Exhibit 10.8
AMENDED CHANGE IN CONTROL
TERMINATION BENEFITS AGREEMENT
WHEREAS, Endeavour International
Corporation, a Nevada corporation (the “ Company
”), and
(the “ Executive ”) entered into the Change in
Control and Termination Benefits Agreement on
; and
WHEREAS, the Company and Executive
desire to amend the Agreement to comply with Section 409A of
the Internal Revenue Code of 1986, as amended and the rules,
notices and regulations thereunder (the
“Code”);
NOW, THEREFORE, the Company and
Executive, for mutual agreements, covenants and warranties herein
and other good and valuable consideration, agree to amend the
Agreement in its entirety, effective December 31, 2008 (the
“ Amended Agreement ”) as follows:
1. Change in Control
. For purposes of the Amended
Agreement, a “ Change in Control ” shall be
deemed to have taken place if any of the following
occurs:
(a) the Company (i) 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
(ii) 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;
(b) any person or entity, including
a “group” as contemplated by Section 13(d)(3) of
the Exchange Act, 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;
(c) 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
(d) 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.
2. Circumstances Triggering
Receipt of Termination Benefits .
(a) Subject to Section 2(c),
the Company will provide the Executive with the benefits set forth
in Section 4 upon any termination of the Executive’s
employment:
(i) by the Company at any time
within the first 24 months after a Change in Control;
(ii) by the Executive for
“Good Reason” (as defined in Section 2(b) below)
at any time within the first 24 months after a Change in Control;
or
(iii) by the Company or the
Executive pursuant to Section 2(d).
(b) In the event of a Change in
Control, the Executive may terminate employment with the Company
and/or any subsidiary for “Good Reason,” following
notice and opportunity for remedy as set forth herein and in
Section 3. For purposes hereof, “ Good Reason
” shall mean (subject to such notice and opportunity to
remedy) the occurrence of any of the following events without the
Executive’s prior written consent:
(i) A material reduction of the
Executive’s authorities, duties, or responsibilities as an
executive and/or officer of the Company from those in effect as of
ninety (90) calendar days prior to the Change in Control,
other than an insubstantial and inadvertent reduction that is
remedied by the Company promptly after receipt of notice thereof
given by the Executive; provided, however, that any reduction in
the foregoing resulting merely from the acquisition of the Company
and its existence as a subsidiary or division of another entity
such as a change in reporting relationship or title shall not be
sufficient to constitute Good Reason;
(ii) The Company’s requiring
the Executive to be based at a location in excess of fifty
(50) miles from the location of the Executive’s
principal job location or office immediately prior to the Change in
Control; except for required travel on the Company’s business
to an extent substantially consistent with the Executive’s
then present business travel obligations;
(iii) A reduction by the Company of
the Executive’s Base Salary and/or target annual bonus
opportunity in effect on the Effective Date hereof, or as the same
shall be increased from time to time;
(iv) The failure of the Company to
obtain a satisfactory agreement from any successor to the Company
to assume and agree to perform the Company’s obligations
under this Amended Agreement, as contemplated in Section 8
(where it requires successors to accept this Amended Agreement)
herein; or
(v) A material breach of this
Amended Agreement by the Company which is not remedied by the
Company.
(c) Notwithstanding Sections 2(a)
and (b) above, no benefits shall be payable by reason of this
Amended Agreement in the event of:
(i) Termination of the
Executive’s employment with the Company and/or its
subsidiaries by reason of the Executive’s death or
Disability; provided, that, the Executive has not previously given
a valid “Notice of Termination” pursuant to
Section 3. For purposes hereof, “ Disability
” shall mean the Executive’s inability, due
to
2
physical or mental infirmity, to
perform the Executive’s material duties and responsibilities
to the Company and its subsidiaries for any period of six
consecutive months or for any period of eight months out of any
12-month period, as determined by a physician selected by the
Company or its insurers and acceptable to the Executive or the
Executive’s legal representative (such agreement as to
acceptability not to be withheld unreasonably);
(ii) Termination of the
Executive’s employment with the Company and/or its
subsidiaries on account of the Executive’s retirement without
Good Reason; provided, however, that, if at the time of such
retirement the Executive has Good Reason to terminate the
Executive’s employment hereunder, then such retirement shall
be treated hereunder as a termination of the Executive’s
employment for Good Reason and the Executive shall be entitled to
the benefits provided in Section 4 hereof;
(iii) Termination of the
Executive’s employment with the Company and its subsidiaries
for Cause. For the purposes hereof, “ Cause ”
shall mean:
(A) The Executive’s willful
failure to substantially perform his or her duties with the Company
(other than any such failure resulting from the Executive’s
Disability), after a written demand for substantial performance is
delivered to the Executive that specifically identifies the manner
in which the Committee believes that the Executive has not
substantially performed his or her duties, and the Executive has
failed to remedy the situation within fifteen (15) business
days of such written notice from the Company;
(B) Gross negligence in the
performance of the Executive’s duties which results in
material financial harm to the Company;
(C) The Executive’s conviction
of, or plea of guilty or nolo contendere, to any felony or any
other crime involving the personal enrichment of the Executive at
the expense of the Company;
(D) The Executive’s willful
engagement in conduct that is demonstrably and materially injurious
to the Company, monetarily or otherwise; or
(E) The Executive’s willful
violation of any of the covenants contained in
Section 7.
