RETENTION BONUS AGREEMENT
Exhibit
10.1
This
Retention Bonus Agreement (the “Agreement”) by and
between Ignis Petroleum Group, Inc., a Nevada corporation (the
“Company”) with its principal place of business at One
Legacy Town Center, 0000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxx, Xxxxx 00000, and
___________ (the “Executive”) shall be effective as of
June 1, 2007 (the “Effective
Date").
WHEREAS,
the Board of Directors of the Company (the “Board”)
has determined that it is in the best interests of the Company and its
stockholders that certain key members of management be provided with the
appropriate incentives to cause them to remain employed by the Company pending
the Company’s reorganization;
NOW
THEREFORE, in consideration of the agreements contained herein including
the
undertakings of the parties hereto, the receipt and sufficiency of which
are
hereby acknowledged by each of the parties hereto, it is agreed as
follows:
|
1.
|
Definitions. For
purposes of this Agreement, the following words and phrases shall
have the
following meanings:
|
|
(a)
|
“Affiliate”
means, as it relates to a specified person or entity, a Person
that
directly, or indirectly through one or more intermediaries, controls,
is
controlled by, exercises a controlling influence over, or is under
common
control with, the Person specified.
|
|
(b)
|
“Cause”
means:
|
(i) Executive's
willful failure, neglect, refusal, or nonperformance, at any time, of
Executive's duties or obligations set forth in this Agreement or in Executive’s
employment agreement with the Company, if any (the “Employment
Agreement”), or a willful breach by Executive of this Agreement or
Executive’s Employment Agreement;
(ii) Executive's
conviction or no contest or guilty plea to or indictment for (or its procedural
equivalent) a felony or crime involving moral turpitude, or Executive's guilty
plea or no contest plea to a lesser included offense or crime in exchange
for
withdrawal of a felony indictment, felony charge by information, or a charged
crime involving moral turpitude, whether the charge arises under federal,
state
or local law;
(iii) Executive's
death or disability;
(iv) Executive's
failure to adhere in any material respect to any material written policy
of the
Company;
1
(v) Executive's
appropriation (or attempted appropriation) of a material business opportunity
of
the Company or any of its affiliates, including, without limitation, attempting
to secure or securing, any personal profit in connection with any transaction
entered into on behalf of the Company or any of its affiliates;
(vi) Executive's
commission of an act of fraud, illegality, theft or willful misconduct toward
the Company or any of its affiliates in the course of employment with the
Company that relates to the Company's or any of its affiliates' assets,
activities, operations or other employees;
(vii) Executive's
repeated intoxication with alcohol or drugs while on the Company's premises
during regular business hours; or
(viii) Executive's
gross incompetence that has a material adverse impact on the Company's finances
or operations or a pattern of gross incompetence of Executive, in each case
as
determined in good faith by the Board of Managers of the Company;
|
(c)
|
“Change
of Control” means,
|
(i) a
merger or consolidation approved by the Company’s stockholders in which
securities possessing more than fifty percent (50%) of the total combined
voting
power of the Company’s outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately prior
to
such transaction;
(ii) any
stockholder-approved sale, transfer or other disposition of all or substantially
all of the Company’s assets in complete liquidation or dissolution of the
Company;
(iii) any
sale of substantially all of the company’s assets pursuant to either Chapter 11
or Chapter 7 of the United States Bankruptcy Code (the
“Code”);
(iv) confirmation
of a Plan of Reorganization or a Plan of Liquidation under Chapter 11 of
the
Code;
(v) liquidation
of the Company under Chapter 7 of the Code;
(vi) the
acquisition, directly or indirectly, by any person or related group of persons
(other than the Company or a person that directly or indirectly controls,
is
controlled by or is under common control with, the Company) of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act
of
1934, as amended) of securities possessing more than fifty percent (50%)
of the
total combined voting power of the Company’s outstanding securities pursuant to
a tender or exchange offer made directly to the Company’s stockholders;
or
2
(vii) a
change in the composition of the Board over a period of six consecutive months
or less such that a majority of the Board members ceases, by reason of one
or
more contested elections for Board membership, to be comprised of individuals
who either (A) have been Board members continuously since the beginning of
such
period or (B) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members described
in
clause (A) who were still in office at the time the Board approved such election
or nomination.
|
(d)
|
“Employed
Months” means the number of days between the Effective Date
and the Transaction Date divided by
30.
