EXHIBIT 10.4

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Second Amended and Restated Employment Agreement (“Agreement”) is entered
into effective as of December 31, 2008 (the “Effective Date”), by and between
Endeavour International Corporation, a Nevada corporation (the “Company”), and
William L. Transier (“Employee”).

WHEREAS, the Employee and the Company were parties to an employment agreement
dated February 26, 2004 (the “Original Agreement”), which was amended on
October 9, 2006 (the “Amendment”), and which was amended and restated effective
as of May 29, 2008 (the “First Amended and Restated Agreement”); and

WHEREAS, the Company and Employee desire to amend and restate further the First
Amended and Restated Agreement to comply with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”);

NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties, and agreements contained herein, and for other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:

1. Effect of Agreement. Effective as of the Effective Date, this Agreement
supersedes and replaces any pre-existing employment agreements between the
Company and the Employee, including the Original Agreement, the Amendment, and
the First Amended and Restated Agreement, except as is otherwise referenced
herein.

2. Employment. The Company hereby employs Employee, and Employee will hereby
continue his employment by the Company, on the terms and conditions set forth in
this Agreement.

3. Term of Employment. Subject to the provisions for earlier termination
provided in this Agreement, the term of this Agreement (the “Term”) shall
terminate on May 31, 2011.

4. Employee’s Duties. During the Term, Employee shall serve as Chairman, Chief
Executive Officer and President, with such duties and responsibilities as may
from time to time be assigned to him by the board of directors of the Company
(the “Board”), provided that such duties are consistent with the customary
duties of such position. During the Term, Employee shall serve as a member and
Chairman of the Board. Employee agrees to devote all of his business time, skill
and attention to the business and affairs of the Company and to use reasonable
best efforts to perform faithfully and efficiently his duties and
responsibilities. Employee shall not, either directly or indirectly, enter into
any business or employment with or for any person, firm, association or
corporation other than the Company during the Term; provided, however, that
Employee shall not be prohibited from making financial investments in any other
company or business, or, with notice to the Board, from serving on the board of
directors of any other company if such service does not materially interfere
with the performance of his duties or responsibilities hereunder. Employee shall
at all times observe and comply with all lawful directions and instructions of
the Board.

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5. Compensation.

(a) Inducement Stock. As an inducement to Employee to enter into the Original
Agreement, the Company issued 500,000 shares (“Inducement Stock”) of Company
restricted common stock (“Restricted Stock”) to Employee as of February 26,
2004. The Inducement Stock grants were evidenced by the forms of Inducement
Stock Agreement attached as Exhibits “A” and “B” to the Original Agreement.

(b) Base Compensation. Effective as of September 9, 2006, for services rendered
by Employee under this Agreement, the Company shall pay to Employee a base
salary of $800,000 per annum (“Base Compensation”). The Base Compensation is
payable in accordance with the Company’s customary payroll practices and subject
to customary withholdings, including share withholdings as described in
Section 15(b) hereof. The amount of Base Compensation shall be reviewed by the
Board on an annual basis as of the close of each fiscal year of the Company and
may be increased as the Board may deem appropriate. In the event the Board (or,
if established, the compensation committee thereof) deems it appropriate to
increase Employee’s annual base salary, said increased amount shall thereafter
be the “Base Compensation.” Employee’s Base Compensation, as increased from time
to time, may not thereafter be decreased unless agreed to by Employee. Nothing
contained herein shall prevent the Board from paying additional compensation to
Employee in the form of bonuses or otherwise during the Term.

6. Bonus. With respect to each full fiscal year during the Term, the Board in
its sole discretion may grant the Employee a discretionary bonus (“Bonus”). The
target bonus for each year shall be equal to the Base Compensation; however, the
Board may grant a maximum Bonus of up to 200% of the Base Compensation payable
in the form and in accordance with the Company’s customary payroll practices for
its annual bonuses for its executives and subject to customary withholdings.

