agreement remains in force.
(c) Disability. If the
Employee’s employment is terminated by reason of the Employee’s Disability
during the Employment Term, this Agreement shall terminate without further
compensation obligations to the Employee, other than for payment of Accrued
Obligations (which shall be paid to the Employee in a lump sum in cash within
90 days of the Date of Termination) and the timely payment or settlement of
any other amount pursuant to the Other Benefits, and (ii) treatment of all
other compensation under existing plans as provided by the terms and rules of
those plans; provided, that the Company and the Employee agree that Award
Agreements issued under the Company’s 2005 Long-term Incentive Plan shall
continue to provide for accelerated vesting upon a participant’s death or
disability on the same terms that those Award Agreements currently provide for
such vesting for so long as this Agreement remains in force.
(d) Good Reason; Other Than for
Cause or Change of Control. If, during the employment Term,
the Company (or applicable affiliated company) shall terminate the Employee’s
employment hereunder other than for Cause or as a consequence of a Change of
Control, or the Employee terminates for Good Reason, this Agreement shall
terminate without further compensation obligations to the Employee, other than
for (i) payment of Accrued Obligations (which shall be paid to the Employee
in a lump sum in cash within 90 days of the Date of Termination) and the
timely payment or settlement of any other amount pursuant to the Other Benefits
and (ii) treatment of all other compensation under existing plans as
provided by the terms and rules of those plans.
(e) Cause; Other Than for Good
Reason. If the Employee’s employment is terminated for Cause during the
employment Term, this Agreement shall terminate without further compensation
obligations to the Employee other than the obligation to pay to the Employee
Base Salary through the Date of Termination plus the amount of any compensation
previously deferred by the Employee and any accrued vacation or other pay
pursuant to the Company’s vacation policy, in each case to the extent
theretofore unpaid and to reimburse expenses pursuant to Section 3.4(g) incurred
prior to the Termination Date. If the Employee voluntarily terminates the
Employee’s employment during the Employment Term, excluding a termination either
for (i) Good Reason or (ii) a Change of Control, this Agreement shall terminate
without further compensation obligations to the Employee, other than for that
portion of Employee’s Base Salary that was not previously paid to the Employee
from the last payment date through the effective date of the Employee’s
voluntary termination plus the amount of any compensation previously deferred by
the Employee, and any accrued vacation or other pay pursuant to the Company’s
vacation policy, to the extent not previously paid, in each case to the extent
theretofore unpaid, to reimburse expenses pursuant to Section 3.4(g) incurred
prior to the Termination Date and the timely payment or provision of the Other
Benefits, as provided in any applicable plan; and the Employee shall have no
further obligations nor liability to the Company. In such case, any amounts owed
to the Employee shall be paid to the Employee in a lump sum in cash within
90 days of the Date of Termination subject to applicable laws and
regulations.
4.8 Continuation of Payments
During Disputes. The Parties agree that in the case
of:
(a) termination
which the Company contends is for Cause, but Employee claims is not for Cause;
or
(b) termination
by Employee under Section 4.4 herein,
the
Company shall continue to pay all compensation due to Employee hereunder until
the resolution of such dispute, but the Company shall be entitled to repayment
of all sums so paid, if it ultimately shall be determined by a court of
competent jurisdiction, in a final non-appealable decision, that the termination
was for Cause or such termination by Employee was not authorized under Section
4.4 herein, and all sums so repaid shall bear interest from the date on which
such court makes such determination at the Prime Rate as published in The Wall Street Journal on
the date on which such court makes such determination. Any such
reimbursement of payments by Employee shall not include any legal fees or other
loss, costs, or expenses incurred by the Company, notwithstanding any provision
of the Indemnification Agreement, which is attached as Exhibit A and is
considered a part of this Agreement.
ARTICLE
FIVE
INDEMNIFICATION
5. Indemnification. The
Employee shall be indemnified and held harmless pursuant to the terms and
conditions set forth in the Indemnification Agreement substantially in the form
attached as Exhibit
A hereto.
ARTICLE
SIX
CONFIDENTIALITY
6. Confidentially;
Non-Competition; and Non-Solicitation.