|
|
(e)
|
“Good
Reason” means the Company’s breach of this Agreement or the
Employment Agreement, if any, and the continuing breach by the
Company
after receiving written notice by the Executive giving the Company
at
least 15 days to cure such breach.
|
|
(f)
|
“Monthly
Base Salary” means $[____________] the Executive’s monthly
base salary in effect on the date of this
Agreement.
|
|
(g)
|
“Person”
means any individual, corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint
venture,
estate, trust, association, organization, labor union, governmental
or
quasi-governmental authority of any nature, or other
entity.
|
|
(h)
|
“Retention
Bonus” means the Monthly Base Salary multiplied by
the number of Employed
Months.
|
|
(i)
|
“Transaction
Date” means the date upon which a Change of Control,
Reorganization or Liquidation becomes
effective.
|
|
2.
|
Payment
of Retention Bonus.
|
|
(a)
|
In
consideration for the Executive’s efforts with the Company, the Company
shall pay to the Executive a Retention Bonus in the manner and
at the
times set forth herein.
|
|
(b)
|
The
payments provided for in this Section 2 shall commence on June
1, 2007 and
will be paid as follows: (i) 25% of the Retention Bonus shall
be paid at the commencement of each month that a Retention Bonus
is due to
the Executive; and (ii) the remaining 75% shall be paid on the
earlier
of: (A) the occurrence of a Change of Control, or (B) six
months from the Effective Date. Any Retention Bonus amount that
has accrued before this Agreement has been signed shall be paid
at the
time of signing.
|
3
|
(c)
|
If
the Executive’s employment with the Company is terminated at any time
during the Term (as defined in Section 3) (i) by the Company without
Cause
or (ii) by the Executive with Good Reason, Executive will be eligible
for
and the Company will pay to the Executive any remaining unpaid
portions of
the Retention Bonus so that the Executive will receive an additional
payment of, an amount equal to (A) the Monthly Base Salary multiplied
by
six minus (B) all prior Retention Bonus payments paid under this
agreement
to the Executive. The Company shall pay any amount owed to the
Executive pursuant to this Section 2(c) within five business days
of any
such termination.
|
|
(d)
|
If
the Executive’s employment with the Company is terminated at any time
during the Term by the Company for Cause as a result of the Executive’s
death, Executive’s estate will be eligible for and the Company will pay to
the Executive’s estate any remaining unpaid portions of the Retention
Bonus so that the Executive’s estate will receive an amount equal to (i)
the Monthly Base Salary multiplied by the number of Employed Months
minus
(ii) all prior Retention Bonus payments paid to the
Executive. The Company shall pay any amount owed to the
Executive’s estate pursuant to this Section 2(d) within five business days
of any such termination.
|
|
(e)
|
Notwithstanding
the foregoing, the Company shall not be required to pay and the
Executive
shall not be eligible for a Retention Bonus (except for portions
already
paid) if the Executive’s employment with the Company is terminated at any
time during the Term (i) by the Company for Cause (other than as
a result
of the Executive’s death) or (ii) by the Executive without Good
Reason. In the event of any termination pursuant to this
Section 2(e), any amount paid to the Executive prior to such termination
may be retained by the Executive.
|
|
3.
|
Term. This
Agreement shall become effective as of the Effective Date and shall
terminate upon the earlier of the date upon which the Executive
is paid
his entire Retention Bonus, including the amount set forth in Section
2(b)(ii) above, or the date upon which the Executive’s employment with the
Company is terminated (as the case may be, the
“Term”).
|
|
4.
|
Release
of Liability. In consideration for the Company’s agreement
to make the payments provided for herein, the Company’s obligation to pay
such amounts is expressly conditioned upon Executive’s release of certain
claims as to the Company and its Affiliates from any actions, suits,
damages, demands and claims related to the period of Executive’s
employment and/or the termination of Executive’s employment, except for
the following: (a) any claims for wages, commissions, benefits,
vacation
pay, reimbursement of expenses and any and all other ordinary or
accrued
amounts owed to the Executive by the Company and its Affiliates;
and (b)
any and all claims, causes of action, demands, cross-claims,
counterclaims, rights of setoff, indemnity, contribution or subrogation
or
any other defense or claim which Executive may hold against the
Company
and its Affiliates where the Executive may be required to defend
himself
due to litigation against the
Executive.
|
4
|
5.
|
Taxes. All
payments to be made to Executive under this Agreement will be subject
to
any applicable withholding of federal, state and local income and
employment taxes.