7. Additional Benefits. In addition to the Base Compensation provided for in
Section 5 herein, Employee shall be entitled to the following:

(a) Expenses. The Company shall, in accordance with any rules and policies that
it may establish from time to time for executive officers, reimburse Employee
for business expenses reasonably incurred in the performance of his duties. It
is understood that Employee is authorized to incur reasonable business expenses
for promoting the business of the Company, including reasonable expenditures for
travel, lodging, meals and client or business associate entertainment. Request
for reimbursement for such expenses must be accompanied by appropriate
documentation, and shall be reimbursed in accordance with the Company’s rules
and policies as in effect from time to time and as set forth in
Section 9(k)(iii) below.

(b) Vacation. Employee shall be entitled to five (5) weeks of vacation per year,
without any loss of compensation or benefits. Employee shall not be entitled to
compensation for, or to carry forward, any unused vacation time.

 

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(c) General Benefits. Employee shall be entitled to participate in the various
employee benefit plans or programs, if any, provided to the officers of the
Company in general, including but not limited to, health, dental, disability and
life insurance plans, subject to the eligibility requirements with respect to
each of such benefit plans or programs, and such other benefits or perquisites
as may be approved by the Board during the Term. Nothing in this paragraph shall
be deemed to prohibit the Company from making any changes in any of the plans,
programs or benefits described in this Section 7, provided the change similarly
affects all executive officers of the Company similarly situated.

(d) Corporate Change. Upon the occurrence of a “Corporate Change” as hereinafter
defined, Employee shall be considered as immediately and totally vested in any
and all Restricted Stock, stock options or other similar equity or equity-based
awards previously made to Employee by the Company or its subsidiaries under a
“Long Term Incentive Plan” or other grant duly adopted by the Board or the
Compensation Committee thereof (such Restricted Stock, options or similar awards
are hereinafter collectively referred to as “Awards”); provided, however, with
respect to Awards that are deferred compensation subject to Code Section 409A,
such accelerated vesting shall not cause an acceleration of a payment or result
in a change in form of payment that would violate Code Section 409A. For
purposes of this Agreement, a “Corporate Change” shall occur if (i) the Company
(A) shall not be the surviving entity in any merger, consolidation or other
reorganization (or survives only as a subsidiary of an entity other than a
previously wholly-owned subsidiary of the Company) or (B) is to be dissolved and
liquidated, and as a result of or in connection with such transaction, the
persons who were directors of the Company before such transaction shall cease to
constitute a majority of the Board, or (ii) any person or entity, including a
“group” as contemplated by Section 13(d)(3) of the Securities Exchange Act of
1934, as amended, acquires or gains ownership or control (including, without
limitation, power to vote) of 30% or more of the outstanding shares of the
Company’s voting stock (based upon voting power), and as a result of or in
connection with such transaction, the persons who were directors of the Company
before such transaction shall cease to constitute a majority of the Board, or
(iii) the Company sells all or substantially all of the assets of the Company to
any other person or entity (other than a wholly-owned subsidiary of the Company)
in a transaction that requires shareholder approval pursuant to applicable
corporate law; or (iv) during a period of two consecutive calendar years,
individuals who at the beginning of such period constitute the Board, and any
new director(s) whose election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least a majority of the
directors then still in office, who either were directors at the beginning of
the two (2) year period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
Board; or (v) any other event that a majority of the Board, in its sole
discretion, shall determine constitutes a Corporate Change hereunder.

8. Confidential Information. Employee, during the Term, will have access to and
become familiar with confidential information, secrets and proprietary
information concerning the business and affairs of the Company, its controlled
subsidiaries and other controlled entities, including client and customer
information, information concerning their products, patent rights

 

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and know-how, and other technical information, business strategies and pricing
information, and other confidential and/or proprietary information
(collectively, “Confidential Information”). Confidential Information shall not
include (i) any information that is or becomes generally available to the public
other than as a result of Employee’s improper or unauthorized disclosure of such
information in violation of this Agreement or (ii) was within Employee’s
possession prior to its affiliation with the Company or its controlled
subsidiaries or other controlled entities (including his affiliation with
Endeavour International Operating Company, f/k/a NSNV, Inc. prior to its
acquisition by the Company). As to such Confidential Information, Employee
agrees as follows:

(a) During the Term or at any time following the termination of this Agreement,
Employee will not, directly or indirectly, without the prior written consent of
the Company (1) disclose or permit the disclosure of any such Confidential
Information, or (2) use, reproduce or distribute, or make or permit any use,
reproduction or distribution of, directly or indirectly, any such Confidential
Information, except for any disclosure, use, reproduction or distribution that
is required in the course of his employment with the Company, its controlled
subsidiaries or other controlled entities.