6.1 Confidentiality. In
consideration of employment by the Company and Employee’s receipt of the salary
and other benefits associated with Employee’s employment, and in acknowledgment
that (a) the Company is engaged in the oil and gas business, (b) the Company
maintains secret and confidential information, (c) during the course of
Employee’s employment by the Company such secret or confidential information may
become known to Employee, and (d) full protection of the Company’s business
makes it essential that no employee appropriate for his or her own use, or
disclose such secret or confidential information, Employee agrees that during
the time of Employee’s employment and for a period of one (1) year following the
termination of Employee’s employment with the Company, Employee agrees to hold
in strict confidence and shall not, directly or indirectly, disclose or reveal
to any person, or use for his own personal benefit or for the benefit of anyone
else, any trade secrets, confidential dealings, or other confidential or
proprietary information of any kind, nature, or description (whether or not
acquired, learned, obtained, or developed by Employee alone or in conjunction
with others) belonging to or concerning the Company or any of its subsidiaries,
except (i) with the prior written consent of the Company duly authorized by its
Board, (ii) in the course of the proper performance of Employee’s duties
hereunder, (iii) for information (x) that becomes generally available to the
public other than as a result of unauthorized disclosure by Employee or his
affiliates or (y) that becomes available to Employee on a nonconfidential basis
from a source other than the Company or its subsidiaries who is not bound by a
duty of confidentiality, or other contractual, legal, or fiduciary obligation,
to the Company, or (iv) as required by applicable law or legal
process. Notwithstanding the foregoing, this Section is not intended,
nor shall be construed, to prohibit Employee’s use of Employee’s general
knowledge, skill and experience or Employee’s inventive powers.
6.2 Non-Competition. During
Employee’s employment with the Company and for so long as Employee receives any
Severance Benefit or is receiving any Severance Amount provided under Section
4.7 of this Agreement in respect of the termination of his employment, Employee
shall not be engaged as an officer or Employee of, or in any way be associated
in a management or ownership capacity with any corporation, company, partnership
or other enterprise or venture which conducts a business which is in direct
competition with the business of the Company; provided, however, that
Employee may own not more than two percent (2%) of the outstanding securities,
or equivalent equity interests, of any class of any corporation, company,
partnership, or either enterprise that is in direct competition with the
business of the Company, which securities are listed on a national securities
exchange or traded in the over-the-counter market. For purposes of
this Agreement, if Employee is paid a lump sum Severance Amount then it shall be
deemed that Employee is continuing to receive a Severance Benefit or Severance
Amount for the number of months of Employee’s Base Salary represented by the
lump sum payment and shall be measured from the date such payment is
received. It is expressly agreed that the remedy at law for breach of
this covenant is inadequate and that injunctive relief shall be available to
prevent the breach thereof.
6.3 Non-Solicitation. Employee
also agrees that he will not, directly or indirectly, during the term of his
employment or within one (1) year after termination of his employment for any
reason, in any manner, encourage, persuade, or induce any other employee of the
Company to terminate his employment, or any person or entity engaged by the
Company to represent it to terminate that relationship without the express
written approval of the Company. It is expressly agreed that the
remedy at law for breach of this covenant is inadequate and that injunctive
relief shall be available to prevent the breach thereof.
ARTICLE
SEVEN
CHANGE
OF CONTROL
7. Certain Definitions.
7.1 Change of Control Effective
Date. The “Change of Control Effective Date” shall mean the first date
during the Change of Control Period (as defined in Section 7.2) on which a
Change of Control occurs. Notwithstanding anything in this Agreement to the
contrary, if a Change of Control occurs and if the Employee’s employment with
the Company (or applicable affiliated company) is terminated prior to the date
on which the Change of Control occurs, and if it is reasonably demonstrated by
the Employee that such termination of employment (i) was at the request of
a third party who has taken steps reasonably calculated to effect a Change of
Control or (ii) otherwise arose in connection with or anticipation of a
Change of Control, then for all purposes of this Agreement the “Change of
Control Effective Date” shall mean the date immediately prior to the date of
such termination of employment.
