Exhibit 10.1
EMPLOYMENT AGREEMENT
     THIS AGREEMENT is made and entered into as of the 3rd day of February,
2009, by and between MAGELLAN PETROLEUM CORPORATION, a Delaware corporation (the
“Company”), and William H. Hastings, an individual residing at 2 Thurston Lane,
Falmouth, Maine 04105 (the “Executive”).
W I T N E S S E T H
     WHEREAS, the Executive commenced employment with the Company on
December 11, 2008 (the “Effective Date”) and is current serving as its President
and Chief Executive Officer; and
     WHEREAS, the Company and the Executive (the “Parties”) desire to enter into
this agreement (the “Agreement”) setting forth the terms and conditions of the
Executive’s employment; and
     WHEREAS, the Parties are also entering into two non-qualified stock option
award agreements (the “Option Agreements”) and an indemnification agreement (the
“Indemnification Agreement”);
     NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the Parties,
intending to be legally bound, agree as follows:
1. Term of Employment.
     1.1 The Company hereby agrees to employ the Executive, and the Executive
hereby accepts employment with the Company in accordance with the terms and
provisions of this Agreement.
     1.2 The term of employment this Agreement (“Term”) shall be the period
commencing as of the Effective Date and ending on the earlier of:
(a) December 11, 2013 (the 5th anniversary of the Effective Date); or (b) the
date of termination of the Executive’s employment pursuant to Sections 5, 6 or 7
below, whichever is applicable. If not terminated earlier than December 11, 2013
in accordance with Sections 5, 6 or 7 below, the Company shall provide the
Executive written notice not less than six (6) months prior to December 11, 2013
of the Company’s intention to either (i) permit this Agreement to terminate on
such date or (ii) renew the Executive’s employment with the Company in the
offices described below in Section 2.1. If the Company notifies the Executive of
its intention to renew this Agreement, the Company and the Executive shall in
good faith negotiate the duration and other terms of the Executive’s continued
employment with the Company. Upon termination of this Agreement for any reason,
the obligations of Company under this Agreement shall cease and Employee shall
forfeit all right to receive any compensation or other benefits under this
Agreement, except the amounts described in Sections 6, 7, 8 or 9 of this
Agreement.

 

--------------------------------------------------------------------------------

 

2. Duties.
     2.1 Offices. As of the Effective Date, the Executive has assumed the
positions of President and Chief Executive Officer of the Company. It is the
intention of the Parties that during the Term hereof, the Executive will
continue to serve as President and Chief Executive Officer of the Company and
will devote substantially all of his business time and attention and best
efforts to the affairs of the Company and its subsidiaries and his duties;
provided, however, that Executive may continue to participate, on a part time
basis, as (i) a director of a floating liquefied natural gas company and (ii) as
a consultant to a methanol company (“Permitted Activities”) so long as such
Permitted Activities do not constitute an actual or potential conflict of
interest with the Company’s business in the judgment of the Board. The Executive
will have such duties as are appropriate to his position, and will have such
authority as required to enable the Executive to perform these duties.
Consistent with the foregoing, the Executive shall comply with all reasonable
instructions of the Board of Directors of the Company (the “Board”) or a
committee thereof. Nothing in this Agreement shall prevent the Executive from
(i) participating in charitable, civic, educational, professional, community or
industry affairs or, with prior written approval of the Board, serving on the
board of directors or advisory boards of other companies; and (ii) managing the
Executive’s and the Executive’s family’s personal investments so long as such
activities do not materially interfere with the performance of the Executive’s
duties hereunder or create a potential business conflict or the appearance
thereof.
     2.2 Office Location. The Company expects to relocate its principal
executive offices to Portland, Maine during the first quarter of 2009. Until the
relocation has been effectuated, the Executive shall be permitted to work from
his home in the Portland, Maine area.
     2.3 Board Service. The Executive was elected to the Company’s Board as a
Class II director of the Company, as of the Effective Date. The Board has also
determined to nominate Executive for a three-year term of office as a Company
director, commencing at the 2008 annual meeting of shareholders and expiring at
the 2011 annual meeting of shareholders. During the Term of this Agreement, the
Board shall nominate the Executive from time to time, as a director of the
Company for reelection as a Class II director, each time the members of such
Class stand for election thereafter. In addition, the Company, as the sole
stockholder of Magellan Petroleum Australia Limited (“MPAL”), will recommend to
the MPAL Board of Directors that the Executive be elected to the MPAL Board of
Directors promptly.
3. Compensation and Benefits.
     3.1 Salary. During the Term of this Agreement, the Company shall pay the
Executive a base salary at an initial annual rate of Three Hundred Thousand
Dollars ($300,000). Beginning July 1, 2009 and effective each July 1st
thereafter during the Term of this Agreement, the Executive’s salary shall be
increased by a percentage amount that shall not be less than the greater of
(i) 4% per year or (ii) the percentage increase in the Bureau of Labor
Statistics’ announced Consumer Price Index for All Urban Consumers, All Items
(the “CPI-U”), unadjusted, for the 12-month period ending on the June 30th
immediately preceding the July 1st on which such salary increase is scheduled to
take effect. The first increase to the Executive’s base salary as of July 1,
2009 shall consist of a pro rata seven (7) month portion of the increase

-2-

--------------------------------------------------------------------------------

 