(b) If, during the Term or at any time following the termination of this
Agreement, Employee is requested or required (by oral question or request for
information or documents, in any legal proceeding, interrogatory, subpoena,
civil investigative demand, or similar process) to disclose any Confidential
Information, Employee agrees to notify the Company immediately in writing of the
request or requirement so that the Company may seek an appropriate protection
order or waive compliance with the provisions of this Section. If, in the
absence of a protective order or the receipt of a waiver under this Agreement,
Employee is, on the advice of counsel, compelled to disclose any Confidential
Information to any tribunal or else stand liable for contempt, Employee may
disclose such Confidential Information to the tribunal; provided, however, that
Employee shall use his commercially reasonable best efforts to obtain a court
order or other assurance that confidential treatment will be accorded to such
Confidential Information.

(c) Upon termination of employment of Employee, for whatever reason, Employee
shall surrender to the Company any and all documents, manuals, correspondence,
reports, records and similar items then or thereafter coming into the possession
of Employee which contain any Confidential Information of the Company or its
controlled subsidiaries or other controlled entities.

(d) Employee recognizes and acknowledges that the obligations of Employee
contained in Section 8 of this Agreement are reasonable and necessary to protect
the legitimate business interests of the Company, and that any breach or
violation of any of the provisions of such Section is likely to result in
irreparable injury to the Company for which the Company would have no adequate
remedy at law. Employee agrees that if Employee shall breach or violate
Section 8 of this Agreement, the Company shall be entitled, if it so elects, to
institute and prosecute proceedings at law or in equity, including, but not
limited to, a proceeding seeking injunctive relief, to obtain damages with
respect to such breach or violation, to enforce the specific performance of
Section 8

 

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this Agreement by Employee, or to enjoin Employee from engaging in any activity
in violation of Section 8 of this Agreement. Employee acknowledges that in the
event of any such breach or violation, the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages or posting a bond, and to an equitable accounting of all
earnings, profits, and other benefits arising from any such breach or violation,
which rights shall be cumulative and in addition to any other rights or remedies
to which the Company may be entitled. Employee agrees that in the event of any
such violation, an action may be commenced for preliminary or permanent
injunctive relief and other equitable relief in any federal or state court of
competent jurisdiction sitting in Harris County, Texas, or in any other court of
competent jurisdiction. Employee waives, to the fullest extent permitted by law,
any objection that Employee may now or hereafter have to such jurisdiction or to
the laying of the venue of any such suit, action, or proceeding brought in such
a court and any claim that such suit, action or proceeding has been brought in
an inconvenient forum. Employee agrees that effective service of process may be
made upon Employee under the notice provisions contained in Section 12 of this
Agreement. Employee further agrees that the existence of any claim or cause of
action against the Company, whether predicated upon a breach or violation by the
Company of this Agreement or any other contract or agreement between Employee
and the Company, shall not constitute or be asserted as a defense to the
enforcement by the Company to the provisions of this Section relating to the
Company’s right to injunctive or other equitable relief for Employee’s breach or
violation of Section 8 of this Agreement.

9. Termination. This Agreement may be terminated prior to the end of the Term as
set forth below:

(a) Resignation (other than for Good Reason). Employee may resign, including by
reason of retirement, his position at any time by providing written notice of
resignation to the Company in accordance with Section 12 hereof. In the event of
such resignation, except in the case of resignation for Good Reason (as defined
below), this Agreement shall terminate and Employee shall not be entitled to
further compensation pursuant to this Agreement other than payment for (i) any
unpaid Base Compensation or unpaid Bonus accrued hereunder as of Employee’s
employment termination date, and (ii) any unpaid reasonable business expenses
incurred prior to Employee’s employment termination date, subject to the
Company’s expense reimbursement rules and policies as in effect from time to
time (the “Accrued Amounts”). Accrued Amounts, if any, shall be paid to Employee
in accordance with the Company’s customary payroll practices as in effect from
time to time, but in no event later than fifteen (15) days following Employee’s
termination of employment.