7.2 Change of Control
Period. The “Change of Control Period” shall mean the period commencing
on the date of this Agreement and ending on the third anniversary of such date;
provided, however, that
commencing on the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof herein
referred to as the “Renewal Date”), the Change of Control Period shall be
automatically extended so as to terminate three years after such Renewal
Date.
7.3 Change of Control.
For purposes of this Agreement, a “Change of Control” shall mean:
(a) the
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
15% or more of either (A) the then outstanding Common Shares the Company
(the “Outstanding Shares”) or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Voting Securities”); provided, however, that for
purposes of this Subsection 7.3(a) the following acquisitions shall not
constitute a Change of Control: (w) Company-sponsored recapitalization that
is approved by the Incumbent Board, as defined below; (x) a capital raise
initiated by the Company where the Incumbent Board remains for at least 548 days
after the closing date of the raise, or (y) an acquisition of another company or
asset(s) initiated by the Company and where the Company’s shareholders
immediately after the transaction own at least 51% of the equity of the combined
concern; or
(b) individuals
who, as of the date of this Agreement, constitute the Company’s Board (the
“Incumbent Board”) cease for any reason to constitute a majority of such Board
of Directors; provided,
however, that any individual becoming a director of the Company
shareholders subsequent to the date hereof whose election, or nomination for
election by the Company’s shareholders was approved by a vote of a majority of
the directors of the Company then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Company Board; or
(c) consummation
of a reorganization, merger, amalgamation or consolidation of the Company, with
or without approval by the shareholders of the Company, in each case, unless,
following such reorganization, merger, amalgamation or consolidation,
(i) more than 50% of, respectively, the then outstanding shares of common
stock (or equivalent security) of the company resulting from such
reorganization, merger, amalgamation or consolidation and the combined voting
power of the then outstanding voting securities of such company entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Shares and Outstanding
Voting Securities immediately prior to such reorganization, merger, amalgamation
or consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger, amalgamation or consolidation,
of the Outstanding Shares and Outstanding Voting Securities, as the case may be,
(ii) no Person (excluding a parent of the Company that may come into being
after the date of this Agreement through any transaction deliberately undertaken
by the Company after an affirmative vote of its Incumbent Directors and the
Company shareholders), any employee benefit plan (or related trust) of the
Company or such company resulting from such reorganization, merger, amalgamation
or consolidation, and any Person beneficially owning, immediately prior to such
reorganization, merger, amalgamation or consolidation, directly or indirectly,
15% or more of the Outstanding Shares or Outstanding Voting Securities, as the
case may be) beneficially owns, directly or indirectly, 15% or more of,
respectively, the then outstanding shares of common stock (or equivalent
security) of the company resulting from such reorganization, merger,
amalgamation or consolidation or the combined voting power of the then
outstanding voting securities of such company entitled to vote generally in the
election of directors, and (ii) a majority of the members of the board of
directors of the company resulting from such reorganization, merger,
amalgamation or consolidation were members of the Incumbent Board at the time of
the execution of the initial agreement providing for such reorganization,
merger, amalgamation or consolidation; or
(d) consummation
of a sale or other disposition of all or substantially all the assets of the
Company, with or without approval by the shareholders of the Company, other than
to a corporation or entity, with respect to which following such sale or other
disposition, (i) more than 50% of, respectively, the then outstanding
shares of common stock (or equivalent security) of such corporation or entity
and the combined voting power of the then outstanding voting securities of such
corporation or entity entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or substantially all the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Shares and Outstanding Voting Securities immediately prior to such
sale or other disposition in substantially the same proportion as their
ownership, immediately prior to such sale or other disposition, of the
Outstanding Shares and Outstanding Voting Securities, as the case may be,
(ii) no Person (excluding the Company, any employee benefit plan (or
related trust) of the Company or such corporation or entity, and any Person
beneficially owning, immediately prior to such sale or other disposition,
directly or indirectly, 15% or more of the Outstanding Shares or Outstanding
Voting Securities, as the case may be) beneficially owns, directly or
indirectly, 15% or more of, respectively, the then outstanding shares of common
stock (or equivalent security) of such corporation or entity or the combined
voting power of the then outstanding voting securities of such corporation or
entity entitled to vote generally in the election of directors, and (C) a
majority of the members of the board of directors of such corporation or entity
were members of the Incumbent Board at the time of the execution of the initial
agreement or action of the Incumbent Board providing for such sale or other
disposition of assets of the Company; or
(e) approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.
