1 Schedule A
Exhibit 10.4
19 September 2014
Derek Neilson
Mansefield
Alford Aberdeenshire AB33 8NL
Re: Key Employee Retention Plan
Dear Derek:
In recognition of your continuing key role at Endeavour Energy UK Limited (the “Company”), you shall be entitled to certain bonuses upon the terms and conditions set forth in this letter (“Agreement”). This Agreement is between you and the Company.
Terms and Conditions
The Company agrees to make the following payments, in addition to your normal salary and benefits, to you, subject to the terms and conditions in this Agreement and execution and delivery of this Agreement to the Company by September 19, 2014 (the “Delivery Date”):
| 1. | Commitment Amount: If you agree to continue your employment with the Company and not resign, and your employment with the Company is not terminated for “Cause” (as hereinafter defined), before the earlier of (i) the “Transaction Date” (as defined below) or (ii) September 26, 2015, you shall be entitled to the “Commitment Amount” set forth on the attached Schedule A. Provided you return a fully executed copy of this Agreement by the Delivery Date, the Commitment Amount will be advanced to you on the next regular payroll date that follows the Delivery Date. However, if you resign your employment, or are terminated with Cause, prior to the earlier of the Transaction Date or September 26, 2015, you agree that, within ten (10) calendar days, you will pay to the Company the full amount of the Commitment Amount you received (i.e., the net amount of the Commitment Amount after reduction by all amounts withheld therefrom). You agree that the Company may recover such payment (or any part therefrom) from you by making deductions from your salary and/or any other sums owed to you by the Company, subject to applicable law. |
| 2. | Retention Bonus: If you remain an employee of the Company and do not resign, and your employment with the Company is not terminated for Cause, before the “Transaction Date” (as defined below) then you shall be paid the “Retention Bonus” in the amount set forth on the attached Schedule A. Payment of the Retention Bonus shall be made within fifteen (15) calendar days following the Transaction Date. In the event that prior to the Transaction Date your employment with Endeavor is terminated without “Cause” (as defined below), or by reason of death or permanent disability (under the Company’s group income protection plan), you shall also be entitled to the Retention Bonus, payable on the date that is thirty (30) calendar days following your termination date. Payment of a Retention Bonus on account of a termination without Cause shall be contingent on your executing and not revoking an agreement, in a form provided by the Company, granting a full release of all actual and potential claims you have or may have against the Company, or any of its affiliates (the “Release”), which shall be provided on your termination date. |
| 3. | Amount of Payments. The amount of the Commitment Amount and Retention Bonus (together, the “Payments”) are set forth on the Attached Schedule A (reduced by the amount of required income tax withholdings under PAYE and any employee National Insurance contributions (and all and any other deductions required by law). The Payments will not be taken into account to increase any benefits or compensation provided (such as calculating any pension contributions), or to continue coverage, under any other plan, program, policy or arrangement of the Company or its affiliates, except as otherwise expressly provided in such other plan, program, policy or arrangement. |
| 4. | Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below: |
“Transaction Date” means: the date of the earlier to occur of: (i) the closing date of any out of court agreement for the restructuring of Endeavour Operating Corporation’s (“Endeavour”) balance sheet, (ii) the effective date of a confirmed plan of reorganization under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) providing for the restructuring of Endeavour’s balance sheet, (iii) the closing date of a sale of all or substantially all of the assets or a majority of the outstanding stock of Endeavour in one or more transactions under section 363 of the Bankruptcy Code or pursuant to a confirmed chapter 11 plan, and (iv) the date of the entry of an order of a United States Bankruptcy Court ordering the conversion of Endeavour’s chapter 11 case to a case under chapter 7 of the Bankruptcy Code.
“Cause” means any act or omission by you which constitutes: (i) fraud, embezzlement or material, willful misconduct; (ii) any indictment for, conviction of or entry of a plea of nolo contendere to any criminal offence (other than an offence under any road traffic legislation for which a penalty of imprisonment cannot be imposed; (iii) illegal possession or use of any drug or narcotic, (iv) any violation of the Endeavour Code of Business Conduct, (v) termination for poor performance, poor attendance, misconduct or gross misconduct as described in the Endeavour UK Disciplinary and Dismissal Policy, as amended from time to time, or (vi) any other reason entitling Endeavour to dismiss you lawfully and summarily. Any determination of Cause shall be reasonably made by the management of the Company and shall be binding on you and your successors and assigns.
| 5. | Forfeiture of Rights. Because your continued performance of services is an important reason for the Payments, your rights to such Payments may be forfeited under certain circumstances described below. |
| a. | Commitment Amount: As provided above, your rights to retain the Commitment Amount will be forfeited if you resign or are terminated with Cause from your employment before the earlier of the Transaction Date or September 26, 2015. Thus, you will not forfeit your rights to retain the Commitment Amount if you die, become permanently disabled (under the Company’s group income protection plan) or are terminated without Cause before the earlier of Transaction Date or September 26, 2015. |
| b. | Retention Bonus: As provided above, your rights to receive payment of the Retention Bonus will be forfeited upon the termination of your employment prior to the Transaction Date for any reason, unless such termination is without Cause, death or permanent disability. |
You may not assign your rights under this Agreement except upon your death. The Company may assign its obligations hereunder to any successor (including any acquirer of substantially all of the assets of the Company).
This Agreement sets forth the entire understanding of the Company and you regarding any retention or incentive bonus, and may be changed only by a written agreement signed by you and the Company.
This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales. Each party irrevocably agrees that the Courts of England and Wales shall have non-exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims).
This Agreement may be executed in two or more counterparts, and by the different parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement electronically (including portable document format (pdf.)) or by facsimile shall be as effective as delivery of a manually executed counterpart of this Agreement.
To accept this Agreement, please sign where indicated below, and return on or before Friday, September 19, 2014 in a confidential envelope to Julie Ferro, 811 Main, Suite 2100, Houston, Texas 77002, via confidential facsimile at + ###-###-#### or to ***@***.
Sincerely
ENDEAVOUR ENERGY UK LIMITED
/s/Cathy Stubbs
By: Cathy Stubbs
Title: Director
ACCEPTED AND AGREED AS OF THE
DATE FIRST SET FORTH ABOVE:
/s/Derek Neilson
By: Derek Neilson
Schedule A
Commitment Amount: £100,000
Retention Bonus: £100,000