(b) Death. If Employee’s employment is terminated due to his death, this
Agreement shall terminate and the Company shall have no obligations to Employee
or his estate, beneficiaries or legal representatives with respect to this
Agreement other than payment of the Accrued Amounts, if any. Accrued Amounts, if
any, shall be paid to Employee in accordance with the Company’s customary
payroll practices as in effect from time to time but in no event later than 15
days following Employee’s termination of employment on account of death.
Notwithstanding the foregoing, in the event of his

 

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death, Employee shall be considered as immediately and totally vested in any and
all outstanding Awards previously granted to Employee by Company or its
subsidiaries; provided, however, with respect to Awards that are deferred
compensation subject to Code Section 409A, such accelerated vesting shall not
cause an acceleration of a payment or result in a change in form of payment that
would violate Code Section 409A.

(c) Discharge.

(i) The Company may terminate Employee’s employment in the event of Employee’s
Misconduct or Disability (both as defined below) only upon written notice
thereof delivered to Employee in accordance with Section 9(f) and Section 12
hereof. In the event that Employee’s employment is terminated during the Term by
the Company for any reason other than his Misconduct or Disability (both as
defined below), then, except as provided in Section 9(k)(i) below, (A) the
Company shall pay in lump sum in cash to Employee, within fifteen (15) days
following the expiration of the revocation period for the Release (as defined
below), but in no event later than the fifteenth (15th) day of the third month
following the year in which the Date of Termination occurs, an amount equal to
the product of (x) Employee’s Base Compensation as in effect immediately prior
to Employee’s termination, multiplied by (y) three, (B) for three years
following the expiration of the revocation period for the Release, the Company,
at its cost, shall provide or arrange to provide Employee (and, as applicable,
Employee’s dependents) with accident and group health insurance benefits
substantially similar to those which Employee (and Employee’s dependents) were
receiving immediately prior to Employee’s termination (if any); provided,
however, the welfare benefits otherwise receivable by Employee pursuant to this
clause (B) shall be reduced to the extent comparable welfare benefits are
actually received by Employee (and/or Employee’s dependents) during such period
under any other employer’s welfare plan(s) or program(s), with Employee being
obligated to promptly disclose to the Company any such comparable welfare
benefits; and provided, further, however, that for the avoidance of doubt, the
COBRA continuation period shall run concurrently with the period set forth in
this Clause (B). In addition to the aforementioned compensation and benefits,
(C) the Company shall pay in lump sum in cash to Employee, within fifteen
(15) days following the expiration of the revocation period for the Release, but
in no event later than the fifteenth (15th) day of the third month following the
year in which the Date of Termination occurs, an amount equal to the product of
(x) Employee’s average Bonus paid by the Company during the most recent two
(2) years immediately prior to the date of termination, multiplied by (y) three
and (D) Employee shall be considered as immediately and totally vested in any
and all Awards previously granted to Employee by Company or its subsidiaries;
provided, however, with respect to Awards that are deferred compensation subject
to Code Section 409A, such accelerated vesting shall not cause an acceleration
of a payment or result in a change in form of payment that would violate Code
Section 409A. With respect to benefits set forth under Clause (B) above, all
insurance premiums and/or benefits payments made by the Company with respect to
such benefits shall be made so as to be exempt from Section 409A of the Code

 