described in the immediately preceding sentence. By way of example only, if the
CPI-U, unadjusted, increased during the 12-month period ending June 30, 2010, by
4.2%, then the increase for the Executive’s salary effective on July 1, 2010
shall be 4.2%. The Company may, in its sole and absolute discretion, further
increase the Executive’s base salary in light of the Executive’s performance,
inflation, changes in the cost of living and other factors deemed relevant by
the Board. The Executive’s base salary will be paid in accordance with the
standard practices for other members of senior management of the Company, but
not less frequently than monthly.
     3.2 Bonuses. During the Term hereof, the Executive will be eligible to
receive such bonus awards, if any, as shall be determined by the Board in its
sole and absolute discretion after receiving the recommendation of the
Compensation Committee.
     3.3 Equity Awards.
     (a) On the Effective Date, the Executive was granted two non-qualified
stock options (the “Stock Options”) under the Magellan Petroleum Corporation
1998 Stock Option Plan, as amended on October 24, 2007 and further amended and
restated by the Board of Directors on December 11, 2008 (the “Stock Incentive
Plan”), which Stock Options entitle the Executive to purchase an aggregate of
three million, one hundred thousand (3,100,000) shares of Common Stock of the
Company. Effective February 2, 2009, the Executive has agreed to surrender an
aggregate of 387,500 of the non-qualified stock options previously granted
to the Executive on December 11, 2008, 262,500 of which shall be deemed to come
from tranche one (time-based Options) and 125,000 of which shall be deemed to
come from tranche two (performance vesting Options) (such 387,500 options, the
“Surrendered Options”).
     (b) The terms and conditions of the Stock Options are set forth in the
Option Agreements, the form and content of which are substantially similar to
the option agreements evidencing other awards under the Stock Incentive Plan.
The Executive acknowledges and agrees that the award of the Stock Options is
expressly conditioned on the receipt of shareholder approval in accordance with
the terms of the Option Agreements, the Incentive Plan and listing standards of
the Nasdaq Stock Market, Inc.
     (c) Future awards of equity under the Incentive Plan (or any successor
plan), if any, shall only be made by the Board in its sole discretion, after
receipt of a recommendation by the Compensation Committee.
     3.4 Benefit Programs. The Executive will be entitled to participate on
substantially the same terms as other members of senior management of the
Company in all employee benefit plans and programs of the Company (other than
any severance plan, program or policy), subject to any restrictions or
eligibility requirements under such plans and programs, from time to time in
effect for the benefit of senior management of the Company, including, but not
limited to, retirement plans, profit sharing plans, group life insurance,
hospitalization and surgical and major medical coverages, short-term and
long-term disability.

-3-

--------------------------------------------------------------------------------

 

     3.5 Insurance Benefits.
          (a) During the Term hereof, the Company shall reimburse the Executive
a maximum of $8,000 per year for family health insurance coverage, which shall
consist of medical, prescription and dental benefits. Reimbursements under this
paragraph shall be made no later than the end of the year following the year in
which such expenses were incurred by the Executive. The expenses eligible for
reimbursement during the Executive’s taxable year may not affect the expenses
eligible for reimbursement in any other year, and the right to reimbursement is
not subject to liquidation or exchange for another benefit.
          (b) The Company shall purchase a long-term disability insurance policy
with coverage to age 65 for the Executive, such policy to be mutually selected
by the Company and the Employee, and shall pay the annual premiums under such
policy in an annual amount not to exceed $12,500.
          (c) In addition, the Company shall purchase a ten-year, term life
insurance policy for the Executive, such policy to be mutually selected by the
Company and the Employee, with aggregate coverage of $1.5 million and shall pay
the annual premiums under such policy in an annual amount not to exceed $3,000.
     3.6 Vacations and Holidays. During the Term of this Agreement, the
Executive will be entitled to vacation leave of four (4) weeks per year at full
pay or such greater vacation benefits as may be provided for by the Company’s
vacation policies applicable to senior management. The Executive will be
entitled to such holidays as are established by the Company for all employees.
     3.7 Automobile. The Company will provide the Executive with a leased
automobile as approved by the Board of Directors as per the Company’s
perquisites policy from time to time.
4. Business Expenses. The Executive will be entitled to prompt reimbursement for
all reasonable, documented and necessary expenses incurred by the Executive in
performing his services hereunder in accordance with the policies of the
Company, provided that the Executive properly accounts therefor in accordance
with the policies and procedures established by the Company.
5. Separation from Service. No termination shall be deemed to have occurred
under this Agreement unless there has been a “Separation from Service” as
defined under Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and the term “termination of employment” and the like shall be
construed to mean “Separation from Service” as so defined.
6. Termination of Employment by the Company.
     6.1 Termination by the Company Other Than For Disability or Cause. The
Company may terminate the Executive’s employment at any time for any reason
other than (i) by reason of the Executive’s Disability (as defined in
Section 6.2(c) hereof) or (ii) for Cause (as defined in Section 6.3(a) hereof),
by giving the Executive a written notice of termination at least thirty
(30) days before the date of termination (or such lesser notice period as the
Executive may agree to).

-4-

--------------------------------------------------------------------------------

 

In the event of such a termination of employment pursuant to this Section 6.1,
the Executive shall be entitled to receive the Severance Benefits described in
Section 9 of this Agreement.
     6.2 Termination Due to Disability.
     (a) If the Executive incurs a Disability, as defined below, the Company may
terminate the Executive’s employment by giving the Executive written notice of
termination at least thirty (30) days before the date of such termination (or
such lesser notice period as the Executive may agree to). In the event of such
termination of the Executive’s employment because of Disability, the Executive
shall be entitled to receive (i) his base salary pursuant to Section 3.1 through
the date of such termination of employment, plus his base salary for the period
of any vacation time earned but not taken for the year of termination of
employment; (ii) any other compensation and benefits to the extent actually
earned by the Executive under any other benefit plan or program of the Company
as of the date of such termination of employment, such compensation and benefits
to be paid at the normal time for payment of such compensation and benefits to
the extent not previously paid, and (iii) any reimbursement amounts owing under
Section 4 hereof.
     (b) In addition, in the event of such Disability, the Executive and/or his
designated beneficiaries shall receive the insurance benefits owed to them under
the long-term disability insurance provided by the Company under Section 3.5(b)
hereof.
     (c) For purposes of this Agreement, the term “Disability” shall mean a
“long-term disability” as defined in the policy of long-term, disability
insurance provided by the Company under Section 3.5(b) hereof.
     (d) If (i) the Executive incurs a Disability, as defined above; (ii) the
Company terminates the Executive’s employment with the Company under
Section 6.2(a) above, and (iii) the Executive ceases, at any time prior to 5th
anniversary of the Effective Date, to qualify for disability insurance payments
under the long-term disability insurance provided by the Company under
Section 3.5(b) hereof, then the Company shall, commencing on the 1st calendar
day of the month immediately following the date on which the Executive no longer
qualifies for disability insurance payments, make monthly payments to the
Executive to replace his payments under the disability insurance (each, a
“Replacement Payment”). Each Replacement Payment shall in an amount sufficient
to put the Executive in the same after-tax position (after taking into account
applicable Federal, state, local or other income taxes) that he would have been
in if he had continued to received monthly disability insurance payments. The
Company’s obligation to make monthly Replacement Payments shall continue for the
lesser of (X) twenty-four (24) months, or (Y) the number of months then
remaining prior to the 5th anniversary of the Effective Date.
     6.3 Termination for Cause.
     (a) The Company may terminate the Executive’s employment immediately for
Cause for any of the following reasons: (i) an act or acts of dishonesty or
fraud by the Executive relating to the performance of his services to the
Company; (ii) a breach by the Executive of his duties or responsibilities under
this Agreement resulting in significant demonstrable injury to the Company or
any of its subsidiaries; (iii) the Executive’s conviction of a felony or any
crime