Notwithstanding the foregoing,
“Cause” shall not exist unless and until the Company
has delivered to the Executive, along with the Notice of
Termination for Cause, a copy of a resolution duly adopted by
three-quarters (3/4) of the entire Board (excluding the
Executive if the Executive is a Board member) at a meeting of the
Board called and held for such purpose (after reasonable notice to
the Executive and an opportunity for the Executive, together with
counsel, to be heard before the Board), finding that in the good
faith opinion of the Board an event (or events) set forth in
clauses (A)-(E) above has occurred and specifying the
particulars thereof in detail.
3
This Section 2(c) shall not
preclude the payment of any amounts otherwise payable to the
Executive under any of the Company’s employee benefit plans,
stock plans, programs and arrangements, which payment shall be
governed exclusively by the terms thereof.
(d) A termination of the
Executive’s employment by the Company without Cause or by the
Executive for an event that would constitute Good Reason following
a Change in Control, that occurs, in either event, prior to a
Change in Control, but occurs (i) not more than 180 days prior
to the date on which a Change in Control occurs and
(ii) (x) at the request of a third party who has
indicated an intention or taken steps reasonably calculated to
effect a Change in Control or (y) otherwise arose in
connection with, or in anticipation of, a Change in Control, shall
be deemed to be a termination or removal of the Executive without
Cause within the first 24 months after a Change in Control for
purposes of this Amended Agreement. Notwithstanding anything herein
to the contrary, for the purposes of this subsection (d) such
a Change in Control must also constitute a change in ownership of
the Company, a change in effective control of the Company or a
change in ownership of a substantial portion of the Company’s
assets within the meaning of Code Section 409A and Treasury
Regulation 1.409A-3(i)(5).
3. Notice of Termination;
Termination Date . Any
termination of the Executive’s employment with the Company
and its subsidiaries as contemplated by Section 2 shall be
communicated by written “Notice of Termination” to the
other party hereto. Any “Notice of Termination” shall
indicate the effective date of termination, which, shall be more
than 60 days after the date the Notice of Termination is delivered
(the “ Termination Date ”), the specific
provision in this Amended Agreement relied upon, and, except for a
termination pursuant to Section 2(d), will set forth in
reasonable detail the facts and circumstances claimed to provide a
basis for such termination including, if applicable, the failure by
the Company, after provision of written notice by the Executive, to
effect a remedy (to the extent curable) of any of the events set
forth in Section 2(b). Notwithstanding the foregoing, in the
case of the Executive’s resignation for Good Reason,
Termination Date shall mean the close of business on the last day
on which the Company may cure any event alleged by the Executive to
give rise to a Good Reason termination. Executive must provide the
Notice of Termination to the Company within 90 days of the events
constituting Good Reason for termination and the Company shall have
a period of 30 days after the Notice of Termination during which
the Company may remedy the condition before such termination shall
be effective. In the event the Company effects a remedy within such
30-day period and the Executive does not rescind the Notice of
Termination upon being notified of such remedy, the termination
benefits described in Section 4 hereof shall not be payable
with respect to such termination.
4. Termination
Benefits . Subject to the
conditions set forth in Section 2(a) and contingent upon the
Executive’s executing (and not revoking) the
“Release” (as defined below), the following
post-termination payments or benefits shall be paid or provided to
the Executive following the Executive’s termination of
employment:
(a) Severance Payment . The
Company shall pay to the Executive, as a severance payment, an
amount equal to the sum of (i) two times (A) the
Executive’s “Base Pay”, which shall be an amount
equal to the greater of (x) the Executive’s rate of
annual base salary (prior to any deferrals) at the Termination Date
or (y) the Executive’s rate of annual base salary (prior
to any deferrals) immediately prior to the Change in Control, and
(B) the Executive’s
4
“Incentive Pay”, which shall be an
amount equal to the average annual bonus earned by the Executive
under the Company’s incentive compensation plan or any other
annual bonus plan (whether paid currently or on a deferred basis)
during the three fiscal years of the Company immediately preceding
the fiscal year of the Company in which the Change in Control
occurred plus (ii) a pro rata portion of the Executive’s
target bonus for the fiscal year in which the Termination Date
occurs, which payment, except as provided in Section 4(d)
below, shall be made in a single lump sum on the first business day
following the expiration of the revocation period for the
Release.