ARTICLE
EIGHT
MISCELLANEOUS
8. Miscellaneous.
8.1 Benefit. This
Agreement shall inure to the benefit of and be binding upon each of the Parties,
and their respective successors. This Agreement shall not be
assignable by any Party without the prior written consent of the other
Party. The Company shall require any successor, whether direct or
indirect, to all or substantially all the business and/or assets of the Company
to expressly assume and agree to perform, by instrument in a form reasonably
satisfactory to Employee, this Agreement and any other agreements between
Employee and the Company or any of its subsidiaries, in the same manner and to
the same extent as the Company.
8.2 Governing
Law. This Agreement shall be governed by, and construed in
accordance with the laws of the State of Colorado without resort to any
principle of conflict of laws that would require application of the laws of any
other jurisdiction; provided,
however, that Delaware law shall govern with respect to the Employee’s
rights under a Change of Control under Article Seven herein.
8.3 Counterparts. This
Agreement may be executed in counterparts and via facsimile, each of which shall
be deemed to constitute an original, but all of which together shall constitute
one and the same Agreement. Each such counterpart shall become
effective when one counterpart has been signed by each Party
thereto.
8.4 Headings. The
headings of the various articles and sections of this Agreement are for
convenience of reference only and shall not be deemed a part of this Agreement
or considered in construing the provisions thereof.
8.5 Severability. Any
term or provision of this Agreement that shall be prohibited or declared invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or declaration, without
invalidating the remaining terms and provisions hereof or affecting the validity
or enforceability of such provision in any other jurisdiction, and if any term
or provision of this Agreement is held by any court of competent jurisdiction to
be void, voidable, invalid or unenforceable in any given circumstance or
situation, then all other terms and provisions hereof, being severable, shall
remain in full force and effect in such circumstance or situation, and such term
or provision shall remain valid and in effect in any other circumstances or
situation.
8.6 Construction. Use
of the masculine pronoun herein shall be deemed to refer to the feminine and
neuter genders and the use of singular references shall be deemed to include the
plural and vice versa, as appropriate. No inference in favor of or
against any Party shall be drawn from the fact that such Party or such Party’s
counsel has drafted any portion of this Agreement.
8.7 Equitable
Remedies. The Parties hereto agree that, in the event of a
breach of this Agreement by either Party, the other Party, if not then in breach
of this Agreement, may be without an adequate remedy at law owing to the unique
nature of the contemplated relationship. In recognition thereof, in
addition to (and not in lieu of) any remedies at law that may be available to
the non-breaching Party, the non-breaching Party shall be entitled to obtain
equitable relief, including the remedies of specific performance and injunction,
in the event of a breach of this Agreement, by the Party in breach, and no
attempt on the part of the non-breaching Party to obtain such equitable relief
shall be deemed to constitute an election of remedies by the non-breaching Party
that would preclude the non-breaching Party from obtaining any remedies at law
to which it would otherwise be entitled.
8.8 Attorney’s
Fees. If any Party hereto shall bring an action at law or in
equity to enforce its rights under this Agreement, the prevailing Party in such
action shall be entitled to recover from the Party against whom enforcement is
sought its costs and expenses incurred in connection with such action (including
fees, disbursements and expenses of attorneys and costs of investigation). In
the event that Employee institutes any legal action to enforce Employee’s legal
rights hereunder, or to recover damages for breach of this Agreement, Employee,
if Employee prevails in whole or in part, shall be entitled to recover from the
Company reasonable attorneys’ fees and disbursements incurred by Employee with
respect to the claims or matters on which Employee has prevailed.