-5-

--------------------------------------------------------------------------------

 

involving moral turpitude; (iv) the Executive’s material failure (for reasons
other than death, illness, injury or Disability) to perform his duties under
this Agreement or insubordination (defined as refusal to execute or carry out
the lawful and ethical directions from the Board or its duly appointed
designees) where the Executive has been given written notice of the acts or
omissions constituting such failure or insubordination and the Executive has
failed to cure such conduct, where susceptible to cure, within ten days
following such notice; or (v) a breach by the Executive of any provision of any
material policy of the Company or any of his obligations under Section 14 of
this Agreement.
     (b) The Company shall exercise its right to terminate the Executive’s
employment for Cause by giving the Executive written notice of termination
specifying in reasonable detail the circumstances constituting such Cause. In
the event of such termination of the Executive’s employment for Cause, the
Executive shall be entitled to receive only (i) his base salary pursuant to
Section 3.1 earned through the date of such termination of employment plus his
base salary for the period of any vacation time earned but not taken for the
year of termination of employment, such base salary to be paid in a lump sum no
later than the next payroll date following the Executive’s date of termination
to the extent not previously paid; (ii) any other compensation and benefits to
the extent actually earned by the Executive under any other benefit or bonus
plan or program of the Company as of the date of such termination of employment,
such compensation and benefits to be paid at the normal time for payment of such
compensation and benefits to the extent not previously paid; and (iii) any
reimbursement amounts owing under Section 4 hereof.
7. Termination of Employment by the Executive.
     (a) Good Reason. The Executive may terminate his employment for Good Reason
by giving the Company a written notice of termination at least 30 days before
the date of such termination (or such lesser notice period as the Company may
agree to) specifying in reasonable detail the circumstances constituting such
Good Reason. In the event of the Executive’s termination of his employment for
Good Reason, the Executive shall be entitled to receive the Severance Benefits
described in Section 9 of this Agreement. For purposes of this Agreement, “Good
Reason” shall mean, without the Executive’s written consent: (i) a material
negative change in the scope of the authority, functions, duties or
responsibilities of Executive’s employment from that which is contemplated by
this Agreement; provided that a change in scope solely as a result of the
Company no longer being a public company or becoming a subsidiary of another
corporation shall not constitute Good Reason; (ii) any reduction in the
Executive’s base salary under Section 3.1 hereof; (iii) the Company materially
changing the geographic location in which the Executive must perform services
from the Portland, Maine metropolitan area; or (iv) any material breach by the
Company of any provision of this Agreement without the Executive having
committed any material breach of the Executive’s obligations hereunder
(including Section 14 hereof), in each case of (i), (ii), (iii) or (iv), which
breach is not cured by the Company within thirty (30) days following written
notice thereof to the Company of such breach. If an event constituting a ground
for termination of employment for Good Reason occurs, and the Executive fails to
give notice of termination within sixty (60) days after the occurrence of such
event, the Executive shall be deemed to have waived his right to terminate
employment for Good Reason in connection with such event (but not for any other
event for which the sixty (60) day period has not expired). In addition,
prospective changes to employee

-6-

--------------------------------------------------------------------------------

 

benefits for future employment made on an across-the-board basis to all
similarly situated executives of the Company and its subsidiaries shall not be
considered Good Reason.
     (b) Other. The Executive may terminate his employment at any time and for
any reason, other than pursuant to subsection (a) above, by giving the Company a
written notice of termination to that effect at least sixty (60) days before the
date of termination (or such lesser notice period as the Company may agree to);
provided, however, that the Company following receipt of such notice from the
Executive may elect to have the Executive’s employment terminate immediately
following its receipt of such notice. In the event of the Executive’s
termination of his employment pursuant to this subsection (b), the Executive
shall be entitled to receive only: (i) his base salary pursuant to Section 3.1
earned through the date of such termination of employment plus his base salary
for the period of vacation time earned but not taken for the year of termination
of employment, such base salary to be paid in a lump sum no later than the next
payroll date following the Executive’s date of termination to the extent not
previously paid; (ii) any other compensation and benefits to the extent actually
earned by the Executive under any other benefit or bonus plan or program of the
Company as of the date of such termination of employment, such compensation and
benefits to be paid at the normal time for payment of such compensation and
benefits to the extent not previously paid; and (iii) any reimbursement amounts
owing under Section 4 hereof.
8. Termination of Employment By Death.
     (a) In the event of the death of the Executive during the course of his
employment hereunder, the Executive’s estate (or other person or entity having
such entitlement pursuant to the terms of the applicable plan or program) shall
be entitled to receive: (i) the Executive’s base salary pursuant to Section 3.1
hereof earned through the date of the Executive’s death plus the Executive’s
base salary for the period of vacation time earned but not taken for the year of
the Executive’s death, such base salary to be paid in a lump sum no later than
the next payroll date following the Executive’s date of termination to the
extent not previously paid; (ii) any other compensation and benefits to the
extent actually earned by the Executive under any other benefit plan or program
of the Company as of the date of such termination of employment, such
compensation and benefits to be paid at the normal time for payment of such
compensation and benefits to the extent not previously paid; and (iii) any
reimbursement amounts owing under Section 4 hereof.
     (b) In addition, in the event of such death, the Executive’s beneficiaries
shall receive the insurance benefits owed to them under the term life insurance
provided by the Company under Section 3.5(c) hereof and any other benefits owed
to them under the Company’s employee benefit plans.
9. Severance Benefits Upon Termination Without Cause or For Good Reason. If at
any time prior to the end of the Term of this Agreement, the Executive’s
employment hereunder shall terminate because of termination by the Company
pursuant to Section 6.1, or because of termination by the Executive for Good
Reason pursuant to Section 7(a), then the Executive shall be entitled to the
following:

-7-

--------------------------------------------------------------------------------

 

