EXHIBIT 10.4
SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Second Amended and Restated
Employment Agreement (“ Agreement ”) is entered
into effective as of December 31, 2008 (the “
Effective Date ”), by and between Endeavour
International Corporation, a Nevada corporation (the “
Company ”), and William L. Transier (“
Employee ”).
WHEREAS, the Employee and the
Company were parties to an employment agreement dated
February 26, 2004 (the “ Original Agreement
”), which was amended on October 9, 2006 (the “
Amendment ”), and which was amended and restated
effective as of May 29, 2008 (the “ First Amended and
Restated Agreement ”); and
WHEREAS, the Company and Employee
desire to amend and restate further the First Amended and Restated
Agreement to comply with Section 409A of the Internal Revenue
Code of 1986, as amended (the “ Code
”);
NOW, THEREFORE, in consideration of
the mutual covenants, representations, warranties, and agreements
contained herein, and for other valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties agree as
follows:
1. Effect of Agreement .
Effective as of the Effective Date, this Agreement supersedes and
replaces any pre-existing employment agreements between the Company
and the Employee, including the Original Agreement, the Amendment,
and the First Amended and Restated Agreement, except as is
otherwise referenced herein.
2. Employment . The Company
hereby employs Employee, and Employee will hereby continue his
employment by the Company, on the terms and conditions set forth in
this Agreement.
3. Term of Employment .
Subject to the provisions for earlier termination provided in this
Agreement, the term of this Agreement (the “ Term
”) shall terminate on May 31, 2011.
4. Employee’s Duties .
During the Term, Employee shall serve as Chairman, Chief Executive
Officer and President, with such duties and responsibilities as may
from time to time be assigned to him by the board of directors of
the Company (the “ Board ”), provided that such
duties are consistent with the customary duties of such position.
During the Term, Employee shall serve as a member and Chairman of
the Board. Employee agrees to devote all of his business time,
skill and attention to the business and affairs of the Company and
to use reasonable best efforts to perform faithfully and
efficiently his duties and responsibilities. Employee shall not,
either directly or indirectly, enter into any business or
employment with or for any person, firm, association or corporation
other than the Company during the Term; provided, however, that
Employee shall not be prohibited from making financial investments
in any other company or business, or, with notice to the Board,
from serving on the board of directors of any other company if such
service does not materially interfere with the performance of his
duties or responsibilities hereunder. Employee shall at all times
observe and comply with all lawful directions and instructions of
the Board.
(a) Inducement Stock . As an
inducement to Employee to enter into the Original Agreement, the
Company issued 500,000 shares (“ Inducement Stock
”) of Company restricted common stock (“ Restricted
Stock ”) to Employee as of February 26, 2004. The
Inducement Stock grants were evidenced by the forms of Inducement
Stock Agreement attached as Exhibits “A” and
“B” to the Original Agreement.
(b) Base Compensation .
Effective as of September 9, 2006, for services rendered by
Employee under this Agreement, the Company shall pay to Employee a
base salary of $800,000 per annum (“ Base Compensation
”). The Base Compensation is payable in accordance with the
Company’s customary payroll practices and subject to
customary withholdings, including share withholdings as described
in Section 15(b) hereof. The amount of Base Compensation shall
be reviewed by the Board on an annual basis as of the close of each
fiscal year of the Company and may be increased as the Board may
deem appropriate. In the event the Board (or, if established, the
compensation committee thereof) deems it appropriate to increase
Employee’s annual base salary, said increased amount shall
thereafter be the “Base Compensation.” Employee’s
Base Compensation, as increased from time to time, may not
thereafter be decreased unless agreed to by Employee. Nothing
contained herein shall prevent the Board from paying additional
compensation to Employee in the form of bonuses or otherwise during
the Term.
6. Bonus . With respect to
each full fiscal year during the Term, the Board in its sole
discretion may grant the Employee a discretionary bonus (“
Bonus ”). The target bonus for each year shall be
equal to the Base Compensation; however , the Board may
grant a maximum Bonus of up to 200% of the Base Compensation
payable in the form and in accordance with the Company’s
customary payroll practices for its annual bonuses for its
executives and subject to customary withholdings.
7. Additional Benefits . In
addition to the Base Compensation provided for in Section 5
herein, Employee shall be entitled to the following:
(a) Expenses . The Company
shall, in accordance with any rules and policies that it may
establish from time to time for executive officers, reimburse
Employee for business expenses reasonably incurred in the
performance of his duties. It is understood that Employee is
authorized to incur reasonable business expenses for promoting the
business of the Company, including reasonable expenditures for
travel, lodging, meals and client or business associate
entertainment. Request for reimbursement for such expenses must be
accompanied by appropriate documentation, and shall be reimbursed
in accordance with the Company’s rules and policies as in
effect from time to time and as set forth in Section 9(k)(iii)
below.
