Form Letter for Retention Bonus Agreement
EXHIBIT
99.1
Form
Letter for Retention Bonus Agreement
October
22, 2007
RE: Retention
Bonus
Dear
__________:
The
Company recognizes that the possibility of Change in Control can create
uncertainty and distraction among the employees, which may work to the detriment
of the Company and its shareholders. Accordingly, the Board of Directors
of the
Company has determined that appropriate steps should be taken to encourage
and
incent you to remain in the employ of the Company through any Change in Control
of the Company. A “Change in Control” is as defined in Exhibit A to this
letter.
Accordingly,
in consideration for your agreement to remain in the employment of the Company,
the Company agrees to pay you within two business days following each date
specified on Schedule 1 attached hereto (each a “Retention Date”) the amount
specified on Schedule 1 (the “Retention Bonus”), provided that you are in the
employ of the Company as of each such Retention Date.
Nothing
contained in this letter agreement changes your employment relationship with
the
Company and this is not a contract of employment. In addition, you are expected
to abide by all company policies and standards of conduct applicable to
employees of the Company.
In
the
event that your employment is terminated for cause, you will forfeit your
right
to receive any Retention Bonus to which you would have otherwise been entitled.
Termination for “cause” shall mean:
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(A)
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Conviction
of a felony in the conduct of your official duties or the failure
by you
to contest prosecution of a felony.
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(B)
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Disclosure
to unauthorized persons of Company information which is believed
by the
Board of Directors of the Company to be confidential which is demonstrably
and materially adverse to the
Company.
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(C)
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Willfully
engaging in illegal conduct or gross misconduct which is materially
and
demonstrably injurious to the
Company.
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(D)
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Willful
and continued failure to perform substantially your duties with
the
Company (other than for disability) after a written demand for
substantial
performance is delivered by the Board or the Chief Executive Officer
which
specifically identifies the manner in which the Board or the Chief
Executive Officer believes that you have not substantially performed
your
duties and, if the failure is one that can be cured, you do not
comply
within thirty (30) days after receipt of such
demand.
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In
the
event that you voluntarily terminate your employment with the Company prior
to a
Retention Date, you will forfeit your rights to any remaining Retention
Bonus.
If
you
accept the terms and conditions set forth in this letter, please sign and
return
the enclosed copy of this letter to the undersigned.
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AURORA
OIL & GAS CORPORATION
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By:
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Accepted
and agreed to:
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By:
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Date:
______________________________________,
2007
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EXHIBIT
A
TO RETENTION LETTER AGREEMENT
For
purposes of the Retention Bonus, a Change in Control is defined to occur
when:
the occurrence of any of the following events (but only if with respect to
the
employee, such event would constitute a change in the ownership or effective
control of the Company or in the ownership of a substantial portion of the
assets of the Company, as defined under Section 409A of the Code):
1. Change
in Stock Ownership.
Any one
person, or more than one person acting as a group, acquires ownership of
stock
of the Company that, together with stock held by such person or group, for
the
first time constitutes more than 50% of the total fair market value or total
voting power of the stock of the Company. An increase in the percentage of
stock
owned by any one person, or persons acting as a group, as a result of a
transaction in which the Company acquires its stock in exchange for property
will be treated as an acquisition of stock for purposes of this Section 1.
This
Section 1 applies only when there is a transfer or issuance of stock of the
Company and stock in the Company remains outstanding after the
transaction.
2. Change
in Effective Control.
Either
of the following occurs:
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(A)
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Any
one person, or more than one person acting as a group, acquires
(or has
acquired during the 12-month period ending on the date of the most
recent
acquisition by such person or persons) ownership of stock of the
possessing for the first time 30% or more of the total voting power
of the
stock of the Company; or
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(B)
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A
majority of the members of the Company’s Board of Directors is replaced
during any 12-month period by directors whose appointment or election
is
not endorsed by a majority of the members of the Board of Directors
before
the date of the appointment or election;
or
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3. Change
in Asset Ownership.
Any one
person, or more than one person acting as a group, acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition
by
such person or persons) assets from the Company that have a total gross fair
market value equal to or more than 40% of the total gross fair market value
of
all of the assets of the Company (without regard to any liabilities associated
with such assets) immediately before such acquisition or acquisitions. However,
a Change in Control shall not occur under this paragraph 3if assets are
transferred to:
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(A)
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a
shareholder of the Company (immediately before the asset transfer)
in
exchange for or with respect to its
stock;
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(B)
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an
entity, 50% or more of the total value or voting power of which
is owned,
directly or indirectly, by the
Company;
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(C)
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a
person, or more than one person acting as a group, that owns, directly
or
indirectly, 50% or more of the total value or voting power of all
outstanding stock of the Company;
or
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(D)
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an
entity, at least 50% of the total value or voting power of which
is owned,
directly or indirectly, by a person described in subparagraph (C)
above;
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Except
as otherwise provided in this Section 3, status under subparagraphs
(A),
(B), (C), and (D) above is determined immediately after the transfer
of
assets.
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For
purposes of this Section 3, persons will be considered to be acting as a
group
if they are owners of a corporation that enters into a merger, consolidation,
purchase or acquisition of stock or assets, or similar business transaction
with
the Company. If a person, including an entity shareholder, owns stock in
both
corporations (including the Company) that enter into a merger, consolidation,
purchase or acquisition of stock or assets, or similar transaction, such
shareholder is considered to be acting as a group with other shareholders
only
with respect to the extent of ownership in that corporation before the
transaction giving rise to the change and not with respect to the ownership
interest in the other corporation. However, persons will not be considered
to be
acting as a group solely because they purchase or own stock of the same
corporation at the same time, or as a result of the same public offering.
In
addition, persons will not be considered to be acting as a group solely because
they purchase assets of the same corporation at the same time.
SCHEDULE
1
RETENTION
BONUS
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Employee
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Date
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Amount
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October
26, 2007
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$
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December
26, 2007
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$
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February
26, 2008
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$
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April
28, 2008
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$
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