     (a) The Company shall pay to the Executive his base salary pursuant to
Section 3.1 hereof earned through the date of such termination of employment in
a lump sum no later than the next payroll date following the Executive’s date of
termination to the extent not previously paid, and any other compensation and
benefits to the extent actually earned by the Executive under any benefit or
bonus plan or program of the Company as of the date of such termination of
employment, any such compensation and benefits to be paid at the normal time for
payment of such compensation and benefits to the extent not previously paid.
     (b) The Company shall pay the Executive any reimbursement amounts owing
under Section 4 hereof.
     (c) The Company shall pay to the Executive a severance benefit (the
“Severance Benefit”). The Severance Benefit shall equal the amount of base
salary that the Executive would have received if he remained employed for the
balance of the Term, based upon his then-current base salary without further
increase. However, in no event shall the Severance Benefit by less than the
amount of base salary that the Executive would have received if he remained
employed for twenty-four (24) months, based upon his then-current salary without
further increase. The amount of the Severance Benefit as so determined shall be
divided into twenty-four (24) equal installments. Payment of such installments
shall be made as follows:
(i) payment shall commence on the first (1st) date of the seventh (7th) month
following the Executive’s Separation from Service. The amount of the first
payment shall equal the first seven (7) such installments.
(ii) subsequent payments shall be made on the first day of each succeeding month
for the balance of the twenty-four (24) month period.
     (d) The Company’s obligation to provide the severance benefits set forth in
Sections 9(c) upon the Executive’s termination of employment without Cause or
for Good Reason, shall be subject to (i) the Executive’s compliance with the
provisions of Section 14 hereof; (ii) delivery to the Company of the Executive’s
resignation from all officer, directorships and fiduciary positions with the
Company, its subsidiaries and employee benefit plans; and (iii) the Executive’s
execution without revocation of a valid Termination, Voluntary Release and
Waiver of Rights Agreement, in substantially the form attached to this Agreement
as Exhibit A (the “Release”).
10. Golden Parachute Excise Tax.
     (a) In the event that any payment or benefit received or to be received by
the Executive pursuant to this Agreement or any other plan, program or
arrangement of the Company or any of its affiliates would constitute an “excess
parachute payment” within the meaning of Section 280G of the Code (“Excess
Parachute Payment”), then the payments under this Agreement shall be reduced (by
the minimum possible amounts) until no amount payable to the Executive under
this Agreement constitutes an Excess Parachute Payment; provided, however, that
no such reduction shall be made if the net after-tax payment (after taking into
account Federal, state, local or other income and excise taxes) to which the
Executive would otherwise be entitled without such reduction would be greater
than the net after-tax payment

-8-

--------------------------------------------------------------------------------

 

(after taking into account Federal, state, local or other income and excise
taxes) to the Executive resulting from the receipt of such payments with such
reduction. If, as a result of subsequent events or conditions (including a
subsequent payment or absence of a subsequent payment under this Agreement or
other plan, program or arrangement of the Company or any of its affiliates), it
is determined that payments under this Agreement have been reduced by more than
the minimum amount required to prevent any payments from constituting an Excess
Parachute Payment, then an additional payment shall be promptly made to the
Executive in an amount equal to the additional amount that can be paid without
causing any payment to constitute an Excess Parachute Payment.
     (b) All determinations required to be made under this Section 10 shall be
made by a nationally recognized independent accounting firm mutually agreeable
to the Company and the Executive (the “Accounting Firm”) which shall provide
detailed supporting calculations to the Company and the Executive as requested
by the Company or the Executive. All fees and expenses of the Accounting Firm
shall be borne solely by the Company and shall be paid by the Company upon
demand of the Executive as incurred or billed by the Accounting Firm. All
determinations made by the Accounting Firm pursuant to this Section 10 shall be
final and binding upon the Company and the Executive.
     (c) In the event that a reduction is required to be made pursuant to this
Section 10, then the Severance Benefit (and the corresponding installment
payments) shall be reduced to the extent necessary to comply with this
Section 10.
11. Entitlement to Other Benefits, Plans or Awards. Except as otherwise provided
in this Agreement, this Agreement shall not be construed as limiting in any way
any rights or benefits that the Executive or his spouse, dependents or
beneficiaries may have pursuant to any other employee benefit plan or program of
the Company. All benefits, including, without limitation, stock options, stock
appreciation rights, restricted stock units and other awards under the Company’s
benefits, plans or programs, shall be subject to the terms and conditions of the
plan or arrangement under which such benefits accrue, are granted or are
awarded. In addition, nothing herein shall be construed to prevent the Company
from amending, altering, eliminating or reducing any benefits, plans or programs
so long as the Executive continues to receive compensation and benefits
consistent with those described in Section 3 hereof.
12. Advisory Expenses. The Company hereby agrees to reimburse the Executive, on
an as-incurred basis, for his reasonable out-of-pocket expenses as determined by
the Board’s Compensation Committee incurred in negotiating and executing this
Agreement, the Option Agreements and the Indemnification Agreement, including
the reasonable fees of the Executive’s legal counsel and tax advisors during
2008 and 2009. Such reimbursements shall be made promptly and in no event later
than the year following the year in which the expense is incurred. This right of
reimbursement is not subject to liquidation or exchange for another benefit. The
amount of expenses eligible for reimbursement during any year may not affect the
expenses eligible for reimbursement in any other year.
13. Officer and Director Protections. As required by the Company’s Restated
Certificate of Incorporation, the Company shall enter into its customary
Indemnification Agreement with the Executive under which the Company agrees to
indemnify the Executive to the fullest extent

-9-

--------------------------------------------------------------------------------

 

