EMPLOYMENT
AGREEMENT dated effective as of November 22, 2006 (this
“Agreement”), between National Energy Group, Inc. (the
“Company”), having an address at 4925 Greenville
Avenue, Suite 1400, Dallas, Texas 75206, and Mr. Bob G.
Alexander (the “Employee”), having an address at6017
Morning Dove Lane, Edmond, Oklahoma 73003.
Upon the terms
and conditions hereinafter set forth, the Company hereby agrees to
employ Employee and Employee hereby agrees to become employed by
the Company. During the Term of Employment (as hereinafter
defined), Employee shall be employed in the position of Chairman,
President and Chief Executive Officer of the Company and his
principal office of employment shall be located in Oklahoma City,
Oklahoma, and shall also serve in other positions of affiliates of
the Company as may be designated (the “Designated
Affiliates”) from time to time by the board of directors of
the Company (the “Board”), provided that such
Designated Affiliates are engaged in the business of exploration,
production or operation of natural gas and oil properties or
related businesses (collectively, the “Oil & Gas
Business”). Employee shall perform such duties as are
specified from time to time by the Company, the Board and the
Designated Affiliates, consistent with the position of Chairman,
President and Chief Executive Officer. Employee shall serve in such
capacities at the pleasure of the Board. Employee shall report to
and be under the supervision of the Board and such persons as shall
be designated from time to time by the Board.
During the Term
of Employment, Employee shall devote all of his professional
attention, on a full time basis, to the business and affairs of the
Company and the Designated Affiliates, shall use his best efforts
to advance the best interest of the Company and the Designated
Affiliates and shall comply with all of the policies of the Company
and the Designated Affiliates applicable to employees, including,
without limitation, such policies with respect to legal compliance,
conflicts of interest, confidentiality and business ethics as are
from time to time in effect; provided that such policies of
the Designated Affiliates do not result in any Securities and
Exchange Commission (“SEC”) or other jurisdictional
regulatory body compliance violations or conflicts of interest with
the policies of the Company.
During the Term
of Employment, the Employee shall not, without the prior written
consent of the Board, directly or indirectly render services to, or
otherwise act in a business or professional capacity on behalf of
or for the benefit of, any other Person (as hereinafter defined) as
an employee, advisor, independent contractor, agent, consultant,
representative or otherwise, whether or not compensated (the
“Exclusivity Obligation”).
The employment
period shall commence effective as of November 22, 2006 and
shall continue
through the
period (the “Term of Employment”) ending on
November 21, 2007 (the “Expiration Date”), unless
earlier terminated as set forth in this Agreement.
For all
services to be performed by Employee under this Agreement, during
the Term of Employment, the Employee shall be compensated in the
following manner:
The Company
will pay Employee a salary (the “Base Salary”) at an
annual rate of $1,000,000. The Base Salary shall be payable in
accordance with the normal payroll practice of the Company (but no
less frequently than bi-weekly).
Employee shall
be eligible to receive bonus compensation as determined in the sole
and absolute discretion of the Board (“Bonus
Compensation”).
All amounts
paid by the Company to Employee under or pursuant to this
Agreement, including, without limitation, the Base Salary and any
Bonus Compensation, or any other compensation or benefits, whether
in cash or in kind, shall be subject to normal withholding and
deductions imposed by any one or more local, state or federal
governments.
This Agreement
shall terminate (subject to Section 10(f) below) and the Term of
Employment shall end, on the first to occur of (each a
“Termination Event”):
(b) The
death of Employee or the total or partial disability that, in the
reasonable judgment of the Company, renders Employee, with or
without reasonable accommodation, unable to perform his essential
job functions for the Company for a period of at least 90
consecutive business days;
(c) The
discharge of Employee by the Company with or without Cause (as
hereinafter defined);
(d) The
resignation of Employee (and without limiting the effect of such
resignation, Employee agrees to provide the Company with not less
than 30 days prior written notice of his resignation);
or
(e) A
Change of Control (as hereinafter defined).