(b) Health Benefits . To the
extent the Executive timely elects to continue healthcare coverage
through COBRA, the Company shall pay that portion of the COBRA
premium equal to the difference between the COBRA premium and
Executive’s monthly contribution towards health benefits that
is in effect as of the date of Executive’s termination of
employment for a period equal to 18 months following the
Termination Date; provided, that, the Company’s obligation to
provide such health benefits shall cease at the time Executive
becomes eligible for health benefits from another employer. If the
Company’s pre-tax payment of the premiums for such benefits
would cause the Executive to be taxed on the Company’s actual
cost of providing such accident and group health insurance benefits
because such benefits are “self-insured,” the Company
will pay such premiums on an after-tax basis so the premium amounts
are included in the Employee’s taxable income. With respect
to any such benefits that are taxable and not otherwise excluded
from deferred compensation under Code Section 409A, any amount
reimbursable and paid in one tax year shall not affect the amount
to be reimbursed or paid in another tax year, all reimbursements
shall be paid no later than the end of the Executive’s
taxable year following the tax year in which such expenses were
incurred and the reimbursements under this Section cannot be
substituted for any other benefit.
(c) Release . The
Company’s obligation to make the payment and provide the
benefits described in this Section 4 are conditioned expressly
on the Executive’s executing (and not revoking) a general
release of claims against the Company (as “Company” is
defined in Section 8) and its subsidiaries in a form
reasonably satisfactory to the Company (the “ Release
”). If the Executive fails to execute a Release within
forty-five (45) days following the later of (i) the
Termination Date or (ii) the date the Executive actually
receives an execution copy of such Release (which shall be
delivered to the Executive no later than five (5) business
days following the Termination Date), or if the Executive revokes
such Release within seven (7) days following execution, the
Executive shall forfeit all payments and benefits described
hereunder.
(d) Specified Employee .
Notwithstanding the foregoing, if all or any portion of the
severance payment or benefits are determined to be
“nonqualified deferred compensation” subject to
Section 409A of the Internal Revenue Code of 1986, as amended
(the “ Code ”), and the Company determines that
the Executive is a “specified employee” as defined in
Section 409A(a)(2)(B)(i) of the Code and Final Treasury
Regulations promulgated thereunder (the “ Treasury
Regulations ”) and other guidance published thereunder,
then such payment (or portion thereof) shall be accumulated and
paid on the first day of the seventh month following the
Executive’s separation from service. For purposes of this
Amended Agreement, whether the Executive is a “specified
employee” will be determined in accordance with the written
procedures adopted by the Board.
5
(e) Separation from Service .
Notwithstanding anything herein to the contrary, for purposes of
this Amended Agreement, “termination of employment”
shall mean the Executive’s “separation from
service” from the Company and its “affiliates” as
defined in Code Section 409A and Final Treasury Regulations
Section 1.409A-1(h), including the default presumptions
thereof. For purposes of this Amended Agreement, “
affiliate ” shall mean shall mean (i) any person
or entity that directly or indirectly controls, is controlled by or
is under common control with the Company and/or (ii) to the
extent provided by the Board, any person or entity in which the
Company has a significant interest. The term “ control
” (including, with correlative meaning, the terms
“controlled by” and “under common control
with”), as applied to any person or entity, means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such person or
entity, whether through the ownership of voting or other
securities, by contract or otherwise; provided, however, with
respect to any payment subject to Section 409A of the Code,
the term “affiliate” shall mean any member of the
Company’s control group within the meaning of Final Treasury
Regulations Section 1.409A-1(h)(3), as such may be modified or
amended from time to time, by applying the “at least 50
percent” provisions thereof.
5. Certain Additional Payments by
the Company .
(a) Anything in this Amended
Agreement to the contrary notwithstanding, in the event that it
shall be determined (as hereafter provided) that any payment (other
than the Gross-Up payments provided for in this Section 5) or
benefit provided by the Company or any of its subsidiaries to or
for the benefit of the Executive, whether