allowed under Delaware law for any claims related to the Executive’s service to
the Company as President, Chief Executive Officer and as a director.
14. Executive’s Obligations.
     (a) Confidentiality. The Executive agrees that he shall not, directly or
indirectly, use, make available, sell, disclose or otherwise communicate to any
person, other than in the course of the Executive’s employment and for the
benefit of the Company, either during the period of the Executive’s employment
or at any time thereafter, any nonpublic, proprietary or confidential
information, knowledge or data relating to the Company, any of its subsidiaries,
affiliated companies or businesses, which shall have been obtained by the
Executive during the Executive’s employment by the Company. The foregoing shall
not apply to information that (i) was known to the public prior to its
disclosure to the Executive; (ii) becomes known to the public subsequent to
disclosure to the Executive through no wrongful act of the Executive or any
representative of the Executive; or (iii) the Executive is required to disclose
by applicable law, regulation or legal process (provided that the Executive
provides the Company with prior notice of the contemplated disclosure and
reasonably cooperates with the Company at its expense in seeking a protective
order or other appropriate protection of such information). Notwithstanding
clauses (i) and (ii) of the preceding sentence, the Executive’s obligation to
maintain such disclosed information in confidence shall not terminate where only
portions of the information are in the public domain.
     (b) Non-Solicitation. In the event that the Executive receives Severance
Benefits under Section 9 of this Agreement, the Executive agrees that for the
two (2) year period following the date of termination hereof the Executive will
not, directly or indirectly, individually or on behalf of any other person,
firm, corporation or other entity, knowingly solicit, aid or induce any
managerial level employee of the Company or any of its subsidiaries or
affiliates to leave such employment in order to accept employment with or render
services to or with any other person, firm, corporation or other entity
unaffiliated with the Company or knowingly take any action to materially assist
or aid any other person, firm, corporation or other entity in identifying or
hiring any such employee (provided, that the foregoing shall not be violated by
general advertising not targeted at Company employees nor by serving as a
reference for an employee with regard to an entity with which the Executive is
not affiliated). For the avoidance of doubt, if a managerial level employee on
his or her own initiative contacts the Executive for the primary purpose of
securing alternative employment, any action taken by the Executive thereafter
shall not be deemed a breach of this Section 14(b).
     (c) Non-Competition. The Executive acknowledges that the Executive performs
services of a unique nature for the Company that are irreplaceable, and that the
Executive’s performance of such services to a competing business will result in
irreparable harm to the Company. Accordingly, in the event that the Executive
receives Severance Benefits under Section 9 of this Agreement, the Executive
agrees that for a period of two (2) years following the date of termination, the
Executive will not, directly or indirectly, become connected with, promote the
interest of, or engage in any other business or activity competing with the
business of the Company within the geographical area in which the business of
the Company is conducted. The Executive specifically acknowledges that the
geographic area to which the covenants contained in this Section 14(c) shall
apply everywhere in the world (which discrete

-10-

--------------------------------------------------------------------------------

 

geographic locations shall be identified by the energy resource basins involved,
not the country or political subdivision) where the Company or its subsidiaries
(i) own or otherwise hold oil, gas or other mineral resources or assets;
(ii) are otherwise actively engaged in the business of extracting and selling
oil, gas or other mineral resources or assets, or (iii) have definitive plans
for (i) or (ii) within the twelve (12) months following the date of the
Executive’s termination of employment with the Company. Notwithstanding the
foregoing, the Executive shall not be prohibited from engaging in the Permitted
Activities, so long as such Permitted Activities do not constitute an actual or
potential conflict of interest with the Company’s business in the judgment of
the Board.
     (d) Non-Disparagement. Each of the Executive and the Company (for purposes
of this Section 14(d), “the Company” shall mean only (i) the Company by press
release or otherwise and (ii) the executive officers and directors thereof and
not any other employees) agrees not to make any public statements that disparage
the other party, or in the case of the Company, its subsidiaries, affiliates,
officers, directors or business partners. Notwithstanding the foregoing,
statements made in the course of sworn testimony in agency, administrative,
judicial or arbitral proceedings (including, without limitation, depositions in
connection with such proceedings) or otherwise as required by law shall not be
subject to this Section 14(d).
     (e) Return of Company Property and Records. The Executive agrees that upon
termination of the Executive’s employment, for any reason whatsoever, the
Executive will surrender to the Company in good condition (reasonable wear and
tear excepted) all property and equipment belonging to the Company and all
records kept by the Executive containing the names, addresses or any other
information with regard to customers or customer contacts of the Company, or
concerning any proprietary or confidential information of the Company or any
operational, financial or other documents given to the Executive during the
Executive’s employment with the Company.
     (f) Cooperation. The Executive agrees that, following termination of the
Executive’s employment for any reason, the Executive shall upon reasonable
advance notice, and to the extent it does not interfere with previously
scheduled travel plans and does not unreasonably interfere with other business
activities or employment obligations, assist and cooperate with the Company with
regard to any matter or project in which the Executive was involved during the
Executive’s employment, including any litigation. The Company shall compensate
the Executive for any lost wages (or, if the Executive is not then employed,
provide reasonable compensation as determined by the Compensation Committee) and
expenses associated with such cooperation and assistance.
     (g) Assignment of Inventions. The Executive shall promptly communicate and
disclose in writing to the Company all inventions and developments including
software, whether patentable or not, as well as patents and patent applications
(hereinafter collectively called “Inventions”), made, conceived, developed, or
purchased by the Executive, or under which the Executive acquires the right to
grant licenses or to become licensed, alone or jointly with others, which have
arisen or which arise out of the Executive’s employment with the Company, or
relate to any matters directly pertaining to, the business of the Company or any
of its subsidiaries. Included herein as if developed during the employment
period is any specialized equipment and software developed for use in the
business of the Company. All of the Executive’s right, title and

-11-

--------------------------------------------------------------------------------

 

interest in, to, and under all such Inventions, licenses, and right to grant
licenses shall be the sole property of the Company. As to all such Inventions,
the Executive will, upon request of the Company execute all documents which the
Company deems necessary or proper to enable it to establish title to such
Inventions or other rights, and to enable it to file and prosecute applications
for letters patent of the United States and any foreign country; and do all
things (including the giving of evidence in suits and other proceedings) which
the Company deems necessary or proper to obtain, maintain, or assert patents for
any and all such Inventions or to assert its rights in any Inventions not
patented.
     (h) Equitable Relief; Reformation; Survival. The Parties acknowledge and
agree that the other party’s remedies at law for a breach or threatened breach
of any of the provisions of this Section 14 would be inadequate and, in
recognition of this fact, the Parties agree that, in the event of such a breach
or threatened breach, in addition to any remedies at law, the other party,
without posting any bond, shall be entitled to obtain equitable relief in the
form of specific performance, temporary restraining order, a temporary or
permanent injunction or any other equitable remedy which may then be available.
If it is determined by a court of competent jurisdiction in any state that any
restriction in this Section 14 is excessive in duration or scope or is
unreasonable or unenforceable under the laws of that state, it is the intention
of the parties that such restriction may be modified or amended by the court to
render it enforceable to the maximum extent permitted by the law of that state.
The obligations contained in this Section 14 shall survive the termination or
expiration of the Executive’s employment with the Company and shall be fully
enforceable thereafter.
15. Alternative Dispute Resolution. Any controversy, dispute or questions
arising out of, in connection with or in relation to this Agreement or its
interpretation, performance or nonperformance or any breach thereof shall be
resolved through mediation. In the event mediation fails to resolve the dispute
within 60 days after a mediator has been agreed upon or such other longer period
as may be agreed to by the parties, such controversy, dispute or question shall
be settled by arbitration in accordance with the Center for Public Resources
Rules for Non Administered Arbitration of Business Disputes, by a sole
arbitrator. The arbitration shall be governed by the United States Arbitration
Act, 9 U.S.C. Sec. 1-16, and judgment upon the award rendered by the arbitrator
may be entered by any court having jurisdiction thereof. The place of the
arbitration shall be Portland, Maine.
16. General Provisions.
     16.1 No Duty to Seek Employment. The Executive shall not be under any duty
or obligation to seek or accept other employment following termination of
employment, and no amount, payment or benefits due to the Executive hereunder
shall be reduced or suspended if the Executive accepts subsequent employment,
except as expressly set forth herein.
     16.2 Deductions and Withholding. All amounts payable or which become
payable under any provision of this Agreement shall be subject to any deductions
authorized by the Executive and any deductions and withholdings required by law.
     16.3 Notices. All notices, demands, requests, consents, approvals or other
communications (collectively “Notices”) required or permitted to be given
hereunder or which