8.9 No
Waiver. No failure, delay or omission of or by any Party in
exercising any right, power or remedy upon any breach or default of any other
Party, or otherwise, shall impair any such rights, powers or remedies of the
Party not in breach or default, nor shall it be construed to be a waiver of any
such right, power or remedy, or an acquiescence in any similar breach or
default; nor shall any waiver of any single breach or default be deemed a waiver
of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any Party of any provisions of this Agreement must be
in writing and be executed by the Parties and shall be effective only to the
extent specifically set forth in such writing.
8.10
Remedies
Cumulative. All remedies provided in this Agreement, by law or
otherwise, shall be cumulative and not alternative.
8.11
Amendment. This
Agreement may be amended only by a writing signed by all of the Parties
hereto.
8.12
Entire
Contract. This Agreement and the documents and instruments
referred to herein constitute the entire contract between the parties to this
Agreement and supersede all other understandings, written or oral, with respect
to the subject matter of this Agreement.
8.13
Survival. This
Agreement shall constitute a binding obligation of the Company and any successor
thereto. Notwithstanding any other provision in this Agreement, the
obligations under Articles 5 and 6 shall survive termination of this
Agreement.
8.14
Savings
Clause. Notwithstanding any other provision of this Agreement,
if the indemnification provisions in Exhibit A hereto or
any portion thereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Company shall nevertheless indemnify Employee as to
Expenses, judgments, fines, penalties and amounts paid in settlement with
respect to any Proceeding to the full extent permitted by any applicable portion
of this Agreement that shall not have been invalidated and to the fullest extent
permitted by applicable law.
8.15
Modifications and
Waivers. Notwithstanding any other provision of this
Agreement, the indemnification provisions in Exhibit A hereto and
the Change of Control provisions Article Seven herein, may be amended from time
to time to reflect changes in Delaware law or for other reasons.
8.16
Notices. All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been given (i) when delivered by hand or
(ii) if mailed by certified or registered mail with postage prepaid, on the
third day after the date on which it is so mailed:
|
(a)
|
If to
Employee:
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
| (b) |
If to the
Company:
Teton
Energy Corporation
▇▇▇
▇▇▇▇
▇▇▇▇▇▇ – ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
President and
COO
|
or to
such other address as may have been furnished to Employee by the Company or to
the Company by Employee, as the case may be.
8.17
No
Limitation. Notwithstanding any other provision of this
Agreement, for avoidance of doubt, the parties confirm that the foregoing does
not apply to or limit Employee’s rights under Delaware law or the Company’s
Corporate Documents.
8.18
Non-Binding
Mediation. Before commencing any legal proceeding in any court
of law, any controversy arising out of or relating to this Agreement, its
enforcement or interpretation, or because of an alleged breach, default, or
misrepresentation in connection with any of its provisions, or any other
controversy arising out of Employee’s employment, including, but not limited to,
any state or federal statutory claims, shall first be submitted to non-binding
mediation in Denver, Colorado, before a sole mediator selected from Judicial
Arbitration and Mediation Services, Inc., Denver, Colorado, or its successor
(“JAMS”), or if JAMS is no longer able to supply the mediator, such mediator
shall be selected from the American Arbitration Association, provided, however,
that provisional injunctive relief may, but need not, be sought by either party
to this Agreement in a court of law while mediation proceedings are
pending
[Signatures
Follow On Next Page]
IN WITNESS WHEREOF, the
parties have set their hands and seals hereunto on the date first above
written.
| Teton Energy Corporation | EXECUTIVE | ||||
| By: |
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
|
By: |
/s/
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
|
||
| Name: |
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ ▇▇
|
Name: |
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
|
||
| Title: |
President
& COO
|
|
|||
Schedule
A
Outside
Activities
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
|
Company
or
Project
Name
|
Nature
of
Business
|
Date
Hired
or
Commenced
Involvement
|
Position
|
Compensation
|
Annual
Time Commitment, (time away from office)
|
Dated: ▇▇▇▇▇ ▇,
▇▇▇▇
▇▇▇▇▇▇▇▇: Employee: _____ Company: ______
[Employee
and Company agree that there are no outside activities]
Exhibit
A
Indemnification
Agreement
Exhibit
B
Form
of Restricted Stock Agreement