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and, for purposes thereof, each such payment shall be treated as a separate
payment under Section 409A of the Code. To the extent any such payments are not
exempt from Section 409A of the Code (i.e., they constitute “nonqualified
deferred compensation” subject to Section 409A of the Code), such payments shall
be paid by the Company according to a fixed schedule consisting of monthly
installment payments. If the Company’s pre-tax payment of the premiums for such
benefits would cause the Executive to be taxed on the Company’s actual cost of
providing such accident and group health insurance benefits because such
benefits are “self-insured,” the Company will instead pay such premiums on an
after-tax basis so the premium amounts are included in the Employee’s taxable
income. With respect to any such benefits that are taxable and not otherwise
excluded from deferred compensation under Code Section 409A, any amount
reimbursable and paid in one tax year shall not affect the amount to be
reimbursed or paid in another tax year, all reimbursements shall be paid no
later than the end of the Executive’s taxable year following the tax year in
which such expenses were incurred and the reimbursements under this Section
cannot be substituted for any other benefit. The Company’s obligation to make
the payments and provide the benefits described in this Section 9(c)(i) is
conditioned expressly on Employee’s executing (and not revoking) a general
release of any and all claims arising out of or relating to Employee’s
employment and termination of employment in a form reasonably satisfactory to
the Company (the “Release”). If Employee fails to execute a Release within
forty-five (45) days following the later of (i) the Date of Termination or
(ii) the date Employee actually receives an execution copy of such Release
(which shall be delivered to Employee no later than five (5) business days
following Date of Termination), or if Employee revokes such Release within seven
(7) days following execution, Employee shall forfeit all payments and benefits
described hereunder.

(ii) In the event Employee is terminated because of Misconduct, the Company
shall have no obligations pursuant to this Agreement after the Date of
Termination other than for payment of the Accrued Amounts, if any. As used
herein, “Misconduct” means (A) the continued failure by Employee to
substantially perform his duties with the Company (other than any such failure
resulting from Employee’s incapacity due to physical or mental illness or any
such actual or anticipated failure after the issuance of a Notice of Termination
by Employee for Good Reason), after a written demand for substantial performance
is delivered to Employee by the Board, which demand specifically identifies the
manner in which the Board believes that Employee has not substantially performed
his duties, and the Employee fails to cure such failure within ten (10) days
after receipt of such demand, (B) the engaging by Employee in conduct which is
demonstrably and materially injurious to the Company, monetarily or otherwise
(other than such conduct resulting from Employee’s incapacity due to physical or
mental illness or any such actual or anticipated conduct after the issuance of a
Notice of Termination by Employee for Good Reason), (C) Employee’s conviction
for the commission of a felony or (D) action by Employee toward the Company
involving dishonesty. Anything contained in this Agreement to the contrary
notwithstanding, the Board shall have the sole power and authority to terminate
the employment of Employee on behalf of the Company.

 

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(d) Disability. If Employee shall have been absent from the full-time
performance of Employee’s duties with the Company for ninety (90) consecutive
calendar days as a result of Employee’s incapacity due to physical or mental
illness, Employee’s employment may be terminated by the Company for “Disability”
and Employee shall not be entitled to further compensation pursuant to this
Agreement, other than for payment of the Accrued Amounts, if any.
Notwithstanding the foregoing, in the event that Employee’s employment is
terminated by the Company due to Disability, Employee shall be considered as
immediately and totally vested in any and all Awards previously granted to
Employee by the Company or its subsidiaries; provided, however, with respect to
Awards that are deferred compensation subject to Code Section 409A, such
accelerated vesting shall not cause an acceleration of a payment or result in a
change in form of payment that would violate Code Section 409A.

(e) Resignation for Good Reason. Employee shall be entitled to terminate his
employment for Good Reason as defined herein. If Employee terminates his
employment for Good Reason, he shall be entitled to the compensation and
benefits provided in Section 9(c)(i) hereof in accordance with the terms
therein, including, without limitation, the requirement that Employee execute
and not revoke the Release contemplated in Section 9(c)(i). “Good Reason” shall
mean the occurrence of any of the following circumstances without Employee’s
express written consent; provided, that, Employee has provided a Notice of
Termination to the Company within fifteen (15) days after the initial occurrence
of any such circumstance of Employee’s intention to terminate Employee’s
employment for Good Reason, and the Company has failed to cure, to the extent
curable, such circumstance within fifteen (15) days of receipt of the Notice of
Termination given in respect hereof:

(i) the material breach of any of the Company’s obligations under this Agreement
without Employee’s express written consent;

(ii) the continued assignment to Employee of any duties inconsistent with the
office of Chairman, Chief Executive Officer and President;

(iii) the failure by the Company to pay to Employee any portion of Employee’s
compensation;

(iv) the failure by the Company to continue to provide Employee with benefits
substantially similar to those enjoyed by other executive officers who have
entered into similar employment agreements with the Company under any of the
Company’s medical, health, accident, and/or disability plans in which Employee
was participating immediately prior to such time;

(v) a change in the location of Employee’s principal place of employment by the
Company by more than 50 miles from the Company’s headquarters in Houston, Texas;
or

 

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(vi) the failure of the Company to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as contemplated in
Section 14 hereof.

In addition, the occurrence of a Corporate Change, shall constitute “Good
Reason” hereunder, but only if Employee terminates his employment within ninety
(90) days following the effective date of such Corporate Change.

(f) Notice of Termination. Any purported termination of Employee’s employment by
the Company under Sections 9(c)(ii) (Misconduct) or 9(d) (Disability), or by
Employee under Section 9(e) (Good Reason), shall be communicated by written
Notice of Termination to the other party hereto in accordance with Section 12
hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a
notice which, if by the Company and is for Misconduct or Disability, shall set
forth in reasonable detail the reason for such termination of Employee’s
employment, or in the case of resignation by Employee for Good Reason, said
notice must specify in reasonable detail the basis for such resignation. A
Notice of Termination given by Employee pursuant to Section 9(e) shall be
effective even if given after the receipt by Employee of notice that the Board
has set a meeting to consider terminating Employee for Misconduct. Any purported
termination for which a Notice of Termination is required which is not effected
pursuant to this Section 9(f) shall not be effective.

(g) Date of Termination. “Date of Termination” shall mean the date specified in
the Notice of Termination, provided that the Date of Termination shall be at
least fifteen (15) days following the date the Notice of Termination is given;
provided, however, that in the case of Employee’s resignation for Good Reason,
Date of Termination shall mean the close of business on the last day on which
the Company may cure any circumstance alleged by Employee to give rise to a Good
Reason termination. Notwithstanding the foregoing, in the event Employee is
terminated for Misconduct, the Company may refuse to allow Employee access to
the Company’s offices (other than to allow Employee to collect his personal
belongings under the Company’s supervision) prior to the Date of Termination.
Notwithstanding anything herein to the contrary, for purposes of this Agreement,
“termination of employment” shall mean Employee’s “separation from service” from
the Company and its “affiliates” as defined in Code Section 409A and Final
Treasury Regulations Section 1.409A-1(h), including the default presumptions
thereof. For purposes of this Agreement, “affiliate” shall mean (i) any person
or entity that directly or indirectly controls, is controlled by or is under
common control with the Company and/or (ii) to the extent provided by the Board,
any person or entity in which the Company has a significant interest. The term
“control” (including, with correlative meaning, the terms “controlled by” and
“under common control with”), as applied to any person or entity, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person or entity, whether
through the ownership of voting or other securities, by contract or otherwise;
provided, however, with respect to any payment or benefit subject to
Section 409A of the Code, the term “affiliate” shall mean any member of the
Company’s control group within the meaning of Final Treasury Regulations
Section 1.409A-1(h)(3), as such may be modified or amended from time to time, by
applying the “at least 50 percent” provisions thereof.

 

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(h) Mitigation. Employee shall not be required to mitigate the amount of any
payment provided for in this Section 9 by seeking other employment or otherwise,
nor (except as set forth in Section 9(c)(i)(B)) shall the amount of any payment
provided for in this Agreement be reduced by any compensation earned or benefits
received by Employee as a result of employment by another employer, except that
any severance amounts payable to Employee pursuant to the Company’s severance
plan or policy for employees in general shall reduce the amount otherwise
payable pursuant to Sections 9(c)(i) or 9(e).