-12-

--------------------------------------------------------------------------------

 

are given with respect to this Agreement shall be in writing and shall be
delivered personally, sent by facsimile transmission with a copy deposited in
the United States mail, registered or certified, return receipt requested,
postage prepaid, or sent by overnight mail addressed as follows:

     
To the Company:
  Magellan Petroleum Corporation
 
  10 Columbus Boulevard
 
  Hartford, CT 06106
 
  Attn: Chairman of the Board
 
  Facsimile: (860) 293-2349
 
   
With a copy to:
  Edward B. Whittemore, Esq.
 
  Murtha Cullina LLP
 
  CityPlace I, 185 Asylum Street
 
  Hartford, CT 06103
 
  Facsimile: (860) 240-6150
 
   
To the Executive:
  William H. Hastings
 
  2 Thurston Lane
 
  Falmouth, ME 04105
 
  Facsimile: 207-797-2626
 
   
With a copy to:
  John L. Carpenter
 
  Bernstein Shur
 
  100 Middle Street
 
  P. O. Box 9729
 
  Portland, ME 04104
 
  Facsimile: 207-774-1127

or such other address as such party shall have specified most recently by
written notice. Notice mailed as provided herein shall be deemed given when so
delivered personally or sent by facsimile transmission, or, if sent by overnight
mail, on the day after the date of mailing.
     16.4 Covenant to Notify Management. The Executive shall abide by the ethics
policies of the Company as well as the Company’s other rules, regulations,
policies and procedures. The Executive agrees to comply in full with all
governmental laws and regulations as well as ethics codes applicable. In the
event that the Executive is aware or suspects the Company, or any of its
officers or agents, of violating any such laws, ethics, codes, rules,
regulations, policies or procedures, the Executive agrees to bring all such
actual and suspected violations to the attention of the Company immediately so
that the matter may be properly investigated and appropriate action taken. The
Executive understands that he is precluded from filing a complaint with any
governmental agency or court having jurisdiction over wrongful conduct unless
the Executive has first notified the Company of the facts and permits it to
investigate and correct the concerns.
     16.5 Amendments and Waivers. 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 at any time of any breach

-13-

--------------------------------------------------------------------------------

 

by the other Party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other Party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
     16.6 Beneficial Interests. This Agreement shall inure to the benefit of and
be enforceable by (a) the Company’s successors and assigns and (b) the
Executive’s personal and legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive shall
die while any amounts are still payable to his hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Executive’s devisee, legatee, or other designee or, if
there be no such designee, to the Executive’s estate.
     16.7 Successors. The Company will require any successors (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform.
     16.8 Assignment. This Agreement and the rights, duties, and obligations
hereunder may not be assigned or delegated by any Party without the prior
written consent of the other Party and any attempted assignment or delegation
without such prior written consent shall be void and be of no effect.
Notwithstanding the foregoing provisions of this Section 16.8, benefits payable
pursuant to this Agreement shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment or
garnishment by creditors of the Executive, and any attempt to alienate,
transfer, assign or attach such benefits shall be void. Notwithstanding the
foregoing provisions of this Section 16.8, the Company may assign or delegate
its rights, duties and obligations hereunder to any affiliate or to any person
or entity which succeeds to all or substantially all of the business of the
Company or one of its subsidiaries through merger, consolation, reorganization,
or other business combination or by acquisition of all or substantially all of
the assets of the Company or one of its subsidiaries without the Executive’s
consent.
     16.9 Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to the
conflicts of law provisions thereof.
     16.10 Statute of Limitations. The Executive and the Company hereby agree
that there shall be a one year statute of limitations for the filing of any
requests for arbitration or any lawsuit relating to this Agreement or the terms
or conditions of Executive’s employment by the Company. If such a claim is filed
more than one year subsequent to the Executive’s last day of employment it shall
be precluded by this provision, regardless of whether or not the claim has
accrued at that time.
     16.11 Right to Injunctive and Equitable Relief. The Executive’s obligations
under Section 14 of this Agreement are of a special and unique character, which
gives them a peculiar value. The Company cannot be reasonably or adequately
compensated for damages in an action at law in the event the Executive breaches
such obligations. Therefore, the Executive expressly agrees that the Company
shall be entitled to injunctive and other equitable relief without bond or

-14-

--------------------------------------------------------------------------------

 

other security in the event of such breach in addition to any other rights or
remedies which the Company may possess or be entitled to pursue. Furthermore,
the obligations of the Executive and the rights and remedies of the Company
under Section 14 and this Section 16.11 are cumulative and in addition to, and
not in lieu of, any obligations, rights, or remedies as created by applicable
law. The Executive agrees that the terms of this Section 16.11 shall survive the
term of this Agreement and the termination of the Executive’s employment.
     16.12 Severability or Partial Invalidity. The invalidity or
unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
     16.13 Entire Agreement. This Agreement, along with Exhibit A attached
hereto, the Option Agreements and the Indemnification Agreement, constitute the
entire agreement of the Parties and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings, and negotiations between the
Parties with respect to the subject matter hereof and thereof. This Agreement
may not be changed orally and may only be modified in writing signed by both
Parties. This Agreement, along with Exhibit A attached hereto, the Option
Agreements and the Indemnification Agreement, are intended by the Parties as the
final expression of their agreement with respect to such terms as are included
herein and therein and may not be contradicted by evidence of any prior or
contemporaneous agreement. The Parties further intend that this Agreement, along
with Exhibit A attached hereto, the Option Agreements and the Indemnification
Agreement, constitute the complete and exclusive statement of their terms and
that no extrinsic evidence may be introduced in any judicial proceeding
involving such agreements.
     16.14 Code Section 409A. This Agreement is intended to comply with the
provisions of Section 409A of the Code. The Parties intend that the benefits and
payments provided under this Agreement shall be exempt from, or comply with, the
requirements of Section 409A of the Code.  Notwithstanding the foregoing, the
Company shall in no event be obligated to indemnify the Executive for any taxes
or interest that may be assessed by the IRS pursuant to Section 409A of the
Code.
     16.15 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed an original but all
of which together shall constitute one and the same instrument.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