|
|
6.
|
Section
409A. In the event that the Company determines that any
payments to which Executive becomes entitled under this Agreement
in
connection with the termination of Executive’s employment constitute
deferred compensation subject to Section 409A of the Internal Revenue
Code
of 1986, as amended, and the regulations promulgated thereunder,
the
Company promptly shall inform Executive of such determination,
and
Executive may request a delay in the receipt of any payments to
be made
pursuant to this Agreement. The Company will agree to such
delay upon receipt of a written request from
Executive.
|
|
7.
|
No
Guarantee of Employment. Nothing contained in this
Agreement shall be construed as a contract of employment between
the
Company and the Executive, or as a right of the Executive to continue
in
the employ of the Company, or as a limitation of the right of the
Company
to discharge the Executive with or without
cause.
|
|
8.
|
Successors.
|
|
(a)
|
This
Agreement shall be binding upon the Company, its successors and
assigns,
and in the event of a Change of Control of the Company or in the
event the
Company shall be merged or consolidated or otherwise combined into
one or
more other corporations or other entities, or substantially all
of its
assets are sold or otherwise transferred to one or more other corporations
or entities, this Agreement shall be binding upon the corporation
or
entity resulting from such merger or consolidation or to which
such assets
shall be sold or transferred and shall be assignable by it by way
of
transfer of assets, merger, consolidation or combination to the
same
extent as if it were the Company. Except as provided above in this
Section
8(a), this Agreement shall not be assignable by the Company or
its
successors and assigns. The Company will require any successor
or assign
(whether direct or indirect, by purchase, merger, consolidation
or
otherwise) to all or substantially all of the business and/or assets
of
the Company, by agreement in form and substance satisfactory to
the
Executive, expressly, absolutely and unconditionally to assume
and agree
to perform this Agreement in the same manner and to the same extent
that
the Company would be required to perform it if no such succession
or
assignment had taken place.
|
5
|
(b)
|
This
Agreement shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and
legatees.
|
|
9.
|
Assignment
by Executive. This Agreement shall not be assignable by the
Executive and shall not be subject to attachment, execution, pledge
or
hypothecation.
|
|
10.
|
Notice. For
the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and either delivered
in
hand or by mail by United States registered or certified mail,
return
receipt requested, postage prepaid, or by nationally recognized
overnight
courier, and shall be deemed to have been duly given the sooner
of when
actually received or three (3) days following deposit (a) in the
mail by
United States registered or certified mail, return receipt requested,
postage prepaid or (b) with a nationally recognized overnight courier,
as
follows:
|
If
to the
Company:
One
Legacy Town Center
0000
Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxx,
Xxxxx 00000
If
to the
Executive:
[________________]
0000
Xxxxxx Xxxxxxx
Xxxxx
000
Xxxxx,
XX
00000
or
to
such other address as either party may have furnished to the other in writing
in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
|
11.
|
Modification. No
provision of this Agreement may be modified, waived or discharged
unless
such waiver, modification or discharge is agreed to in writing
signed by
the Executive and the Company. No waiver by either party hereto
of, or
compliance with, any condition or provision of this Agreement to
be
performed by such party shall be deemed a waiver of any other provisions
hereof or of any similar or dissimilar provisions or conditions
at the
same or any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject
matter
hereof have been made by either party which are not set forth expressly
in
this Agreement.
|
6
|
12.
|
Validity. The
invalidity or unenforceability of any provisions of this Agreement
shall
not affect the validity or enforceability of any other provisions
of this
Agreement, which shall remain in full force and
effect.
|
|
13.
|
Governing
Law. This Agreement shall be governed by the laws of the
State of Texas without giving effect to the conflicts of law principles
thereof. The parties hereby agree that the United States Bankruptcy
Court
shall retain exclusive jurisdiction to determine any disputes under
this
Agreement during the pendency of any case filed under Chapter 7
or Chapter
11 with the United States Bankruptcy
Court).
|
|
14.
|
Entire
Agreement. This Agreement constitutes the entire
understanding of the parties, and revokes and supersedes all prior
agreements between the parties related to the payment of a Retention
Bonus
and is intended as a final expression of their agreement. Any
employment agreements, severance agreements or change of control
agreements currently in place shall remain in place and shall not
be
superseded, amended or terminated as a result of this
Agreement.
|
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
[____________________]
|
a
Nevada corporation
|
||
|
By: |
|
|
Name:
|
|||
Title:
|
7