(i) Excess Parachute Payments. Notwithstanding anything in this Agreement to the
contrary, to the extent that any payment or benefit received or to be received
by Employee hereunder in connection with the termination of Employee’s
employment would, as determined by tax counsel selected by the Company,
constitute an “Excess Parachute Payment” (as defined in Section 280G of the
Internal Revenue Code), the Company shall fully “gross-up” such payment so that
Employee is in the same “net” after-tax position he would have been if such
payment and gross-up payments had not constituted Excess Parachute Payments, and
such “gross-up” payment shall be made no later than the end of Employee’s
taxable year next following Employee’s taxable year in which he remits the taxes
to which such gross-up payment relates. The Company shall reimburse any costs
and expenses incurred by Employee, including without limitation, attorneys’ fees
due to a tax audit or litigation in connection with any excise tax (including
penalties and interest or other excise taxes thereon) under Code Section 4999 or
Code Section 280G and any such reimbursement shall be made by the end of the
Employee’s tax year following the tax year in which such taxes that are subject
to the audit or litigation are remitted to the taxing authority, or where as a
result of such audit or litigation no taxes are remitted, by the end of the
Employee’s tax year following the tax year in which the audit is completed or
there is a final nonappealable settlement or other resolution of the litigation.
The Employee’s right to payment or reimbursement pursuant to this Section 9(i)
shall not be subject to liquidation or exchange for any other benefit.

(j) Resignation from Board. In the event Employee’s employment by the Company is
terminated for any reason (other than Employee’s death), Employee shall
immediately resign as a member of the Board and the board of directors of any of
the Company’s subsidiaries. Nothing herein shall be deemed to limit the power of
the shareholders of the Company to at any time remove any director, including,
without limitation, Employee, in accordance with applicable law. All payments to
Employees pursuant to this Agreement shall be conditioned upon Employee’s
compliance with his obligations under this Section 9(j).

(k) Code Section 409A.

(i) Notwithstanding any provision of this Section 9 to the contrary, if all or
any portion of the benefits provided in this Section 9 is determined to be
“nonqualified deferred compensation” subject to Code Section 409A, and the

 

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Company determines that Employee is a “specified employee” as defined in
Section 409A(a)(2)(B)(i) of the Code and the regulations and other guidance
issued thereunder, then such benefits (or portion thereof) shall be accumulated
and paid on the first day of the seventh month following Employee’s termination
of employment. For purposes of this Agreement, whether Employee is a “specified
employee” will be determined in accordance with the written procedures adopted
by the Board.

(ii) This Agreement is intended to comply with the provisions of Section 409A of
the Code, and shall be interpreted and construed accordingly. The Company shall
have the discretion and authority to amend this Agreement at any time to satisfy
any requirements of Code Section 409A or guidance published thereunder;
provided, however, any such amendment shall maintain the economic terms of this
Agreement for the Employee. However, in no event will the Company have any
liability for any failure of the Agreement to satisfy Code Section 409A, and the
Company does not guarantee that the Agreement complies with Code Section 409A.

(iii) The Company shall promptly reimburse Employee for eligible expenses under
this Agreement that Employee incurs and properly reports to the Company in
accordance with its expense reimbursement rules and policies. Notwithstanding
anything herein to the contrary or otherwise, all reimbursements shall be made
so as to be exempt from Section 409A of the Code and to the extent not exempt:
(A) the amount of expenses eligible for reimbursement or in-kind benefits
provided during any calendar year will not affect the amount of expenses
eligible for reimbursement or in-kind benefits provided in any other calendar
year, (B) the reimbursements for expenses for which Employee is entitled to be
reimbursed shall be made on or before the last day of the calendar year
following the calendar year in which the applicable expense is incurred and
(C) the right to payment or reimbursement or in-kind benefits hereunder may not
be liquidated or exchanged for any other benefit.

10. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Employee’s continuing or future participation in any benefit, bonus, incentive,
or other plan or program provided by the Company or any of its affiliated
companies and for which Employee may qualify, nor shall anything herein limit or
otherwise adversely affect such rights as Employee may have under any Awards
with the Company or any of its affiliated companies.