-15-

--------------------------------------------------------------------------------

 

* * * * * *
     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer and the Employee has hereunto set her hand as of the
day and year first above written.

            MAGELLAN PETROLEUM CORPORATION
      By:   /s/ Walter J. McCann         Name:   Walter J. McCann       
Title:   Chairman of the Board     

EXECUTIVE
/s/ William H. Hastings                                        
William H. Hastings

-16-

--------------------------------------------------------------------------------

 

EXHIBIT A
TERMINATION, VOLUNTARY RELEASE AND WAIVER OF RIGHTS AGREEMENT
     I, William H. Hastings, freely enter into this Termination, Voluntary
Release and Waiver of Rights Agreement (the “Agreement”), unqualifiedly accept
and agree to the relinquishment of my title, responsibilities and obligations as
an employee of Magellan Petroleum Corporation (“the Company”), and concurrently
and unconditionally agree to sever my relationship as an employee of the
Company, in consideration for the voluntary payment to me by the Company of the
termination benefits set forth in Section 6-9 of the Employment Agreement dated
as of January , 2009 by and between me and the Company (the “Employment
Agreement”), which is made a part hereof.
1. In exchange for this consideration, which I understand that the Company is
not otherwise obligated to provide to me, I voluntarily agree to waive and
forego any and all claims, rights, interests, covenants, contracts, warranties,
promises, undertakings, actions, suits, causes of action, obligations, debts,
attorneys’ fees or other expenses, accounts, judgments, fines, fees, losses and
liabilities, of any kind, nature or description, in law (including all contract
and tort claims), equity or otherwise (collectively, “Claims”) that I may have
against the Company as an employee of the Company beyond the rights set forth in
the Employment Agreement and to release the Company and their respective
affiliates, subsidiaries, officers, directors, employees, representatives,
agents, successors and assigns (hereinafter collectively referred to as
“Releasees”) from any obligations any of them may owe to me in my capacity as an
employee of the Company except as set forth in my Employment Agreement (and
specifically not as a shareholder or director), accepting the aforestated
consideration as full settlement of any monies or obligations owed to me by
Releasees that may have arisen at any time prior to the date of my execution of
this Termination, Voluntary Release and Waiver of Rights Agreement (the
“Agreement”), except as specifically provided below in the following paragraph
number 2.
2. I do not waive, nor has the Company asked me to waive, any rights arising
exclusively under the Fair Labor Standards Act, except as such waiver may
henceforth be made in a manner provided by law. I do not waive, nor has the
Company asked me to waive, any vested benefits that I may have or that I may
have derived from the course of my employment with the Company. I understand
that such vested benefits will be subject to and administered in accordance with
the established and usual terms governing same. I do not waive any rights which
may in the future, after the execution of this Agreement, arise exclusively from
a substantial breach by the Company of a material obligation of the Company
expressly undertaken in consideration of my entering into this Agreement.
3. Except as set forth in paragraphs 2 and 9 hereof, I do fully, irrevocably and
forever waive, relinquish and agree to forego any and all Claims whatsoever,
whether known or unknown, in contract, tort or otherwise, that I may have or may
hereafter have against the Releasees or any of them arising out of or by reason
of any cause, matter or thing whatsoever arising out of my employment by the
Company (other than as set forth in my Employment Agreement) from the beginning
of the world to the date hereof, including without limitation any

A-1

--------------------------------------------------------------------------------

 

and all matters relating to my employment with the Company and the cessation
thereof and all matters arising under Title VII of the Civil Rights Act of 1964,
42 U.S.C. § 2000 et seq., the Americans with Disabilities Act of 1990, 42 U.S.C.
§ 12101 et seq., the Family and Medical Leave Act of 1993, 29 U.S.C. § 2601 et
seq., the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq.,
the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq.,
all as amended, or under any other laws, ordinances, executive orders,
regulations or administrative or judicial case law arising under the statutory
or common laws of the United States, the State of Maine or any other applicable
county or municipal ordinance.
4. As a material inducement to the Company to enter into this Agreement, I, the
undersigned, recognize that I may have been privy to certain confidential,
proprietary and trade secret information of the Company which, if known to third
parties, could be used in a manner that would reduce the value of the Company
for its shareholders. In order to reduce the risk of that happening, I, the
undersigned, agree that for a period of two (2) years after termination of
employment, I, the undersigned, will not, directly or indirectly, assist, or be
part of or have any involvement in, any effort to acquire control of the Company
through the acquisition of its stock or substantially all of its assets, without
the prior consent of the Board of Directors of the Company. This provision shall
not prevent the undersigned from owning up to not more than one percent (1%) of
the outstanding publicly traded stock of any company.
5. Acknowledgements.
     (a) I further acknowledge pursuant to the Older Worker’s Benefit Protection
Act (29 U.S.C. § 626(f)), I expressly agree that the following statements are
true:
     (b) The payment of the consideration described in Section 9 of the
Employment Agreement is in addition to the standard employee benefits and
anything else of value which the Company owes me in connection with my
employment with the Company or the separation of employment.
     (c) I have [twenty-one days] days from [date of receipt] to consider and
sign this agreement. If I choose to sign this Agreement before the end of the
[twenty-one] day period, that decision is completely voluntary and has not been
forced on me by the Company.
     (d) I will have seven (7) days after signing the Agreement in which to
revoke it, and the Agreement will not become effective or enforceable until the
end of those seven (7) days.
     (e) I am now being advised in writing to consult an attorney before signing
this Agreement.
     (f) I acknowledge that I have been given sufficient time to freely consult
with an attorney or counselor of my own choosing and that I knowingly and
voluntarily execute this Agreement, after bargaining over the terms hereof, with
knowledge of the consequences made clear, and with the genuine intent to release
claims without threats, duress, or coercion on the part of the Company. I do so
understanding and acknowledging the significance of such waiver.
6. Further, in view of the above-referenced consideration voluntarily provided
to me by the Company, after due deliberation, I agree to waive any right to
further litigation or claim against