(b) Vacation . Employee shall
be entitled to five (5) weeks of vacation per year, without
any loss of compensation or benefits. Employee shall not be
entitled to compensation for, or to carry forward, any unused
vacation time.
2
(c) General Benefits .
Employee shall be entitled to participate in the various employee
benefit plans or programs, if any, provided to the officers of the
Company in general, including but not limited to, health, dental,
disability and life insurance plans, subject to the eligibility
requirements with respect to each of such benefit plans or
programs, and such other benefits or perquisites as may be approved
by the Board during the Term. Nothing in this paragraph shall be
deemed to prohibit the Company from making any changes in any of
the plans, programs or benefits described in this Section 7,
provided the change similarly affects all executive officers of the
Company similarly situated.
(d) Corporate Change . Upon
the occurrence of a “Corporate Change” as hereinafter
defined, Employee shall be considered as immediately and totally
vested in any and all Restricted Stock, stock options or other
similar equity or equity-based awards previously made to Employee
by the Company or its subsidiaries under a “Long Term
Incentive Plan” or other grant duly adopted by the Board or
the Compensation Committee thereof (such Restricted Stock, options
or similar awards are hereinafter collectively referred to as
“ Awards ”); provided, however, with respect to
Awards that are deferred compensation subject to Code
Section 409A, such accelerated vesting shall not cause an
acceleration of a payment or result in a change in form of payment
that would violate Code Section 409A. For purposes of this
Agreement, a “ Corporate Change ” shall occur if
(i) the Company (A) shall not be the surviving entity in
any merger, consolidation or other reorganization (or survives only
as a subsidiary of an entity other than a previously wholly-owned
subsidiary of the Company) or (B) is to be dissolved and
liquidated, and as a result of or in connection with such
transaction, the persons who were directors of the Company before
such transaction shall cease to constitute a majority of the Board,
or (ii) any person or entity, including a “group”
as contemplated by Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended, acquires or gains ownership or control
(including, without limitation, power to vote) of 30% or more of
the outstanding shares of the Company’s voting stock (based
upon voting power), and as a result of or in connection with such
transaction, the persons who were directors of the Company before
such transaction shall cease to constitute a majority of the Board,
or (iii) the Company sells all or substantially all of the
assets of the Company to any other person or entity (other than a
wholly-owned subsidiary of the Company) in a transaction that
requires shareholder approval pursuant to applicable corporate law;
or (iv) during a period of two consecutive calendar years,
individuals who at the beginning of such period constitute the
Board, and any new director(s) whose election by the Board or
nomination for election by the Company’s stockholders was
approved by a vote of at least a majority of the directors then
still in office, who either were directors at the beginning of the
two (2) year period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute a majority of the Board; or (v) any other event
that a majority of the Board, in its sole discretion, shall
determine constitutes a Corporate Change hereunder.
8. Confidential Information .
Employee, during the Term, will have access to and become familiar
with confidential information, secrets and proprietary information
concerning the business and affairs of the Company, its controlled
subsidiaries and other controlled entities, including client and
customer information, information concerning their products, patent
rights
3
and know-how, and other technical information,
business strategies and pricing information, and other confidential
and/or proprietary information (collectively, “
Confidential Information ”). Confidential Information
shall not include (i) any information that is or becomes
generally available to the public other than as a result of
Employee’s improper or unauthorized disclosure of such
information in violation of this Agreement or (ii) was within
Employee’s possession prior to its affiliation with the
Company or its controlled subsidiaries or other controlled entities
(including his affiliation with Endeavour International Operating
Company, f/k/a NSNV, Inc. prior to its acquisition by the Company).
As to such Confidential Information, Employee agrees as
follows:
(a) During the Term or at any time
following the termination of this Agreement, Employee will not,
directly or indirectly, without the prior written consent of the
Company (1) disclose or permit the disclosure of any such
Confidential Information, or (2) use, reproduce or distribute,
or make or permit any use, reproduction or distribution of,
directly or indirectly, any such Confidential Information, except
for any disclosure, use, reproduction or distribution that is
required in the course of his employment with the Company, its
controlled subsidiaries or other controlled entities.
(b) If, during the Term or at any
time following the termination of this Agreement, Employee is
requested or required (by oral question or request for information
or documents, in any legal proceeding, interrogatory, subpoena,
civil investigative demand, or similar process) to disclose any
Confidential Information, Employee agrees to notify the Company
immediately in writing of the request or requirement so that the
Company may seek an appropriate protection order or waive
compliance with the provisions of this Section. If, in the absence
of a protective order or the receipt of a waiver under this
Agreement, Employee is, on the advice of counsel, compelled to
disclose any Confidential Information to any tribunal or else stand
liable for contempt, Employee may disclose such Confidential
Information to the tribunal; provided, however, that Employee shall
use his commercially reasonable best efforts to obtain a court
order or other assurance that confidential treatment will be
accorded to such Confidential Information.