11. Assignability. The obligations of Employee hereunder are personal and may
not be assigned or delegated by him or transferred in any manner whatsoever, nor
are such obligations subject to involuntary alienation, assignment or transfer.
The Company shall have the right to assign this Agreement and to delegate all
rights, duties and obligations hereunder, either in whole or in part, to any
parent, affiliate, successor or subsidiary organization or company of the
Company, so long as the obligations of the Company under this Agreement remain
the obligations of the Company.

 

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12. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
Company at its principal office address, directed to the attention of the Board
with a copy to the Secretary of the Company, and to Employee at Employee’s
residence address on the records of the Company or to such other address as
either party may have furnished to the other in writing in accordance herewith
except that notice of change of address shall be effective only upon receipt.

13. Validity. The invalidity or unenforceability of any provision 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.

14. Successors; Binding Agreement.

(a) The Company will require any successor (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 expressly 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 had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle Employee to
compensation from the Company in the same amount and on the same terms as he
would be entitled to hereunder if he terminated his employment for Good Reason,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination. As
used herein, the term “Company” shall include any successor to its business
and/or assets as aforesaid which executes and delivers the Agreement provided
for in this Section 14 or which otherwise becomes bound by all terms and
provisions of this Agreement by operation of law.

(b) This Agreement and all rights of Employee hereunder shall inure to the
benefit of and be enforceable by Employee’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Employee should die while any amounts would be payable to him
hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
Employee’s devisee, legatee, or other designee or, if there be no such designee,
to Employee’s estate.

15. Withholding Taxes.

(a) Tax Withholding. The Company shall have the power and the right to deduct or
withhold from any benefits payable under this Agreement an amount sufficient to
satisfy federal, state, and local taxes, domestic or foreign, required by law or
regulation to be withheld.

(b) Share Withholding. With respect to tax withholding required upon the upon
the lapse of restrictions on the Inducement Stock and the Salary Stock, or upon
any

 

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other taxable event arising as a result of any stock awards pursuant to this
Agreement, Employee may elect, to satisfy the withholding requirement, in whole
or in part, by having the Company withhold shares having a Fair Market Value on
the date the tax is to be determined equal to the minimum statutory total tax
which could be imposed on the transaction. All such elections shall be made in
writing, signed by the Employee, and shall be subject to any restrictions or
limitations that the Company, in its discretion, deems appropriate. Any fraction
of a share required to satisfy such obligation shall be disregarded and the
Employee shall instead pay the amount due in cash.

16. No Restraints. As an inducement to the Company to enter into this Agreement,
Employee represents and warrants that he is not a party to any other agreement
or obligation for personal services, and that there exist no impediments or
restraints, contractual or otherwise, on Employee’s powers right or ability to
enter into this Agreement and to perform his duties and obligations hereunder.

17. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Employee and such officer as may be specifically authorized by the
Board. No waiver by either party hereto at any time of any breach by the other
party hereto of, or in 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. This Agreement is an integration of the parties’ agreement; no
agreement or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party, except
those which are set forth expressly in this Agreement. THE VALIDITY,
INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF TEXAS.

18. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

19. Arbitration. Either party may elect that any dispute or controversy arising
under or in connection with this Agreement be settled by arbitration in Houston,
Texas in accordance with the rules of the American Arbitration Association then
in effect. If the parties cannot mutually agree on an arbitrator, then the
arbitration shall be conducted by a three arbitrator panel, with each party
selecting one arbitrator and the two arbitrators so selected selecting a third
arbitrator. The findings of the arbitrator(s) shall be final and binding, and
judgment may be entered thereon in any court having jurisdiction. The findings
of the arbitrator(s) shall not be subject to appeal to any court, except as
otherwise provided by applicable law. The arbitrator(s) may, in his or her (or
their) own discretion, award legal fees and costs to the prevailing party.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement on December 23,
2008 effective for all purposes as provided above.

 

ENDEAVOUR INTERNATIONAL CORPORATION By:  

/s/    John B. Connally III

Name:   John B. Connally III Title:   Chair of the Compensation Committee
EMPLOYEE:

/s/    William L. Transier

William L. Transier

 

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