The Company may
discharge Employee at any time, for any reason or no reason, with
or without Cause, in which event Employee shall be entitled only to
such payments as are set forth in Section 5 below. As used
herein, “Cause” is defined as Employee’s:
(i) failure to (x) perform the duties assigned to him or
(y) comply with the instructions given to him;
(ii) personal misconduct or insubordination;
(iii) impairment due to alcohol or substance abuse; (iv)
conviction of a crime or being charged with a felony;
(v) violation of a federal or state securities law or
regulation; (vi) commission of an act of moral turpitude or
dishonesty relating to the performance of his duties hereunder;
(vii) failure to comply with any of the terms of this
Agreement; (viii) breach of the Exclusivity Obligation or any
of his obligations set forth in Section 6 or Section 7
below; (ix) any revocation or suspension by any state or local
authority of Employee’s required license(s) to serve in his
position(s) with the Company; or (x) any act or failure to act
by Employee which causes any regulatory authority having
jurisdiction over the Company, the Designated Affiliates or any of
their affiliates to seek any redress or remedy against the
Employee, the Company, any Designated Affiliate or any of their
affiliates. In the event Employee is discharged for Cause, prior to
Employee’s termination, the Company shall provide Employee
with written notice signed by a member of the Board of Directors
stating with specificity the reason(s), incident(s) or event(s)
underlying Employee’s discharge for Cause. For purposes of
this Agreement “Change in Control” means the
consummation of any transaction (including, without limitation, any
merger or consolidation), the result of which is that any Person,
other than Carl C. Icahn or the Related Parties, becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the
Voting Stock of the Company, measured by voting power rather than
number of shares.
In the event of
termination of Employee’s employment hereunder, all rights of
Employee under this Agreement, including all rights to
compensation, shall end and Employee shall only be entitled to be
paid the amounts set forth in this Section 5 below.
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(a)
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In
the event that the Term of Employment ends (i) for the reason
set forth in Section 4(a) above (i.e., Expiration Date), or
(ii) for the reason set forth in Section 4(d) above (i.e.
resignation), or (iii) due to the discharge of Employee by the
Company for Cause, then, in lieu of any other payments of any kind
(including, without limitation, any severance payments), Employee
shall be entitled to receive, within fifteen (15) days
following the date on which the Termination Event in question
occurred (the “Clause (a) Termination Date”) any
amounts of: (A) Base Salary due and unpaid to Employee from
the Company as of the Clause (a) Termination Date; and (B)
Bonus Compensation earned, vested, due and unpaid to Employee from
the Company as of the Clause (a) Termination Date.
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(b)
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In
the event that the Term of Employment ends (i) for the reason
set forth in Section 4(b) above (i.e., death or disability, or
(ii) due to the discharge of the Employee by the
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Company without Cause (which the
Company is free to do at any time in its sole and absolute
discretion), or (iii) for the reason set forth in Section 4(e)
above (i.e., a Change of Control) then, in lieu of any other
payments of any kind (including, without limitation, any severance
payments), Employee shall be entitled to receive, within fifteen
(15) days following the date on which the Termination Event in
question occurred (the “Clause (b) Termination
Date”):
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(i)
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any
amounts of Base Salary and previously earned Bonus Compensation,
vested, due and unpaid to Employee from the Company as of the
Clause (b) Termination Date; and
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(ii)
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a
lump-sum payment in the amount equal to the amount of Base Salary
that would have been paid Employee if Employee had remained
employed by the Company through November 21, 2007, payment of
which shall, be conditioned upon execution and delivery of a
Settlement and Release Agreement by Employee in form attached
hereto as Exhibit “A” ; provided that in
the event that the Term of Employment ends due to the death of
Employee (a) the amounts described in this
Section 4(b)(i) and (ii) shall be paid to
Employee’s spouse , Donna Alexander, upon execution and
delivery by her and by the executor of the estate of Employee of
such Settlement and Release Agreement..
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For the purpose
of this Paragraph 5, any cash Bonus Compensation shall be
deemed earned and to become vested and due on November 21,
2007; provided that Employee is employed by the Company on such
date.
During the Term
of Employment and at all times thereafter, Employee shall hold in a
fiduciary capacity for the benefit of the Company, each Designated
Affiliate and each of their affiliates, respectively, all secret or
confidential information, knowledge or data, including, without
limitation, trade secrets, identity of investments, identity of
contemplated investments, business opportunities, valuation models
and methodologies, relating to the business of the Company, the
Designated Affiliates or their affiliates, and their respective
business as, (i) obtained by Employee at any time during
Employee’s employment by the Company and (ii) not
otherwise in the public domain (“Confidential
Information”). Employee also agrees to keep confidential and
not disclose to any unauthorized Person any personal information
regarding any controlling Person of the Company, the Designated
Affiliates or any of their affiliates and any member of the
immediate family of any such Person (and all such personal
information shall be deemed “Confidential Information”
for the purposes of this Agreement). Employee shall not, without
the prior written consent of the Company: (i) except to the
extent compelled pursuant to the order of a court or other body
having jurisdiction over such matter or based upon the advice
of
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