A-2

--------------------------------------------------------------------------------

 

any or all of the Releasees except as specifically provided in paragraph number
2 above. I hereby agree to indemnify and hold harmless the Releasees and their
respective agents or representatives from and against any and all losses, costs,
damages or expenses, including, without limitation, attorneys fees incurred by
said parties, or any of them, arising out of any breach of this Agreement by me
or by any person acting on my behalf, or the fact that any representation made
herein by the undersigned was false when made.
7. As a material inducement to the Company to enter into this Agreement, I, the
undersigned, understand and agree that if I should fail to comply with the
conditions hereof or to carry out the agreement set forth herein, all amounts
previously paid under this Agreement shall be immediately forfeited to the
Company and that the right or claim to further payments and/or benefits
hereunder would likewise be forfeited.
8. As a further material inducement to the Company to enter into this Agreement,
the undersigned provides as follows:
     First. I represent that I have not filed any complaints or charges against
the Company, or any of the Releasees relating to the relinquishment of my former
titles and responsibilities at the Company or the terms of my employment with
the Company and that if any agency or court assumes jurisdiction of any
complaint or charge against the Company or any of the Releasees on behalf of me
concerning my employment with the Company, I understand and agrees that I have,
by my knowing and willing execution of this Agreement, waived my rights to any
form of recovery or relief against the Company, or any of the Releasees,
including but not limited to, attorney’s fees; provided, however, that this
provision shall not preclude the undersigned from pursuing appropriate legal
relief against the Company for redress of a substantial breach of a material
obligation of the Company expressly undertaken in consideration of my entering
into this Agreement.
     Second. I acknowledge and understand that the consideration for this
release shall not be in any way construed as an admission by the Company or any
of the Releasees of any improper acts or any improper employment decisions, and
that the Company, specifically disclaims any liability on the part of itself,
the Releasees, and their respective agents, employees, representatives,
successors or assigns in this regard.
     Third. I acknowledge and agree that this Agreement shall be binding upon
me, upon the Company, and upon our respective administrators, representatives,
executives, successors, heirs and assigns and shall inure to the benefit of said
parties and each of them.
     Fourth. I represent, understand and agree that this Agreement sets forth
the entire agreement between the parties hereto, and fully supersedes any and
all prior agreements or understandings between the parties pertaining to the
subject matter hereof, except for the provisions of Section 14 of the Agreement,
the terms of which retain their full force and effect, and which are in no way
limited or curtailed by this Agreement.
     Fifth. Modification. This Agreement may not be altered or changed except by
an agreement in writing that has been properly executed by the party against
whom any waiver, change, modification or discharge is sought.
     Sixth. Severability. All provisions and terms of this Agreement are
severable. The

A-3

--------------------------------------------------------------------------------

 

invalidity or unenforceability of any particular provision(s) or term(s) of this
Agreement shall not affect the validity or enforceability of the other
provisions and such other provisions shall be enforceable in law or equity in
all respects as if such particular invalid or unenforceable provision(s) or
term(s) were omitted. Notwithstanding the foregoing, the language of all parts
of this Agreement shall, in all cases, be construed as a whole, according to its
fair meaning, and not strictly for or against any of the parties.
     Seventh. No Disparagement. I agree and promise that I will not make any
oral or written statements or reveal any information to any person, company, or
agency which is disparaging or damaging to the reputation or business of the
Company, its subsidiaries, directors, officers or affiliates, or which would
interfere in any way with the business relations between the Company or any of
its subsidiaries or affiliates and any of their customers, suppliers or vendors
whether present or in the future; provided however, that statements made in the
course of sworn testimony in agency, administrative, judicial or arbitral
proceedings (including, without limitation, depositions in connection with such
proceedings) or otherwise as required by law shall not be subject to this
section Seventh,
     Eighth. Confidentiality. The Company and the undersigned agree to refrain
from disclosing to third parties and to keep strictly confidential all details
of this Agreement and any and all information relating to its negotiation,
except as necessary to each party’s accountants or attorneys.
     Ninth. Termination of Agreement. Notwithstanding anything to the contrary
in this Agreement, this Agreement may be terminated by the Company and all
further payment obligations of the Company shall cease, if: (a) the undersigned
is terminated for “Cause” prior to the undersigned’s separation date; or
(b) facts are discovered after the undersigned’s separation date that would have
supported a termination for “Cause” had such facts been discovered prior to the
undersigned’s separation date.
9. Notwithstanding anything herein to the contrary, this release shall not
affect, release or terminate in any way the undersigned’s rights (i) to receive
payments under the Employment Agreement (ii) under the Indemnification Agreement
entered by the Company and the undersigned with respect to certain liabilities
that the undersigned may incur as an officer or director of the Company or
(iii) under various option agreements and grants from the Company to the
undersigned, or any agreement between the undersigned and the Company relating
to the undersigned’s rights as an owner of stock or options in the Company or
the undersigned’s service as a director of the Company.

A-4

--------------------------------------------------------------------------------

 

AFFIRMATION OF RELEASOR
     I, William H. Hastings, warrant that I am competent to execute this
Termination, Voluntary Release and Waiver of Rights Agreement and that I accept
full responsibility thereof.
     I, William H. Hastings, warrant that I have had the opportunity to consult
with an attorney of my choosing with respect to this matter and the consequences
of my executing this Termination, Voluntary Release and Waiver of Rights
Agreement.
     I, William H. Hastings, have read this Termination, Voluntary Release and
Waiver of Rights Agreement carefully and I fully understand its terms. I execute
this document voluntarily with full and complete knowledge of its significance.
     Executed this                       day of                     , 20      at
                                          .

             
STATE OF                          
)            
 
:         ss.
                                                                             ,
20       
COUNTY OF                      
)          

     Subscribed and sworn to before me, a Notary Public in and for said County
and State, this day of                     , 20      under the pains and
penalties of perjury.
, Notary Public
My Commission Expires:
County of Residence:

A-5