(c) Upon termination of employment
of Employee, for whatever reason, Employee shall surrender to the
Company any and all documents, manuals, correspondence, reports,
records and similar items then or thereafter coming into the
possession of Employee which contain any Confidential Information
of the Company or its controlled subsidiaries or other controlled
entities.
(d) Employee recognizes and
acknowledges that the obligations of Employee contained in
Section 8 of this Agreement are reasonable and necessary to
protect the legitimate business interests of the Company, and that
any breach or violation of any of the provisions of such Section is
likely to result in irreparable injury to the Company for which the
Company would have no adequate remedy at law. Employee agrees that
if Employee shall breach or violate Section 8 of this
Agreement, the Company shall be entitled, if it so elects, to
institute and prosecute proceedings at law or in equity, including,
but not limited to, a proceeding seeking injunctive relief, to
obtain damages with respect to such breach or violation, to enforce
the specific performance of Section 8
4
this Agreement by Employee, or to
enjoin Employee from engaging in any activity in violation of
Section 8 of this Agreement. Employee acknowledges that in the
event of any such breach or violation, the Company shall be
entitled to preliminary and permanent injunctive relief, without
the necessity of proving actual damages or posting a bond, and to
an equitable accounting of all earnings, profits, and other
benefits arising from any such breach or violation, which rights
shall be cumulative and in addition to any other rights or remedies
to which the Company may be entitled. Employee agrees that in the
event of any such violation, an action may be commenced for
preliminary or permanent injunctive relief and other equitable
relief in any federal or state court of competent jurisdiction
sitting in Harris County, Texas, or in any other court of competent
jurisdiction. Employee waives, to the fullest extent permitted by
law, any objection that Employee may now or hereafter have to such
jurisdiction or to the laying of the venue of any such suit,
action, or proceeding brought in such a court and any claim that
such suit, action or proceeding has been brought in an inconvenient
forum. Employee agrees that effective service of process may be
made upon Employee under the notice provisions contained in
Section 12 of this Agreement. Employee further agrees that the
existence of any claim or cause of action against the Company,
whether predicated upon a breach or violation by the Company of
this Agreement or any other contract or agreement between Employee
and the Company, shall not constitute or be asserted as a defense
to the enforcement by the Company to the provisions of this Section
relating to the Company’s right to injunctive or other
equitable relief for Employee’s breach or violation of
Section 8 of this Agreement.
9. Termination . This
Agreement may be terminated prior to the end of the Term as set
forth below:
(a) Resignation (other than for
Good Reason) . Employee may resign, including by reason of
retirement, his position at any time by providing written notice of
resignation to the Company in accordance with Section 12
hereof. In the event of such resignation, except in the case of
resignation for Good Reason (as defined below), this Agreement
shall terminate and Employee shall not be entitled to further
compensation pursuant to this Agreement other than payment for
(i) any unpaid Base Compensation or unpaid Bonus accrued
hereunder as of Employee’s employment termination date, and
(ii) any unpaid reasonable business expenses incurred prior to
Employee’s employment termination date, subject to the
Company’s expense reimbursement rules and policies as in
effect from time to time (the “ Accrued Amounts
”). Accrued Amounts, if any, shall be paid to Employee in
accordance with the Company’s customary payroll practices as
in effect from time to time, but in no event later than fifteen
(15) days following Employee’s termination of
employment.
(b) Death . If
Employee’s employment is terminated due to his death, this
Agreement shall terminate and the Company shall have no obligations
to Employee or his estate, beneficiaries or legal representatives
with respect to this Agreement other than payment of the Accrued
Amounts, if any. Accrued Amounts, if any, shall be paid to Employee
in accordance with the Company’s customary payroll practices
as in effect from time to time but in no event later than 15 days
following Employee’s termination of employment on account of
death. Notwithstanding the foregoing, in the event of
his
5
death, Employee shall be considered
as immediately and totally vested in any and all outstanding Awards
previously granted to Employee by Company or its subsidiaries;
provided, however, with respect to Awards that are deferred
compensation subject to Code Section 409A, such accelerated
vesting shall not cause an acceleration of a payment or result in a
change in form of payment that would violate Code
Section 409A.
(c) Discharge .
(i) The Company may terminate
Employee’s employment in the event of Employee’s
Misconduct or Disability (both as defined below
